LAW LEDGERS Accountants for Lawyers
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Services / Payroll

Payroll for law firms, without the Thursday panic.

Complete payroll administration for New York law firms — from associate W-2s and partner draws to 1099 contractors, benefits deductions, quarterly filings, and year-end W-2s and 1099s. Coordinated with your bookkeeping so payroll never drifts out of sync with your books.

Overview

Payroll that understands how law firms actually pay people.

Law firms have a more complicated payroll picture than most small businesses. Associates and staff are W-2 employees. Partners in partnerships and multi-member PLLCs take draws or guaranteed payments and handle their own tax via K-1. S-corp owner-attorneys must take reasonable W-2 compensation. Of-counsel lawyers are often 1099 contractors. Expert witnesses, process servers, and investigators are usually 1099s, but the IRS and New York Department of Labor have been tightening worker-classification rules, and firms get caught.

We set up payroll correctly for your entity structure, run it on Gusto, ADP, Paychex, or your preferred platform, and coordinate it with the monthly books so W-2 wages, guaranteed payments, draws, and 1099 payments all land in the right place for tax season.

What we do

Full-service payroll, end to end.

01

Direct deposit & pay runs

Semi-monthly, bi-weekly, or weekly pay cycles with direct deposit, check option for employees who prefer it, and detailed pay stubs. Federal, New York State, New York City, and any out-of-state withholdings calculated correctly the first time. Pre-tax and post-tax deductions (health insurance, 401(k), HSA/FSA, commuter benefits, garnishments) all applied in the right order.

Every pay run is reviewed before it goes out. No surprises on Friday morning because an associate's benefits election didn't pull through.

02

Quarterly & annual filings

Federal: Form 941 quarterly and Form 940 annually. New York State: the combined NYS-45 for withholding, wage reporting, and unemployment insurance every quarter. Year-end: W-2s and W-3 to the Social Security Administration, 1099-NEC and 1099-MISC to contractors by January 31, and a full annual reconciliation that matches what payroll paid against what the books recorded.

Every filing is electronic, acknowledgments are retained, and copies go to you the day we file.

03

Partner draws & 1099 contractors

For partnerships and multi-member PLLCs, we track partner draws and guaranteed payments separately from W-2 payroll, so they flow correctly to the K-1s at year-end and don't get mixed with employee wages. Self-employment tax is accounted for at the partner level, not the firm level.

For 1099 contractors, we collect W-9 forms at engagement, track year-to-date payments against the $600 threshold, and issue 1099-NECs at year-end. When a 1099 looks more like a W-2 employee under the IRS and NY Department of Labor tests, we flag the classification risk early.

04

Benefits & retirement plans

Health insurance premiums, HSA and FSA contributions, 401(k) deferrals and employer match, SEP or SIMPLE contributions for smaller firms, commuter benefits, and any other deductions handled in the right tax order. For firms operating defined-benefit or cash-balance plans, we coordinate contributions with the plan administrator and ensure the tax deductibility is preserved.

New hire reporting, unemployment insurance claims support, and garnishment orders are all handled as part of ongoing service — no extra line items.

Frequently asked

Payroll questions, answered.

Can't I just use Gusto or ADP directly?

You can, and many firms do. The problem isn't the payroll platform — it's the setup and coordination. Generic payroll services don't understand the difference between associate W-2 wages and partner guaranteed payments, don't handle partner draws correctly, don't coordinate with the monthly books, and miss NYC-specific obligations like the Commuter Benefits Law. We run payroll through Gusto, ADP, or your platform, but manage the setup, coordinate with bookkeeping, and own the outcomes.

How are partner draws different from employee payroll?

Partners in a partnership or multi-member PLLC are generally not W-2 employees — they're equity holders receiving draws, guaranteed payments, or K-1 distributions. Self-employment tax applies and partners handle their own quarterly estimates. An S-corp firm is different: owner-attorneys can be W-2 employees and must take reasonable compensation. Getting this wrong is a common source of IRS adjustments.

What filings do you handle?

Federal Forms 941 quarterly and 940 annually, W-2s and W-3 at year-end, 1099-NEC and 1099-MISC for contractors. New York State NYS-45 quarterly for withholding, wage reporting, and unemployment. New York City commuter benefits compliance where applicable. All electronic, all acknowledged, all retained.

Do you handle 1099 contractor payments?

Yes. We collect W-9s at engagement, track year-to-date payments against the $600 threshold, and issue 1099-NECs by January 31. We also flag worker-classification risks — if a contractor looks more like an employee under IRS and NY DOL tests (which are now stricter for law firms), we raise it before it becomes an audit finding.

Can you manage benefits deductions and retirement plans?

Yes. Pre-tax and post-tax deductions for health insurance, 401(k) or SEP contributions, HSA/FSA, commuter benefits, and any other elections. For retirement plans, we coordinate employee contributions, employer match, and the annual 5500 filing requirements with the plan administrator.

What happens if we get a garnishment order?

We handle it. Wage garnishments for child support, tax levies, student loans, or court judgments have specific notice, calculation, and remittance rules in New York. We calculate the deduction, remit to the right agency or creditor, provide required notice to the employee, and track the order through its life — dropping it when it expires or is released.

Related services

Payroll pairs naturally with:

01

Full-service bookkeeping

Payroll posts to the books automatically each cycle — wages, taxes, benefits, and employer contributions in the right accounts.

02

Tax preparation & planning

Quarterly 941s flow into the federal corporate return; W-2s and 1099s flow to employee and contractor tax filings.

03

Trust accounting

Partner draws come from operating funds, never from trust — kept strictly separate and documented every cycle.

Stop managing payroll and start practicing law.

Schedule a complimentary consultation to discuss your firm's payroll setup. We'll review your current platform, coordination with bookkeeping, and entity-specific treatment of partner and owner compensation.

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