Do I Need A Payroll Service for My Solo Law Firm and Which One Should I Choose?

Although I’ve probably employed thirty people over the lifetime of my practice — as contractors, part-time associates, law clerks, or of-counsel, I never used a payroll service until a year ago.  Up until very recently, payroll services were costly, complicated or both – and I didn’t want the added expense. And although lack of a payroll service necessitated the hassle of cutting actual checks, because many of the people working for me were freelancers, they’d invoice me and I’d pay electronically. Working with contractors also meant that witholdings weren’t an issue since I could easily cut 1099’s at the end of the year (for that, I’ve been using a service called Yearli).

But when I brought on a full-time associate last year, it was time to employ a payroll system.  There are plenty of options beyond ADP and Paychex which were once the only game in town, and better suited for larger companies. I chose Gusto – based on cost (it’s just $39/month and an additional $6 for each person on the system) and the fact that there are no added costs for tax filings or direct deposit.   Gusto also allows employees to onboard themselves which saves time.  To be fair, getting Gusto up and running isn’t a five minute process – largely because you’ll need to enter your firm’s EIN, along with any applicable state licensing materials – though if you have all of that information in one place, you can be up and running payroll within an hour.

Even without full-time employees, a payroll service – particularly one at a lower price point – makes sense for some types of practice. You can use it to pay contractors or,  depending upon your firm’s business structure, to pay yourself with any applicable withholdings.

If you’re thinking about using a payroll service, here’s a chart listing some of the most popular options. Do you use a Payroll service? Which one did you choose, and why? And did we overlook any payroll options in our chart?  Please share your comments below.

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