The law firm receives a large settlement check from another firm. Some will be paid to the client; some to a service provider, i.e. Blue Cross Blue Shield; some to this law firm. How do I process these transactions?
You asked twice; here is the answer copied from where I already answered:
The settlement is Deposited to Trust Bank and that Sales Receipt is where you list the Liability item.
To Pay out to Others, and the Client, you Write Checks on the Trust Bank. On the items tab, you list Only the Liability item with the client name on that detail line. This way, the Trust Bank and Liability balance match. Every activity in and out of Trust Bank is supposed to Only change Liability.
You Invoice for your fee. Write a check from Trust Bank payable to the Firm. On it, you still Only List the Liability item for that Client name. Now process that detail as if that is Receive Payment. Apply it to the invoice for your own Fees and Costs.
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