Consumer demand for convenience and flexibility is driving a global digital transformation—and the legal industry is no exception. Today’s legal clients want to be able to pay their legal fees quickly, easily, and securely. Indeed, the 2021 Legal Trends Report found that online options are the method of choice for making payments, with 66% of clients preferring online payments.
This virtual shift is good news for you and your practice. As law firms move away from manual processes in favor of client-centered technology solutions, they’re able to increase operational efficiency, minimize labor and resources, and manage costs effectively.
Modern, cloud-based legal technology that prioritizes client-centered experiences can benefit your law firm’s bottom line. According to the 2020 Legal Trends Report, firms that were using online payments, client portals, and client intake and CRM software saw 6% year-over-year growth during some of the most intense periods of the pandemic. These firms also collected nearly 40% more revenue per lawyer compared to firms not using these technologies. Accordingly, it’s no surprise that growing firms in 2021 are 37% more likely to use online payments.
What is a legal payment processing software solution?
Legal payment processing software like Clio Payments streamlines the payment process to make it easy for clients to pay their bills electronically using a credit card, debit card, or eCheck.
Credit and debit card payments
Client credit card payments (borrowing against a line of credit) and debit payments (drawing funds directly from a checking account) are processed by online payment software in the same way. However, debit transactions typically have a lower processing fee. The legal payment processing software solution contacts the card issuer to verify whether the card is valid. If there is enough available credit (or cash in the checking account) to cover the amount, the transaction proceeds and the payee receives a receipt of the payment.
Also referred to as an Electronic Funds Transfer (EFT), an eCheck is similar to a paper check. It’s a promise to pay and requires checking account and routing numbers. However, the eCheck is processed electronically through the Automated Clearing House (ACH) network using legal payment processing software.
In addition to providing clients credit, debit, and eCheck/ACH online payment options, firms using a legal payment processing solution can offer flexible payment plans, accept trust payments, and be confident that they’re compliant with trust accounting rules.
Online payment systems also enable passive bill collection. Legal clients can pay remotely at their convenience. This removes the need for someone at the law firm to be physically present to process the payments.
Legal payment processing software automates back-end processes, minimizing time-consuming administrative tasks and increasing operational efficiency at the firm. Once a client makes a payment, a payment system updates the appropriate billing records at the firm. Thus, indicating exactly how much was paid, when it was paid, and if there are any amounts outstanding.
Meeting client expectations with online payments
Whether you decide to offer credit card options, automated recurring payments, or other online payment options such as debit card or eCheck, expanding your payment methods is crucial for providing clients the payment experience they want. Did you know that 66% of clients prefer to pay using online payments, according to the 2021 Legal Trends Report? No longer considered a premium service or competitive advantage, offering online payment options has become a standard feature that clients expect.
Selecting an online legal payment solution
The marketplace for legal payment processing software can feel overwhelming. It’s important to ask the right questions to find the best provider for your needs. When evaluating which solution is right for your law firm, consider the following seven questions to ask a legal payment processing software provider:
1. How does your legal payment processing software manage trust accounting?
Maintaining IOLTA trust compliance is imperative and you must keep earned and unearned funds separate in accordance with trust accounting rules. Accordingly, legal payment processing software must accept client trust payments and retainers and keep them separate from the law firm’s operating funds. The trust account should also be protected from all third-party debiting, including processing fees and chargebacks.
Learn how Clio Manage can help you comply with legal industry trust accounting regulations while making timely, accurate, and profitable business decisions.
2. Does your legal payment processing software integrate with a practice management solution?
Using disjointed systems to create bills, process payments, and reconcile your firm’s books is a waste of valuable time and resources. Instead, simplify and automate your collection process by ensuring your legal payment processing software integrates seamlessly with your practice management system.
An integrated cloud-based legal practice management solution will automatically post transactions to the appropriate account and sync records with your accounting platform—reducing error-prone data entry, streamlining reporting and tracking, and ensuring your firm gets paid on time.
3. What online payment methods can my firm accept when using your legal payment processing software?
Clients today want to pay their fees using the method that is most convenient for them—whether that’s credit card, debit card, or eCheck/ACH. When investigating lawyer payment solutions, look for software that offers multiple online payment options. This will allow you to create a flexible, client-centered experience for your clients.
4. Can I set up payment plans and recurring charges for clients?
Obtaining legal services can be a stressful experience for many clients, filled with many barriers—and the financial burden can be particularly troublesome. To help increase accessibility to legal services for clients, determine whether the legal payment processing software provider you select can provide a client-centered payment experience that prioritizes clients’ needs (e.g., payment plans, automated scheduled charges).
Payment plans that break large bills into manageable installments on a schedule that fits the client’s needs offer much-needed flexibility to the client, while helping you collect more of your outstanding balances. Similarly, recurring charges help clients manage their budget with predictable, scheduled payments. In turn, your firm can maintain or improve cash flow by making it easier for clients to pay their invoices on time.
5. What fees do you charge?
Comparing fees charged by online payment solution providers can be tricky. There can be multiple fees involved—from monthly fees, per-transaction fees, and extra fees for special cards (e.g., American Express). When evaluating legal payment processing software providers, choose vendors who offer full transparency—don’t get surprised by hidden fees.
As a rule of thumb, credit card transaction fees are 1–3.5% of the transaction, but some cards have higher rates (up to 4.5%); eCheck/ACH fees are typically lower (up to 1.5%). Note that some legal payment processing software providers charge additional fees for processing minimum penalties, additional trust accounts, and PCI compliance. Other potential charges include credit card network fees, monthly memberships, and chargeback fees.
Keep in mind that some legal payment processing solutions, such as Clio Payments, that offer a flat rate across all transactions can simplify the payment process for your firm.
6. How can I give my clients confidence that their payments are safe and secure?
Credit card companies mandate payment card industry (PCI) compliance to help ensure the security of credit card transactions. Be sure to verify that potential legal payment processing software providers can securely process, transmit, and store clients’ card details for recurring payments. All of which should be in compliance with PCI standards.
By protecting client data with a highly secure online payment processing solution, you can assure your clients their payments are as safe as possible. You’ll also be able to effectively managing fraud, disputes, and chargebacks.
7. How quickly can I start accepting payments?
When evaluating potential legal payment processing software providers, consider how quickly the solution can be operational. Is there a lot of training required to learn the software? What kind of support does the vendor offer?
A user-friendly, integrated online payment processing solution is the best path to getting your online payment and collections process up and running swiftly and seamlessly. And operational means you can start processing payments, tracking invoices and payments in real-time, and generating data-driven financial reports. And with a streamlined and expedient onboarding experience, you can start accepting payments quickly. All while realizing a quick return on investment.
Clio Payments: Your built-in legal payment processing solution with Clio Manage
You asked the questions and Clio has the answers. With the aim of providing a client-centered experience, we help you make your collections process fast, automated, and convenient for you and your clients with online payments.
Clio Payments makes it easy for your clients to pay bills online using a credit card, debit card, or eCheck—without the need for a third-party payment processor. Built within the powerful Clio Manage infrastructure, Clio Payments offers a faster, more transparent collections experience and a real-time view of transactions.
Payments are automatically deposited directly into your trust or operating accounting and tracked in real-time. Saving time and effort—so you and your integrated accounting platform are always up-to-date.
Clio Payments makes it easy to maintain IOLTA trust compliance. You can confidently accept trust payments and evergreen retainers, knowing that earned and unearned funds are always kept separate. Your firm’s trust account will also be protected from all third-party debiting, including processing fees and chargebacks.
Clio Payments creates an easy and manageable payment experience for clients by offering flexible payment plans and by securely storing their payment details for faster recurring payments, in compliance with PCI standards. Notably, Clio uses the payment industry’s most advanced security measures. With bank-grade protection of client data and proactive fraud detection—you can safely accept online payments.
Clio provides a cost-effective legal payment processing solution for credit card, debit card, and eCheck/ACH payments alike. Unlike many online payment processing solutions, Clio Payments offers simple, transparent pricing. There’s just one flat rate—with no hidden fees, card brand charges, or extra fees.
Plus, should you ever have any questions or concerns, Clio offers 24/5 customer support with dedicated payments experts.
If you aren’t accepting online payments yet, you could be losing potential clients—not to mention wasting time chasing payments. Don’t let the payment process become a friction point between you and your clients. By implementing a legal payment processing solution today, you can better maintain cash flow, get paid faster, and improve client satisfaction.
By asking potential software providers the important questions, you can select a vendor that best fits your needs. And, ultimately, helps you meet all of your client-focused and ethical responsibilities.
Get started with Clio Payments today.