For many law firms, getting paid promptly can be a challenge because clients aren’t always prepared to retain an attorney when an unexpected legal matter arises. Fortunately, there’s a simple solution to this problem: get your firm an online payment processing software.
How Do Online Payments Benefit My Firm?
21st-century payment processing tools make it easier than ever to collect legal fees. By taking advantage of these software programs, law firms can provide their clients with various options to immediately pay their bills—including credit card and ACH payments.
In the age of Venmo, PayPal, and Bitcoin, your clients expect online payment capabilities and appreciate the convenience it affords them.
You’ll find there are many options available when choosing a payment processing tool for your law firm. In this guide, we’ll help you select a payment processing software that is a good fit for your law firm’s unique needs and solves common invoice collection problems.
How Do I Get Paid Faster?
The quicker your firm is paid, the more consistent your firm’s revenue stream is. A streamlined invoicing and payment processing system can improve your firm’s bottom line. Fortunately, payment processing software designed specifically for law firms offers functionality features that organize and ensure prompt payment from your clients.
Offer Payment Links
An easy way to remove friction from the invoicing and payments process is to include a payment link for your clients. This allows your clients to make immediate electronic payments to your firm. By providing payment links to your clients in multiple ways, you’ll make paying outstanding invoices even easier.
Extend Multiple Payment Options
Leverage the option of getting legal bills paid via different channels—online, over the phone, or in person. Even better, by offering more payment methods, including credit and debit card acceptance, your firm will increase its chances of getting paid faster. According to a recent study conducted by MyCase, our customers who accept online payments are paid 29% faster than those who don’t. Their collection rate was also 10% higher than customers who didn’t use online payment processing software.
Create Invoicing Automation
Cash flow acceleration can also increase by invoicing clients more frequently and creating more manageable payments for clients. For example, by scheduling automatic payment reminders that are sent if a bill isn’t paid within a set amount of time, you create a friction-free process that keeps clients informed about outstanding invoices. These reminders can be sent via email or text, and if a payment link is included in the reminder, it’s even easier for your clients to pay upon receipt.
Set Up Payment Plans and Subscription Billing
Creating payment plans is another way to ensure prompt payments. Once you set up a payment schedule that meets your firm and clients’ needs, your invoices will get paid regularly.
You can even set up an automatic charge to the client’s credit or debit card as long as the client is on board with this plan. Some lawyers also include a service fee that is built into the payment plan schedule. This covers the cost of extending credit to the client over time when ethically permissible in their jurisdiction.
Subscription billing also creates a predictable revenue stream for your law firm. Some law firms offer it for retainers. This allows firms to automatically charge the same amount monthly for an agreed-upon time frame, continuing until the subscription ends.
Similarly, some firms rely on evergreen retainers for prompt payment. When the client’s initial retainer is nearly exhausted, the client is automatically charged for replenishment of the retainer. This means less time wasted invoicing the client and waiting for another retainer payment. Instead, the trust account is replenished automatically.
Issue Invoice Splitting Options
Lastly, invoice splitting is another way to get paid quickly since more than one party can pay the invoice. When multiple parties are involved in a matter, split invoicing allows both parties to pay their portion of the amount due. This prevents the hassle of waiting for one client to reimburse the other for their share of the fee. As a result, your firm is paid promptly, and your clients will appreciate the simplicity of the transaction.
How Can I Make Legal Fees More Manageable?
Paying unexpected legal fees is daunting for most people. That’s why many firms offer their clients flexible payment options. This reduces anxiety about legal fees and is essential for providing high-quality client service. If you’re unsure where to start, below are some steps you can take to make legal fees more manageable for your firm’s clients.
Accept Credit Card Payments
Accepting various payment methods, including credit cards, is important because it gives your clients the luxury to choose their preferred form of payment. An added benefit of accepting payments via credit card is you’ll likely receive those payments sooner than they’re due since it allows clients to pay bills on a schedule that meets their needs.
Offer Payment Plan Options
Payment plans are another way to offer your clients flexibility, especially if the legal fee is significant. Payment plans are ideal since they make your legal fees more affordable and allow clients to pay smaller amounts over time. Additionally, your clients can make regular payments on a set schedule when your firm offers payment plans.
Finally, issuing split invoices when multiple clients are involved in a matter provides your clients with more flexibility. Allowing multiple parties to pay the invoice streamlines the collection process and makes legal fees more affordable for all parties involved.
How Can I Choose The Right Payment Provider For My Law Firm?
When choosing a payment provider for your firm, it’s crucial to select a company that specializes in the legal industry. This will give your firm access to features and functionality that is relevant and most beneficial to your needs. Below are three key points for selecting the right payment provider.
Offers Compliance With Law Firm Ethics
Because lawyers have unique compliance issues, it’s important to focus on tools designed with lawyers’ ethical needs in mind. Providers that offer legal-specific payment processing software understand the ethical obligations of lawyers and have built-in features that protect your firm’s trust account from impermissible credit card fee withdrawals. As a result, fees are never withdrawn from your firm’s trust account since these programs are set up to ensure that all fees are withdrawn from operating accounts only.
However, before choosing software for your law firm, it’s necessary to understand your jurisdiction’s ethical rules fully. This will allow you to thoroughly vet each provider to ensure your services are ethically compliant with your jurisdiction’s laws.
Is An All-In-One System
An invoicing and payments solution that is integrated with your case management platform is the best option to maximize efficiency. This provides a single platform for practice management and invoicing and payments. Using a single system, your firm will operate more efficiently, saving your staff time spent switching between platforms.
An all-in-one system will also reduce errors resulting from re-keying data for collected payments. By eliminating duplicate entry of received payments, your firm will also increase productivity.
In addition, it will help you quickly determine whether there are outstanding invoices at the case and firm levels. This will eradicate the need to compare and reconcile multiple sources, and your firm will have one source of truth for all aspects of client matters, including invoicing and payments.
Provides Gross-Card Settlements
When choosing a payment provider, find out if the software offers gross or net card settlements. It’s essential to choose a payments provider that offers gross card settlements since net card settlements potentially raise an ethics issue and may cause your firm to be out-of-compliance with trust accounting. Net card settlements may also result in a situation where you are depositing less than your customer paid you.
Net card settlements often occur with consumer payment software like PayPal, Square, Stripe, and Intuit/QuickBooks. This also includes bank providers such as Chase, Elavon, or your local bank or credit union. In comparison, legal payment providers understand your unique needs and will credit your trust account with the gross or total amount of the credit or debit card payments. Afterward, these providers will deduct the processing fee from your firm’s operating account in a separate transaction.
The Future of Collecting Payments for Law Firms
By choosing a legal payments provider that understands the legal industry and its needs, you can access functionalities that will get your firm paid faster.
- Accepting payments online across multiple channels.
- Payment plans that make it easier for your clients to pay legal fees.
- Instant payments that allow you to receive payments promptly.
- Sending a payment request link without needing to set up an invoice or create a new client profile.
- Support staff who understand your business and the legal industry should you need help with invoicing and payments.
If your law firm isn’t already using a legal payments provider, there’s no better time to start than now. Your clients and your firm’s bottom line will thank you!
Get started with MyCase’s Online Payments today.
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