Law firms can now accept a variety of payment types, including cash, check, credit and debit cards, and even bitcoin. But before giving the green light to all payment methods, you’ll first want to assess your options and choose the ones that best meet the needs of your firm and clients.
This means that you should look for payment methods that:
- Increase client convenience
- Decrease expenses associated with processing
- Follow current best practices
- Meet the American Bar Association (ABA) or state bar’s trust accounting regulations
In a world that is increasingly shifting to online workflows, online payments—credit cards, debit cards, eChecks, and ACH transfers—have become a necessity for any modern law firm. In fact, many clients will take their business elsewhere if their prospective legal counsel doesn’t accept online payments.
Long story short: for your law firm to truly thrive, you need to invest in an online payment processor.
What kind of electronic payments can law firms accept?
Electronic payments are fast and easy to use, making them a popular choice for vendors in all industries. However, they also carry a level of risk, so weighing the pros and cons of each method against your firm’s budget, security requirements, and client expectations is necessary.
Credit cards, debit cards, and ACH transfers are one thing, but you may also find yourself with clients who ask about mobile wallets and other nontraditional payment methods such as:
- Android Pay
- Apple Pay
- Cash App
While these payment methods are growing in popularity, bear in mind that they can quickly lead to non-compliance due to a lack of confidentiality protections. Therefore, until the ABA says otherwise, it’s best for law firms to avoid using these payments altogether.
What to consider when selecting an online payment processor
You’ll want to carefully research your options when looking for a suitable online payment processor, also called a merchant, for your law firm. If you choose the wrong merchant, you may end up losing money with hidden fees—and you may also run into compliance issues if the merchant offers poor data security.
Ultimately, you want to select a merchant that enhances your productivity, protects your clients’ personal information, and improves overall cash flow.
Before investing in a particular payment processor, make sure you’re answering the following questions:
1. Is it designed for law firms?
While your law firm is a business, not all service providers or merchants are created equal. More specifically, not all of them are set up to serve the legal industry. For starters, you have legal-specific compliance requirements to uphold, and not all online payment processors take that into account.
But when you select software designed specifically for law firms, you’re selecting software that upholds your trust accounting and data security requirements, complete with safeguards in place to prevent activity that could be considered an ethics violation.
2. Does it value data security?
As a lawyer, you are legally and ethically obligated to protect your clients’ sensitive information. In the event of a cyber-attack or data breach, for example, you may be held responsible for any lost or stolen data, any damages, and any subsequent legal action.
Look for a payment processor with high-level security features, complete with Level 1 Service Provider certification.
3. What is the fee structure?
Some merchants charge varying processing fees for credit cards, debit cards, and ACH transfers, while others may charge a flat fee for all transactions.
Each method comes with its own pros and cons, so it’s up to you to assess which fee structure would be most appropriate for your law firm in terms of profitability and convenience.
4. Does it have the potential to impact your accounting processes?
When it comes to trust accounting, there are very clear regulations to follow. Specifically, processing fees should never be deducted from client trust accounts.
If you opt for a retail-oriented payment processor instead of one built for law firms, you risk accounting issues. Instead, look for a merchant that protects your clients’ funds and your good standing with the bar.
5. How quickly will it disburse payments?
If cash flow is a concern, be sure you’re aware of the processing times for the merchant you select. Do you want funds to be available immediately after your client presses “send,” or are you willing to wait up to a week?
For optimal cash flow, look for a payment processor that allows funds to be available by the next day.
6. Does it include reporting features?
In the legal world especially, time is money. When you choose a payment processor that includes access to in-depth records, you don’t have to spend valuable time (that could otherwise be put toward your billable hours) doing manual inspections of your firm’s financial health.
TimeSolvPay, for example, provides metrics on data including:
- Accounts receivable
- Invoices, payments, and trusts
- Billable hours
- Ledger entries
- Realization per client, invoice, and timekeeper
7. Does it integrate with other legal software?
No one wants to constantly switch between tools and platforms for invoicing, billing, and collecting payments. Not only is this a headache, but it also creates a high margin of error.
With legal-specific software, you can integrate your tools to securely and automatically import information from one platform to another, saving time and mental space alike.
Options for implementing new payment methods at your law firm
Switching to new payment methods and processors isn’t just an adjustment for your law firm. You also need to keep your clients in the loop about any updates to their current processes—whether it involves a client portal, invoice payment link, or automatic recurring billing.
With law firm CRM software, you can easily notify your clients of new payment options through automated emails and text messages, complete with links to video tutorials explaining how to start making online payments.
For those needing additional assistance, you can schedule personalized, automated calls that invite your clients to contact you directly with any questions about the new payment processing method.
Improve your law firm’s payment processes with TimeSolvPay
TimeSolvPay is a credit card processor designed specifically for lawyers looking to save time and money, increase client convenience, and improve overall workflows while maintaining compliance.
Key features of TimeSolvPay include:
- Next-day funding
- Detailed reports
- Transparent pricing
- Trust accounting safeguards
- Seamless integrations with invoicing, billing, timekeeping, and expense tracking tools