Law firms can choose from a variety of payment methods when collecting compensation for legal services rendered. Traditionally, clients typically brought in or mailed payments to the firm in the form of cash or paper checks. A firm member would then manually deposit the funds into the appropriate bank account. This type of payment arrangement has become less common in recent years with modern payment options offering more convenience. Electronic payment methods, like credit or debit cards, e-checks, and ACH transfers, are now commonly used within law firms of all sizes.

Law firms can benefit in numerous ways from the acceptance of electronic payments. Electronic payments save law firms a significant amount of time by eliminating the need to transfer cash to the bank or wait for a paper check to clear. With a credit card payment, the funds can be transferred to the appropriate account within minutes, which promotes positive cashflow within the firm. For firms that send out electronic invoices, an integrated electronic payment system can also speed up payments and streamline the accounting process.
Electronic payments can also help law firms improve client relations. Legal clients do not like spending extra time delivering their payments to a physical office or mailbox. It is much easier and more convenient to pay a law firm invoice from the comfort of home, or even on the go. Some clients feel more secure using credit cards, while others appreciate the ability to pay off their legal fees over time. Whatever the client’s reasoning, law firms that offer electronic payment options are better positioned to receive the benefits.

Depending on the jurisdiction, law firms may have to contend with numerous rules when accepting and processing electronic payments. From the handling of process fees to reporting requirements, there can be a lot that law firms must do to remain in good standing with the respective bar.

Law firms need payment processing software that is specifically designed to meet these legal industry needs. These payment processing companies typically have systems in place to automatically handle these process requirements and provide ACH solutions for attorneys by promoting compliance with ABA and IOLTA guidelines.

Some payment methods are better suited than others for helping law firms keep their collection numbers high and the Account Receivables (AR) low. For example, the acceptance of credit cards and electronic payments can be far more effective for faster payments than limiting payments to paper checks or cash. But the method of collecting those electronic payments also significantly affects the amount of time between invoicing and payment. A website payment option is a good tool, but an individual client portal is even better. A payment link that accompanies electronic invoices also promotes faster payment.

One of the quickest ways for law firms to secure compensation is stored payments, coupled with running batch payments. With stored payment methods, clients provide credit card or bank account information to the firm, along with a preauthorization for payment. On the agreed upon date of the month, the law firm runs the stored payment method. With batch payments, firms can use stored payment methods to secure payment from numerous clients simultaneously, providing a law firm payment processing solution that get firms paid in minutes.

Not every payment option offers the right payment solution for the legal industry. Attorneys are under an increased duty to ensure that client payment information is handled in the most secure manner possible. It is important that law firms utilize payment processing companies and ACH networks that are highly secure. When choosing the best platform, law firms should look for a system that has several built-in security levels with Level 1 Service Provider certification.