There are many forms of payment law firms can choose from when collecting compensation for legal services rendered. Customarily, clients typically brought in or mailed payments to the firm in the form of cash or traditional 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 online payment options offering more convenience and less human error in the collections process. Electronic methods, like credit or debit card payments, and ACH (electronic check) 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 and online payment methods can also help law practices 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 legal billing invoice from the comfort of home, or even on the go. Some law firm clients feel more secure using credit and debit payment options, while others appreciate the ability to pay off their legal fees over time. Whatever the client’s reasoning, law firms that offer a variety of payment methods 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.

Prior to integrating digital payment solutions, law firms ought to conduct thorough research on the rules and regulations set forth by their state bar associations and take into account any ethical considerations. Barring any infringement on ethical rules, law firms need legal payment processing software that is specifically designed to meet the industry needs. These payment processing companies typically have systems in place to automatically handle these process requirements and provide credit card processors and ACH solutions for attorneys by promoting compliance with ABA and IOLTA guidelines, specifically in the instance of advance payments and trust accounts.

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 batches of automated payments. With stored payment methods, clients provide the details of their preferred payment method, whether it is a credit card or bank account, to the firm, along with a preauthorization for payment. On the agreed upon date of the month, the law firm continues electronic payment processing from the stored form of payment. With batch processing, firms can use stored methods to secure regular payment from numerous clients simultaneously, providing a legal payment solution that gets firms paid in minutes.

Not every legal billing and accounting platform offers the right, convenient payment solution for legal professionals. 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 to deliver a secure payment experience. When choosing the best invoicing and collections platform, law firms should look for a legal practice management software system that has seamless integration options, or legal billing software with several built-in levels of security including Level 1 Service Provider certification.