A positive client experience isn’t just about strong client relationships. It’s about making legal processes easier and more manageable for the people you serve, from client intake all the way through to closing out their legal matters.
One way law firms can improve the client experience is by offering flexible, inclusive payment methods.
When it comes to payment methods, many law firms only accept traditional payments via cash or check instead of more technologically advanced and relevant methods. Due to complex ethical concerns, many law firms are hesitant to adopt new technology, particularly when it involves client funds. Fortunately, legal billing software has been designed to help lawyers adapt to shifting client payment preferences while guaranteeing compliance with federal and state bar regulations.
While not all payment methods are right for every law firm, there are a few common payment options that all law firms should adopt to benefit clients and their businesses alike.
1. Credit Card Payments
Law firms have been slow to adapt to this trend. Luckily, for law firms ready to take the leap, technology has advanced to make accepting credit cards safe, simple, and seamless.
Allowing invoice payment via credit card is simply good business. Credit card payments make paying bills fast and convenient for clients, especially when online payment options are available. Each year, the use of cash and paper checks continues to decline—instead of forcing clients to go to the bank, mail a check, or drop by your office to remit payment, online credit card payment options allow clients to pay invoices instantly from home.
Accepting credit card payments has benefits for law firms, too. Because credit cards don’t require clients to have funds up front, they are a more accessible payment option for some clients. Therefore, accepting credit card payments broadens your potential client pool.
Bills paid by credit card are paid 39% faster, according to LawPay, which means your firm has access to payments owed without time-consuming collection efforts. Credit card payments also reduce the administrative time and overhead costs associated with traditional billing, like manually entering paid invoices into an accounting system or paying for postage.
Getting credit card payments right
With so many benefits, why are law firms still hesitant to accept credit card payments? Most attorneys are wary of credit card accounts because they’re concerned about avoiding compliance issues with client funds, particularly surrounding trust accounts.
While the regulations for managing client funds vary by state, a few standard regulations apply in most cases:
- Client funds deposited into trust accounts may only be withdrawn once fees or expenses are incurred
- Firms cannot deposit trust account funds into their operating account—funds must be deposited into the trust account directly
- Trust accounts can only be accessed by the law firm, not by any outside parties or credit card companies
Traditionally, when credit card payments are processed, funds are transferred from the customer’s account to the law firm’s account. Credit card payment processors charge fees for use of the service, and these fees may be passed on to the customer depending on specific State Bar Association regulations.
Another issue for law firms considering allowing credit card payments is chargebacks. Chargebacks occur when a customer disputes a credit card payment with their card company. When this occurs, the credit card processor accesses the account the customer funds were paid to and removes the funds, returning them to the customer. Because no outside entity should be able to access client trust accounts, chargebacks pose an ethical concern for law firms.
Luckily, legal-specific payment processors do away with the challenges of accepting credit card payments. They are designed to help law firms accept credit card payments without ethical violations. Legal payment processors allow funds to be deposited in one account and fees are withdrawn from another. For example, legal payment processors reroute chargebacks to the law firm operating account, so trust funds are never accessed by an outside party. Additionally, legal payment processors ensure that processing fees are charged to attorneys’ accounts, not clients’.
By partnering with a legal-specific payment processor, law firms can improve the client experience while meeting their ethical obligations.
Debit Card Payments
Like credit card payments, debit card payments allow clients to pay bills quickly, easily, and with nominal inconvenience or cost to law firms. Debit card payments are ideal for clients who have enough money available to pay a legal invoice immediately but want to do so in a quick and convenient manner. Additionally, allowing debit card payments helps clients avoid interest charges.
The challenges associated with accepting debit card payments are similar to those for credit cards. Fees to use debit cards must be applied to the law firm, not to the client, and charges cannot be withdrawn from client accounts until they are incurred. The tools used by legal payment processors allow law firms to accept debit card payments, worry-free.
ACH payments, which stand for “automated clearing house payments,” are a form of eCheck. This payment option directly deposits funds from a client bank account to a law firm account without a third-party intermediary like a credit card processor. ACH payments combine the convenience of paying by credit card with the functionality and simplicity of paying via check—all without credit card processing fees.
Similar to payments made via payment card, ACH payments must be handled with care to avoid ethical violations. Once again, using a legal-specific payment processor like LawPay allows law firms to navigate legal regulations with ease.
Build a Better Client Payment Experience with CosmoLex
CosmoLex offers users safe, secure payment options for clients with CosmoLexPay. CosmoLexPay protects client information with bank-grade security standards, giving clients the peace of mind that their personal information is always kept private. Using this built-in feature with CosmoLex’s practice management software, law firms can optimize billing and accounting for the most efficient matter management. To give CosmoLex a try, schedule a demo or register for a free trial.