Why Not All Payment Processors Are Created Equal
In our increasingly tech-driven world, law firms have more options than ever for how to accept and process payments. And there are important differences between the various processors out there.
While many law firms use industry-agnostic payment processing options like Stripe, Square, or PayPal, there are drawbacks to using software that’s not tailored to the unique needs of the legal profession, and the compliance obligations law firms must uphold.
When it comes to getting the job done right and ensuring your firm doesn’t run afoul of any local or federal regulations when processing payments, it’s worth investing in a software solution that meets all your needs.
Where does generic payment processing software fall short for law firms?
Generic software can seem like an appealing option. There are lots of solutions on the market, and each software touts a laundry list of features and benefits. But while some tools may say they’re a great fit for the legal market, the reality is different.
Here are some common areas where industry-agnostic payment processors fail to meet the needs of law firms.
Compliance
Making sure your firm stays compliant with all applicable legal regulations is critical to ensuring the overall health and success of your practice.
Generic software solutions don’t provide built-in compliance features, which can make audits more complicated and increase the risk of compliance violations.
Trust accounting is one of the most complex aspects of running a law firm. It requires legal professionals to handle client funds meticulously, and adhere to strict trust accounting rules. Failing to manage trust accounts properly can lead to legal and ethical consequences for law firms that could damage their credibility and their bottom line.
While generic payment processors can help with basic transactions, they’re simply not set up to handle the complexities of trust accounting.
Invoicing and alternative fee arrangements
Law firms have diversified their payment options to support client needs, but with increased client convenience comes increased billing and invoicing complexity. Managing this critical activity accurately and transparently is paramount to maintaining client trust and living up to ethical standards.
While your legal practice management software keeps the daily work of a law firm moving, legal CRM software makes it easier to bring in new clients, engage current clients, and increase your profits. But not all legal CRMs are created equal. Look for these six features when choosing a legal CRM—and put them to work for your law firm.
Retainers and flat fees
Retainers require precise tracking and separation of client funds from operational funds, while flat fees demand accurate invoicing and itemized billing capabilities.
Utilizing industry-agnostic payment processors can lead to issues with retainers and flat fees because they lack the specific tools necessary to handle these issues, which can lead to commingling of funds, billing errors, and noncompliance with legal industry regulations.
Multiple clients and matters
For firms that handle cases where legal bills need to be split among multiple clients or matters, having a solution that makes this process easy is essential.
Using a generic payment processor to handle intricate billing scenarios could lead to payment disputes and discrepancies, which can cost your firm money and the trust of clients and repeat business.
Payment plans
Plenty of law firms frequently offer payment plans to accommodate the financial situations of their clients. Managing and tracking these payment plans can be complex and requires attention to detail and consistent review on the part of law firms.
Most industry-agnostic payment processors don’t provide specialized solutions to ensure accurate tracking and review of client payment plans.
What makes legal-specific payment processors stand apart from industry-agnostic competitors?
If you know that your firm needs more than generic software for processing payments and staying compliant, then it’s time to start shopping for a legal-specific solution. While there are a range of legal payment options out there, it’s important to choose one that provides you with all the tools you need to get the job done.
Here are eight essential features that differentiate legal-specific from industry-agnostic payment processors.
1. Trust accounting safeguards
When it comes to trust accounting, it’s essential that all client funds are managed in accordance with the law so that the risk of ethics violations and legal complications is minimal. Your payment solution absolutely must include built-in compliance safeguards if you want to keep your firm on the straight and narrow.
2. Retainer management
Managing retainers and staying compliant is a critical aspect of the legal process, so it’s essential to find a payment solution that allows you to track retainer funds separately. This functionality is vital to prevent commingling retainer funds with operational funds.
3. Transparent billing
Using a legal-specific software solution will provide you with the ability to generate clear, itemized invoices that accurately reflect the work you do on each case or matter. This level of transparency will aid in building client trust and prevent billing disputes down the road.
4. Payment plan management
By leveraging the right legal payment software, law firms can easily set up and manage payment plans for clients. This feature is essential for any law firm that wants to accommodate the financial restraints of clients while still receiving timely payments.
5. Compliance assurance
Compliance with trust accounting and payment processing rules is paramount for legal professionals. The right software will be built with these regulations in mind, reducing the risk of non-compliance and simplifying the audit process.
7. Secure payment processing
Security for both you and your clients is another crucial component of a great payment processing solution. Make sure the solution you choose provides your firm with bank-level security, so that you never have to worry about compromised client data.
8. Integrations
Most law firms rely on multiple software solutions for everything from time tracking, to practice management, and beyond. Choosing a payment processor that integrates with tools you already use will go a long way to making your job easier, while minimizing the chance of human error.
9. Client convenience
As technology continues to transform the way we live our daily lives, most people expect to be able to pay for goods and services online.
Legal clients are no exception.
Legal-specific payment solutions should make it easy for clients to promptly submit payment every time by keeping credit cards on file, and other conveniences. Bonus points if they also make it easy for clients to pay with a quick email or on the law firm’s website.
Make payment processing a snap with CosmoLexPay
If you’re ready to stop dealing with the hassle and vulnerability that come with using industry-agnostic payment solutions, it’s time to make the switch to something better.
From ensuring that your firm stays compliant with industry regulations while making it easier for your clients to pay you on time, to integrating with practice management tools that your firm is already using, CosmoLexPay is the payment solution your firm needs to keep things on the right track.
Ready to make the switch? Schedule a free demo of CosmoLexPay to see how we can streamline payment processing at your firm.
While your legal practice management software keeps the daily work of a law firm moving, legal CRM software makes it easier to bring in new clients, engage current clients, and increase your profits. But not all legal CRMs are created equal. Look for these six features when choosing a legal CRM—and put them to work for your law firm.
