What to Look for When Choosing a Bank for Your Law Firm

The bank your law firm works with may be a part of your financial process for decades to come, so you know you want to make a well-considered decision about which institution to partner with.

We always recommend talking to more than one bank before making a decision. But what, exactly, should you be asking these prospective institutions?

Familiarity with trust accounts

Start by gauging the bank’s familiarity and comfort with trust accounts. Trust accounts come with different regulatory requirements than more standard operating accounts, and it’s helpful if the institution you partner with understands how important trust compliance is.

Likewise, your bank should be able to link your trust account with your local IOLTA program, so that all interest earned on the account can go toward pro bono legal work in your state.

Line of credit and credit cards

A line of credit typically comes with better interest rates than a credit card. If your firm needs to borrow to make an important change, a line of credit from your bank may be a good way to proceed. Do some research into how difficult it can be to get an increase for a line of credit with the bank you’re thinking of choosing and ask them directly what that process looks like.

That said, many firms also use credit cards to pay for firm expenses on a day-to-day basis. In fact, using a credit card can be a helpful way to make sure all hard costs make it onto a bill for reimbursement. However, in almost every circumstance, a credit card shouldn’t be used to borrow money—use your bank’s line of credit instead.

Check out features like rewards on credit cards, too. Those points can add up for some significant benefits for your firm.

Interest rates for savings accounts

As we all experienced with the arrival of the Covid-19 pandemic in the spring of 2020, life is unpredictable. You never know when things will change suddenly, so it’s important to have a safety net in place.

All law firms should aim to have a savings account that can cover at least three months’ worth of expenses. While your decision about who to bank with may not hinge on the interest rate the bank can offer for money in your savings account, we do recommend at least asking about it.

Direct deposit for a simpler payroll process

Look for a bank that can partner with you in reducing your administrative workload. There’s no reason why your team should still be cutting hard checks for payroll. Instead, for a small fee, you should be able to fill out your firm’s payroll online and have your bank deposit the paychecks directly into your employees’ bank accounts.

Not only does this approach save you time, but your staff will appreciate having their paychecks streamlined, too.

Remote deposits and online banking

Gone are the days when you need to physically go to a bank to deposit a check. Instead, look for a bank that supports remote deposit options. Even many smaller banks, such as local credit unions, will offer this service, which effectively consists of sending them a photograph of the check—and many will have their own mobile app for remote deposit and banking.

Likewise, your bank should offer online banking services twenty-four hours a day, seven days a week. You should always be able to check your account balances and transfer money from your mobile phone or computer.

Customer verification and fraud protection

Ask your bank what measures they take to prevent fraud. For example, what does their customer verification process look like?

Law firms tend to transfer large sums of money at a time—do they monitor for unusual activity, and how do they accommodate a law firm’s transactions? Ultimately, you don’t want a hold placed on every transaction, but you do want to know there are security measures in place.

That said, a significant aspect of any firm’s cybersecurity and fraud prevention should include internal protocols, too.

The relationship with your client service representative

Get to know your client service representative and build a positive relationship with them. The better this person knows you and your firm, the better equipped they are to keep you informed of any changes or new features that may be directly relevant to you. Likewise, they will be a crucial part of the solution if you need to resolve an issue.

At the end of the day, your bank can be a solid member of your team and a partner in your firm’s future for decades to come.

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