Accepting credit cards is a benefit to both your clients and your cash flow, providing an easy way to quickly take payment for invoices without requiring available funds or a mailed check. However, accepting credit cards comes with a service charge, usually ranging from 2-5%. For lawyers who are trying to maximize their profits, the question arises of whether or not these charges can be passed along to the client rather than the law firm having to pay them and reducing their income as a result.
Often charged as a “convenience fee”, this recovery of payment fees is allowed in some states and not in others. To be certain of whether or not you can charge clients for surcharge recovery, it’s extremely important to check with your local bar association.
In the majority of states which do allow the processing fees to be passed along to the client, it’s required to get consent from the client in writing. Even if your state does not require it, it’s a good idea to collect it anyway in the event of a dispute.
States that allow convenience fees
Certain states have allowed lawyers to pass along charges for payment fees to their clients, including Utah, Hawaii and Virginia. However, some states have certain requirements associated with this option. For example, in New York, lawyers are allowed to pass along the transaction fee only if the client consents and the charge is nominal.
States which don’t allow convenience fees
Colorado, Kansas, Massachusetts, Michigan and Mississippi are all states which expressly prohibit law firms to pass along credit card surcharges to a client.
States which haven’t decided
There are states which haven’t issued formal opinions on the issue, and in these instances lawyers must decide if they want to take the risk.
State laws directly impact a lawyer’s ability to pass along credit card surcharges, so regardless of a bar association’s lack of issued opinion, lawyers should also check the rules and statutes of their jurisdiction.
- Advanced Practice Management Strategies for Increased Productivity (27:00)
- Infographic: 10 Tips to Increase Your Law Firm's Productivity
- Top 10 Productivity Metrics Your Law Firm Should Track
- What name should my law firm put on trust accounts?
- For trust accounting records, what happens if my bank doesn't return deposit slips?