Can my law firm pass on charges for payment fees to my client?

CosmoLex Team

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 … Read More

How should our firm pay credit card merchant fees?

CosmoLex Team

When accepting credit card payments from clients, fees should be paid out of the firm’s operating account and never from the client trust account or taken out of funds being deposited into a trust account. Traditional merchants pull the processing fees from the account the funds were deposited to. If your firm will be accepting retainer payments where the funds … Read More

How can I make sure my law firm gets paid?

CosmoLex Team

For a law firm to be profitable, it needs to be able to collect payments for work completed. Timely billing and accounting Law firms should ensure invoices are sent to clients on a regular basis, setting expectations and ensuring bills are received near when the work is completed. Descriptive line items should also be used to convey value and make … Read More

What charges should and should not be passed on to clients?

CosmoLex Team

In order to strike a balance between maximizing profits and keeping clients from feeling overcharged, firms must decide what charges are passed along to clients. Transaction fees  Whether or not attorneys are allowed to pass on credit card transactions fees varies by state[1] For example, Mississippi and Florida prohibit lawyers from charging a convenience fee or passing on the credit … Read More

How should my law firm be tracking time?

CosmoLex Team

Whether you bill by a flat fee rate or the hour, all lawyers should be tracking their time. From figuring out client invoice amounts to determining productivity and pricing, time tracking is essential. To do it properly there are a few different methods firms can choose from, but it’s best to pick one of them and stick to it. For … Read More

What information should I include in my invoice?

CosmoLex Team

Proper invoicing is the key to ensuring uncontested bills and prompt payments. You want to make it clear the value that’s provided while leaving no question as to how and when to make a payment[1]. Consistency is key, sticking with a standard layout used each time you send an invoice. Invoices should be viewed as a form of communication with … Read More

Is a contingent fee tracked as Accounts Receivable?

CosmoLex Team

Law firms track accounts receivable (A/R), the amounts that clients owe a law firm for services rendered, by generating an invoice showing the amount due during a given time period. When a law firm, however, agrees to accept a contingent fee as compensation for services rendered, the client doesn’t owe anything to the firm until the attorneys secure a recovery … Read More

Is a flat fee tracked as Accounts Receivable?

CosmoLex Team

Law firms track accounts receivable (A/R), the amounts that clients owe a law firm for services rendered, by generating an invoice showing the amount due during a given time period. When a law firm agrees to accept a flat fee for services to be provided, however, the client either pays the fee immediately, or the firm generates an invoice for … Read More

Can legal clients pay by credit card?

CosmoLex Team

The ABA and state bar associations decided decades ago that it is ethical for attorneys to accept credit card payments from clients. Best law firm administrative practices when accepting credit card payments are as follows: Obtain written consent from clients to disclose limited confidential information to credit card companies in order to accept credit card payments.[2] When submitting a request … Read More

Can general accounting programs like QuickBooks allocate legal payments?

CosmoLex Team

Most specialized and general accounting programs are able to allocate partial payments between cost advances and fees shown on the invoice. Some state ethical rules, however, require law firms to allocate partial payments to reimbursed cost advances first and attorney fees second. General accounting programs like Quickbooks® automatically allocate partial payments proportionally between each line item shown on an invoice, … Read More