Why Modern Law Firms Must Use Electronic Payment Solutions
As more and more of the economy moves into the electronic and online world, so must law firms adapt to serving clients in the digital space. Part of this move includes having the ability to accept electronic payments from clients.
Here’s why law firms need electronic payment solutions.
Electronic Payments Dominate Customer Preferences
According to one survey, 75% of respondents preferred to pay for goods and services with a debit card or credit card. Another survey found that 74% of households with internet access paid bills online, 79% had switched to paperless billing, and 70% reported that having multiple payment options increased their customer satisfaction.
According to another survey, 55% of consumers rarely or never used a checkbook. Sixty-one percent of 18 to 24-year-olds reported never using checks, while that number was 52% among 21 to 37-year-olds.
Sixty-five percent of consumers expect to be able to pay a bill via credit or debit card on a website or mobile app, while 79% expect service providers to offer the same payment options as large national corporations.
With the move towards a cashless society, electronic payments are becoming the preferred method of payment for law firm clients. Accordingly, not having electronic payment options risks harming your firm’s reputation with your clients.
For example, they may see a failure to keep up with widely available electronic payment solutions as an indication that you or your firm also may not be keeping up with the latest legal tools and developments in the law.
Benefits of Implementing an Electronic Payment Systems
Having your firm offer your clients electronic payment options provides multiple benefits to both you and your clients, including:
- Helping attract prospective clients. With more people not having checkbooks, only accepting payment by check means that prospective clients who don’t use checks might choose to work with another law firm that offers them easier payment methods.
- Issuing immediate payment confirmations. There’s no waiting for paper invoices or checks to work their way through the mail, and both you and your clients have instant confirmation of when payments go through.
- Supporting a positive client experience. Clients will appreciate the option of handling their invoices at their convenience, 24 hours a day, seven days a week
Concerns About Accepting Electronic Payments
For many years lawyers saw credit cards as more appropriate for retail transactions rather than for paying for their professional services. However, those attitudes have slowly melted away as more and more people (lawyers included) increasingly adopted credit and debit cards as their preferred form of payment.
Many lawyers still express concerns with accepting credit card or electronic payments in light of attorneys’ ethical obligations. In particular, lawyers have struggled with using electronic payment solutions while complying with the rules requiring separation of client and third-party funds from the lawyer’s operating funds.
In recent years electronic payment solutions have come onto the market targeted specifically to the legal industry. These payment solutions enable lawyers to separate payments into earned and unearned funds and direct both into their proper accounts. In addition, the solutions deduct the processing fees from the lawyer’s or firm’s operating funds rather than from funds that may still legally belong to the client or a third party.
Of course, some lawyers still take issue with the idea of having to pay credit card or electronic payment processing fees. But firms are beginning to recognize that these fees represent just another cost of doing business and should be incorporated into the firm’s overhead.
Electronic Payments Optimize Law Firm Workflows
Utilizing electronic payment solutions helps save attorneys time and effort in handling the business aspects of running a law firm. First, electronic payments translate into faster payments. Lawyers often receive full payment for the work they have performed sooner, as well.
One survey of lawyers concluded that firms that accept electronic payments get paid 39% faster. Electronic payment solutions also make it possible for lawyers to follow up with clients to ensure that invoices actually get paid. Finally, electronic payments eliminate the risk of invoices or checks getting lost in the mail.
Electronic payments also prove incredibly useful when you have client work on retainer or repeated transactions. This is because online payment solutions allow for automated invoicing or recurring payments.
Many electronic payment solutions on the market also offer integrations with other software solutions that lawyers may be using for their practice, such as case/practice management software, timekeeping software, and accounting/bookkeeping software. This helps law firm managers avoid the need to jump between multiple programs or reconcile data from different programs.
Electronic payment solutions also make it easier for firm partners and managers to track and review the firm’s financial performance. In particular, these solutions can enable lawyers to see what type of work drives the most revenue or identify the firm’s most lucrative clients.
This can allow firms to diversify their work to ensure they have a more balanced portfolio and protect themselves from the loss of a client representing a significant portion of the firm’s income. It also allows firms to target clients for referrals or additional services.
Finally, reputable electronic payment solutions take the burden of ensuring the security of client financial information off the shoulder of the law firm. Having an online solution means that your firm doesn’t ever have to take possession of bank account details or credit card numbers. As long as your firm selects an established payment processor who always stays at the forefront of online financial security, your firm should never have to worry about the security of your clients’ financial information.