Reasons Why Every Law Firm Should Accept Credit Cards
Most people are not aware that the use of credit cards could fuse into their everyday lives, either for business purposes or individual use.
Since credit cards are available to businesses of all sizes including law firms, they can help build your credit profile and improve your future credit borrowing terms.
Historically, many law firms have not set up the means of accepting credit card payments because they do not see their practices as modern businesses instead, some see themselves as mere professional service providers. They feel that the way they presently process payments is good enough, and there is no reason for them to change their old fashion ways. However, what they fail to realize is that one of the most critical areas of changing technology is payment methods, especially regarding credit card processing.
Though it is true that lawyers are different, and they serve a profoundly important role in our society. Nonetheless, just like everyone else, lawyers must eat. If one does not ask for money, one is less likely to receive it. Admittedly, there are better and worse ways to approach the topic, but merely ignoring fees, or only taking cash is limited thinking, primarily if your law firm serves small business clients. There is a probability that you will accept payment by credit card.
These are four reasons why every law firm should start accepting credit cards
1. IT SAVES TIME
2. IT MAKES BILLING EASIER AND FASTER
3. IT GETS YOU MORE CLIENTS
How Much Does A Lawyer Cost For A Divorce
The upfront retainer can be $1,500 for a very simple divorce with no issues, to a $15,000 + retainer when the issues and the monetary value of the assets involved are sizeable. You can count on a minimum retainer of $5,000 for divorces with a hint of custody issues, says Constantini.
Do All Divorces Cost the Same Amount?
The simple answer is no. Not all divorces are created equal, so they are not charged equally. Like other types of cases, the charge for a divorce attorney largely depends on the complexity of the case and the experience level of the attorney.
The upfront retainer can be $1,500 for a very simple divorce with no issues, to a $15,000 + retainer when the issues and the monetary value of the assets involved are sizeable. You can count on a minimum retainer of $5,000 for divorces with a hint of custody issues
The Ethics Of Law Firms Accepting Credit Cards
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The Ethics of Law Firms Accepting Credit Cards
In 1969, when the American Bar Associations Committee on Ethics and Professional Responsibility first looked at whether a law firm could accept payment via credit cards, they could not have been more disdainful.
The payment of legal fees using credit cards deemed unacceptable. The committee found it was wrong to put professional services in the same category as sales of merchandise and sales of nonprofessional services. ).
This opinion set back solo and small law firm finances for the next 50 years.
So, today, do lawyers take credit cards? Even though the opinion was reversed in 1974 , lawyers have been slow to accept payment of legal fees from credit cards. In a 2018 survey of law firms by Clio, checks were still the payment method most accepted by firms44 years after the ABA approved credit card payments. This is in spite of checks being eclipsed by payments being made with credit and debit cards by hundreds of billions of dollars across other industries.
Still, many lawyers are accepting credit card paymentsand are getting faster and collecting more because of it. In this article, Ill take a close look at the ethics of accepting credit card payments for lawyers in every state, some specifics to be aware of, and how to manage them.
Read it through to the end, and youll feel secure about ethically accepting credit card payments at your law firm.
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So Do Lawyers Take Credit Cards
The short answer is, yes. Almost every jurisdiction in the US has come out in favor of law firms accepting credit card payments for legal fees and expenses. Following the American Bar Associations adoption of the Code of Professional Responsibility in 1969, a cascading number of ethics opinions were published throughout the states endorsing the acceptance of credit cards.
At first, these opinions are products of their time. Accepting credit cards was treated as shameful conduct. Lawyers were not able to advertise that they accepted credit cards. For example, lawyers could not display promotional materials provided by a credit card company, except possibly a small insignia to be tactfully displayed in the attorneys office. Those Visa and Mastercard stickers on the doors to most retail businesses could not be displayed under these ethics opinions. Norcould firms participate in a directory of firms accepting credit cards.
Fast-forward to today, when Bates v. State Bar of Arizona has changed all that. Freed from many of the constraints on lawyer-advertising, firms can now advertise that they accept credit cards. In states that have not refreshed their ethics opinions on the subject, lawyers may still need to inform their clients about the chance of interest being charged on their payments.
Clio Payments: The Easy Way For Law Firms To Accept Credit Cards
Get paid faster and provide a better payment experience with Clio Paymentscredit card processing and legal payments software.
The integration of Clio Payments with Clio Manage provides a secure, efficient, and client-centered billing and collections ecosystem that enables clients to pay with a credit card , while automating back-end processes at the firm, such as updating billing records.
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Final Notes On Lawyer Payment Methods
Payment is an integral part of a successful law firms billing process. However, firms may not be taking full advantage of the lawyer payment methods available today. However, by giving legal clients what they want when it comes to paymentsconvenient and secure ways to payattorneys can encourage clients to pay promptly.
While todays technology makes many potential payment methods for law firms available, not all options are suitable for all firms. For many law firms, looking for an option that works with other firm tools and that allows them to accept multiple payment methods is the best all-in-one payment solution.
For example, Clio Payments makes it easy for law firms to accept secure legal credit card payments online. You can also use Clio Payments to set up recurring credit card payment plans for clients. And, because online payments in Clio Manageis a component of legal practice management software, it works seamlessly with your billing workflows to save you time and help your firm get paid faster.
When considering potential payment methods, its crucial for law firms to research their state bars rules and regulations and any applicable ethical considerations before implementing digital payment methods.
The information in this article applies only to US practices. This post is provided for informational purposes only. It does not constitute legal, business, or accounting advice.
We published this blog post in October 2021. Last updated: December 31, 2021
Does Your Firm Accept Credit Cards From Clients
Does your firm accept credit card payments from clients? Not too long ago it would be an utter shock to hear that a law firm would accept credit cards from their clients. To someone outside of the legal industry, this would sound downright silly. We live in a day and age where people are swiping their card far more often than they are taking dollars from a billfold. While the rest of the world seems to be leaving paper money, coins, and their checkbooks in the past, the same cannot be said for law firms.
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Does It Matter If My Bill Is Purely For Profit Costs
No. Under Rule 17.1 when you receive payment from a client in full or part settlement of your bill, you always have the option of paying the entire sum into your client account, regardless of the composition of the payment you have received. That is to say, it does not matter if it is client money, a combination of client and office money or just office money. If the money you receive from your client is all office money as it represents payment of a bill for work you have already done, or the bill includes paid disbursements, you will not be in breach of the SRA Accounts Rules 2011 provided that you transfer any office money out of the client account within 14 days of receipt.
I Cant Accept Credit Cards And Maintain Iolta Compliance
We hear you. Youre concerned about how credit card payments would work in light of the ABA Model Rules of Professional Conduct.
According to Rule 1.15, lawyers must be careful to ensure earned funds are deposited into an operating account, while a clients funds go to a trust account. When accepting cash, checks, or other traditional forms of payment, its simply a matter of depositing the funds in the right place, but how does this work when using a credit card?
This is how an online payment solution designed specifically for legal professionals can make credit card payments both easy and ethical. For example, when payments are made through LawPay, your earned and unearned fees are always separated and deposited into their proper accounts. You can also rest easy knowing that LawPay will never allow any third-party debiting to occur from your IOLTA account.
If you want to accept credit cards without getting into hot water, your best bet is to use an online payment solution that understands the legal industry and was built from the ground up to anticipate and accommodate your needs.
These days, accepting online credit card payments is an essential part of running a modern law firm. Thankfully, it’s not only easier than ever to offer this option, but the benefits are overwhelmingsimpler workflows, increased cash flow, better productivity in your firm, and best of all, happier clients who pay on-time and more frequently. What more could a lawyer ask for?
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How Much Should You Pay For A Lawyer
The cost of a lawyer all depends on the experience level of the lawyer and the type of case you need to hire them for. In general, a more experienced lawyer charges higher prices than a less-experienced one. Additionally, the complexity of your case plays a role, in that more complex cases warrant higher legal fees. Since most offices offer a free consultation, it may be wise to shop around for a lawyer that you feel will represent you well at a fair cost.
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.
Ethics Rules For Trust Accounting
For many business owners, choosing a credit card processing provider is as simple as comparing a few of the top playersPayPal, Stripe, and Square, for exampleand deciding whats best for them. Credit card processing for lawyers, however, is not as simple. When accepting credit card payments, several ethics rules come into play. Lawyers need to ensure that their credit card processors will keep them compliant.
Specifically, lawyers need to consider the potential for chargebacks on trust accounts. If a client disputes a charge that results in a chargeback, and the credit card company withdraws money from a pooled trust account, this may add to an ethics violation.
Law firms need a credit card processing solution for lawyersone that does not allow chargebacks on trust accounts and does not take fees from trust accounts.
A solution like Clio Payments ensures that you have separate operating and trust accounts and that processing fees are deducted from your operating account only. Youll never have to worry about an inadvertent ethics violation due to your choice of credit card processor.
Note: Aside from trust accounting ethics, youll need to ensure your firm is PCI Compliant.
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Four General Ethical Considerations For Law Firms Accepting Credit Cards
The ethics opinions on these considerations vary state by state. For example, the ethics opinions of four states expressly permit law firms to accept credit cards in all four of the above hypotheticals. However, the ethics opinions of eight states forbid passing credit card surcharges to clients.
Law firms also need to exercise care regarding how and in what instances they accept online payments via methods like PayPal or Apple Pay. Ethics opinions around other online payment methods are still evolving,
For example, though collecting fee payments for completed legal services may be acceptable, taking retainers or holding unearned fees may not be possible with some payment methods. When firms place funds directly in a trust account, services that transfer funds into other accounts or take processing fees may conflict with the rules. For example, the ABAs Model Rules of Professional Conduct Rule 1.15: Safekeeping Property notes that lawyers must deposit any legal fees and expenses paid in advance into a client trust account .
Why Take Credit Cards
Taking charge cards from clients makes it easier for them to pay you and for you to process the payments. Firms that accept credit cards are paid 40% faster, according to the 2017 Legal Trends Report by Clio. When it comes to making one-time online payments, 76% of consumers preferred to use their credit or debit cards, according to the 2017 TSYS U.S. Consumer Payment Study. Consumers like to pay with credit cards as they can get rewards points, cash back and other perks. Paying legal bills with a credit card is also a convenience for clients.
For law firms, taking credit cards means you get paid faster, the money is often deposited in your account sooner than a check, and it may reduce re-keying of payment information into your time/billing or practice management or accounting software if there is integration with your credit card processor. You can send out your bills electronically and include a link to pay with a credit card. The transaction is handled through the payment processor so that your firm does not have to deal with PCI compliance and the risk of having credit card information in your systems. If a client wants to call in a card or make the payment while visiting the firm, you can take the payment online through the credit card processor, so you dont run the risk of having someone write down the number on a slip of paper at the firm.
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Will Lawyers Accept Credit Card Payments For Their Fees
One of the first questions most clients ask about billing is always Do you accept credit cards? At the Columbus Criminal Defense offices of Luftman, Heck & Associates, the answer is yes, and we think all criminal defense attorneys should accept credit cards.
You see, once there was a stigma attached to taking credit cards for legal services. After all, we provide a key element of justice, so some thought that taking a credit card to pay for those services cheapened it. Those days are long gone.
Why Lawyers Should Consider Credit Card Payments
Many smaller law firms look at billing as a necessary evil. Its not the act itself thats the problem. You need to get paid, after all. And sending out the invoice is easy.
Its the getting paid part thats often hard. Keeping tabs on your client receivables is time-consuming. Sending out dunning letters not only takes up time, it creates discomfort for you and for your slow-to-pay client. And that discomfort has only intensified during the pandemic.
But theres a way to ease the pain for both partiesby setting up your firm to accept credit card payments. Doing so can help you get paid faster. If a clients finances are temporarily tight, they can pay you without having the money in the bank just yet.
Whats more, people prefer the convenience of plastic. According to a 2017 study from global payments provider TSYS, 76% of consumers use credit or debit cards when making one-time online payments. And some businesses specifically look for law firms that accept credit cards. Its more convenient, and it makes expenses easier to monitor. Plus, they like the fraud protection that card issuers provide.
If you think credit card payments might make sense for your practice, here are some things to think about as part of your due diligence.
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How To Pay For A Lawyer When Youre Short On Cash
If you require a lawyer, you are probably wondering what legal representation for your case is going to cost you. There are various types of attorney fees and actual costs will vary based on several factors. These include where you live and the experience level of the attorney. We will also explain the major variables when calculating attorney fees for a particular legal case.
Well let the experts, the lawyers themselves, break it all down for you. Then, well show you how to finance legal fees and find the right lawyer.
Lets get started.