Technology and trends are changing faster than most non-superheroes can keep up with, much less an attorney attempting to run both a law practice and a business. How do you defend yourself against the onslaught of new technology with options changing on a weekly basis? Many attorneys are either completely overwhelmed, becoming paralyzed with indecision; or simply choose to ignore technology and change altogether. Some just hope it will all simply go away and wish for the “good ‘ole days”.
One of the most critical areas where this holds true is how attorneys accept payments, especially in regards to credit card processing. Historically, law firms have not considered themselves as “traditional businesses”, but as professionals practicing law. While it is true attorneys have an ethical and sometimes higher calling to uphold justice, in reality, they have to run a successful business first, which involves getting compensated for their work. If not, the ability to successfully practice law may be in peril. It’s time for better billing for lawyers.
Cash flow is long known as the key to effectively running a business. With technology, attorneys now have the ability to finally control cash flow through the use of credit cards and electronic payments. By doing so, you gain control of your accounts receivables and ultimately your overall practice. If your practice currently maintains a significant outstanding amount of receivables, then you are effectively extending credit to your clients. In most cases, law firms do not have an “underwriting” process to determine the creditworthiness of their clients and have little insight into their ability to pay fees.
Traditionally, law firms do not perform credit checks or report delinquent clients to credit agencies. By allowing your firm to accept credit card payments, you can effectively shift your receivables to the card- issuing banks. Visa and MasterCard banks have already established the creditworthiness and financial capability of your clients. They are in the business of issuing credit, collecting debt and monitoring credit so you don’t have to.
Credit cards and debit cards are becoming the payment of choice among consumers. As an example; today, credit cards are responsible for more than $2.5 trillion in transactions a year, accepted at more than 24 million locations, and used in more than 200 countries and territories. In addition, there is an estimated 10,000 payment card transactions made every second around the world. (Source: American Bankers Association, March 2009).Based on these emerging trends, attorneys can no longer ignore the importance of accepting credit cards, nor the risks associated with bad debts.
How to Get Started
If you are considering accepting credit cards in your practice, make sure the credit card processing company you choose understands the specific needs of a law firm. Most attorneys prefer to accept payment in a professional manner. As such, Law firms do not have a check-out lane or ATMs stationed in their reception area. There are many custom payment options available to law firms which include credit card terminals and web-based solutions specifically designed for attorneys and their business. The total cost of a credit card transaction typically averages between 2% and 3.5% of the payment amount.
If you thought the internet was a fad, swore you would never carry a cell phone (now you do, but you’re still trying to figure out how to send a text message), then you are likely thinking that you will never accept credit card payments from your clients. Like the Internet, credit cards and other forms of electronic payments have become an integral part of our nation’s commerce and the way many people prefer to pay. In 2009, credit cards officially surpassed paper check transactions in the U.S. Last year, over $60 Billion was processed through debit and credit cards. With the shift to electronic and card-based banking, it’s time to rethink the way your firm handles billing and collections.
It’s no longer necessary to be a website developer or have a degree in computer science to embrace credit card payments, just a smart attorney that knows how to get paid. By leveraging technology as a payment tool, you give clients flexible payment options while allowing yourself to get paid quickly and securely.
With technology progressing at a rate that’s faster than a speeding bullet, throw on your Super-Lawyer cape and take back control of your receivables—and, ultimately, your practice.