As technology has evolved to meet the needs and demands of consumers and business owners alike, more and more businesses have made the switch to accepting online payments from clients. However, change hasn’t come to all industries at the same speed.
In particular, many in the legal industry have been hesitant to accept online payments for a number of reasons. For many, this hesitancy is based on common misconceptions regarding online payments.
Don’t let these myths prevent your law firm from embracing valuable, modern payment solutions. Here, we’ll explore three common misconceptions regarding online payments for lawyers.
Myth 1—Online payments are risky
Lawyers take issues of security and confidentiality very seriously. Because of this, many are hesitant to accept credit cards online due to fears about the potential exposure of their clients’ sensitive data.
In the legal industry, specifically, attorneys also worry about their own security when it comes to accepting credit cards—namely, that online payment solutions will not be compliant with the rules governing trust and IOLTA accounts.
Reality: Online payments are safe and secure
While these concerns are well-intentioned, the reality is that transaction security has advanced tremendously in recent years, making online payments some of the most secure payment options available today.
Credit card processing is a heavily regulated industry, and strictly enforced security standards, known as Payment Card Industry Data Security Standards (PCI DSS), ensure standardization of, and compliance with, the strictest security measures. Any entity that accepts, processes, transmits, or stores credit card information has to meet certain PCI compliance standards, as determined by their transaction volume.
In terms of trust accounting rules, while most online payment solutions were not developed to address the unique compliance needs of lawyers, there are legal-specific payment solutions, like LawPay, that have been developed specifically for the legal industry. These services ensure complete protection and compliance by properly separating earned and unearned fees and contractually protecting trust/IOLTA accounts against any third-party debiting.
Myth 2—Credit card processing fees are too expensive
One of the most common complaints that professionals across all industries make when it comes to accepting credit card payments is that they do not want to pay the associated processing fees. These fees can vary significantly, but typically range from 3 to 5% based on the payment provider, type of merchant account, and card type.
Reality: Getting paid faster can make fees a worthwhile investment
Some might believe that any transaction fee is too much to give up—especially given the hard work that went into earning it in the first place—but the reality is that accepting online credit card payments typically speeds up a law firm’s cash flow, providing meaningful financial bandwidth. Solo and small firms, who often work with less money on hand, can especially benefit from speedier cash flows. But many firms of all sizes suffer from cash flow problems, as clients regularly fail to pay their bills on time, if at all—On average, attorneys in the U.S. only collect 86% of the invoices they issue, according to the 2016 Legal Trends Report.
Additionally, the report found that lawyers who accept online payments actually get paid 11 days faster than those who only accept traditional check-based payments. That’s a difference of 35%!
Think about it this way: If you have $10,000 outstanding in client invoices, you could very well not be able to cover an upcoming bill of your own, an employee paycheck, or who knows what else. But by giving your client the option to pay you online, you can increase the speed of collecting what you’re owed by 35%. So even if you pay credit card fees of 3%, when you deposit $9,700 of your original total invoice amount, you’ll have that money in hand, ready to keep your business running.
Myth 3—Clients don’t care about their payment options
Many law firms believe that clients prefer paying by check or cash. These firms think that clients naturally understand that law firms don’t accept credit card payments, and the inconvenience of mailing or dropping off checks isn’t an issue.
Reality: Your legal clients want to pay you in the manner that’s most convenient for them
Your clients have more options than ever before when it comes to how they pay their bills, and you know what? They like it. In fact, a 2016 study conducted by Fiserv found that 90%of reporting households use multiple payment options, and even more compelling, 71% said that having multiple payment options increases their satisfaction with a business.
Much of this satisfaction can be attributed to the fact that modern payment trends have already changed the way people do their banking and pay their bills. According to a report from Bank of America, 62% of Americans did most of their banking online in 2016, an 11% increase from the year prior.
Online payments allow your clients to pay their bills at their own convenience, to do so quickly and easily, and to pay in a way that they find safe and secure. For example, with Clio Payments, which is powered by LawPay, you can send a client their bill right from Clio with a link that lets them pay online instantly.
What does that mean for lawyers? With the widespread acceptance of online payment options, and the increasing expectation that these payment options will be made available, attorneys who fail to offer these preferred payment options to their clients risk losing new, and even existing, business to other lawyers who let clients pay the way they want.
Online payments can help your firm succeed
Online payments are here to stay. Of course, lawyers must still take care and do their due diligence when selecting a credit card processor, but in the modern era, providing quality client service means providing the payment options your clients want, and lawyers who embrace this change will be that much better positioned to compete.
And, of course, they’ll also get paid faster.
In short, if you haven’t considered accepting online payments at your law firm yet, look into it. You might be surprised at the difference it can make for your firm.
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