Amy Porter is the Founder and CEO of LawPay, an online credit card service designed to meet the unique requirements of legal billing and accounting—and an integral partner to the Clio Payments service. Amy has worked in the electronic payments industry for more than 20 years and has more than ten years of experience in the legal industry.
We talked to Amy to learn more about what lawyers need to consider when planning their firm’s online billing procedures.
Clio: How has the legal industry changed its perception of accepting credit card payments from clients?
Amy: Ten years ago, attorneys were just starting to think about accepting credit cards. The common practice was to hand out paper invoices and wait for a check to come in the mail. For legal professionals, accepting credit cards just wasn’t done. Lawyers would say they felt it was unprofessional. They didn’t want to put their clients in debt. They had this perception that a credit card was only something you used if you couldn’t afford to pay a legal bill.
Fast forward ten years, and the pendulum has swung completely the other way. Now, credit cards are used not because you don’t have access to funds, it’s because you do have access to funds. You want miles, rewards, and convenience. It’s how clients prefer to pay. We are also seeing more corporate clients using credit cards. They also want rewards, and they want a more convenient way to pay.
Clio: How does LawPay help a lawyer through their typical day?
Amy: By using LawPay, lawyers save time, money, and resources. They reduce the time spent putting bills together and invoicing. They reduce time—literally, the hours—tracking down payments.
Many lawyers don’t bill sometimes until 60 days after they do their work. If you look at an average day’s receivable, depending on the area of practice, it might be anywhere from 30 to 90 days after that to the time they get paid. When you put that together, you’re looking at anywhere from three to six months by the time a lawyer gets paid for work they’ve already done. That’s just not a good business model. If you can accept immediate payment by having a credit card on file—by including it as part of your client engagement letter, or your retainer agreement—then all of a sudden, you’ve sped up your cash flow by five months. That’s significant for a solo, small firm attorney. It changes their world.
Every time we work with a new firm, we run through a live transaction that puts money in their account—and their reaction is always priceless. Their first response is always something like, “This is magic.” They cannot believe they get paid so fast, within seconds. It blows their mind. It’s one of those things that is so simple, they can’t believe they ever did it any other way.
Clio: What are some of the ethical considerations lawyers need to consider with electronic payments?
Amy: There was always this fear that accepting credit card payments would jeopardize client funds—jeopardize their IOLTA account. Traditionally, when you accept credit cards, you have what’s called a merchant account. With a traditional merchant account, part of the agreement is that when you accept a card payment, you give access to the card brand to whatever deposit account the transaction goes into. In the event of a chargeback, the issuing bank can go in and take that money back out. It’s a big deal. Most people don’t realize that it happens.
Let’s say an attorney takes a credit card for advanced fees or a retainer, and they put it into their IOLTA account. By the very nature of doing that on a credit card, they inadvertently give third-party access to the card brand and their outside bank, which is against IOLTA guidelines and against the ABA Model Rules of Professional Conduct. You can’t give Visa or MasterCard, or any of the issuing banks, access to your client’s money. It’s not your money.
LawPay allows the law firm to separate earned and unearned fees. Lawyers can take unearned fees and advance fees and deposit them into their IOLTA account. We also protect that IOLTA account. We don’t allow any access from the card brands. Inherently, our LawPay agreement is not a traditional merchant account, and that’s what makes the LawPay program unique.
It changes their world in terms of compliance with legal standards and regulations. These are secure transactions, so firms don’t have to worry about liability.
Clio: Are chargebacks allowed for operating accounts, where the money does belong to the firm?
Amy: For operating accounts, we don’t see chargebacks frequently—but they do happen. For example, a client will attempt to get out of paying their legal bill or won’t be satisfied with the outcome of a case. A lot of times, the issuing bank will try to snatch that money back. But, we prevent the issuing banks from doing that. We’ll go to the lawyer, and we’ll let them know they have a client disputing a charge, and we’ll ask if they want us to fight this case for them. Many times, they’ll give a refund anyway. Or, they can say absolutely not, I filed X, Y, and Z—here’s a signed retainer agreement and the authorization from this client to charge the card—and, we’ll fight those chargebacks on the attorney’s behalf.
Clio: What can you tell us about the Clio Payments partnership between Clio and LawPay?
Amy: We’re excited about the Clio Payments partnership because we feel like Clio is in line with our thoughts and our culture as a company. As far as being a practice management solution, being a part of how attorneys do business every day, making that easier, and making them more successful as lawyers—it’s very much a part of what we want to accomplish. In joining forces with Clio, we make a great team. We have all the pieces of the puzzle in one place that a lawyer can use to be successful.
Lawyers should be thrilled that two of the products and services they use are now streamlined and available with one login. It makes their world a lot easier. It’s a great pairing of services, and it makes things in Clio work a little easier at the end of the day.
Clio: What are you looking forward to at this year’s Clio Cloud Conference?
Amy: We’re excited to be a part of the Clio Cloud Conference. It’s great to have so many mutual clients all in one space, where people are excited about the technology, about new products, and new features. They’re engaged, ready to learn, and they want to grow their practice. It’s exciting to be a part of that, to be a solution, and it’s been a great partnership on all fronts. It’s win, win, win—for LawPay, Clio, and our clients.
LawPay is a Gold Sponsor of this year’s Clio Cloud Conference. Want to meet Amy in person? Use coupon code “LawPay” when registering for Clio Cloud Conference 2016, and you’ll receive a $150 discount on your ticket price.