Why law firms should accept credit cards

Steven J. Best, owner of Affinity Consulting

Chances are you have a credit card in your wallet right now. And I would bet you have an expectation that merchants will regularly accept your card as payment for goods and services. Your law firm’s clients are no different. Credit cards are a modern way of transacting business in 2024, and by not accepting credit cards, you are almost sending the message that your firm is behind the times. And quite frankly, that is not a good message to send out to the prospective client public, especially the growing millennial and even Generation Z client base. Whether your firm regularly deals with individuals or companies, offering the option of paying your firm’s bills and/or retainer requests by credit card is simply expected.

Your clients expect it in 2024

If you walked into a local merchant, selected items for purchase and then walked up to a payment register, most of us would expect the merchant to take credit cards and would likely be taken aback if asked to pay by cash or check only. Now, there are some businesses that still operate this way, but most throughout the world now transact business with credit cards. Law firms should be no different. Asking your client to pay you by cash or check only makes doing business with your firm harder and could, in the near future, cause a client to think twice about doing business with your firm. Further, credit card payments typically permit your client to extend their payment terms beyond the charge date, allowing your firm to get paid faster.

Get paid faster: control your cash flow

Too many lawyers look at the balance in their operating account as a barometer of business success. The better barometer is cash flow. How regularly are your invoices going out and how quickly are those invoices being “relieved” or paid? Delivering invoices quickly and accurately is the first step but making it easy for your clients to remit payment is just as important, if not more important. Simply put, accepting credit cards improves cash flow which is more important than cash in the bank. Cash flow is an analysis of current cash on hand, payables due to vendors, receivables expected from clients and anticipated billing in future periods.

Because firms primarily work on a “bills out, money in” basis, you want to shorten the time between the two actions.

Cost is simply the cost of doing business

This writer believes we should just buck up and eat those credit card processing fees. Getting paid faster is worth the 2-3% fee. And don’t pass that fee along to your clients — that’s again, in this writer’s opinion, petty and borders on ridiculous. If you’re accepting a $30,000 retainer, amounting to, let’s say, a $900 processing fee – i.e. 3%, you may want to simply ask your client to remit payment by check, but don’t refuse that retainer because it’s being paid by credit card. 97% of a retainer is much better than zero. And remember, the 2-3% fee is typically considered a normal business expense and tax deductible. Note, however, that there are some legal and ethical considerations.

Use credit card processing tools built into your law practice management software or deal with a merchant processing company that deals with law firms

You may use a law practice management software (LPMS) to track important case-related information like contacts, calendar appointments, documents, case facts, and communications including emails and texts. Examples of such products include Clio, MyCase, PracticePanther, Rocket Matter, and Smokeball. Of that sample, four of them have credit card processing built in. Smokeball, while having no built-in tool, tightly integrates with LawPay, as does MyCase, which is owned by LawPay’s parent company. While they still charge the typical credit card processing fee, they connect seamlessly to your LPMS-generated invoices and make it easy to include ePayment links in invoice emails. As a member of The Missouri Bar, you can receive discounts on certain products. Click here to view your member benefits.

If you do not use an LPMS, or yours lacks a built-in ePayment tool, you can still take advantage of credit card payments via a merchant processor.

Consider LawPay, Law Charge, or LexCharge, as they specifically deal with law firms. That means, for example, they’ll understand what an attorney’s trust account is and that there can be no merchant processing fees associated with it. Also, you would not have to deal with your banking institution’s in-house or preferred provider. Just about any credit card processing company can work with your firm and deliver fast payments to its bank accounts — operating and/or trust.

Every study of the subject tells us law firms that make it easy to pay by credit card are more likely to be paid faster and in full. Make it easier on the client and yourself by charging ahead.