Plastic has overtaken cash and checks as the preferred payment option among consumers. So why then is the legal industry behind others in accepting electronic payments?
The answer is a little complicated.
When Cash Was King
As credit cards rose to prominence in the retail sector, the legal industry determined plastic was an inappropriate form of payment for professional services. At least that’s what the American Bar Association’s Ethics Committee opined back in the 1960s, an opinion that’s since been reversed (1974). All these years later, however, legal clients are still left wondering why their attorney won’t accept their debit card, and this is where the other part of the equation comes into play.
Industry regulation, while varying from state to state, generally prohibits the comingling of client funds and earned funds. Accounting for this standard is of course trickier with credit cards than traditional forms of payment, and law firms have been reluctant to make their finances more complicated.
Even still, there are solutions abound for attorneys interested in electronic payments while avoiding the regulation headaches. Software, such as Law Pay, allows firms to securely accept electronic payments while maintaining compliance with attorney trust accounting rules. Similar platforms that allocate payments into trust vs. operating accounts are plentiful, with a bonus of making record keeping a snap.
Electronic Payments and Realizing Revenue
Lawyers who accept credit cards get paid 40% faster, according to Clio’s 2017 Legal Trends Report. And should it be any surprise? With electronic payments, clients can pay directly from their smartphone or computer in minutes.
Of course, whether or not your firm accepts electronic payments also impacts your ability to acquire clients in the first place. Consumers today want convenience, and those law firms that are easier to work with will have a competitive advantage.