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Law Practice Magazine

The Finance Issue

Change How You Get Paid: Grow Your Firm

Daniel M Lear


  • Making payment easier for clients is one, fairly quick, way to impact your bottom line.
  • While getting paid faster doesn’t mean you get paid more, having cash sooner can provide more financial flexibility, particularly if the firm is small.
  • Making it easy for clients to pay by improving your billing and payments processes is the key to increasing revenue.
Change How You Get Paid: Grow Your Firm

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Most firms want to grow. They aim to expand their customer base, client matters and, most importantly, revenue. Many assume that expensive marketing campaigns are the best or even the only way to do that. The truth is that a few quick and inexpensive improvements can significantly impact a firm’s bottom line fairly quickly.

The Lawyer Collections Conundrum

Lawyers leave a fair amount of money on the table. The 2022 Clio Legal Trends Report indicated that lawyers fail to collect payment for more than 10 percent of the work that they bill. To be fair, the collections number has decreased steadily for the last few years, but 10 percent is still a lot: for example, a law firm grossing $300,000 per year leaves $30,000 on the table in uncollected legal fees.  

A firm can have a meaningful impact on its revenue simply by improving its collection rate––the amount of money that it collects as a percentage of the amount that it bills. Firms can also improve their cash positions simply by expediting the speed at which the firm gets paid. While getting paid faster doesn’t mean you get paid more, having cash sooner can provide more financial flexibility, particularly if the firm is small.

Here are three strategies firms can employ relatively quickly to either increase or expedite the collections rate, improve their cash position and increase revenue.

Payment Barriers

One surefire way to decrease your collections rate and increase the time it takes to get paid is by making it hard for clients to pay you. Firms do this all the time! Here are actual quotes I’ve heard from law firms: “We only take cash or checks. It’s easier for our firm.” “Those card fees are too expensive!” “We only take cards over the phone. Please call when our billing person is in the office . . . and not at lunch, or in a meeting or in the restroom.”

In many cases in the real world, outside of legal, I don’t even have to pull out my wallet to pay for something. Firms that make clients go get cash, or cashier’s checks, or even root around in their wallet for their checkbook (for those who even have one or know what one is) are putting up barriers to getting paid now or ever. Let’s chat about how you can make it easier for your firm to get paid.

Credit or Debit Cards

Accepting credit or debit cards is an essential payment option for law firms. Not only is it convenient for clients, but it also ensures timely payments because most processors deposit your funds within a few days––and many processors are moving to same day or next-day deposits. I don’t want to minimize the importance of processing fees. Make sure you’re not getting gouged. But most reputable processors come in right around the same price. And, honestly, the time and energy that you’ll spend searching for or negotiating that last little bit of savings will be far better spent billing clients and building your business. The most important part is giving clients the convenience of paying with a card.

E-Checks, ACH, Bank Transfer

E-checks are known by many names––ACH, bank transfer, or EFT in Canada––but they are all digital versions of a paper check. These days a payor only needs an account and routing number to use one. E-checks can be a cost-effective payment option, as they generally come with lower processing fees than credit or debit card transactions. While conventional wisdom suggests that no one is using e-checks these days, across law firms with which I am familiar, I see about 20 percent of their clients pay with e-checks. What’s more, some companies have shortened the long wait times that often plague e-checks, enabling firms to receive payments either the same day or next day. This is true even for higher dollar transactions.

Wire Transfers

Wire transfers can be a solid payment option for larger transactions. They are secure and fast, but often come with high fees. Wire transfers can be particularly useful for international transactions. The downside of wires is that they aren’t integrated into many other systems, requiring manual work to request, receive and log them. Firms who have access to high-dollar, same-day or next-day e-checks can integrate those payments into their workflows much more easily than they can with wire transfers.

Google Pay or Apple Pay

There are dozens of mobile wallets akin to GPay or Apple Pay today. Some of them are more compatible with trust accounts than others. In an increasingly digital world, payment methods like these are only going to become more popular. The only challenge is that some of these systems aren’t set up to meet trust account rules. So, if you choose to leverage wallets like this, make sure they comply with the rules of professional conduct in your state or plan to use them only for payments into your business or operating account exclusively.


Cryptocurrency (with Bitcoin being the most well-known example) is another method that some are starting to use for payment. Lawyers will appreciate that cryptocurrencies are a secure payment method that eliminates the need for a go-between. It can also reduce processing fees. However, it's important to understand the risks associated with cryptocurrency before accepting it as payment. A few jurisdictions have issued ethics opinions regarding accepting cryptocurrency including the Nebraska Bar, the New York City Bar, the North Carolina State Bar and the District of Columbia Bar. The content of the opinions varies. If you are practicing in one of these jurisdictions and considering accepting cryptocurrency as payment, you should read the opinion yourself. The basic gist is that, while it is permissible, cryptocurrency transactions can be volatile. As a result, it is important to have a process in place to convert the cryptocurrency to a stable currency, such as USD or EUR, to avoid any potential losses or uncertainty about value.

Processing Costs

It’s true that I just mentioned that negotiating for that last .25 percent is unlikely to have a significant impact on firm revenue. However, saving 2 percent on your processing certainly can. Here are a couple of ways to do that.

Shift Processing Fees to Clients

One way to increase your revenue with credit card payments is by shifting credit card processing fees to clients. This is a lengthy and complex topic that began in 2005 with a class action lawsuit by small businesses against the card brands. Very briefly, most states allow businesses, including law firms, to shift the cost of payment processing to their clients. A handful of states––Alabama, Colorado, Connecticut, Indiana, Iowa, Maine, Massachusetts, Michigan, Mississippi, Nebraska and West Virginia––prohibit shifting these fees either by state law or by ethics opinion but the landscape is rapidly changing in favor of the practice––for example, Kansas’s law prohibiting fee shifting that was recently struck down.

The ways that a firm could use this fee-shifting tool are many and varied but law firms that shift credit card fees and also offer payment via debit cards (debit cards can’t have their fees shifted) or e-check (which can be legally shifted but a firm may elect not to) such that their clients still have a way to pay that’s “free to them” often save 60 to 80 percent of their processing costs. To make that a bit more meaningful, let’s take a firm that’s doing two million dollars annually through cards. Assuming the firm has a mix of credit and debit payment options, the firm is paying around $30,000 in credit card processing fees each year. A reduction of that cost by 80 percent means they’re saving $24,000 annually.

Implement A Collect Early, Collect Often Billing Model

Making it easy for clients to pay by improving your billing and payments processes is the key to increasing revenue. The easiest payment experience is the one that the client doesn’t even have to make. Just as Amazon and Uber and Apple and lots of other businesses have a customer’s card saved, law firms using reputable, vetted payment platforms can now store a customer’s payment information safely and securely. And firms are doing it. Whether the firm bills after the work has been completed and accepts the money into the operating account or the firm has an evergreen retainer model in which the trust account can’t drop below a certain amount, law firms can use stored payment methods. Of course, it’s important for the law firm to establish and get consent for this practice up front. Firms that do will dramatically improve their collections rate and, in so doing, increase revenue.

Most lawyers assume that marketing or sales is the only way to grow firm revenue. Investments or improvements in those areas can drive growth. But many firms have opportunities to grow right at their fingertips. By changing how they get paid––whether by making it easier for clients to pay, shifting processing fees or implementing a collect early/collect often billing model––firms can increase revenue quickly and inexpensively.