Boost Cash Flow With Electronic Payment Solutions

As the economy shifts online, law firms must adapt to clients’ evolving payment preferences, including accepting electronic payments (or e-payments). The 2024 Legal Industry Report by LawPay and MyCase surveyed over 2,600 legal professionals and found that 78% of law firms now accept online payments, with this number expected to grow.

Why are e-payments beneficial? This article highlights the common types of electronic payments, their advantages, and how your firm can stay compliant with online payment charges.

Types of Electronic Payments Attorneys Are Using to Grow Their Firm

As the popularity of electronic payments has grown, so too has the number of methods for how lawyers get paid.

• You are likely already familiar with two of the most popular types of electronic payment: debit cards and credit cards.
• Another option is virtual cards, which are electronic tokens that are only valid for a single use and a predetermined amount. Virtual cards are typically emailed to a vendor and treated like credit cards.
• It’s also worth being familiar with ‘Automated Clearing House' (ACH) payments. Most ‘direct’ forms of online payment, such as direct deposit or electronic checks, are ACH payments.

Advantages of Electronic Payments for Law Firms

The COVID-19 pandemic isn’t the only reason electronic payments have become so common—they also offer substantial benefits. Below, we’ll outline some of the many advantages that e-payments offer a legal practice like yours.

1. Provide a Positive Client Experience

Clients increasingly prefer e-payment solutions, a trend supported by data. A 2021 Insider Intelligence study found 75% of respondents planned to switch bills to electronic payments, with 87% of millennials favoring this change. Fiserv's survey further confirmed this, showing credit and debit cards top consumers' "must-have" lists for bill pay options. Among younger consumers, 95% prefer debit cards, 83% favor payment apps, and 82% want mobile wallets. These numbers highlight the growing demand for e-payments and their importance in maintaining client satisfaction.

2. Attract Prospective Clients

Electronic payments not only help serve existing clients but also attract new ones. Today, consumers expect businesses, including law firms, to support electronic payments. According to Payments Journal, 60% of consumers use digital payments, 44% have set up automated payments with their checking accounts, and 39% pay via mobile apps or websites. This strong preference for electronic transactions is unlikely to wane.

As society moves towards cashless transactions, electronic payments are becoming the norm for law firm clients. Lacking e-payment options could harm your firm's reputation; clients and prospects might view this as a sign that your firm is not keeping pace with current practices. Embracing electronic payments ensures your firm remains competitive and responsive to client expectations in a rapidly evolving digital landscape.

3. Get Paid More and Faster

Electronic payments benefit law firms by enhancing efficiency and speeding up transactions. According to the LawPay and MyCase 2024 Legal Industry report, firms using LawPay collected 33% more from clients, with bills paid nearly four times faster than cash or check payments. Solutions like LawPay’s Next Day Payments enable receiving payments in as little as one business day. Additionally, e-payments simplify tracking payments, sending reminders, and eliminating lost invoices or checks, ensuring more revenue is collected.

4. Optimize Law Firm Workflows

Because online payment solutions allow for automated invoicing or recurring payments, electronic payments prove incredibly useful when you have client work on retainer or over repeated transactions.

Many electronic payment solutions on the market also offer integrations with other software solutions that lawyers may use for their practice, such as case or practice management, timekeeping, and accounting/bookkeeping software. This prevents law firm managers from jumping between multiple tools or reconciling data from different programs.

5. Increase Data Security

Imagine you didn’t have to worry so much about the security of client financial information. With electronic payment solutions, that dream can be a reality.

Having an online solution means that your firm doesn’t have to store bank account details or credit card numbers on your own servers. As long as you select an established payment processor with high-grade security, your firm shouldn’t have to worry about your clients’ financial information safety.

How Your Firm Can Ensure Electronic Payment Compliance

Many lawyers worry about accepting electronic payments while complying with Interest on Lawyers’ Trust Accounts (IOLTA) guidelines. However, legal-focused e-payment solutions, like LawPay, address these concerns by separating earned and unearned funds and ensuring processing fees are deducted from operating funds, not client funds.

Additionally, firms should consider payment processing fees as part of their overhead. Most attorneys find the small fees worthwhile for faster payments and improved cash flow. Firms can surcharge credit card payments, following local bar association rules if necessary.

Scale Your Firm Today With LawPay Online Payments

As the business world becomes more digital, electronic payments are necessary in order to remain competitive and meet client business expectations.

With LawPay, you’ll have access to the best, user-friendly billing and payment features that can make your business more profitable and productive—while delighting clients.

Payment features include:

• Next-Day Payments: Enjoy faster access to your money—just one business day after the payment is initially received.
• Online Payment Options: Provide debit, credit, and eCheck options for faster payments and payment scheduling for convenience.
• Pay Later: Increase your revenue with legal fee financing loans—ensuring 100% payment upfront while clients pay in installments over time.
• Card Vault: Easily charge and collect payments using your client’s preferred payment method—stored in a secure, industry-compliant system.

When you’re ready to see how LawPay can benefit your firm firsthand, schedule a LawPay demo.