7 Questions to Ask Legal Payment Processing Software Providers
Today’s consumers demand convenience and flexibility. These heightened expectations are driving a global digital transformation across a host of sectors—and the legal industry is no exception.
Legal clients want to be able to pay their fees quickly, easily, and securely. In fact, legal clients are not only looking for alternative payment methods, 70% want the ability to have a payment plan.
The right legal practice management software can make this effortless to offer to your clients. But how do you know which one to go with? Read on to find out.
What is a legal billing software?
Legal billing software, like Clio Payments, streamlines the payment process to make it easy for clients to electronically pay their bills using a credit card, debit card, or eCheck.
Credit and debit card payments
Client credit card payments (borrowing against a line of credit) and debit payments (drawing funds directly from a checking account) are processed by online payment software in the same way.
That said, there are differences between the two. Among them, debit transactions typically have a lower processing fee than credit card transactions.
To make a transaction, the legal payment processing software solution contacts the card issuer to verify whether the card is valid. If there’s enough available credit (or cash in the checking account) to cover the amount, it proceeds and the payee receives a receipt of the payment.
eCheck payments
An eCheck, which is also referred to as an Electronic Funds Transfer (EFT), is similar to a paper check. It’s a promise to pay and requires a checking account and routing numbers.
Unlike paper checks, the eCheck is processed electronically through the Automated Clearing House (ACH) network using legal payment processing software.
According to the 2020 Legal Trends Report, firms that used online payments, client portals, and client intake and CRM software saw 6% year-over-year growth during the most intense periods of the pandemic.
These firms also collected nearly 40% more revenue per lawyer compared to firms not using these technologies.
So, it should come as no surprise, as shown in the 2021 Legal Trends Report, growing firms in 2021 are 37% more likely to use online payments.
Online payment systems also enable passive bill collection. By allowing legal clients to pay remotely at their convenience, it removes the need for someone at the law firm to be physically present to process the payments.
Legal payment processing software also:
Automates back-end processes
Minimizes time-consuming administrative tasks
Increases operational efficiency at the firm
For example, once a client makes a payment, a payment system updates the appropriate billing records at the firm. It indicates exactly how much was paid, when it was paid, and if there are any amounts outstanding.
No longer considered a premium service or competitive advantage, offering online payment options has become a standard feature that clients expect.
Selecting an online legal payment solution
The marketplace for legal payment processing software can feel overwhelming. When evaluating which solution is best for your law firm, it’s important to ask the right questions.
Here are the seven most important questions to ask a legal payment software provider.
It’s imperative to maintain IOLTA trust compliance and keep earned and unearned funds separate in accordance with trust accounting rules.
Accordingly, legal payment software must accept client trust payments and retainers and keep them separate from the law firm’s operating funds. The trust account should also be protected from all third-party debiting, including processing fees and chargebacks.
2. Does your legal payment processing software integrate with a practice management solution?
As a lawyer, your time is precious. Yet, too many law firms use disjointed systems to create bills, process payments, and reconcile their firm’s books—wasting valuable time and resources.
When investigating the best legal billing software, look for solutions that offer multiple online payment options. This will allow you to create a flexible, client-centered experience.
4. Can I set up payment plans and recurring charges for clients?
Obtaining legal services is stressful for many clients. The experience can be filled with barriers—and the financial burden can be particularly troublesome.
To help increase accessibility to legal services for clients, determine whether the legal payment processing software provider you select can provide a client-centered payment experience that prioritizes clients’ needs. For example:
Payment plans break large bills into manageable installments on a schedule that works for a client. In addition to offering much-needed flexibility, this helps you collect more of your outstanding balances. As stated above, 70% of consumers want the option to pay a lawyer via a payment plan. Making it easier for your clients to pay your firm is just another way you can support them on their legal journey.
Similarly, recurring charges help clients manage their budget with predictable, scheduled payments. In turn, your firm can maintain or improve cash flow by making it easier for clients to pay their invoices on time.
5. What fees does your legal payment software charge?
Comparing fees charged by online payment solution providers can be tricky.
That’s largely because there can be multiple fees involved, including monthly fees, per-transaction fees, and extra fees for special cards (e.g., American Express).
When evaluating legal payment processing software providers, choose vendors who offer full transparency—so you don’t get surprised by hidden fees.
As a rule of thumb:
Credit card transaction fees are 1.5–3.5% of the transaction (that said, some cards have higher rates of up to 4.5%).
eCheck/ACH fees are typically lower (up to 1.5%).
Note that some legal payment processing software providers charge additional fees for processing minimum penalties, additional trust accounts, and payment card industry (PCI) compliance. Other potential charges include credit card network fees, monthly memberships, and chargeback fees.
Keep in mind that some legal payment processing solutions, such as Clio Payments, which offers simple, transparent fees, can simplify the payment process for your firm.
6. How can I give my clients confidence that their payments are safe and secure?
Credit card companies mandate PCI compliance to help ensure the security of credit card transactions.
So, be sure to verify that potential legal payment processing software providers can securely process, transmit, and store clients’ card details for recurring payments. All of which should be in compliance with PCI standards.
By protecting client data with a highly secure online payment processing solution, you can assure your clients their payments are as safe as possible. You’ll also be able to effectively manage fraud, disputes, and chargebacks.
A user-friendly, integrated online payment processing solution is the best path to getting your online payment and collections process up and running swiftly and seamlessly. And operational means you can start to:
Process payments quickly
Track invoices and payments in real-time
Generate data-driven financial reports
Realize a quick return on investment
For more tips on getting started with payments for lawyers, visit our payments resource hub.
Clio Payments: Your built-in legal payment processing solution with Clio Manage
You asked the questions and Clio has the answers. With the aim of providing a client-centered experience, we help you make your collections process fast, automated, and convenient for you and your clients.
Clio Payments makes it easy for your clients to pay bills online using a credit card, debit card, or eCheck—without the need for a third-party payment processor. Built within the powerful Clio Manage infrastructure, Clio Payments offers a faster, more transparent collections experience and a real-time view of transactions.
Clio provides a cost-effective legal payment processing solution for credit card, debit card, and eCheck/ACH payments alike. Unlike many online payment processing solutions, Clio Payments offers simple, transparent pricing. There are no hidden fees, surprise bills, or extra costs.
Clio Payments also allows law firms to offer clients payment flexibility with bulk billing, payment plans, and split billing for multiple payers–ensuring you get paid in a way that makes sense for your client.
Clio Payments now available in Canada
Since launching Clio Payments in the US, we’ve seen the tremendous impact of streamlining this crucial touchpoint for our customers—Law firms are getting paid faster, and the client experience is improved as well—so we’re thrilled to now offer this functionality to our Canadian customers as well.
According to the Canadian Bar Association, nearly 12 million Canadians will experience at least one legal problem in a 3-year period, and few will have the resources to solve them.
As a result of inaccessible legal services, 50% of Canadians try to solve their problems on their own with minimal or no legal assistance.
Over 20% of the Canadian population can not access legal services.
For many clients, online payment methods and the flexible payment plans they afford may be the difference between being able to access a lawyer and not.
Clio payments will enable our Canadian customers to dramatically improve the financial performance of their firms while helping them to deliver an effortless client experience. Ultimately, this will help make legal services more accessible to Canadians.
Conclusion
As law firms move away from stagnant manual payment processes in favor of client-centered technologies like legal payment software, they can see a host of benefits, including:
Increased operational efficiency
Reduced labor and resources
Improved cost management
A better bottom line
If you aren’t accepting online payments yet, you could be losing potential clients—not to mention wasting time chasing payments or processing checks. Don’t let the payment process become a friction point between you and your clients. By implementing a legal payment solution, you can better maintain cash flow, get paid faster, and improve client satisfaction.
By asking potential software providers the important questions, you can select a vendor that best fits your needs. And that ultimately helps you meet all of your client-focused and ethical responsibilities.
Curious to learn how Clio can help your law firm maximize efficiency and increase revenue? Book a demo to see Clio Payments in action.
We published this blog post in November 2021. Last updated: .
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