Law firms looking to grow their book of business can benefit from offering multiple payment options. Payment methods such as online payments and payment plans can be particularly advantageous as they help reduce large bills.
Plus, payment plans don’t just benefit the client – the American Bar Association (ABA) affirms that flexible payment plans can boost law firm profitability by 10% and increase payment collection rates by 32%.
Can Lawyers Accept Payment Plans?
Lawyers are allowed to offer payment plans for their legal services, but there are implications to consider. While taking online payments is generally not risky, it’s crucial to adhere to ethical and legal regulations. By adopting legal-specific software, lawyers can ensure compliance with state bar regulations, separating client and third-party funds from their own.
How Do Payment Plans Work at Law Firms?
Before setting up payment plans, it’s important to consider clients’ preferences and financial situations. Engage in open conversations with clients to gauge their interest and value in payment plans.
Additionally, assess your firm’s financial stability, as charging lower installments over an extended period may pose challenges. Understanding your law firm’s finances is crucial when designing payment plans.
Three Steps To Set Up Payment Plans at Your Firm
Investing time to educate yourself on the process of setting up payment plans for your firm can prevent future confusion and frustration for you, your staff, and your clients.
1. Determine Your Billing Policy and Terms for Payment Plans
Every client must sign an agreement before they choose to work together, which should include a breakdown of your firm’s legal billing policy. If you choose to accept payment plans, that should be relayed in your billing policy with parameters and should include relevant information like the timeline of payment due dates, acceptable payment methods, and grace periods for late payments.
Being upfront and clear with your clients about how payment plans work can help mitigate confusion and ensure your firm is paid on time.
2. Efficiently Communicate Payment Terms
Efficiently communicating payment terms is crucial from the beginning of your client relationship. Clients should have a clear understanding of your firm’s operations and an outline of the business relationship. Include the ways clients can communicate with your firm, access documents, and of course, pay you.
We all get busy, so it’s important to have standardized processes that keep you and the client accountable.
3. Adopt Legal Billing Software
When adopting legal billing software, it’s important to have an all-in-one solution that keeps your billing and collections in one place. All-in-one means your firm has access to full legal case management software on the same platform where you’ll manage your collections and legal billing without a third party.
Benefits of Payment Plans for Lawyers
Lawyers can reap various benefits from incorporating payment plans into their practice, such as:
- Accessibility: Payment plans make legal services more affordable for clients by reducing the impact of large upfront bills while ensuring a steady cash flow for law firms.
- Client retention: Offering flexible payment plans expands the potential client base and fosters loyalty, resulting in increased revenue.
- Reduced administrative tasks: Payment plans minimize the need for chasing down late payments, saving time and effort.
- Improved financial stability: Over 80% of law firms reported that offering payment plans improved client relationships, and over 70% experienced increased revenue, reducing accounts receivable.
Reduce AR and Get Paid Faster With Payment Plans
Incorporating payment plans into your law firm’s practice can provide various benefits without significant operational disruptions. By implementing effective payment plans, law firms can enhance their financial stability while increasing accessibility to their services for clients.
PracticePanther is the leading cloud-based legal practice management platform trusted by tens of thousands of attorneys across the globe. Native features like customizable workflows, document templates, time tracking and billing, payment processing, and unlimited eSignature help firms of all sizes get more done in less time.
To learn more about PracticePanther’s all-in-one solution, please visit: www.practicepanther.com.