It used to be that after a case was resolved, a lawyer would send an invoice to the client and the client mailed a check. Today, more and more clients expect to pay for their legal services the same way they pay for everything else – plastic. Is it time for your firm to start processing payment by credit card?

There are two ways you can accept credit cards: by setting up a traditional merchant account, or by using an aggregator service such as Square.

Merchant accounts are how credit cards have always been processed. You set up an account directly with the credit card processor. Generally there is a monthly fee associated with the account, but your processing fees are lower. The processor will provide you with the equipment needed to take payments, and can help integrate things across your office, website, and mobile devices.

An aggregator acts as the medium between the merchant (you) and the credit card companies. Instead of having individual merchant accounts with the credit card, the aggregator handles many accounts at a time. The use of a service like Square generally does not require a contract or other long-term commitments – in fact, you can sign up for Square and be processing payments within minutes. The fees tend to be higher with an aggregator, but you aren’t paying a monthly account fee.

Points of Comparison:

Transaction Limits – think about how often you will take a credit card payment and how large those payments are. Different services have differing limits on transactions. Aggregators are designed for small businesses who process small payments. If you are processing large amounts on a regular basis, a merchant account might better suit your needs.

Ability to separate payments – Generally, state law and ABA Rules dictate how a law firm can process earned and unearned costs. You will need to make sure that whichever service you choose, it can handle how you need to allocate monies in order to stay in compliance.

Security – Security can mean several things – you need to make sure you are protecting your client’s personal information, and you also need to make sure you are protecting yourself and your firm from disputes. Choose a service that provides encryption, especially if you are taking mobile payments. Also make sure you have payment authorization – at the least, clients need to sign for any payment, even if it’s a small amount. Having a payment authorization protects you if the client decides to dispute the charges.

Professionalism – It can be very convenient to pull out your phone at the courthouse and process an invoice then and there. But it may not always be appropriate. Think about how you want to present yourself to your clients, and how your payment processing fits into that image. 

 

 

 

Kimberly Hanlon
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Kimberly Hanlon

Attorney at Law at Kimberly M. Hanlon, LLC
Kimberly Hanlon is an estate planning and small business law attorney in the Twin Cities. She is also a co-owner of MoreLaw Minneapolis, the executive suite exclusively for attorneys in downtown Minneapolis.
Kimberly Hanlon
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