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Every service-based business wants to get paid faster, and law firms are no different. Imagine getting paid 20 percent faster. What kind of a difference would that make to your law firm’s cash flow, profitability, and ability to invest in growth?
One of the best ways to ensure an efficient billing and payment cycle is to make it easy for clients to pay — and that requires having a modern legal billing solution with embedded payments processing in place.
This allows your clients to pay directly from within their digital invoice and gives them options for payment types, such as credit and debit card payments, automated clearing house (ACH) and eChecks.
The ability to get paid on time requires efficient processes and software to support them — timekeeping for billable hours, effective billing templates, accurate billing cycles, and the list goes on.
But even with processes and systems in place, be aware of common bottlenecks that can slow down legal billing processes and negatively affect your clients’ on-time payment rates — and your firm’s profitability.
Your law practice’s monthly billing process likely begins with compiling billed time and related expenses for each client into a pre-bill. If your attorneys have tracked their time diligently, this part of the process should be smooth.
Reviewing, revising and finalizing the prebills is where slowdowns occur. A lead attorney must review the prebill, add notes, and adjust costs as needed before the bill can be finalized and sent to the client.
If you have electronic pre-bill functionality in your legal billing solution, you can speed up this process by automatically moving pre-bills through the approval chain.
Jennifer Landrum, office manager at Griffith, Jay & Michel, LLP, estimates it used to take her about two weeks to complete her firm’s billing cycle. Using the pre-bill feature within Centerbase, she now saves a minimum of three days each month on billing alone.
Hopefully, your law firm’s billing software automates many of the routine billing and payment functions, such as calculating billing interest and tax, applying existing client funds to bills, and sending overdue bill reminders. If you conduct these manually, however, you’re missing out on significant efficiencies.
Electronic legal billing and payments software can make your billing process more efficient by generating draft bills, taking your firm’s fee structure into account, and customizing the billing and payment process to your firm’s needs.
Jane Corser, firm administrator at Latham, Luna, Eden & Beaudine, LLP, says that when her firm switched to the Centerbase platform, her billing cycle improved from 10 days to just three days.
To get paid faster, use immediacy to your law firm’s advantage. The sooner a client receives an invoice after services are rendered, the sooner they’ll pay their bill because the services are fresh in their mind.
Even if you send invoices soon after providing services, however, the likelihood of clients paying their bill on time drops significantly if you don’t make it easy for them to do so.
It’s important to offer flexible payment options that fit your clients’ needs. Offering billing arrangements, printed or digital bills, online payments and multi-payor functionality for clients to choose from increases their on-time payments.
When it comes to law firms’ billing and payments processes, efficiency and flexibility are key. The best way to achieve both is to have a legal billing solution with an embedded payments feature. Embedded payments can:
When researching legal billing and payments solutions for your law firm, consider these features to help you select the right solution:
Embedding payments into your billing solution makes it easy for clients to do business with you and allows you to manage the business of your firm with automation and simplicity. Learn how you can accomplish all this with Centerbase Payments, embedded in the Centerbase platform.
Compliance is a priority for law firms. And legal software can be a key tool in helping you meet your firm’s compliance requirements.
In this article, we’ll cover major compliance issues that law firms need to monitor and solutions that can reduce your risks.
A primary compliance concern for law firms is staying on top of compliance related to both data and processes: for example, storing firm and client data safely in the cloud, managing online client portals, processing online payments, handling trust accounting issues, and following ethical requirements relating to online advertising and marketing.
In this section, we’ll go over a few major buckets of compliance risks in the digital world that your firm should recognize and address.
When it comes to storing data, security is the top compliance priority. Law firms must make “reasonable efforts” under ABA Model Rule of Professional Conduct 1.6 to prevent the disclosure of client-related information. That means law firms must understand what client data they store, where they are storing it, and what the potential entry points for data loss and disclosure are. Additional compliance requirements vary depending on the size and type of law that your firm practices, but it’s best practice to review applicable requirements and make sure that your firm’s cloud infrastructure has the robust protections necessary to safeguard your clients’ data.
Choosing a reputable provider of cloud-based legal platforms is the first step in ensuring compliance. The provider should have a proven track record and, ideally, have suffered zero data breaches in the past. Make sure that it offers robust security features like encryption and access control, such as password policies, two-factor authentication, and role-based permissions.
Much like the cloud, client portals require firms to pay special attention to how they secure client information. Your law firm should implement strong access controls, such as two-factor authentication and secure file transfer protocols, to prevent unauthorized access to client data. Law firms that use client portals also must comply with the ABA Model Rules of Professional Conduct, which include requirements for maintaining client confidentiality (Rule 1.6), establishing competence (including with technology) (Rule 1.1), and keeping clients informed of matters (Rule 1.4).
Processing client payments online
There are a host of considerations when deciding how to accept online payments from your clients. Clients overwhelmingly prefer to have the ability to pay online and to pay with credit cards. Turning to legal software to do the behind-the-scenes work of processing online payments for your law firm is your best bet.
The right legal technology platform can ensure that all online payments accepted follow the ABA Model Rules, Interest on Lawyers’ Trust Accounts (IOLTA) guidelines, and Payment Card Industry Data Security Standards (PCI DSS). The right legal payment and accounting software will ensure that your legal team does not commingle client trust account funds with the funds they use for operations.
Following rules for online law firm advertising
Law firm websites must meet certain ethical requirements set forth by their state bars. For example, websites shouldn’t advertise a lawyer as an “expert” or as “specialized” in a particular practice area unless they hold a specific qualification permitted by their state. They should also not hold themselves out to be the “best” lawyer to handle a type of matter. Attorneys may also need to include a disclaimer noting that the information on their website should not be considered legal advice. Lawyers should check their state bar’s requirements to ensure compliance. In some states, the bar may require or permit the submission of the law firm’s website content for ethical review.
Additionally, prospective clients want to see that your law firm is capable of handling matters like theirs. One of the best ways to highlight your expertise is through the words of satisfied clients. But there are limits to what you can share online — and you also need to prepare for how to handle a negative review. ABA Model Rule 7.1 requires that all communications about a lawyer and their services must be true and not misleading. Marketing statements, such as testimonials, could be misleading if they set an expectation that a lawyer can obtain the same results as another client without reference to the specific factual and legal circumstances of each client’s case.
Finally, law firms should make sure that their websites meet the requirements of the Americans with Disabilities Act. That means your site’s design and visual and audio content need to be accessible to everyone, including people with disabilities.
A digital marketing company that focuses on helping law firms can help identify and avoid online marketing pitfalls and help you comply with your state bar’s requirements.
True compliance starts with your people. Your law firm should have a data protection plan (especially when it comes to client data) that outlines steps and safety procedures. It should include policies on who can access client data, how and when they can access it, and how data is retained and backed up. Also, make sure that your attorneys and staff are trained on how to handle sensitive data and best practices for compliance.
Legal software plays a critical role in helping law firms remain compliant with laws and regulations. As touched on throughout this article, the laws related to compliance are plentiful, and navigating those waters yourself is unnecessarily risky.
With advanced legal software, your firm can ensure data security through the cloud, keep client information confidential, and process online payments both quickly and while fulfilling your legal and ethical requirements. By leveraging legal software, your firm will streamline compliance processes, reduce the risk of data breaches and other violations, and ultimately protect your law firm’s reputation.
