Family Law Attorneys: Credit Card Payment Options

Family law attorneys can take credit cards as a form of payment, but there are some ethical considerations and processing fees to be aware of. In the past, accepting credit cards was seen as shameful conduct for lawyers, but now it is generally accepted and even expected by clients. Some law firms use payment processors like LawPay, LawCharge, or peer-to-peer services such as Venmo and PayPal. Processing fees typically range from 2-3% of the transaction amount, which can add up, so it is essential to evaluate the alternatives. Attorneys who don't accept credit cards may be missing out on opportunities to improve cash flow and meet client expectations.

Family law clients' preferences for payment methods

Family law clients, like most consumers, tend to prefer paying with credit cards. In a 2024 study from Forbes Advisor, 76% of consumers preferred to pay businesses with a credit card. This preference for card transactions is further emphasised by a Forbes study, which showed that over 70% of consumers prefer businesses that accept card transactions.

The preference for credit card payments is largely due to the convenience, efficiency, and familiarity that they offer. Online credit card payments, in particular, make paying bills fast and convenient for clients, especially when they can be made instantly from anywhere. This is supported by the 2021 Legal Trends Report, which showed that 66% of consumers prefer online payment methods.

However, it is important to note that there are ethical considerations when it comes to accepting credit card payments in the legal industry. Historically, law firms have been slow to accept credit card payments due to ethical concerns, with the American Bar Association's Committee on Ethics and Professional Responsibility initially deeming it "wrong" to put professional legal services in the same category as "sales of merchandise and sales of nonprofessional services". While the opinion was reversed in 1974, and the Bates v. State Bar of Arizona case further changed advertising constraints, some states may still have outdated ethics opinions on the matter.

In addition to credit card payments, family law clients may also prefer other online payment methods such as debit cards, peer-to-peer services like Venmo, PayPal, Google Pay, and Apple Pay, and payment plans. Payment plans can be tailored to meet the client's individual needs and provide flexibility, especially for those who cannot afford upfront payments. According to the 2024 Legal Industry Trends Report, 48% of law firms collected more money while using payment plans.

Ultimately, the best payment arrangement for family law clients will depend on their unique needs and preferences. By offering multiple payment methods, law firms can improve the client experience, boost profitability, and enhance client satisfaction and retention.

Ethical considerations for credit card payments

Credit card payments have become a universal convenience, and most businesses, including law firms, accept them. While credit card payments are now allowed in the legal industry, there are ethical considerations that attorneys and law firms should be aware of.

Firstly, there is the issue of protecting confidential client information. Credit card companies require access to client funds, which could potentially compromise sensitive data. This is especially important in cases where there is a dispute between the attorney and client, and a "chargeback" is initiated, depleting other clients' funds.

Secondly, the type of fee or expense paid for with a credit card must comply with the relevant Rules of Professional Conduct. For example, in California, advanced costs or expenses must be deposited into a separate client trust account, and credit card payments may not be suitable for this purpose.

Another ethical consideration is the processing fees associated with credit card transactions. Most credit card processors charge a percentage-based transaction fee, which can range from 2-3% of the total amount. This fee can be covered by the attorney or passed on to the client as a surcharge. While some states expressly permit passable surcharges, it is generally not recommended, and lawyers should notify clients about these charges beforehand.

Additionally, in states with outdated ethics opinions, lawyers may need to inform clients about the potential for interest to be charged on their credit card payments. This transparency is essential to ensure clients are aware of any potential additional costs.

Finally, the use of credit cards by businesses has been criticized as unethical due to tricks and traps employed by credit card companies to increase profits. These practices can harm individuals and society, and lawyers should be cautious of the potential impact on their clients.

Overall, while credit card payments offer convenience and improved cash flow for law firms, attorneys must carefully navigate these ethical considerations to ensure they uphold their professional obligations and protect their clients' interests.

Online payment platforms for law firms

Online payment platforms are revolutionizing the way law firms manage transactions, offering enhanced security, efficiency, and client satisfaction. Law firms can benefit from the convenience of online payments, which make it easier for clients to pay their bills and improve cash flow and profitability.

When choosing an online payment platform, law firms should consider the following:

• Security: The platform should be secure and compliant with legal and ethical requirements, such as ABA and IOLTA guidelines, to ensure that transactions are protected and trust accounts are handled correctly.
• Integration: The platform should integrate seamlessly with existing legal practice management software, accounting, and billing systems to streamline workflows and enhance efficiency.
• Payment methods: The platform should support various payment methods, including credit cards, debit cards, and electronic funds transfers, to provide flexibility and convenience to clients.
• Processing fees: Law firms should be aware of processing fees charged by the platform, which are typically a percentage of each transaction. These fees can impact the profitability of the firm and may need to be passed on to the client.
• Additional features: Some platforms offer automated payment reminders, reporting, and integration with other cloud-based platforms, which can further improve efficiency and client experience.
• LawPay: A trusted and widely-used online payment solution specifically designed for law firms, ensuring secure, compliant, and efficient transactions. It is endorsed by over 50 bar associations and integrates with legal practice management software.
• Square: A versatile and user-friendly online payment system for small to mid-sized law firms, offering streamlined payment processing, invoicing, and financial management.
• Stripe: A popular and flexible online payment processing platform that can manage payments from a law firm's website or mobile app. It integrates with various cloud-based platforms and offers an open API for developers.
• HeadNote: A platform tailored to meet the unique financial needs of legal professionals, ensuring compliance with trust accounting rules. It integrates with major legal practice management software and offers automated payment reminders.
• PayPal: A well-known and widely-used online payment processing service, offering an easy and consumer-friendly way to send and receive money. Many law firms accept PayPal, and it is simple to set up and link to bank accounts.
• ClientPay: A platform that provides features specifically tailored to legal practices, including peer-to-peer services such as Venmo, Google Pay, and Apple Pay.

The history of credit card payments in the legal industry

However, in 1974, the opinion shifted with the reversal of the previous stance (ABA Formal Opinion 338). Despite this official change, lawyers and law firms were hesitant to embrace credit card payments. A 2018 survey by Clio revealed that checks remained the most common payment method for law firms, even decades after credit card approval. This resistance to change was notable, especially considering the widespread adoption of credit and debit cards in other industries.

The ethical considerations surrounding credit card processing fees also played a role in the slow integration of credit card payments in the legal industry. Most credit card processors charge a percentage-based transaction fee, typically between 2-3% of the total amount. This created a dilemma, as passing this fee to the client could raise ethical concerns, yet absorbing it would reduce the firm's profit. While some jurisdictions deemed it ethical for lawyers to pass on processing fees to clients, it was generally not recommended.

Over time, the preference for credit card payments among clients and the benefits of convenience and faster payment collection influenced law firms' decisions to accept credit cards. According to a 2024 Forbes Advisor study, 76% of consumers preferred using credit cards to pay businesses. Additionally, law firms that offered multiple payment methods, including credit cards, experienced improved profitability and faster payment collection.

Today, while most states allow lawyers to accept credit cards, the adoption varies across firms. Some firms have embraced credit card payments, while others remain hesitant due to ethical considerations or a preference for traditional payment methods like checks. The history of credit card payments in the legal industry reflects a gradual shift influenced by changing opinions, ethical considerations, and the evolving preferences of clients.

Pros and cons of accepting credit card payments

Family law attorneys can take credit card payments, and there are several pros and cons to doing so.

Pros

Credit card payments can improve a law firm's client experience, cash flow, and profitability. According to a 2024 study by Forbes Advisor, 76% of consumers prefer to pay businesses with a credit card. Offering credit card payments as an option can provide a competitive edge and open up a new market of clients. Law practices that offer a variety of payment methods save as much as three hours a day, see a spike in profitability of up to 10%, and get paid faster.

Cons

One of the main concerns regarding credit card payments for law firms is the processing fees. Most credit card processors charge a percentage amount per transaction, typically between 2-5% of the transaction. This could create ethical issues if the client was relying on the full total being available for bills or expenses. Not all states allow lawyers to charge or pass along these processing fees to the client.

Another potential issue is the historical stigma associated with credit card payments for legal services. In the past, accepting credit cards was treated as shameful conduct, and lawyers were restricted in advertising that they accepted credit cards. While these constraints have been relaxed in many states, lawyers in certain states may still need to inform their clients about the chance of interest being charged on their payments.

Frequently asked questions