Paying for legal services can be a time-consuming and out-dated experience.

Today’s clients expect more. Other industries have evolved to meet client expectations, and it’s time the legal sector matched that evolution. Law firms which seize the opportunity to implement tech solutions that offer customers best-in-class service have a competitive advantage that will enable them to grow, compete and win.

Introduction

Most law firms are out of touch with what the average consumer does, how they act and what they want. For many years now, clients have become accustomed to using online payment methods in every aspect of daily life – a fact which was only accelerated by the COVID-19 pandemic. If your firm isn’t meeting client expectations, you impact your ability to win and retain clients.

Law firm clients aren’t the only ones missing out, though. Finance and accounts teams spend several hours a day ringing clients and taking phone calls just to get invoices paid. When your team spends a huge amount of time chasing payments and managing associated admin, instead of completing billable work, how much further can you really expect to grow?

Here at Legl, we believe the maths is clear: if you give consumers a convenient and simple way to put money on account, they will convert into clients quicker. They will also pay their bills quicker. And you will have better cash flow as a result.

It doesn’t take weeks to implement a digital payments solution, and it doesn’t cost a fortune to maintain. It takes less than 24 hours to get up and running, and you’ll be future-proofing your business for a long time to come.

The current state of online payments

Payment methods and their popularity have always changed over time. But with the advent of COVID-19, new concerns over safety, convenience and necessity have seen the world migrate towards online payments faster than ever before.

If people can pay for everything from their food shop to their gym membership online, then law firms have no excuse not to offer the same level of convenience. The numbers don’t lie.

Connecting the dots: the benefits of online payments to both you and your clients

Convenience. Security. Flexibility.

Those three words are the cornerstones of online payments. They represent every reason why you should be integrating more digitally-friendly payment methods into your practice, enabling your clients to transfer their money in a way which is both safer and more intuitive to use.

What’s more, those benefits aren’t just for your clients. They go both ways. In other words, what’s convenient, secure and flexible for your clients is also convenient, secure and flexible for you.

Convenience

For the client
‍Enable clients to pay their bills at a time that suits them, on a personal device of their choice and in as few steps as possible – no matter where they’re based.

For the Law Firm
‍Collect payments faster and maintain a healthier cash flow. Streamline Accounts Receivable operations with simple reconciliation for finance teams by collecting all the correct information about the payment.

The Proof
Online payments require two steps and an average of 90 seconds to complete. BACs transfers require eight steps, nine minutes to complete and often a card reader to set up the initial bank transfer.

Security

For the Client
Provide strong customer authentication (SCA) and allow clients to make payments with confidence by using their credit or debit cards.

For the Law Firm
Improve the safety of your client’s data, protect against cyber attacks and avoid the financial and reputational consequences of a security breach.

The Proof
2/3 of consumers rate safe and secure payments as the most important factor in online checkout processes.

Flexibility

For the Client
Support simple payment options and make your services more accessible by enabling clients to pay their bills in a way that suits them.

For the Law Firm
Maintain high levels of client satisfaction and reduce the confusion around payments to ensure you get paid on time, every time.

The Proof
71% of consumers believe having multiple ways to pay a bill increases their overall satisfaction with a service.

‍What are the other benefits to your firm?

1. Removing the need to manually chase payments and saving a huge amount of time for finance/accounts teams as a result
2. Surfacing real-time data for a better overview of payments coming into the business
3. Enabling direct payments straight into client/office account as required
4. Ensuring better tracking and reconciliation using payment references
5. Enabling finance and credit control teams to focus on higher value activities instead of wasting time following up manually with clients to provide them with receipts or other details
6. Removing the risk associated with taking payments over the phone, and making processes more compliant

A beginner’s guide to digital wallets

Digital wallets have been around since 2011, but a surprising number of people and businesses (law firms included) still don’t know exactly what they are.

In simple terms, digital wallets allow users to store all of their important cards and payment information virtually within their smartphone, watch or tablet.

Still struggling to picture it?

Imagine taking a picture of your wallet on your phone, having it stored securely under password fingerprint or biometric protection, and then using that picture to pay for daily purchases as if it was a real wallet.

As well as taking up less space in your pocket, digital wallets are also protected by a fingerprint scanner or facial recognition and the user’s information is highly encrypted, making them more secure than physical debit or credit cards.

Why should your law firm care about them?

The data shows that digital wallets are becoming more and more common, at an ever-increasing rate. They are extremely convenient to use, and supporting them will dramatically improve your chances of being paid on time. After all, studies have shown that people are more likely to forget their wallets than their phones.

Plus, with the rise of scams and fraud in today’s fast-paced world, most consumers aren’t comfortable with reading out their card details and security number during a phone call. Digital wallets let them avoid that.

Although digital wallets are admittedly more popular amongst younger generations, it’s important to remember that these younger individuals are the clients of the future. If you aren’t prepared to meet their payment expectations now, will you be ready when they eventually need you?

1. The number of unique digital wallet users could exceed 4.4 billion globally by 2025, up from 2.6 billion in 2020.
2. The total amount spent through digital wallets is expected to rise from USD $5.5 trillion to $10 trillion in the same time period.
3. 32% of mobile wallet users have three or more active cards contained on their phone (e.g. Apple Pay or Google Pay).

55% of law firms don’t have enough cash to cover one month’s operating expenses

60 is the average number of days it takes for an invoice to be paid across UK law firms

80% of law firm clients expect to be able to pay their invoice(s) online

If a £25m turnover firm gets paid on average 2 weeks faster, that would result in an additional £1 million on the balance sheet.

Staying secure in the world of online payments

With great payment power comes great responsibility. Online payments are subject to a host of cybersecurity considerations and legislations, and these are especially stringent in the legal industry. Whether it’s a case of someone accessing sensitive data or hijacking your emails to send clients fraudulent bank details, cybersecurity breaches can be of huge financial and reputational damage to your law firm.

If you want to avoid that, here are five of our top tips for improving the security of online payments in your law firm.

1. Comply with PCI While online payments are infinitely more secure than taking payments over the phone, you still need to ensure that your payment software of choice is PCI compliant. This means any transfers you receive are encrypted in transit, and that this is a regulatory requirement.
2. Host it securely When integrating an online payment system, take care to host it in a secure environment with all the correct safeguards in place. Not sure if you’re safe? Look for a Secure Socket Layer (SSL) certificate to confirm whether your data exchange is encrypted.
3. Double down on authentication You can’t protect against data loss and fraudulent transactions without Strong Customer Authentication (SCA). Make sure that SCA is enabled for all digital payments – it’s convenient for your customer as well as safe.
4. Be responsible with your customers’ dataYou don’t need to see your client’s full card information, and you shouldn’t be writing that down or processing that information manually. With a good payment processor, your client’s card data will be encrypted so that your finance team only sees the last four digits of the card number and the type of card they paid on. Trust goes both ways, after all.
5. Train your staff Employees can be your biggest asset in combating cyber threats, but they can also be your biggest weakness. Only 64% of UK organisations provide formal cybersecurity training to their employees, but studies show that effective training can reduce the risk to an organisation by 70%.

What is the biggest risk?

The biggest risk to your law firm (in our opinion) is that your communications are intercepted and client money is directed into another account. You can eliminate this risk by providing your clients with secure payment request links that enable them to pay securely online by card while going through the SCA process.

Alternatively, you can enable them to pay with Pay by Bank, where you don’t need to share bank details in writing and where the client has protection via facial recognition or fingerprint to confirm the payment.

Did you know? The average consolidated total cost of a data breach in the UK is £2.37 million, and 15% of law firms globally show signs of a compromised network!

Managing your cash flow

Although cash flow is consistently raised as a key priority for law firms, a worrying number of them still struggle to maintain a healthy level of cash in their business.

You don’t need to look hard to find out why. Inconvenient payment methods and inefficient billing processes result in an unnecessarily long lock-up period (the time it takes to convert “work-in-progress”) and long average invoice payment times (often 6 weeks or more). In other words, law firms take too long to bill for their work, don’t receive invoice payments quickly, and have less control over their incoming funds as a result.

The longer it takes to get paid, the more dramatic the negative impact on your firm’s cash flow could be. The longer the delays in receiving payment and having cash in the bank, the longer it takes you to reinvest that cash on new hires, new tech, marketing material/business development or other areas of business growth. Improving your cash flow is therefore essential to growth.

So how do you improve your cash flow?