Legal Technology

Cashing in with credit-card processing software

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Niki Black

Nicole Black.

In prior columns I have covered time-tracking software and legal billing software with the promise that I’d eventually focus on payment processing software for law firms. Well that time has come, and in this column I’ll explain the ins and outs of choosing the right payment processing vendor for your law firm.

You’ll learn why law firms should consider using payment processing software, the types of legal-specific tools available, and how to determine which one will be the best fit for your law firm.

First, let’s talk about what payment processing software does and why it benefits law firms. Simply put, this tool allows your law firm to accept automated clearing house (e-check) and credit card payments from clients.

Why should your firm accept these types of payments? Because that’s what 21st-century legal consumers expect. In the “old days,” law firms accepted limited forms of payment, with most preferring cash or checks. Things are different in 2018. In the age of Venmo, PayPal, Amazon, and countless other online services, your clients expect to be able to pay online.

These days, credit cards and online payments are the norm, and legal consumers assume that law firms will offer those payment options. Mailing checks is outdated, and coming into the office to pay during regular business hours can be a hassle for your clients. By giving them the option to pay via ACH or credit card, online or off, your firm will get paid faster, and your clients will have more choices when it comes to paying their legal bills. In other words, it’s a win-win for both your firm and its clients.

When choosing payment processing software for your law firm, it’s important to focus on tools designed with lawyers’ unique needs in mind. Law firms in most jurisdictions will want to choose from legal-specific payment processing software, since this ethically compliant software will ensure that your firm’s trust account is protected from impermissible withdrawals such as credit card fees. Legal-specific tools will ensure that all fees are deducted from your firm’s operating account rather than its trust account. But note that it’s important to gain a full understanding of your jurisdiction’s ethical rules so that you can thoroughly vet each provider to ensure that the services provided are ethically compliant with your jurisdiction’s rules related to accepting credit card payments.

The good news is that you have a number of options to choose from when it comes to payment processing software for lawyers. There are three types available:

    1. Standalone payment processing software that doesn’t integrate with other software.
    2. Standalone payment processing software that integrates with legal billing and law practice management software.
    3. Law practice management software with built-in legal payment processing tools.

The primary differences between the different options are convenience and cost.

Standalone payment processing software is beneficial since it provides your clients with multiple payment options. But when it integrates with or is built into your law firm’s legal practice management software, it’s even more convenient to use since you’ll be able to instantly send your clients a legal bill using the legal billing or practice management software, and your clients can then simply click on a link and instantly pay online via e-check (ACH) or credit card. That payment is then immediately reflected in the legal billing or practice management software.

The other factor to consider when choosing payment processing software is the cost. The fees vary greatly from one vendor to another, and sometimes the credit card fees will vary depending on the type of credit card used by your client (i.e. Visa versus American Express). There are also annual or monthly fees to be aware of; some payment processing vendors will charge a subscription fee to use their software on top of the fees imposed for each transaction. In other cases, if the payment processing software integrates with law practice management platforms, you may have to either pay subscription fees for both the payment processing software and the practice management software or pay a higher subscription cost for the practice management software in order to have access to the payment processing software. So it’s important to carefully research the applicable fees and integration costs when considering payment processing software.

Keeping that in mind, let’s move on to some of the choices available to your firm.

What follows is a description of some of the legal-specific payment processing software products that are often used by lawyers. This is not an all-inclusive list, but includes a number of different types of tools—all of which provide mechanisms to protect your trust account from unethical withdrawals—and one of which is sure to suit your firm’s needs.

If your firm does not use law practice management software and does not plan to do so, you have lots of options and can use any of the standalone payment processing tools I’ll be discussing below, regardless of whether they integrate with legal practice management software or not.

If you already use law practice management software or plan to do so in the near future, you’ll want to choose a payment processing tool that will integrate with your chosen practice management system.

The final option is to use a law practice management system with a built-in payment processing system, which will be the last category discussed.

First, here are two standalone tools to consider, neither of which integrate with legal practice management software: Headnote and Lex/Actum. Headnote’s pricing is 1.9 percent for each ACH payment and 3.5 percent for each credit card payment processed. Lex/Actum’s pricing structure is tiered based on the amount charged each month, with a range of $29 per month (up to $10,000 of transactions per month) to $99 per month ($60,000 or more in transactions per month). The processing fees for each transaction decrease as you move up to the higher tiers. At the lowest tier, the fees are 25 cents per credit card transaction and $2 per ACH transaction. At the highest tier, the credit card transaction fee is 10 cents per transaction while the ACH fee is $1.50 per transaction.

Next, there are the standalone payment processing tools that also offer the option of integrating with specific legal billing and practice management software programs: LawPay and LexCharge. As a standalone product, LawPay charges $20 per month or $180 per year in addition to transaction fees, which are 1.95 percent and 20 cents for standard cards and 2.95 percent and 20 cents for specialty cards such as American Express along with other rewards, corporate, and international cards. Card brand network fees may also apply to some transactions. LawPay integrates with many different legal billing and law practice management software programs; the full list is available here. It’s important to carefully research the fees and costs associated with each integration since you may still have to pay LawPay’s monthly fee, various transaction fees, and/or pay a higher monthly fee for your legal billing or practice management software in order to qualify for the higher tier that includes the LawPay integration.

Like LawPay, LexCharge can also be used as a standalone payment processing system. LexCharge does not provide specific fee information on its website. Instead it is indicated on it its FAQ page that the monthly charges will range from 1.5 percent to 2.5 percent plus transaction fees of 20 cents to 30 cents. LexCharge integrates with Rocket Matter law practice management software.

Your final choice is to choose a law practice management software program with a built-in payment processing system. Two companies that offer this option are MyCase and Abacus. (Note that I am the legal technology evangelist with MyCase). Abacus offers the Abacus Payment Exchange, a payment processing service that integrates with AbacusLaw, Amicus Attorney, Amicus Online and Abacus Private Cloud. There is a 3 percent charge per credit card transaction and no charge for ACH transactions. For MyCase, payment processing is available to all customers, and there are no additional fees applied to use the built-in payment processing tools other than the per transaction costs: 3 percent for all credit card transactions and all ACH transactions are free.

So whether or not your law firm uses legal billing or practice management software, you’ll find that there’s a payment processing tool available that will meet your firm’s needs. But make sure you fully understand the ethical implications of using the software and its fee structure prior to committing. Then, in no time flat, your firm will enjoy the benefits of accepting instant online ACH and credit card payments.


Nicole Black is a Rochester, New York, attorney, author, journalist and the legal technology evangelist at MyCase, legal practice management software for solo and small-firm lawyers. She is the nationally recognized author of Cloud Computing for Lawyers, and she co-authored Social Media for Lawyers: The Next Frontier. She also co-authored Criminal Law in New York, a Thomson West treatise. She writes regular columns for ABAJournal.com, The Daily Record, Above the Law and Legal IT Pros, has authored hundreds of articles and regularly speaks at conferences regarding the intersection of law, mobile and cloud computing, and internet-based technology. Follow her on Twitter @nikiblack, or she can be reached at [email protected].

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