3 Reasons Your Firm Needs to Offer Installment Payments
In the strange new COVID-19 world, even the most tech-averse law firms have been forced to adopt creative, tech-driven solutions to keep the doors open. But there’s still one key area where law firms are falling behind the curve: Offering modern financing and payment solutions for their clients.
Thankfully, installment payment plans have made it easier than ever for law firms to support their clients, without sacrificing internal cash flow. Also known as “Buy Now, Pay Later” plans, installment payments allow clients to pay their fees over time, typically through a secure financial technology platform.
Here are three of the top reasons your firm should consider offering installment payments.
1. Installment payments are a proven way to increase sales.
Buy Now, Pay Later has dominated the global payments industry over the last 12 to 18 months, with more than 40% of online merchants now offering these options at checkout. That’s because installment payments increase average order values, as customers have the cash flow to purchase other products. Installments are also a good fit for the times: According to a recent NerdWallet survey, 58% of American cardholders report that they have taken steps to improve their credit situation in the wake of COVID-19.
This same model can boost sales in the professional services world. It’s a simple fact that clients may not purchase all the services and advice they need when they’re concerned about cost. If you can offer them the choice to pay over time, however, you’re more likely to convert prospects – and sell more services to your existing clients.
2. You can stop negotiating your fees and focus on client work.
Until now, lawyers haven’t had many options to help good-quality prospects and clients afford their legal fees. Unless a case qualifies for third-party litigation funding (and the plaintiff is willing to accept a partial loss of their settlement,) loans and in-house payment plans are usually the only legitimate financing options.
Aside from eating up time and resources, in-house payment plans require a lot of extra negotiation. All too often, payment plans can transform attorneys into bankers, haggling over fees and chasing down overdue payments. When you offer a third-party installment plan, you take that responsibility off your plate, while still giving your clients more flexibility.
3. It allows you to preserve relationships with past-due clients.
Although attorneys are paid to have uncomfortable conversations, it can still be tough to approach a valuable, trustworthy client with an overdue bill. When you consider that it takes 82 days on average for lawyers to get paid, it’s clear that collections pose a real problem for attorneys.
Installment payment plans can help here, too. If your client misses the due date, you can present them with a repayment plan in smaller installments and skip the collections process altogether.
With the global success of Buy Now, Pay Later, more consumers will be looking to try out the installments model when they purchase “big ticket” items, including legal assistance. After years of offering IOLTA-compliant fee financing plans for law firms, LawFundAR has also just introduced the first-ever non-recourse “Advice Now, Pay Later” plan for legal clients, called LawFundAR Installments. This innovative product splits legal fees into four interest-free installments, using the client’s existing credit card. Whether you prefer a full financing solution or a true installments plan, LawFundAR has your firm covered.
About the Author: Claire Pennock is the Content Marketing Manager at QuickFee, a global financial technology company. She also leads the brand and content strategy for its subsidiary LawFundAR.
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