A Strategic Approach: Tips For Growing Your Legal Practice During Economic Uncertainty
Running a law firm can be challenging. The demands of practicing law are often overwhelming, leaving small firm lawyers with little time left to focus on law firm management. However, in today’s highly competitive landscape, the failure to focus on the business side of a law practice can often have long-term effects on a law firm’s financial viability. This is because a critical aspect of running a successful, profitable law practice is ensuring prompt and timely payments from clients.
However, that’s easier said than done in times of economic uncertainty. During financial volatility, potential legal clients often struggle to retain a lawyer, while current clients may not be able to pay legal invoices promptly. Fortunately, there are steps you can take to ensure payment flexibility, thus ensuring that your firm is both retained and paid on time.
By making it as easy as possible for clients to pay their legal bills, you can maintain positive client relationships, ensure a steady cash flow, and drive your firm’s growth and success. Here are three ways to make that happen.
Offer Payment Plans
Clients aren’t always able to come up with a large lump sum for a retainer fee, and problem that is even more common in today’s economic climate. Setting up payment plans for their legal bills will solve this problem for some clients.
Using legal billing software, you can create a payment plan which determines the payment amount and due dates, and the software will then automatically send out invoices when payment is due under the plan. Even better, provide your clients with multiple ways to pay.
Accept Credit Cards As Payment
The more payment flexibility you offer clients, the more likely you will get paid. On the other side of the pandemic, legal clients are used to touchless payment methods, including credit cards and online payments. They are accustomed to paying for services this way and expect to have those options available. When your firm accepts credit cards, it’s simply a matter of sending clients a legal bill and getting paid instantly when they click on the payment link. If your firm doesn’t offer this option, they’ll find another firm that does.
Provide Access To Legal Fee Loans
Of course, in the face of economic headwinds, some clients may not have money on hand for a retainer but may prefer to keep their credit card lines available for other types of purchases. Legal fee loans solve that problem. This type of loan is provided by a third-party service provider to a legal client and covers either retainer fees or flat fees. Legal fee loans are distinguishable from litigation financing transactions and, unlike litigation finance loans, are not dependent on the outcome of the case.
With legal fee loans, your firm will receive from the loan company the full amount invoiced up front, removing the risk of nonpayment sometimes encountered with payment plans. With these loans, there is no need for additional reminders or follow-up by your firm since the lending company manages the loan and collects all future payments.
Legal fee loans are not a new concept. Ethics committees have issued opinions that go back as far as 1993 that greenlight these types of loans, including 1) ABA Formal Opinion 484 (2018), 2) Florida Bar Ethics Opinion 16-2 (2016), 3) State Bar of California Formal Opinion No. 2020-204 (2020), 4) New York State Bar Association Opinion 1108 (2016), and 5) Alabama Ethics Opinion RO-93-19 (1993).
The bottom line: there are many steps your firm can take to provide payment flexibility and convenience to legal clients. The more options offered, the more likely your firm will be retained. The likelihood that invoices will be paid promptly will increase despite economic uncertainty, ensuring client satisfaction and a steady cash flow, both of which are critical for success in today’s economic environment.
Nicole Black is a Rochester, New York attorney and Director of Business and Community Relations at MyCase, web-based law practice management software. She’s been blogging since 2005, has written a weekly column for the Daily Record since 2007, is the author of Cloud Computing for Lawyers, co-authors Social Media for Lawyers: the Next Frontier, and co-authors Criminal Law in New York. She’s easily distracted by the potential of bright and shiny tech gadgets, along with good food and wine. You can follow her on Twitter at @nikiblack and she can be reached at [email protected].