This article originally appeared on the LawPay blog.

What if you could receive your full fee upfront at the beginning of an engagement while still giving your clients the ability to pay in installments?

That’s what using an online payment solution with flexible payment options such as legal fee financing (also known as “Buy Now, Pay Later” or BNPL) allows you to do.

Here are some of the biggest benefits of embracing legal fee financing and BNPL options.

The Rising Popularity of Buy Now, Pay Later

Statistics show that, when given a choice, consumers are increasingly opting for BNPL plans. Between July 2020 and March 2021, the use of online payment plans grew by nearly 50 percent.

Cardify, a market research firm, found younger adults, in particular, are frequently choosing online payment plans even when they have the funds to cover the total cost of a purchase. This is likely influenced by the demographic’s growing aversion to credit cards—in fact, about one in four Millennials don’t have a credit card.

Using a legal-focused payment solution to add financing as one of your available payment methods can make a huge difference for your firm. Here are some of the biggest benefits of embracing legal fee financing and BNPL options.

Faster and More Reliable Payments

One of the most common reasons lawyers hesitate to let clients pay over time is that traditional payment plans can have a higher incidence of late and non-payments.

With BNPL solutions, however, there’s no risk of either. Your firm receives the full requested amount upfront, and clients still have the opportunity to split an invoice into multiple payments.

The other major benefit of legal fee financing is that it increases how quickly you collect your full fees. When it comes to traditional payment plans, giving clients the ability to make multiple smaller payments over time means, by definition, you receive smaller deposits.

Allowing clients to use a BNPL option, on the other hand, means you can secure your total invoiced amount at the start of the engagement.

More Time Back in Your Day

According to a report from Thomson Reuters, 74 percent of small law firms say they spend too much time on admin tasks (such as billing and collections) and not enough on practicing law. And in a survey of small law firms conducted by LexisNexis, almost half of respondents reported that 10–39 percent of their total client accounts are typically past due.

In short, the average lawyer is spending a non-negligible portion of their day exclusively on following up with clients about overdue invoices. And, depending on the amount of the invoice, at a certain point, chasing after an outstanding payment becomes more trouble than it’s worth. 

Along with giving you the power to offer legal fee financing, online payment technology simplifies and streamlines the overall invoicing process and makes it easier for your clients to pay.

Larger Pool of Potential Clients

Most likely, acquiring new clients is always somewhere in your top five priorities, so identifying ways to provide an exceptional client-focused payment experience is crucial.

Rather than being put in the challenging position of having to find a way to pay one large lump sum, BNPL solutions enable your clients to secure legal representation and still allocate funds for other expenses.

For example, legal fee financing is a great option for a solo business owner who is in need of legal services but also has to keep money in reserves for unexpected costs.

BNPL solutions also open up access to legal representation to people who want an alternative to credit cards. These individuals may not currently have a credit card and would prefer not to apply for one. Additionally, legal fee financing is an attractive option for prospective clients who do have a credit card but would rather not charge a large amount.

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The ability to offer legal fee financing can be a game-changer for your firm. And adding it as one of your accepted payment methods is about to get even easier with ClientCredit—the first legal client financing option on the market, available exclusively through LawPay.

To get started with LawPay and learn more about ClientCredit, visit lawpay.com/basf.

Sources:

1The Ascent, March 2021; 2Cardify, July 2020; 3TD Bank, March 2019, 4Thomson Reuters, September 2020; 5Lexis Nexis, August 2014