There are so many things lawyers aren’t taught in law school about managing a law firm. Instead, lawyers learn about substantive and procedural legal issues, and little, if any, attention is given to providing future lawyers with information on the ins and outs of running a law firm. This lack of foresight by most law schools leaves solo and small firm lawyers to fend for themselves and muddle through the basics of launching and running a law firm on the fly.
Not surprisingly, one of the biggest business struggles for solo and small firm lawyers is figuring out how to run a profitable law practice. This challenge is made all the more difficult by the fact that law schools don’t provide lawyers with information on the steps they need to take to ensure that they actually get paid for the legal work they perform.
Fortunately, CLEs can bridge this law practice management gap and arm lawyers with the information they need to ensure that they get paid quickly, efficiently, and ethically. Earlier this month in Chicago, this very topic was covered in a presentation by Michael Downey and Aviva Kaiser: “Bringing in the Money: Ethical Guidance for Receiving Payments.” During this seminar, Michael and Aviva explained how lawyers can use 21st century tools and processes to streamline client payments and get paid right away.
Below you’ll find the visual notes from that session along with some of our favorite tips and links to sites that provide further information (click to view larger image):
Get paid ethically
The speakers emphasized the importance of setting up the necessary bank accounts at the very outset. Ensure that you have an IOLTA account that complies with the ethical rules of your jurisdiction. Because trust violations are some of the most common errors that lawyers make, make sure that you fully understand your obligations, so that you avoid the most common ethical issues that lawyers encounter when managing client funds: misappropriating funds, commingling funds, and failing to keep adequate records.
The presenters explained that lawyers have a fiduciary duty to keep their clients’ funds safe. As part of that duty, law firms must have both an operating account (for earned income) and a trust account (for unearned income). For more tips on getting paid ethically, read Chapter 9 of our ebook, “Trust Accounting Basics.” In this chapter, you’ll learn all about the ins and outs setting up and managing your law firm’s bank accounts.
Get paid efficiently
According to the presenters, an important part of getting paid ethically and efficiently is ensuring that your firm maintains adequate bookkeeping records. Because sufficient records are so important, the speakers recommended using law practice management software to ensure that invoices and payments can be tracked and reconciled.
They also emphasized the importance of including payment expectations in the retainer agreement. By putting this information in writing, you clearly outline the obligations of both parties in regard to the legal services that your firm provides and the methods and timing of invoicing and payment. This clarity will help to avoid any misunderstandings and provide a better experience for your clients. For more tips on streamlining the process of getting paid, read Chapter 5 of our eBook, “Let’s Talk Money!” In it, you’ll find all you need to know about establishing an efficient invoicing system for your law firm.
Get Paid Quickly
Finally, the speakers offered their advice on taking advantage of 21st century payment options in order to ensure that your clients are able to pay you quickly and easily. These days, legal consumers expect to have multiple payment methods available to them; the more methods you offer, the more likely you are to get paid. That’s why the presenters recommended that lawyers consider accepting online payments from clients. Doing so makes it simple for your clients to pay your bills and ensures that you get paid quickly.
They emphasized that it’s important to choose a reputable payment processor that is familiar with the specific needs of law firms. This ensures that any fees are taken out of the firm’s operating account, rather than the trust account, thus avoiding any compliance issues. To learn more about accepting online payments from clients, check out this blog post: “5 Things Lawyers Need To Know When Accepting Online Credit Card Payments.”
And if you’re looking for an online payments system designed specifically for law firms, look no further than MyCase Payments. If your law firm uses MyCase’s law practice management software, access to MyCase Payments is free. You can learn more about MyCase Payments here.