Your Guide to ACH Legal Payments

Law firms can only generate profits in one way—by collecting payments. Yet, according to our Legal Industry Trends Report 2024, 15% of law firms report that getting paid is a challenge. This can affect your cash flow and bottom line, ultimately stifling firm growth. 

So, how can you increase your law firm’s collection rate and help clients pay faster? Automated clearing house (ACH) payments provide an easier way for clients to pay online. This article explains everything you need to know about ACH legal payments, including the following.

• What Are ACH Payments?

• How do ACH Payments work?

• Types of ACH Transfers

• Why Your Firm Should Accept ACH Payments

• How ACH Payments Benefit Lawyers

• How ACH Payments Benefit Clients

• What Are the Risks of ACH Payments?

• How Does ACH Compare to Other Payment Methods

• How To Set Up ACH Payments

What Are ACH Payments?

An ACH transfer is an electronic transaction between U.S. banks that is processed through the ACH Network. Banks, financial institutions, government entities, businesses (including law firms), and individual consumers use the ACH Network to send and receive money securely online.

How do ACH Payments Work?

ACH payments work by electronically moving money between bank accounts through the ACH Network. For example, when a client pays a law firm using ACH, the payment request is sent to an ACH operator, like the Federal Reserve or The Clearing House, which processes the transfer in batches throughout the day. These transactions aren’t instant, but they’re reliable, secure, and cost-effective. 

Most standard ACH payments take one to three business days to complete, though faster options like same-day or next-day transfers are also available. For law firms, this behind-the-scenes system makes it easy to collect payments without the hassle of paper checks or in-person visits.

Types of ACH Transfers

There are two types of ACH transactions: direct deposits and direct payments.

1. ACH Direct Deposits

An ACH direct deposit is an electronic transaction where a consumer receives money from a business or government entity. 

ACH Direct Deposit Example: A law firm using ACH to pay attorney salaries or contractor invoices directly into employees’ or vendors’ bank accounts each month is a typical use case.

2. ACH Payments

The reverse of a direct deposit, an ACH direct payment, is a digital transaction where a consumer sends money. Legal ACH payments are so ubiquitous that you may have experienced one without knowing.

ACH Payment Example: If you’ve paid bills online with money from your bank account or used an app like Venmo to pay friends, you’ve issued an ACH payment.

In fact, organizations and individual consumers made 33.6 billion ACH Network payments totaling nearly $86.2 trillion in 2024, according to NACHA, the group that governs the ACH Network.

3. Better Collection Rates

Law firm profitability starts with offering clients several payment options. Clients who can address invoices more conveniently are more likely to pay—which means better cash flow and greater revenue.

Credit cards (83%) and ACH payments (12%) make up the most popular retainer payment methods, outperforming checks, cash, and other methods —as shared in our 2024 Benchmark Report.

4. Affordable Payment Processing

ACH payments can be very affordable. In fact, sometimes banks offer free ACH transfers for certain types of transactions. Typical ACH fees are as follows, according to Merchant Maverick (a reviews site specializing in financial services and software).

• Flat fee per transaction: $0.20 – $1.50

• Percentage fee per transaction: 0.5% – 1.5%

• Monthly fee: $5 – $30

• Batch fee: Less than $1 per batch

5. Easier Reconciliation

Businesses may enjoy an easier accounting process with ACH legal payments. Every payment is recorded electronically; there’s no need to connect invoices with check numbers.

 How ACH Payments Benefit Clients

1. Better Client Experience

Imagine your clients’ day-to-day lives. They probably autopay bills online, use credit cards to purchase goods on e-commerce sites like Amazon, or stream television on-demand with Netflix. In other words, they’re used to convenient and instant transactions. ACH payments fit right in—they provide your clients with a more straightforward, familiar way to pay.

2. Secure Payment Processing

The Federal Reserve Bank and the Electronic Fund Transfer Act highly regulate the ACH network. Additionally, NACHA’s Operating Rules govern all ACH transactions conducted within the ACH Network. This extensive oversight makes ACH secure.

What Are the Risks of ACH Payments?

No payment method is foolproof—networks can be hacked, and paper checks can be stolen or forged. However, pairing ACH payments with secure legal invoicing and payment software can create a very safe payment ecosystem.

For instance, MyCase’s legal invoicing software enables you to send invoices directly to clients through the secure Client Portal. On the back end, you can see when clients take action, such as viewing an invoice or making a payment. MyCase also lets you see your firm’s finances with the click of a mouse, so you’re always up-to-date on accounts receivables.

How Does ACH Compare to Other Payment Methods?

ACH vs. Checks

For many modern law firms, paper checks are going out of style. With the ease of digital transactions, many clients no longer want to drive to your office or send payments slowly through the mail. Compared to physical checks, ACH payments are:

• Faster

• More convenient for law firms and clients

• More secure—account numbers remain confidential when payments route through the ACH Network, unlike paper checks that openly display account numbers.

• More environmentally-friendly

ACH vs. Credit Cards

ACH legal payments can be more affordable than credit card transactions. For example, according to Bankrate, credit card fees typically range from a 1.5% to 3.5% charge per transaction. Compare those figures to average ACH transfer fees of 0.5% to 1.5% per transaction. By accepting more ACH transactions, your law firm may save significant money in the long run.

However, with ACH payments, your law firm won’t immediately know if a client doesn’t have enough funds to fulfill the transaction. Credit cards provide immediate feedback on fund availability.

ACH vs. Wire Transfers

Like credit card transactions, wire transfers can be more expensive than ACH payments. Banks typically charge a wire transfer fee ranging from $15 to $50 per transaction. Additionally, ACH payments are more regulated, so lawyers and clients may rest easier knowing that their money is secure.

On the other hand, wire transfers could be better for law firms that conduct international business, as ACH is only available between U.S. banks. Also, wire transfers may process more quickly than ACH transactions, depending on the ACH payment method (same day, next day, or standard ACH).

How To Set Up ACH Payments Easily With MyCase and LawPay

For law firms around the country, the benefits of ACH legal payments are clear. With MyCase and LawPay (our sister company under AffiniPay), you can receive payments faster and build a more profitable firm—no matter how you get paid.

MyCase legal invoicing software helps you automate invoice creation and send bills via a secure Client Portal. It can even send automated invoice reminders so you can focus on billable time rather than administrative tasks.

When clients are ready to pay, transactions can be securely processed through LawPay, the legal payments software of choice for more than 58,000 lawyers. Most importantly, MyCase and LawPay ensure that your firm accepts payments in compliance with ABA and IOLTA guidelines.

Try MyCase free for 10 days or schedule a demo today to see what intuitive legal invoicing and payments software can do for your firm.