Find the Right Legal Fee Financing Solution for Your Clients
Why Offer Financing Options at All?
For many attorneys, practicing law isn’t just a profession: It’s a calling to help people with complex legal problems. Unfortunately, prospects and clients don’t always have the upfront capital to pay for legal services. In fact, it takes an average of 83 days for lawyers to get paid across the industry.
So when you have a prospect who can’t pay your retainer (or a great client who falls behind on payment), what can you do? One way to ease the tension is by offering a legal fee financing option.
All About Legal Fee Financing
There are many legal financing solutions out there to consider for your practice, from in-house payment plans to retainer financing. With legal fee financing, however, you can expand your arsenal of options by offering a “Buy Now, Pay Later” style payment plan, typically through a third-party financial provider.
Legal fee financing works by giving clients capital through a structured payment agreement, which allows them to pay in monthly installments over 3 to 12 months. With this lending model, clients are empowered to get the full counsel and representation they need. Meanwhile, your firm sees an increase in new work, as well as a rapid reduction in accounts receivable and bad debt write-offs.
Am I Eligible to Provide Legal Fee Financing?
The fee financing model has already been successful in other industries, particularly in the accounting world and other parts of the professional services sector. There’s a reason it works well for law firms, too. Because courts have strict deadlines, clients can’t always afford to wait until they have enough money to pay their lawyer.
While almost any law firm can provide a fee financing option, there are some guidelines that you should keep in mind. Recognizing that many individuals and businesses struggle to pay their legal fees, the American Bar Association (ABA) issued Formal Opinion 484 on financing options. This opinion clarifies how lawyers can ethically refer clients to fee financing companies – so it’s important to make sure that your firm’s toolkit follows these guidelines.
You’ll also need to make sure that any legal financing solution covers all the interest requirements for client trust accounts. The ABA requires complete adherence to state IOLTA programs. This means that your financial provider should meet these standards as well.
Key Benefits of Fee Financing for Lawyers
No matter what kind of law you practice, fee financing makes it easier to collect money for your services. At the same time, it can ease the burden on your clients and give them more time to pay. That’s why many firms consider legal fee financing to be a “win-win scenario.”
LawFundAR Financing (powered by QuickFee) is a legal fee financing plan that can help you reduce the long-term impact of delayed payments. After seeing many successes in the accounting industry (and helping 25% of the Top 100 accounting firms), QuickFee has now introduced the same online fee financing model for the legal industry. LawFundAR also has no upfront costs and is fully compliant with ABA Opinion 484 and state IOLTA guidelines.
Some of the main benefits you can expect when you sign up:
- Faster payments at point of purchase
- Improved cash flow position for your firm
- Fewer past-due accounts, collections, and write-offs
- Stronger relationships with your best clients
- Increased bandwidth for your administrative and billing teams
- Less paperwork
- More work from your existing clients
- Additional funds for business development and growth
Learn how LawFundAR can provide effective financing for your law firm clients! Submit our online form to schedule a FREE demo.