Option Play: Financing Legal Services is a Win for Lawyers and Their Clients

Ask pretty much any attorney why they decided to become a lawyer, and the answer is universal.

‘I want to help people.’

While that’s not necessarily useful for business planning purposes, it’s a wonderful sentiment; and, it also cuts against the public perception of attorneys, who are often depicted in popular culture as greedy and shallow. In reality, most lawyers do just want to help.

LegalMate delivers financing options built for law firms and their clients, so cost isn’t a barrier for consumers who want to engage legal services.

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The fact of the matter is that legal services are arcane and expensive in the view of the general population. Even savvy consumers struggle to understand the legal process, and how much legal services cost; they just know that they are in need of legal services, when they feel extremely vulnerable, and they’re stressed to the max. Legal consumers are only trying to figure out two things: what’s going to happen next, and how they’re going to pay for this. 

Fortunately, attorneys (especially those who establish niche practices) tend to be experts at talking to potential clients about the legal process, thereby setting them at ease. Payments, however, continue to be a thorny issue. And, while one attorney response might be: ‘Well, that’s unfortunate, but there’s nothing I can do about it,’ the savvy lawyer, who runs a consumer-centric law firm, will seek to assist clients in any way possible, including by helping them to seek out viable payment options.

Fortunately, there are better alternatives to the traditional law firm payment model.

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Most legal consumers can’t pay for legal services in full -- according to the Clio Legal Trends Report, 44% of law firms believe that their clients don’t pay their bills because they don’t have the funds to pay an invoice off in its entirety. And, when those clients can’t pay an upfront retainer, or continuing invoices, they’re forced to either abandon the prospect of hiring a lawyer altogether, or they turn to a credit card for payment, locking into exorbitant interest rates, burying them in debt, often for several years or more. 

So, consumers are asked to make a Hobson’s Choice: getting no legal help at all, or taking a bad deal on the payment. As a law firm, you might as well be asking your clients to buy a home without being able to access a mortgage, because that is how daunting accessing legal service in the current environment is for many Americans. 

This is probably the most damning issue in modern law practice. There is supply (lawyers who want to help), there is demand (legal consumers who want to hire lawyers); but, law firm pricing is out of line with consumer expectations and their ability to pay. Clients can’t pay lawyers up front, and are less likely to pay invoices in arrears, after a retainer has been paid – so, law firms stack up uncollectable accounts receivable, like Legos.

But, it’s not actually about pricing; it’s about paying. And, there is another way that attorneys can help their clients afford legal services.

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Legal services financing companies can set up flexible payment plans for law firm clients, at repayment rates under 5% interest – highly competitive compared to credit cards and alternative options. Legal services financing allows law firm clients to set up their preferred repayment model, and one that works for their budget. So, harried legal consumers can focus on managing their important legal matters – not trying to figure out how to pay for them.

For law firms that want to help as many clients as they can, introducing their potential clients to a company that focuses on financing legal services largely eliminates the cost barrier that separates legal consumers from the attorneys they want to work with.

Not only is this option a boon for legal clients, it’s also a win for their law firm. By assisting more clients, the law firm can do its part to close the access to justice gap, by providing competent legal services to those who need them most. Of course, the best way to reduce accounts receivable is to eliminate them; and, if a law firm utilizes legal services financing, that law firm is no longer a creditor: the law firm gets paid in full, and it’s up to the funding service to collect recurring payments from the client. The legal services funding option can also reduce discounting by law firms. When there is pushback from legal consumers on pricing, including for a retainer, most law firms will just discount the retainer to close the deal. Offering an attractive payment plan instead, eliminates the need to reduce fees.

If legal consumers want to work with you, but are having trouble paying your fees, a legal services financing company allows you to bring the mountain to Muhammad.

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LegalMate is a startup offering financing services exclusively to law firms and their clients.

LegalMate has a Clio integration, so you can connect your potential clients directly with financing solution options from your favorite case management system.

Contact LegalMate today, to learn more.