Buy now pay later/client financing for law firms

The State-by-State Guide to Client Financing

Financing legal fees is not new. Bar associations have been grappling with the rules around   lawyers accepting a simple financing tool - credit cards - since the 1970's. Given that cards haven't been around for that long - and that some states are still grappling with how lawyers can use them* - what happens most often when clients need to finance their legal bill is that lawyers or law firms themselves become the bank. They offer installment payments or financed offerings to their clients in order to enable the clients to pay the firms' legal bills.


Making it easy for customers to pay should be a hallmark of any serious law firm. But it shouldn't come at the cost of the law firm's financial health. 

Enter client financing, otherwise known by its more popular name "Buy Now, Pay Later." Buy now, pay later is a type of short-term financing that allows a client to engage a lawyer or firm for legal services and pay for those services at a future date. Typically, the law firm refers a would-be client to a third-party financing company that pays the law firm the client's fee and arranges for the client to pay the financing company back over time, usually with installment payments. The financing company charges the law firm, the client, or both, a fee to provide the financing.


Buy now, pay later has become a popular and widely-available means to purchase everything from car repairs to tickets to sporting events to pretty much anything at Walmart or on Amazon.


So, it's not surprising to see this type of mechanism emerge in legal. Over the last few months a number of buy now, pay later options have emerged for legal (including one from ours truly).


But just as we've seen with so many other ways that lawyers can get paid, whether it's storing a client's payment method or shifting the cost of processing to clients, the question of whether a firm "should" do something is always more complicated than whether they "can." 


As a result, we're working on a 50-state survey of the laws and legal regulations governing client financing or "buy now, pay later" for lawyers. State laws, federal regulations, and ethics rules/bar opinions all play a role. 


Our guide isn't quite ready yet but sign up below and we'll send you copy as soon as it is.



Let us help reduce the cost and improve the client experience associated with accepting payments.

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