Was there ever a time when doctors didn’t accept credit card payments? There must have been. But because we don’t think twice about whipping out our plastic when we’re at, say, the dentist’s, we can’t imagine a time when we didn’t have that convenience. Although there are those who say we’ll never be solvent unless we lose credit card debt, cards do come in handy…as long as we are able to afford the payments.
So why don’t small firms accept them? There’s a school of thought that lawyers think that taking credit card payments reeks of retail, and would reflect badly on the industry. Not so, opines a recent post on “Above The Law”, which claims that this form of keeping-up-with-the-times hasn’t seemed to tarnish the staid, respectable field of medicine.
Drawing another relevant parallel, Jay Shepherd, who runs a Boston management-side employment-law boutique, mentions a favorite ethnic eatery that doesn’t take cards. This, to him, is a hassle, but that’s not the reason that businesses—like this eatery, and small law firms—lose clients, he says. “Absolute hassles (which economists would call ‘total costs’) are not what drive human behavior. Marginal costs are.”
To Shepherd’s way of thinking, the extra step of having to stop first at an ATM to bring enough cash to pay for his Chilean sandwich is a marginal cost (since time = money). That is what, ultimately, stood in the way of his frequenting the eatery–which has since closed–no matter how much he liked the food there. “There’s a lesson here for small law firms,” he says. “Make it as easy as possible for your clients to give you money.” This includes taking credit cards.
So what is it that keeps small law firms from going the card route? Image, for one. “Many lawyers think [cards] are…unprofessional.” Too, there’s the matter of a merchant charge. “Simple,” he says. “Most credit card charges for merchants run in the three-percent range.” Therefore, taking cards would more than make up in increased business what a business loses in three-percent service charges. You can always just up your fees by that three percent. “If your rate is $250 an hour, just raise it to $260,” Shepherd says.
Another blogger who weighed in on the issue was “Divorce Discourse”’ author Lee Rosen, noted North Carolina family law expert, who said: “If you don’t accept credit cards, your clients are wondering why. You’re making it harder for your clients to pay you. Eliminate friction. Make it easy to hire you and easy to pay you.”
Once you’ve decided to go with credit cards, Rosen cautions against just choosing what your bank offers. “We have a merchant account at our office,” Rosen says. “We’ve negotiated a good rate with the card processor. There are many… processors and the rates are very, very negotiable.” The processor he’s using now “threw in three machines plus three check-processing machines.” There’s also a mobile device that plugs into your iPhone and links up to a downloadable app, making it possible for you to accept cards over the phone. xxxxx
Finally, Rosen advises against charging your client the cost of the processing fee. “It’s the cost of doing business,” he says. “Build it into your fee.” His final word on the subject: “Start taking credit cards. Today.” For more information, see the following links: http://abovethelaw.com/2011/03/small-firms-big-lawyers-green-beans-and-credit-cards/ and http://divorcediscourse.com/2010/05/13/accept-credit-cards/