The future of digital payments in the legal industry

Supplied

However, many law firms remain stuck in the past. Their adherence to the old ways of doing things is hindering their evolution in a fast-moving world and having a negative impact on client satisfaction and retention.

Thankfully, digital payments are driving meaningful change and transforming the legal industry for the better.

In this article, we will explore the future of digital payments within the legal industry and the numerous benefits these offer, such as:

• Improved cash flow
• Accurate accounts
• Heightened security
• Superior client experience

Whether yours is a small legal practice or a large corporate firm, the adoption of digital payments can improve every aspect of your financial transactions and future-proof the way you run your business.

What is the future of digital payments?

Technology is constantly evolving and so too are the ways we pay for things. The focus of all these improvements is providing a more seamless customer experience and better cash flow for businesses. As digital payments continue to evolve, let’s take a look at what we can expect to come in the future:

1. Growth of digital wallets

Driven by customer demand, the growth of digital wallets shouldn’t come as a surprise. In fact, it is expected to continue its upward trajectory with a predicted 60% of the world’s population using digital wallets by 2026. That’s pretty significant.

It means that businesses - including legal firms - should be prepared to partner with digital wallet providers such as Google and Apple Pay to ensure they can take card payments with ease and accommodate a wider variety of payment options.

2. Fraud prevention and payment security

With the evolution of online payments have come many concerns around fraud prevention as well as questions around payment security. Back in the good ol’ days you could take your cash to the bank and all you risked was getting robbed on your way there.

Nowadays, with customers transferring money between their accounts, paying businesses and friends, and opening new accounts online, the opportunities for fraud and theft are higher than ever.

However, machine learning and AI are helping tackle this problem by making online payments more secure than ever before. These advanced technologies are detecting and preventing financial fraud in real-time, safeguarding online transactions and protecting customers against potential threats.

3. Improved digital invoicing security

In today’s digital age, almost everyone is sending invoices digitally (otherwise known as e-invoicing). It’s fast, affordable, convenient, and one of the best ways to get paid quickly. However, the continued growth of digital invoicing has also brought with it new cybersecurity challenges, most notably around invoice authenticity and integrity.

Digital signatures are fast emerging as a powerful solution to this problem. They provide a secure method of verification and guarantee the content of the invoice itself has not been tampered with.

Incorporating digital signatures into invoice documentation will soon become something every company does to protect their data and financial information.

How are digital payment methods shaping the legal industry?

The legal industry is being rapidly shaped by the adoption of digital payment technologies. Here are just a few of the ways digital payments are transforming the legal industry for the better.

Seamless client transactions

Digital payments are enabling legal clients to transfer their money in a way that is faster, safer, and more intuitive than ever before. Gone are the days of paper invoices and time-consuming processing waits. Digital payments offer seamless client transactions that make payments easier and more convenient than ever before.

Digital payments mean your clients will typically pay you sooner and you’ll retain them for longer. What’s more, you will maintain a healthier cash flow and streamline your account operations, saving you time and money on administrative jobs now and in the future.

Payment automation

The legal industry faces many challenges around invoice payments and the chasing of. According to the Law Gazette, “Firms are taking more than four months to get paid and face a ticking time bomb if they cannot get clients to settle bills more quickly [...] Legal businesses lag well behind other sectors for ensuring they get paid and many will face serious cash flow issues if they fail to call in debts before tax bills or insurance premiums are due.”

The future of digital payments is bringing a welcome solution to this problem by making payments digital. With online payments now the norm and digital accounting systems widely adopted, manually chasing unpaid invoices is a thing of the past.

The legal industry can now send invoices electronically and have their accounting software automatically chase these invoices to ensure they’re paid on time. This significantly reduces admin work and streamlines payment processes significantly.

Reduce time spent on non-billable hours

Lawyers will often work long hours, many of which are not billable. Research suggests that the average lawyer only charges for 30 percent of the hours they work. Implementing digital payments isn’t just about offering more convenience to clients, it’s important for saving time spent on non-billable tasks.

By leveraging the benefits of digital payments, law firms can streamline their financial processes through; the generation of electronic invoices, the acceptance of electronic payments, the introduction of automated payment plans, and the management of online payments.

All of these benefits drastically reduce the need for time-consuming administration, allowing law firms to focus their attention on paid work.

Close the access to justice gap

Unfortunately, some people can’t afford a lawyer – even if they need one. Not everyone can pay a large invoice all at once and many people are intimidated by the hefty responsibility of such large fees. This is particularly noticeable in the current climate as interest rates and living expenses are high, putting extra strain on people’s daily lives.

Not having access to critical legal services can have a severely negative impact on many aspects of a person’s personal and work life. Thankfully, digital payments are changing this.

Digital payments make it easier than ever before to pay for legal services. No longer are you required to pay an upfront cost. The flexibility of electronic payments and online payment plans is helping to close the access to justice gap, making legal services more widely affordable and accessible.

The future of digital payments in the legal sector looks bright. Convenient and secure payments are integral to the continued success of law firms and their ability to give clients what they want.