Banking: More Than Just Checking and Savings

Published December 30, 2014

Banks offer a variety of services that represent opportunities for a lawyer whose firm has established a good banking relationship.

That business relationship can often be used to give you greater access to and more effective pricing for such personal banking services as the following:

  • Personal loans
  • Home mortgages
  • Discount brokerage services
  • Trust and estate services
  • Personal financial planning
  • Retirement counseling
  • Discounts on standard banking services for your staff, such as lower-cost auto loans or no-fee checking accounts

In addition, there are a variety of other services available for law firms.

  • Credit Card Services. If you have the client’s credit card information and permission to charge his account, you will get paid more readily, improving cash flow. The few dollars that it costs you to get the money faster—typically 2 percent to 4 percent, depending on your volume, the card, and your ability to negotiate with your bank and processing agent—is offset by the ease and assurance of payment as well as the speed of collection.
  • Office Services. Many banks offer services relating to functions such as staff payroll, pension administration, and even monthly billing and collection.
  • Investment Instruments. Law firms can earn a return on cash balances not needed for operating purposes by placing the money into such short-term investment instruments as certificates of deposit, business money market accounts, commercial paper, or U.S. government obligations—all of which a bank can provide.
  • Online Financial Services. These services can facilitate your cash management. For example, banks offer the opportunity to set minimum and maximum cash balances in a firm’s general account, with “extra” funds being transferred daily into interest-bearing accounts and cash advances being drawn from a line of credit if the general account falls below the minimum.

As your needs develop and change over time, be sure to talk to your banker about the various types of assistance that the institution can provide for you.

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Audience type: Administrators, Associates, Large Law Firms, Small Law Firms, Sole Practitioners