While Credit Cards Still Reign, Be Part of the Plastic Kingdom

Yes, your credit card will expire — not just its date of validity, but its very mode of existence. With mobile payments already here, it seems reasonable to conclude that the e-way to pay will eventually render plastic obsolete.

That time has not yet arrived, however, and credit cards remain a viable payment method.

I have long advocated that lawyers should accept the use of credit cards in payment for their fees. The reason is simple: We must make it as easy as possible for clients to pay for legal services.

Clients today are accustomed to using plastic for nearly everything, so paying legal bills with credit cards is an attractive and easy option. That creates a tremendous marketing advantage — not to mention advantages with regard to the increased ease and assurance of payment and the speed of collection — for the lawyer who accepts credit cards.

Accepting credit cards is neither problem-free nor risk-free, however. One notable issue is the administrative charge that the credit card companies apply to lawyers who accept plastic.

But attorneys, like other merchants, have the right to raise their fees across the board by 1 to 2 percent to make up the difference. Lawyers can even raise fees for clients who do not pay by credit card — and, in fact, it is important to note that such a uniform increase may well be essential, because some jurisdictions prohibit charging clients differently based solely on the means of payment.

An alternative is to keep your fee as is and add an "administrative charge" equal to the merchant fee percentage, similar to additional charges for photocopying or faxing. Of course, many clients feel that law firms, unlike other businesses, should absorb such fees as a cost of doing business. If your competitor firms do not make such ancillary charges, think twice about doing so yourself.

A second risk is the potential for a fee dispute after the engagement with a disgruntled client who has already paid by credit card. To avoid problems, you should secure the client's agreement that no dispute with the firm will be raised with or adjudicated by the credit card company.

In other words, the client agrees that the charge is nonrefundable and cannot be reversed by the credit card company. Any dispute over fees paid by credit card should be settled between the lawyer and the client and be governed by the rules of professional conduct.

It also would be wise to call your merchant account holder or the credit card company to confirm that the language you use in the agreement will be accepted by the company to prevent a chargeback and support the merchant over the credit card holder.

There might be a temporary "hold" on your payment until the credit card company can get the story from both sides, but with proper language the card service providers should back you up.

Of course, when you talk to the credit card company, you should get the name and position of the person contacted, along with the date and time of the discussion, and keep it on record. It's best not to be too trusting when it comes to getting paid.