Lawyers find friend with PayPal’s payment options

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If you’re looking for another way to make it easier to get paid, perhaps PayPal might become your new best friend.

PayPal is an online payment service, which probably needs no introduction to those who are frequent buyers or sellers on eBay (I’m not). Now celebrating its 10th birthday, PayPal was acquired by eBay in 2002.

Milwaukee attorney Ernesto Romero, of Ernesto Romero LLC, a solo practitioner, has been accepting payments via PayPal since about that time, and is a huge fan of its Virtual Terminal service.

Virtual Terminal, he explains, is an online version of the credit card swipe machines used in stores like Target. But he hasn’t had to invest in his own standalone swipe machine, as is often the case when obtaining a merchant number for Mastercard, Visa or American Express. Rather, he just gets his client’s credit card information in person or via telephone, fax or mail, and he enters that info via his iPhone, from anywhere. He gets paid within a few days.

Virtual Terminal is inexpensive. It costs $30/month, plus a transaction fee that’s computed based upon the monthly total. If, for example, you receive up to $3,000 per month, you’re also charged 3.1 percent plus $.30 per transaction. That’s $3.40 for every $100 transaction.

Lisa Solomon, of Lisa Solomon, Esq., is a contract lawyer in Ardsley, N.Y., who uses a different PayPal feature as an enhancement to her bottom line. Solomon performs legal research and writing services for other attorneys, who frequently reside in other states.

Specifically, Solomon uses PayPal’s Email Payments service. As the name suggests, she creates a simple e-mail invoice with the PayPal Web site (you can use Outlook or QuickBooks if you prefer) and sends it to the client. The client receives the invoice and pays it securely via the PayPal Web site – Solomon has no access to her clients’ credit card numbers. She gets paid in a few days. She also sends her own “marketing” invoice, in addition to the PayPal e-mail invoice, which details the work performed.

Unlike Virtual Terminal, Email Payments does not involve monthly fees. The only charge is transactional, and the highest rate is 2.9 percent plus $.30 per transaction, for anything up to $3,000 per month. That translates to $3.20 on a $100 transaction.

She’s found PayPal to be a fantastic convenience, for the remote clients especially. She gets paid quickly, and the clients/attorneys for whom she works are offered a discounted rate if they are willing to use PayPal and pay her upfront.

Now, about that upfront payment: You’ll need to make sure that your use of PayPal does not violate attorney trust account rules. Romero says he uses it only to collect fees already earned. As for Solomon, she explains that, because she’s a vendor to her clients, and there’s no attorney-client privilege between herself and the lawyers who’ve hired her on a project basis, the trust account rules don’t apply to her.

She adds another important pointer for those considering PayPal, and that’s to apply to become a “verified” PayPal business member as soon as possible, which means you’ve linked your credit card or bank account with PayPal. The verification process is fast and easy, according to her, and it means you won’t be subject to the $500 monthly withdrawal limit that’s placed upon new, and unverified PayPal account holders.

Finally, both Romero and Solomon say that PayPal is secure. In PayPal’s early years, when online payment was unchartered waters and before the eBay acquisition, there might have been some questions, says Romero. But these days, PayPal has gone out of its way to be perceived as consumer-friendly, with its chargeback policies. He’s never had a client ask for a refund via a chargeback, but he’s told that you’ll be terminated promptly from PayPal if you’re subject to too many chargebacks.

A while ago, I spoke to Nerino Petro, the law practice management advisor at the State Bar of Wisconsin, to ask him about ways he frequently sees lawyers “bleed green.” The failure to collect on accounts receivable was a biggie.

He said he’s always amazed at the number of lawyers who can be cutthroat in the courtroom or boardroom, but turn into puppy dogs when it comes to hitting up their own clients for money they’re rightfully owed. In a way, that’s a compliment. They’re nice, and nice people are in short supply these days. But, even nice lawyers need to eat.

If adding PayPal to your payment options makes it easier for one more client to pay you, and the time and money you’ve invested to make that an option is minimal, why not make it available to them?

Finally, a quick follow-up on a previous column. A few weeks ago, I wrote that Twitter has helped Milwaukee lawyer Chris Moander get work, and that I envisioned it could help me as a journalist by me posting the projects I’m working on, and seeing if anyone “Tweets” me with a comment or suggestion. Three weeks into using Twitter sporadically, it worked!

I wrote that I was writing about PayPal, and Solomon e-mailed me. So now I’m a confirmed Twitter believer.

Send your cheap law office management and legal marketing ideas to [email protected].