There's a particular kind of frustration that billing professionals at law firms know well. It's the moment you open a multi-payor matter and realize you're about to spend the next hour doing something that should take five minutes.

You've got one matter. Three payors. An insurance carrier at 60%, a client paying the remaining 35%, and a co-defendant handling 5%. You've generated the invoice. Now you need to split it correctly, make sure the numbers add up, route the right bill to the right party, update the spreadsheet that tracks it all, make sure the LEDES submission goes to the right carrier with the right Client Matter ID, and then — once payments start coming in — make sure each one posts to the right payor so AR doesn't fall apart.

That's not a billing problem. That's a process problem. And it's a process problem that most practice management systems have never actually solved — they've just left firms to work around it.

Centerbase changes that with Multi-Payor Billing: a purpose-built billing engine that takes every manual step in that process and handles it automatically, inside a single matter record. Let's walk through what that actually looks like in practice — from the moment you set up a matter to the day it closes.

The Setup: One Configuration, Saved for the Life of the Matter

The old way of handling multi-payor matters usually started the same way: someone set up a matter in the system, then opened a spreadsheet alongside it. The spreadsheet became the source of truth for payor allocations — who owes what, what percentage they carry, what's been billed, what's been paid. Every billing cycle required someone to update it. Every new person on the billing team had to learn where it lived and how it worked.

In Centerbase, the setup starts inside the matter itself. Navigate to Matter → Cog → Split Billing → Multi-Payor, click Edit, and you're in the Multi-Payor configuration screen. Add your payors — as many as the matter requires, up to 70 or more — and assign each one a billing percentage. That configuration is saved as a multi-payor record attached to the matter, and it stays there for the life of the case.

The system gives you two tools to make percentage setup fast. If your payors split equally, hit Distribute Evenly and the system assigns identical percentages across all parties in one click. If you're working with custom allocations and the numbers come out slightly off — 99.9% instead of 100%, or 100.1% due to rounding in your mental math — Match Remaining automatically corrects the last payor's share so the total balances. No calculator, no manual correction.

You also designate a Primary Payor for the matter. This is the party that receives any rounding remainder when invoice amounts don't divide evenly across payor percentages. It's a small but important detail: without it, those fractions of a cent create ongoing reconciliation issues. With a designated Primary Payor, every invoice closes clean.

If the matter involves insurance carriers who require LEDES billing, you can assign a unique Client Matter ID to each payor right here in the setup screen. That ID will flow automatically into the LEDES mapping table later — which we'll come back to — so there's no duplicate entry required.

One configuration. Every payor, every percentage, every LEDES ID — set up once and tracked automatically from first invoice through final AR close.

Once you save the configuration, the matter is ready. The spreadsheet stays in the drawer. The system holds the record now.

Billing: The Math Happens Automatically, Every Time

Here's something that surprises people when they first see Multi-Payor Billing in action: time and expense entry doesn't change at all. Attorneys and timekeepers enter time and expenses exactly the way they always have. The matter handles the split on the back end, at the invoice level.

When you run a bill, Centerbase takes the total invoice amount and divides it among your payors according to the percentages you defined in the setup. If the matter has a 60/35/5 split, the $10,000 invoice becomes a $6,000 charge to the carrier, a $3,500 charge to the client, and a $500 charge to the co-defendant — automatically, without anyone doing arithmetic. The Primary Payor absorbs any rounding remainder.

The bill's financial summary gives you immediate visibility into how the split landed. The first five payors and their billing percentages appear on the bill itself. Click through and you'll see the full payor breakdown: each party's previous balance, current charges, payments applied to date, and any credits on account. It's a complete financial snapshot of where each payor stands on that invoice.

Now here's the part that billing managers tend to appreciate most: if the bill gets edited before it's posted — and bills get edited all the time, for all kinds of legitimate reasons — the splits recalculate automatically. You don't need to go back to the spreadsheet, redo the math, and make sure the updated numbers made it into the right column. The payor schedule stays intact. The system handles the recalculation. You review, approve, and post.

When a bill is edited before posting, splits recalculate automatically. The payor schedule stays intact. No manual correction required.

For matters with many payors — insurance defense cases sometimes involve a dozen or more funding sources — this automation isn't just convenient. It's the difference between a billing process that scales and one that breaks under its own weight.

LEDES Billing: One Setup, No Duplicate Entry

If multi-payor billing is complex on its own, adding LEDES e-billing requirements to the mix has historically made it significantly more so. Insurance carriers don't all use the same LEDES format. They each have their own Client Matter ID requirements. And they change their specifications with enough regularity that e-billing coordinators have spent years managing a queue of support tickets just to keep LEDES templates current.

Centerbase addresses both parts of this problem.

First, the connection between Multi-Payor setup and LEDES configuration. The Client Matter ID you assign to each payor in your Multi-Payor setup flows directly into the LEDES template mapping table. When you go to map your LEDES fields, those IDs are already there — no crosswalk, no manual re-entry, no copying between screens. Set it up once in Multi-Payor and the LEDES side of the house already has what it needs.

Each payor can also have their own LEDES template and delivery address. In the gear icon settings next to any payor, you can uncheck Use Client Settings and configure that payor independently. A matter with four insurance carriers can run four different LEDES 1998B formats, each mapped to the right Client Matter ID and delivered to the right address. That's a configuration that used to require careful manual coordination — and that's now handled in one screen.

Second, the template management problem. When a carrier updates their LEDES format requirements, the answer used to be: open a support ticket and wait. E-billing coordinators would submit the ticket, the carrier's deadline would approach, and billing would sit on hold while someone else made the change.

Centerbase's self-serve LEDES Template Builder puts that control directly in your team's hands. Navigate to System Settings → Electronic Billing → Self-Serve Templates, build your LEDES 1998B template, map the fields, and publish. Templates are validated before they go live, so misconfigured templates are caught before they reach production. Existing system-provided templates are untouched — you can adopt self-serve templates at your own pace, for the carriers where you need the flexibility, without any impact on your current setup.

E-billing coordinators can build, validate, and publish an updated LEDES template the same day a carrier changes their requirements. No ticket. No wait. No billing hold.

For firms that do substantial insurance defense work, this combination — per-payor LEDES templates, automatic Client Matter ID mapping, and self-serve template management — removes more friction from the e-billing process than any single feature has in a long time.

Payments and Credits: The Right Balance in the Right Place

Posting payments on multi-payor matters is one of those tasks that looks simple and isn't. The question isn't just "who paid?" — it's "which payor's balance should this payment reduce, and on which matter?" Get that wrong and AR stops making sense. Get it wrong consistently and reconciliation becomes a monthly project.

Centerbase makes the allocation explicit and immediate. When you record a payment, you select the client as usual — all bills for that client appear, including multi-payor ones. If you're working from the Multi-Payor Matter record directly and need to apply the payment to a specific payor, you select that individual payor. The balance updates immediately. There's no ambiguity about where the payment went, and no additional step required to reflect it in AR.

Credits work at two levels, and the distinction is useful. Credits assigned at the matter level stay on that matter — they're available to offset charges on that matter and nothing else. Credits assigned at the client level are available across all of that client's matters. In a multi-payor context, this means you can apply a credit from a specific carrier's overpayment directly to the matter where it belongs, without it flowing into other matters where it doesn't apply.

It's a small distinction, but it's the kind of precision that finance and accounting teams depend on when they're producing reports that need to be right. Not approximately right. Actually right.

AR Reporting: The Full Picture, Without the Reconciliation Step

One of the most common frustrations in law firm finance is pulling an AR Aging report on a multi-payor matter and knowing that what you're looking at isn't complete. Payor-level detail lives somewhere else. The numbers you're seeing don't include the full picture. Before you can trust the report, you have to reconcile it against another source.

Centerbase brings that data into Centerbase, where it belongs. Each payor in a multi-payor matter is treated as a client for AR reporting purposes. That means the AR Aging report breaks out balances at the payor level — what each party owes, what's been collected from each party, and where each payor's account currently stands. The report reflects the full financial picture of the matter without any additional reconciliation work.

The Multi-Payor tab on each matter is the real-time view for anyone who needs payor-level detail on a specific case. Billing managers can pull it up mid-cycle. Partners can check it before a client call. Finance leads can use it to answer questions from management without making calls to the billing team first.

One thing worth knowing about the AR Aging report: if your team groups it by Invoice, it will display the client assigned to the matter rather than the individual payors. Grouping by payor gives you the full payor-level breakdown. It's a simple setting change, but it's worth flagging for teams that are setting up their reporting workflows for the first time.

AR Aging reflects every payor's balance accurately — what's owed, what's collected, and what's outstanding — without a manual reconciliation step.

The Point Isn't the Features. It's the Time You Get Back.

It's easy to describe Multi-Payor Billing as a set of features: payor schedules, automatic splits, LEDES integration, self-serve templates, real-time AR. And those features are real and useful. But the actual value of the feature set isn't best measured in capabilities — it's best measured in what your billing team stops doing.

They stop maintaining the spreadsheet. They stop recalculating splits when bills are edited. They stop opening support tickets when a carrier updates their LEDES format. They stop reconciling AR reports against external records. They stop manually cross-walking Client Matter IDs between the billing system and the LEDES mapping screen.

All of that time goes somewhere else — to higher-value work, to matters that actually need human judgment, to the kind of proactive billing management that helps firms get paid faster and maintain better client relationships.

That's what it means to move from manual to manageable. Not that multi-payor billing becomes simple, because the underlying complexity is real and it doesn't disappear. It means the system absorbs that complexity instead of passing it to your billing team as manual work.

Multi-Payor Billing is available now in Centerbase. No migration required. Setup starts at Matter → Cog → Split Billing → Multi-Payor. If you're an existing Centerbase customer, your Customer Success Manager can walk your team through configuration in a single session. If you're evaluating Centerbase, we're happy to walk you through the full workflow in a live demonstration — including the specific scenarios your billing team deals with today.

See it in action: Contact your Customer Success Manager or visit centerbase.com to schedule a walkthrough of Multi-Payor Billing in Centerbase.

About Centerbase

Centerbase provides cloud-based legal software that centralizes all aspects of law firm management, including billing, accounting, timekeeping, matter and document management, automated workflows, and profitability reporting. Designed for mid-size law firms, Centerbase helps firms modernize operations, optimize productivity, and improve client service. For more information, visit centerbase.com.

Media Contact:
Trish Stromberg
trish.stromberg@centerbase.com

If your law firm handles insurance defense, co-defendant matters, or any case where more than one party shares financial responsibility for fees, you've probably built a system for managing it. Maybe it's a spreadsheet that lives alongside every multi-payor matter. Maybe it's a manual allocation process your billing manager runs at the end of every billing cycle. Maybe it's a combination of both, stitched together with follow-up emails and a lot of double-checking.

It works, until it doesn't. An invoice gets edited after the split was calculated. A payor's balance doesn't reconcile with AR. A LEDES submission goes to the wrong carrier. The workarounds that keep multi-payor billing functional are also the reason it takes so much time and generates so many errors.

Multi-Payor Billing in Centerbase was built to change that. It's a purpose-built billing engine that handles split invoicing, payor-level AR tracking, and LEDES submissions for matters with multiple funding sources — automatically, inside a single matter record. No spreadsheets. No sub-matters. No off-system reconciliation.

Here are five specific ways it helps law firms operate more efficiently and accurately.

1. Eliminate the Spreadsheet That Lives Next to Every Multi-Payor Matter

Ask any billing manager at a firm that handles insurance defense, and they'll tell you the same thing: every multi-payor matter comes with a shadow document. A spreadsheet, a shared notes file, a column in a billing tracker — something that lives outside the practice management system and tries to answer the question the system can't: who owes what?

The reason that shadow document exists is simple. Most billing systems weren't designed to handle matters where the financial obligation is split among multiple parties. So firms build workarounds. The workarounds become standard operating procedure. And the standard operating procedure becomes a time sink that billing teams accept as unavoidable.

Multi-Payor Billing removes the need for that external document entirely. In Centerbase, you define your payor schedule directly inside the matter record — navigate to Matter → Cog → Split Billing → Multi-Payor, add your payors, assign percentage splits, and save. Every payor's obligation is tracked in Centerbase from that point forward, through every billing cycle, payment, and AR close. The system holds the record. Your billing team doesn't have to.

Define your payors once. The system tracks every allocation, every payment, and every balance from first invoice through final AR close.

The practical effect is significant. Billing managers spend less time maintaining parallel records and more time on work that requires their judgment. And the risk of discrepancy between what's in the system and what's in the spreadsheet — which is a common source of billing errors on complex matters — drops to zero.

2. Automate Billing Splits So the Math Is Never Wrong

Manual allocation is one of the most error-prone tasks in legal billing. When an invoice needs to be split among four payors — one carrying 60%, one at 25%, one at 10%, and one holding the remainder — someone has to do that math. Then someone has to check it. And if the bill gets edited before posting (which happens constantly), someone has to do it again.

Centerbase takes that work off the table completely. Once you've set up your payor schedule, Centerbase handles every split automatically at the invoice level. When a bill generates, the system divides the total among your payors according to their assigned percentages. No calculator required. No manual entry. No second-check.

Two tools in the Multi-Payor setup make configuration fast and accurate. Distribute Evenly assigns equal percentages across all payors with a single click — useful for co-defendant matters where each party carries the same share. Match Remaining automatically adjusts the last payor's percentage when allocations are slightly over or under 100%, so everything balances without manual correction.

You also designate a Primary Payor to receive rounding remainders — those fractions of a cent that don't divide evenly across payors. It's a small detail, but it's the kind of detail that creates reconciliation headaches when it's handled inconsistently. With a designated Primary Payor, every invoice closes clean.

And if a bill is edited before it's posted — a line item is adjusted, a write-down is applied — the splits recalculate automatically. The payor schedule stays intact. Your billing team doesn't need to do anything.

3. Give Every Role a Complete View of Matter Financials

Multi-payor matters create visibility problems that go well beyond the billing team. When financial data is split across a practice management system, a spreadsheet, and whatever someone's memory holds about a carrier's payment history, it's hard for anyone — billing manager, attorney, partner, finance lead — to get a clear picture of where a matter actually stands.

Centerbase's Multi-Payor tab addresses this directly. Every matter with a multi-payor configuration gets a dedicated tab that functions as a real-time financial ledger. It shows what's been billed to each payor, what's been paid, and what the current balance is — updated automatically with every billing run and every payment posted.

When a bill is generated, the financial summary on the bill itself shows the first five payors and their billing percentages. A link from that summary goes directly to the full Multi-Payor tab for the complete payor breakdown, including previous balances, current charges, payments applied, and credits. Attorneys reviewing a matter before a client meeting can pull up the tab and see the actual financial picture — not an estimate, not a number from a two-week-old spreadsheet.

Every payor's balance, payment history, and billing percentage — visible in a single tab, updated in real time.

For finance and accounting teams, the AR Aging report reflects multi-payor matters accurately. Each payor is treated as a client for reporting purposes, so payor-level balances appear in full — what's owed, what's been collected, and what's outstanding. The result is audit-ready AR data that doesn't require a manual reconciliation step before it can be trusted.

One nuance worth noting: if your team groups the Aged AR report by Invoice, it will display the client assigned to the matter rather than individual payors. Grouping by payor or by matter gives you the full payor-level breakdown.

4. Manage LEDES Submissions Per Payor Without Duplicate Setup

For firms that do insurance defense work, LEDES e-billing adds another layer of complexity to multi-payor matters. Each carrier may require a different LEDES format. Each carrier has its own Client Matter ID. And historically, getting all of that configured correctly has required either extensive manual coordination or opening support tickets every time a carrier changes their requirements.

Centerbase connects Multi-Payor Billing and LEDES configuration in a way that eliminates most of that friction.

When you set up a payor in your Multi-Payor configuration, you can assign a unique Client Matter ID directly to that payor. That ID flows automatically into the LEDES template mapping table — no separate entry, no crosswalk between systems. Set it up once in Multi-Payor and it's available when you're mapping LEDES fields.

Each payor can also be assigned their own LEDES template and delivery address. In the gear icon settings next to any payor, you can uncheck Use Client Settings and configure that payor independently. A matter with four insurance carriers can run four different LEDES formats, each mapped to the correct Client Matter ID — all from a single configuration screen.

The LEDES Template Builder in Centerbase takes this further. When a carrier changes their format requirements — which happens with regularity in insurance defense work — your e-billing coordinators can build and publish an updated LEDES 1998B template themselves, directly from System Settings → Electronic Billing → Self-Serve Templates. No support ticket. No billing hold while you wait. Templates are validated before publishing, so configuration errors are caught before they reach production. Existing system-provided templates are untouched.

5. Simplify Payment Posting and Credit Application Across Payors

Receiving and applying payments on multi-payor matters has always required careful attention. Post a payment to the wrong payor and the AR won't reconcile. Apply a credit at the wrong level and it either disappears or shows up where it shouldn't. In a system that wasn't built for multi-payor billing, these are manual checks that happen every time.

Centerbase handles payment allocation with straightforward, explicit controls. When recording a payment, you select the client as usual — all bills, including multi-payor ones, appear in the payment screen. If you're working directly from the Multi-Payor Matter record and need to allocate to a specific payor, you select that individual payor. The selected payor's balance updates immediately. There's no ambiguity about where the payment went.

Credits work at two distinct levels, and the distinction matters for multi-payor matters. Credits assigned at the matter level apply only to that matter. Credits assigned to the client are available across all of that client's matters. This means a billing manager can apply a credit from one payor to a specific matter without it affecting other matters, or apply a client-level credit that flows wherever it's needed.

Post a payment, select the payor, and the balance updates immediately. No manual ledger step. No reconciliation required.

The result is a payment workflow that's faster and less prone to error. And because every payment is recorded against the correct payor in Centerbase, the AR Aging report stays accurate without any additional reconciliation work from your team.

The Bottom Line

Multi-payor billing is genuinely complex work. Multiple funding sources, dynamic splits, payor-specific LEDES requirements, and AR reporting that needs to reflect every obligation accurately — the underlying complexity isn't going away. The question is whether your practice management system is absorbing that complexity or passing it back to your billing team as manual work.

Centerbase's Multi-Payor Billing is built to absorb it. Payor schedules are defined once and tracked automatically. Splits calculate at the invoice level without manual intervention. AR reporting reflects every payor's balance without reconciliation. LEDES configuration flows from Multi-Payor setup without duplicate entry. And payments post to the right payor with immediate balance updates.

For billing managers, that means fewer manual steps and fewer opportunities for error. For finance and accounting teams, it means AR data that can be trusted without a second pass. For partners and attorneys, it means matter financials that are visible and complete. And for e-billing coordinators handling insurance carrier requirements, it means LEDES templates they can update themselves the same day a carrier changes their format.

Multi-Payor Billing is available now in Centerbase. No migration required. Setup starts at Matter → Cog → Split Billing → Multi-Payor. Your Customer Success Manager can walk your team through configuration in a single session.

Ready to see it in action?

Contact your Customer Success Manager or visit centerbase.com to schedule a walkthrough.

About Centerbase

Centerbase provides cloud-based legal software that centralizes all aspects of law firm management, including billing, accounting, timekeeping, matter and document management, automated workflows, and profitability reporting. Designed for mid-size law firms, Centerbase helps firms modernize operations, optimize productivity, and improve client service. For more information, visit centerbase.com.

Media Contact:
Trish Stromberg
trish.stromberg@centerbase.com

Compliance is a priority for law firms. And legal software can be a key tool in helping you meet your firm’s compliance requirements.

In this article, we’ll cover major compliance issues that law firms need to monitor and solutions that can reduce your risks.

What online compliance risks does my law firm face?

A primary compliance concern for law firms is staying on top of compliance related to both data and processes: for example, storing firm and client data safely in the cloud, managing online client portals, processing online payments, handling trust accounting issues, and following ethical requirements relating to online advertising and marketing.

In this section, we’ll go over a few major buckets of compliance risks in the digital world that your firm should recognize and address.

Ensuring cloud security

When it comes to storing data, security is the top compliance priority. Law firms must make “reasonable efforts” under ABA Model Rule of Professional Conduct 1.6 to prevent the disclosure of client-related information. That means law firms must understand what client data they store, where they are storing it, and what the potential entry points for data loss and disclosure are. Additional compliance requirements vary depending on the size and type of law that your firm practices, but it’s best practice to review applicable requirements and make sure that your firm’s cloud infrastructure has the robust protections necessary to safeguard your clients’ data.

Choosing a reputable provider of cloud-based legal platforms is the first step in ensuring compliance. The provider should have a proven track record and, ideally, have suffered zero data breaches in the past. Make sure that it offers robust security features like encryption and access control, such as password policies, two-factor authentication, and role-based permissions.

Sharing data in online client portals

Much like the cloud, client portals require firms to pay special attention to how they secure client information. Your law firm should implement strong access controls, such as two-factor authentication and secure file transfer protocols, to prevent unauthorized access to client data. Law firms that use client portals also must comply with the ABA Model Rules of Professional Conduct, which include requirements for maintaining client confidentiality (Rule 1.6), establishing competence (including with technology) (Rule 1.1), and keeping clients informed of matters (Rule 1.4).

Processing client payments online

There are a host of considerations when deciding how to accept online payments from your clients. Clients overwhelmingly prefer to have the ability to pay online and to pay with credit cards. Turning to legal software to do the behind-the-scenes work of processing online payments for your law firm is your best bet.

The right legal technology platform can ensure that all online payments accepted follow the ABA Model Rules, Interest on Lawyers’ Trust Accounts (IOLTA) guidelines, and Payment Card Industry Data Security Standards (PCI DSS). The right legal payment and accounting software will ensure that your legal team does not commingle client trust account funds with the funds they use for operations.

Following rules for online law firm advertising

Law firm websites must meet certain ethical requirements set forth by their state bars. For example, websites shouldn’t advertise a lawyer as an “expert” or as “specialized” in a particular practice area unless they hold a specific qualification permitted by their state. They should also not hold themselves out to be the “best” lawyer to handle a type of matter. Attorneys may also need to include a disclaimer noting that the information on their website should not be considered legal advice. Lawyers should check their state bar’s requirements to ensure compliance. In some states, the bar may require or permit the submission of the law firm’s website content for ethical review.

Additionally, prospective clients want to see that your law firm is capable of handling matters like theirs. One of the best ways to highlight your expertise is through the words of satisfied clients. But there are limits to what you can share online — and you also need to prepare for how to handle a negative review. ABA Model Rule 7.1 requires that all communications about a lawyer and their services must be true and not misleading. Marketing statements, such as testimonials, could be misleading if they set an expectation that a lawyer can obtain the same results as another client without reference to the specific factual and legal circumstances of each client’s case.

Finally, law firms should make sure that their websites meet the requirements of the Americans with Disabilities Act. That means your site’s design and visual and audio content need to be accessible to everyone, including people with disabilities.

A digital marketing company that focuses on helping law firms can help identify and avoid online marketing pitfalls and help you comply with your state bar’s requirements.

What other steps should my firm think about for compliance?

True compliance starts with your people. Your law firm should have a data protection plan (especially when it comes to client data) that outlines steps and safety procedures. It should include policies on who can access client data, how and when they can access it, and how data is retained and backed up. Also, make sure that your attorneys and staff are trained on how to handle sensitive data and best practices for compliance.

Legal software is critical to your law firm’s compliance

Legal software plays a critical role in helping law firms remain compliant with laws and regulations. As touched on throughout this article, the laws related to compliance are plentiful, and navigating those waters yourself is unnecessarily risky.

With advanced legal software, your firm can ensure data security through the cloud, keep client information confidential, and process online payments both quickly and while fulfilling your legal and ethical requirements. By leveraging legal software, your firm will streamline compliance processes, reduce the risk of data breaches and other violations, and ultimately protect your law firm’s reputation.

Almost nine in ten Americans use some form of digital payment. It’s no wonder, then, that law firm clients expect to be able to make payments online. Not only does this make handling bills easier and faster for your clients, but it’s also good for your law firm’s cash flow. Online payments close the gap between the time a client is billed to when that client makes good on payment.

In this article, we’ll cover how your law firm can accept online payments while remaining compliant with applicable law and ethical guidelines. We’ll also note some of the best features to look for in your payment solution software.

Do clients expect online payment options? 

Yes! Clients expect law firms to deliver a memorable client experience, which includes making payments quick and easy by offering a variety of payment options. Clients want the flexibility of making payments via credit cards, e-checks, and digital transfer services like ACH. In fact, a recent study found that 40% of clients would never hire a lawyer who didn’t take credit or debit cards.

This variety of payment options is also good for your firm and its bottom line. By offering several convenient payment methods, law firms incentivize their clients to pay invoices faster and completely. When you expand your firm’s acceptable methods of payment, you’ll likely find that you spend less time waiting for checks in the mail, less time hounding clients for late payments, and more time on billable work.

Is accepting online payments complicated?

Accepting online payments isn’t complicated, but it does require planning and a little help from technology. It’s not inherently risky for your law firm to accept online payment. Nearly every jurisdiction in the United States has given the green light for law firms to accept credit card payments for legal fees and expenses. But, as with all legal fees, your firm must comply with applicable legal requirements and ethical responsibilities.

In broad strokes, your firm must comply with the rules requiring the separation of client and third-party funds from your law firm’s operating funds. What is the best way to do this? Use payment software developed for attorneys with this exact ethical issue in mind. Without it, your firm might not be compliant.

While your law firm accepting online payment isn’t dicey, using a non-legal payment solution is. These software options often fail to properly handle law firm transactions according to the trust accounting principle noted above as well as Interest on Lawyers’ Trust Accounts (IOLTA) guidelines. The result can be noncompliance, which is bad for everyone — including your law firm’s reputation. The right technology ensures that your law firm has separate operating and trust accounts and ensures that processing fees are deducted from your operating account only.

If you set yourself up correctly, your firm will never have to worry about an inadvertent ethics violation and can focus on delivering exceptional client work.

What makes online payments compliant or noncompliant? What can I do in my firm to ensure compliance?

With the various rules and regulations regarding legal payment, fee collection comes with a host of unique considerations, especially when accepting credit card payments. The right legal payment processing platform will do the behind-the-scenes work for your law firm, ensuring that all online payments accepted comply with the ABA Model Rules of Professional Conduct and IOLTA guidelines.

When picking a payment solution, we recommend looking for the following four features to ensure compliance and improve ease of use.

1. Manage multiple trusts/retainers under a single matter

Not only do clients expect to be able to pay online, but they also expect that your firm will manage their multiple trusts and retainers. Rather than falling short of their expectations, with the proper tools, you can easily manage multiple trusts and retainers under one or many matters and even track them at the client level.

By having the power to track both your firm and client finances in one central place, you can keep an eye on money moving in and out of your firm with complete faith in your firm’s compliance.

2. Separate earned revenue and unearned revenue

Under most state laws, law firms must keep earned revenue and unearned revenue separate. The right payment tool recognizes when payment revenue is unearned (that is, applied to a trust replenishment) and when it is earned (applied to a billing entry) and deposits it accordingly.

You need a legal technology platform that can take an invoice payment and split it between two accounts, keeping your firm in compliance, saving your accounting team time, avoiding mistakes, and raising your collection realization rate. Avoid tools that require you to have either a trust account or an operating account and then require a bookkeeper to determine whether and how to apply and move the funds. That’s asking for human error and compliance woes.

3. Easily manage your IOLTA accounts

You need an efficient way to track multiple IOLTA accounts. With a robust legal platform, you can automatically assign accounts for each client trust so that you can track the flow of money, giving you visibility into where your firm and trust money meet at all times.

4. Apply available funds to pay off client bills automatically

Instead of waiting for that check to arrive in the mail, you can sweep through accounts to find matters with accounts receivable balances and available funds. With this information, your firm can quickly create bill payments and then write checks from your IOLTA account to an operating account. This way, you’re always efficiently applying your client’s money (and making them happy).