While credit cards are gaining popularity, established law firms still rely heavily on checks, ACH, and wire transfers for payment. The reason for that is because, at many law firms, the traditional invoicing and approval process is still the norm, especially for those attorneys who serve corporate clients. However, research has shown that paper invoicing and check processing delay payment more than ninety-four calendar days and, in turn, create an accounts receivable (AR) nightmare for law firms that still operate under this model.
Sarah Schaaf, a former attorney at Google and daughter of two practicing lawyers, set out to tackle the headache of dealing with law firm AR head-on. As she shares in our recent Women in Legal Podcast interview, witnessing the business challenges of running a law firm first-hand contributed to the creation of Headnote.
Exposed to cutting edge technology, both at Google and as an active participant in the San Francisco tech community, Sarah and her co-founder husband, Thornton, were confident in their ability to build a product that would make a significant impact on the legal industry. They had a vision that would streamline the payment process for the client while updating the way law firms run their billing departments, manage collections, and track their outstanding AR. The result is the ability for firms to dramatically speed up payment times and run their back office more efficiently without making significant internal changes. Headnote has exceeded all expectations in usability and practical application for law firm payment processing.
Breaking Paper Processes
Firms that previously relied on wire transfer or check payments are now hearing requests from clients for electronic payment, both credit cards and direct bank payments. ACH and eCheck tools expedite the delivery of funds for less than the cost of most wire transfers or credit card transaction fees.
Moreover, it’s undeniable that the ease or complexity of payment is directly related to payment time and overall collection rates. The use of Headnote’s electronic payment and AR management results in a reduction in payment time from the industry average of 50-90+ days to the Headnote average of 4.3 days, a statistic that makes a staggering impact on the cash flow and the overall AR health of a business.
Many Ways to Get Paid
The magic behind Headnote’s ability to convert law firms to electronic payments and updated AR management lies in their straightforward approach to software and payment processing in general. No complicated sign-up process, no tiered rate structure or monthly SaaS fees, and no complicated billing process to follow.
Law firm users (either attorneys or billing department staff) log in to Headnote and have the ability get paid in multiple ways, all of which automatically route payments to a compliant IOLTA or operating account of the firm’s choosing. This includes the ability for the firm to manually run a credit card charge in person or over the phone, set up a recurring payment plan with the client’s permission, accept website payments, or create payment links that are emailed or sent to the client along with the invoice for services or engagement letter.
Intuitive Payment Link System
Headnote pioneered their simplified “OneLink” system, which allows firms to easily establish a consistent ePayment process firm-wide by sharing the firm’s universal with staff members to be used as a policy for payment acceptance.
Custom payment links can also be created for specific clients or invoice amounts, and they also give the firm the ability to track their cleint’s payment funnel and automate collection efforts. After the Custom Link is created and sent to the client via email or directly from Headnote, the payment request process begins and is monitored and automated until payment is completed. Once clients click on the Custom Link they are also able to view the associated invoice or any documents or PDF files attached to the payment request.
When the client clicks on the Custom Link, they are taken to the law firm’s branded payment page where they are presented with the option to pay with a credit card or eCheck/ACH. Headnote has taken great care to create a superior user experience, an homage to their technical roots in Silicon Valley and an understanding of the importance of creating an uncomplicated payment experience for law firm clients.
The Headnote Instant eCheck Process
A first of its kind eCheck solution, clients can sync with their bank for one-time eCheck/ACH payments. There is no need for the client to open a Headnote account to submit payment (which clients appreciate), nor do they need to dig for routing or account numbers, or deal with micro-deposits and account verification, to complete their bank payment. Headnote uses instant encrypted account authentication to deliver a fast and easy alternative to traditionally tedious ACH or wire transfer transactions.
Industry-Leading Autonomous AR
Headnote is more than just payments, something that really sets their solution apart from other processors on the market. Headnote has pioneered the concept of automated AR functionality for law firm billing departments, an area where many firms struggle.
Most firms have no insight into an invoice after it is sent to the client and they wait for payment, with no visibility into when they’ll get paid or by what method. The traditional AR process that is followed is outdated and includes spreadsheets, manual tracking, AR meetings, and collection tactics that lack uniformity and consistency (let’s face it, no one likes to make awkward calls to late clients).
Headnote’s software gives firms unparalleled transparency into their client’s interraction with their invoice once it’s received (like real-time tracking of whether an invoice has been received, opened, revisited, etc.), as well as the ability to automate the collection process for overdue invoices. Firms control the cadence and messaging of reminders and they’ll continue to be sent until the invoice is paid in full or a specific time period has passed.
Funds and Fees
One of the most impressive differences in Headnote’s payment solution is the delivery of funds and fees charged. Historically, eCheck or ACH payments could take days to arrive. Headnote’s solution offers exclusive one day payment processing, so firm funds are deposited within one business day, and Headnote only charges flat fees for transactions so firms always know exactly what they’ll pay.
Cash Flow Focused Dashboard
For law firm administrators and finance professionals, AR reporting can be a nightmare. Headnote’s clear and concise dashboard calculates a variety of firm-wide metrics for complete visibility of the law firm’s incoming payments, outstanding balances, and a more wholistic understanding of the firm’s entire AR position. These metrics include:
- Activity Feed Including Recent Payments Received
- Total Payments Received
- Average Payment Time and Size
- Breakdown of Payment Methods
- Total Month-over-Month Accounts Receivable and Payments Received
- Status of All Outstanding Payment Requests
- Predictive Reporting on Future Cash Flow Position
Between a rise in check fraud and the need for increased conveniences for law firm clients, electronic payment options are becoming a requirement, not a luxury. Sarah, Thornton, and their team at Headnote have created a laser-focused solution for law firms of 10-150 attorneys to expedite the collection of fees while simultaneously streamlining the AR process and giving firms access to information about their firm’s post-invoicing payment funnel that was never available prior to the firm’s use of Headnote.
This is best stated by Headnote client, Lee Curry, Esq., of Gibson & Keith PLLC:
“Our firm management compared Headnote’s pricing structure and feature set to other ePayment processors and the light bulb clicked – we’ve migrated online payments for our entire office to Headnote.”