Recently, the New York Times reported on the growing popularity of “buy now, pay later” services that enable consumers to purchase online products and spread the cost into manageable, interest-free installments paid over several months. Although pay-later services comprise just 2 percent of payment options (a drop in the bucket compared to credit cards which account for 30 percent of online sales), their share is expected to grow to nearly 5 percent or $80 billion by 2024. In fact, just recently, Amazon announced a deal with Affirm, one of several providers of pay-as-you-go services, to offer an installment payment option for Amazon purchases.
In particular, pay-as-go has gained traction with the next generation of consumers. As the Times explains, “younger adults — who have now lived through two major economic upheavals — have embraced the services, similarly to the way they’ve favored debit cards over credit and all that it represents.”
Installment payment plans could prove beneficial to lawyers by providing another payment option for customers to make fees more manageable. Of course, many lawyers already ‘involuntarily” offer payment plans to clients who run out of money or can’t pay upfront – but that leaves the firm with the responsibility of chasing payments. I’ve also blogged about layaway legal services where clients make incremental payments until they’ve amassed enough to cover the retainer, at which point the lawyer will commence representation. But that’s a risk too because deadlines might pass before the client can come up with the amount needed for the lawyer to start.
But companies that process installment payments are superior to the layaway model or payment plans because they shoulder the responsibility of collections. And because consumers don’t pay interest, installment plans are preferable to credit cards.
The bottom line is that legal fees are expensive. Instead of looking for any means possible to make them more affordable, lawyers tend to turn up their nose at clients who can’t pay. If installment payments offer clients a way to access legal services, then lawyers should start thinking about how to offer them.