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captainsblogI’m really not sure if “Sir“ needs to be capitalized or not. There’s a leftover habit from editing scripts for seaQuest 2047. (By the way, let the record reflect that Siri actually knew how to spell the name of that show, even if nobody else remembers.)
Anyway,…
For the most part, I am a sole practitioner with no staff and I manage all of my own accounts, both receivable and payable. My business “line of credit“ is limited to a single credit card that I use mostly to pay for odd office expenses and court filing fees. Incoming payments go into one of two accounts, which I still remember being identifiable as they were explained in my review for the State Bar ethics exam: "There are two kinds of money. The bills that are green belong to you. The bills with gray and white stripes on them belong to your clients, and you can be disbarred or even arrested if you treat them like they’re green.” That is why we are required to keep a separate “trust account” for all money coming in that is even partially client property.
A large percentage of disciplinary decisions involve lawyers who are unaware of, or choose not to follow, that simple precept, or the much longer list of persnickety requirements connected with it. Among them: a “no commingling “ rule that can get a lawyer in trouble for just leaving their share of a trust account deposit in there for too long. (I usually transfer my fees out as soon as the incoming check is cleared, with always the risk of the bigger problem that happens if that incoming check bounces.) A prohibition on transferring money out of that account by any means other than a paper check that must be written to a payee, not to "cash," so that account does not have an ATM card for any such withdrawals OR deposits. Strictly speaking, we are not even allowed to use online banking to transfer funds out of that account, even to the extent we have earned them, without the express written permission of the client every time we do so. I find it easier just to write the damn checks.
Yes, kids. These:
Until about 25 years ago, "a check" was just about the only way I, or anyone, got paid anything. Minor exceptions existed for things like Social Security direct deposits, but the paper pieces of paper with the futuristic numbers on the bottom? Those were the primary currency of the realm and the rulers of the financial roost.
Yes, there were credit cards back then, but lawyers are always at least a generation behind the curve with any innovation. Plus, in my primary specific line of work, bankruptcy law, credit cards were a complete no-no. Not only could a client's credit card payment to a lawyer for their bankruptcy fee be potentially recovered as "preferential" or render the client's entire debt to the bank nondischargeable, the firm could risk being able to accept credit cards at all if one of its charges wound up not being paid back by the client. The advent of the "debit card"- branded with a blue Visa (beginning with a 4) or red MasterCard (a 5) logo- eliminated some of those risks, but it was often impossible to tell whether that card number was debit or credit, so I've just maintained a "no-no" policy toward anything other than ca-ca-ca-ca-cash, ch-ch-ch-ch-checks, or a few other options, one much older and the others much newer.
What's safer than a money order? They're issued by banks and even the Post Office, have security features, and they're prepaid with actual cash money! Well, except they've become so tied to Nigerian scammers and other bad actors, they often get flagged by bank anti-fraud algorithms. I had one client's mired in an ATM hiccup for months last year before it finally got resolved, and when I get one now I always deposit it with a real live teller.
We always had wire transfers, mostly for big-money transactions. Those have also been fraud magnets, and between the wastes of time and paperwork required now to initiate one and the fees charged in, out or both, I avoid them like the plague.
Some clients now use the little cousin of the wire transfer known as the "ACH," for automated clearing house. It's almost as quick, irreversible and does not result in fees being charged for incoming. Some clients have migrated to this option for routine fee payments, among the providers being one called Tipalti, which just sends payment without much fanfare, and another named Bill. Yes, his name is Bill and he lives up on ACH Hill. This is what I get from Bill every time a client forks it over:
Stay classy there, Billy Bub....
At last, though, we come to the type that has extended beyond the business world, into the wallets and QR codes of Teh Kids everywhere: the mobile payment apps.
----
In the beginning, there was PayPal.
Remember my short history of the eBay auction site last week? Course you don't. I'm kidding myself about anyone reading and remembering this sentence. That commerce concept created a need for money to be securely transferred to pay for purchases, and PayPal filled it. Elno Muskrat made many of his billyuns and billyuns of bucks by merging one of his various X entities with the service and then selling it to eBay for literal billions. The selling and paying arms split off about a decade ago, although at least one of my recent clients suffered endless aggravation from the sites still commingling rules and funds. They've been slowly gobbling potential competitors for almost as many years, including ones known as Xoom, iZettle, and the only other of their tentacles I've become entangled with, Venmo. The Swedish iZettle site is not to be confused with Zelle; that's a competing service major US banks set up to claw back some of the lost revenue from people throwing their money around the Interwebs.
But how do these players make revenue off Johnny sending Jory 10 bucks for a concert gig? The answer lies in a simple bar of soap:
It floats.
Johnny wants to send Jory those ten bucks. Jory has a QR code at his gigs, or gives out his email address that he uses on one of these sites. As soon as Johnny tells PayMoZel to send the money, it instantly gets zapped out of his bank account. Jory will probably only get something like $9.32 unless Johnny designates it as a "friends and family" payment, not a "payment for goods or services." That's the first appearance of what Soprano types call "the vig." Those X bucks, meanwhile, go right into Elon's empire at that instant, but when Jory logs in to see his 10 bucks (or $9.32), he is offered a choice. Transfer it INSTANTLY to Jory's bank account, with another round of vigorish coming out, or "send to bank by regular method (1-3 business days)." Businessy Bill offers the same option for their ACH transfers. While I'm sure there are desperate cash-poor kids who will almost always let the payshark take the cut. I rarely allow it on either PayPal or Venmo.
(Yes, I tried Zelle with a medical provider. It was ca-ca and the doctor never got it. Went back to using plastic cards with her.)
Even when the receiver chooses to pay the fee for "instant transfer," though, and always when they go with the slower-boat option? The payment service "plays the float" and earns interest on those billions in transit at any given moment.
All of this leads up to why I'm telling this long, stupid story. For various reasons, funds got a little tight at the middle of this month. One client's either too busy to pay by any of the above methods when he has money, or when he's not busy he doesn't have it. Those dinosaurs still using the US Mail, even from the same or a one-over zip code, will take days if not a week or more for their mail to get to me. Finally, I've got three of my largest almost-ready receivables tied up in litigation that's gone on for years. So to keep everything on time through the end of last week, I needed one or two commitments to come through. One was fairly small: a legal plan client who only has to pay his filing fee. I get the rest when he actually completes his paperwork. He met me two Fridays ago, with the promise of "drawing" one of those "check" thingies. Oopsies, no check. He'd bring it Monday. That was my World Tour Via Syracuse Day, and I could've detoured to Rochester on my way home to grab it. Oh, noes, my kid's in the hospital. Friday, for sure! Indeed he was there this past Friday. I'd previously offered him the PayPal alternative, which I had to painstakingly explain to him. I don't get notifications of Elon getting the money, so I'm OCDishly checking the backup email address I use for it and pretty much only it.* Nothing. Finally, I text, and he now decides he'd prefer Venmo.
Yes, I have that, too, mainly for literal 10-15 dollar transfers to musicians like Jory. It's linked to a credit union checking account we use, except for small Joryish things, only for one monthly transfer to that credit union. Still, the client is always right and all, and within minutes, there was the filing fee! "Was," meaning "the client gave Venmo the money." For once, I was ready to eat the five bucks and change for the instant transfer:
Not available with this financial institution.
Fine. I opted for the only option of "1-3 business days" and grumbled. PayPal almost always is on the "1" side of the "1-3 days," as in it's there by 7 the next morning. This one, no. Not Saturday, nor Sunday. Even Monday morning, despite the Venmo site telling me "scheduled to arrive Monday," the credit union say it no got. I headed over- they only have two branches in this whole area- to do battle with a bank officer, but blessedly, sometime before getting there, my ATM card said, Oh, this filing fee? Sure you can have that!
Yesterday's only payment came by check. It was infinitely easier to deal with. And tomorrow? COULD, not jinxing it beyond a COULD, bring a blessed end to the largest of those years-long litigation battles and set in motion a transfer to my trust account that will make life much easier once those funds clear.
----
* Hey- this is actually important. The reason I use backchannel email addresses for these services, and NEVER use their mobile apps for them no matter how many times their desktop sites nag me to, is that your email address and a potentially hackable password are a fraudster's ticket into your entire bank account. And all of the major sites make clear that once they get a click to "send money," even if you're tricked into doing it or someone tricks your login or your physical phone away from you? That money's gone, and they're not refunding it like they refund everything over 50 bucks on a fraudulent credit card charge.
So hey, HEY!
Maybe by 2047 this will all be easier. But I doubt it:P
Anyway,…
For the most part, I am a sole practitioner with no staff and I manage all of my own accounts, both receivable and payable. My business “line of credit“ is limited to a single credit card that I use mostly to pay for odd office expenses and court filing fees. Incoming payments go into one of two accounts, which I still remember being identifiable as they were explained in my review for the State Bar ethics exam: "There are two kinds of money. The bills that are green belong to you. The bills with gray and white stripes on them belong to your clients, and you can be disbarred or even arrested if you treat them like they’re green.” That is why we are required to keep a separate “trust account” for all money coming in that is even partially client property.
A large percentage of disciplinary decisions involve lawyers who are unaware of, or choose not to follow, that simple precept, or the much longer list of persnickety requirements connected with it. Among them: a “no commingling “ rule that can get a lawyer in trouble for just leaving their share of a trust account deposit in there for too long. (I usually transfer my fees out as soon as the incoming check is cleared, with always the risk of the bigger problem that happens if that incoming check bounces.) A prohibition on transferring money out of that account by any means other than a paper check that must be written to a payee, not to "cash," so that account does not have an ATM card for any such withdrawals OR deposits. Strictly speaking, we are not even allowed to use online banking to transfer funds out of that account, even to the extent we have earned them, without the express written permission of the client every time we do so. I find it easier just to write the damn checks.
Yes, kids. These:
Until about 25 years ago, "a check" was just about the only way I, or anyone, got paid anything. Minor exceptions existed for things like Social Security direct deposits, but the paper pieces of paper with the futuristic numbers on the bottom? Those were the primary currency of the realm and the rulers of the financial roost.
Yes, there were credit cards back then, but lawyers are always at least a generation behind the curve with any innovation. Plus, in my primary specific line of work, bankruptcy law, credit cards were a complete no-no. Not only could a client's credit card payment to a lawyer for their bankruptcy fee be potentially recovered as "preferential" or render the client's entire debt to the bank nondischargeable, the firm could risk being able to accept credit cards at all if one of its charges wound up not being paid back by the client. The advent of the "debit card"- branded with a blue Visa (beginning with a 4) or red MasterCard (a 5) logo- eliminated some of those risks, but it was often impossible to tell whether that card number was debit or credit, so I've just maintained a "no-no" policy toward anything other than ca-ca-ca-ca-cash, ch-ch-ch-ch-checks, or a few other options, one much older and the others much newer.
What's safer than a money order? They're issued by banks and even the Post Office, have security features, and they're prepaid with actual cash money! Well, except they've become so tied to Nigerian scammers and other bad actors, they often get flagged by bank anti-fraud algorithms. I had one client's mired in an ATM hiccup for months last year before it finally got resolved, and when I get one now I always deposit it with a real live teller.
We always had wire transfers, mostly for big-money transactions. Those have also been fraud magnets, and between the wastes of time and paperwork required now to initiate one and the fees charged in, out or both, I avoid them like the plague.
Some clients now use the little cousin of the wire transfer known as the "ACH," for automated clearing house. It's almost as quick, irreversible and does not result in fees being charged for incoming. Some clients have migrated to this option for routine fee payments, among the providers being one called Tipalti, which just sends payment without much fanfare, and another named Bill. Yes, his name is Bill and he lives up on ACH Hill. This is what I get from Bill every time a client forks it over:
Stay classy there, Billy Bub....
At last, though, we come to the type that has extended beyond the business world, into the wallets and QR codes of Teh Kids everywhere: the mobile payment apps.
----
In the beginning, there was PayPal.
Remember my short history of the eBay auction site last week? Course you don't. I'm kidding myself about anyone reading and remembering this sentence. That commerce concept created a need for money to be securely transferred to pay for purchases, and PayPal filled it. Elno Muskrat made many of his billyuns and billyuns of bucks by merging one of his various X entities with the service and then selling it to eBay for literal billions. The selling and paying arms split off about a decade ago, although at least one of my recent clients suffered endless aggravation from the sites still commingling rules and funds. They've been slowly gobbling potential competitors for almost as many years, including ones known as Xoom, iZettle, and the only other of their tentacles I've become entangled with, Venmo. The Swedish iZettle site is not to be confused with Zelle; that's a competing service major US banks set up to claw back some of the lost revenue from people throwing their money around the Interwebs.
But how do these players make revenue off Johnny sending Jory 10 bucks for a concert gig? The answer lies in a simple bar of soap:
It floats.
Johnny wants to send Jory those ten bucks. Jory has a QR code at his gigs, or gives out his email address that he uses on one of these sites. As soon as Johnny tells PayMoZel to send the money, it instantly gets zapped out of his bank account. Jory will probably only get something like $9.32 unless Johnny designates it as a "friends and family" payment, not a "payment for goods or services." That's the first appearance of what Soprano types call "the vig." Those X bucks, meanwhile, go right into Elon's empire at that instant, but when Jory logs in to see his 10 bucks (or $9.32), he is offered a choice. Transfer it INSTANTLY to Jory's bank account, with another round of vigorish coming out, or "send to bank by regular method (1-3 business days)." Businessy Bill offers the same option for their ACH transfers. While I'm sure there are desperate cash-poor kids who will almost always let the payshark take the cut. I rarely allow it on either PayPal or Venmo.
(Yes, I tried Zelle with a medical provider. It was ca-ca and the doctor never got it. Went back to using plastic cards with her.)
Even when the receiver chooses to pay the fee for "instant transfer," though, and always when they go with the slower-boat option? The payment service "plays the float" and earns interest on those billions in transit at any given moment.
All of this leads up to why I'm telling this long, stupid story. For various reasons, funds got a little tight at the middle of this month. One client's either too busy to pay by any of the above methods when he has money, or when he's not busy he doesn't have it. Those dinosaurs still using the US Mail, even from the same or a one-over zip code, will take days if not a week or more for their mail to get to me. Finally, I've got three of my largest almost-ready receivables tied up in litigation that's gone on for years. So to keep everything on time through the end of last week, I needed one or two commitments to come through. One was fairly small: a legal plan client who only has to pay his filing fee. I get the rest when he actually completes his paperwork. He met me two Fridays ago, with the promise of "drawing" one of those "check" thingies. Oopsies, no check. He'd bring it Monday. That was my World Tour Via Syracuse Day, and I could've detoured to Rochester on my way home to grab it. Oh, noes, my kid's in the hospital. Friday, for sure! Indeed he was there this past Friday. I'd previously offered him the PayPal alternative, which I had to painstakingly explain to him. I don't get notifications of Elon getting the money, so I'm OCDishly checking the backup email address I use for it and pretty much only it.* Nothing. Finally, I text, and he now decides he'd prefer Venmo.
Yes, I have that, too, mainly for literal 10-15 dollar transfers to musicians like Jory. It's linked to a credit union checking account we use, except for small Joryish things, only for one monthly transfer to that credit union. Still, the client is always right and all, and within minutes, there was the filing fee! "Was," meaning "the client gave Venmo the money." For once, I was ready to eat the five bucks and change for the instant transfer:
Not available with this financial institution.
Fine. I opted for the only option of "1-3 business days" and grumbled. PayPal almost always is on the "1" side of the "1-3 days," as in it's there by 7 the next morning. This one, no. Not Saturday, nor Sunday. Even Monday morning, despite the Venmo site telling me "scheduled to arrive Monday," the credit union say it no got. I headed over- they only have two branches in this whole area- to do battle with a bank officer, but blessedly, sometime before getting there, my ATM card said, Oh, this filing fee? Sure you can have that!
Yesterday's only payment came by check. It was infinitely easier to deal with. And tomorrow? COULD, not jinxing it beyond a COULD, bring a blessed end to the largest of those years-long litigation battles and set in motion a transfer to my trust account that will make life much easier once those funds clear.
----
* Hey- this is actually important. The reason I use backchannel email addresses for these services, and NEVER use their mobile apps for them no matter how many times their desktop sites nag me to, is that your email address and a potentially hackable password are a fraudster's ticket into your entire bank account. And all of the major sites make clear that once they get a click to "send money," even if you're tricked into doing it or someone tricks your login or your physical phone away from you? That money's gone, and they're not refunding it like they refund everything over 50 bucks on a fraudulent credit card charge.
So hey, HEY!
Maybe by 2047 this will all be easier. But I doubt it:P