Ethics Opinions

RENDERED September 11, 1987

FEES- The use of credit cards for the payment of legal services and expenses is permitted.

The Ethics Committee of the Mississippi State Bar Association has been requested to render an opinion on the following facts:

A lawyer wants to know if he may offer a credit card plan to his clients, under which the clients could pay the lawyer's legal fees and expenses.

A typical credit card plan is entered into between a bank or other financial institution and a merchant (lawyer in this case). A cardholder (client) under the plan would engage the lawyer for the performance of legal services, and the client would sign an authorized sales slip of the bank in payment of the legal fees. The lawyer would then deposit the sales slip in his account at the bank, and the bank would credit his account for this amount. The bank would then charge the lawyer a designated percentage of this sum as its fee for collecting the account from the client. The bank would then proceed to collect the account from the client, and the client would incur interest charges on delinquent accounts.

Rule 1.5 of the Mississippi Rules of Professional Conduct deals specifically with the subject of attorney's fees. Although the payment of legal services by means of credit cards is not specifically mentioned in this Rule, it should be noted that neither is such practice prohibited therein. Mississippi Rules of Professional Conduct, Rule 1.5.

The American Bar Association has approved the use of credit cards for the payment of legal services, provided that such plan meet certain stated requirements. ABA Formal Opinion 338 (November 16, 1974). This Committee believes that the guidelines set forth in said Opinion are sound, and that the respective interests of lawyers and clients are adequately protected under the requirements stated therein. However, said ABA Opinion contains several restrictions concerning the publicity surrounding, and the advertising of, a credit card plan for lawyers. Since the time that such opinion was rendered, both the American Bar Association and the Mississippi State Bar Association have adopted provisions allowing attorneys to advertise their services through the public media. A.B.A. Model Rules of Professional Conduct, Rule 7.2; Mississippi Rules of Professional Conduct, Rule 7.2. In particular, this Rule permits public dissemination of information concerning the lawyer's prices for specific services and payment and credit arrangements. Mississippi Rules of

Professional Conduct, Comment to Rule 7.2. As a consequence, this Committee believes that no additional restrictions concerning the publicity and advertising of such a credit card plan should be imposed, beyond those set forth in Rule 7.2 and the related rules on lawyer advertising.

Therefore, it is the opinion of this Committee that the use of credit cards for the payment of legal services and expenses is permitted, provided that the credit card plan offered by the lawyer meets these requirements:

1. A lawyer shall not encourage participation in the plan, but his position must be that he accepts the plan as a convenience for clients who desire it.

2. A lawyer may not because of his participation increase his fee for legal services rendered the client.

3. Charges made by lawyers to clients pursuant to a credit card plan shall be only for services actually rendered or cash actually paid on behalf of a client.

4. In participating in a credit card program the lawyer shall scrupulously observe his obligation to preserve the confidences and secrets of a client