Ethics Opinon 1972-10

May 22, 1972

SUBJECT: PAYMENT FOR SERVICES BY CREDIT CARD

I
QUESTION PRESENTED

The Bank of America has a program wherein loans for legal fees are advanced for client-applicants in certain cases. Actions involving domestic proceedings, criminal proceedings and contingent fee cases are excluded from the program. What is the propriety on the use of credit cards in those situations allowed under the program?

II
SUMMARY

Rule 3 of the Rules of Professional Conduct of the State Bar of California would not proscribe the use of credit cards for fees, however, one could argue that Canon 34 of the American Bar Association would preclude such use. Further information on this matter will be forthcoming upon receipt of the opinion of the Law Office Economics Committee which has been consulted on this matter.

III
CANONS

Canon 34 states:

"No division of fees for legal services is proper, except with another lawyer, based upon a division of service or responsibility."

Canon 35 of the American Bar Association provides that:

"The professional services of a lawyer should not be controlled or exploited by any lay agency, personal or corporate, which intervenes between client and lawyer."

The last sentence of Canon 12 (a guideline for fixing the amount of a fee) states:

"In fixing fees it should never be forgotten that the profession is a branch of the administration of justice and not a mere money-getting trade."

Rule 3-102 provides:

"A member of the State Bar or a firm of which he is a member shall not directly or indirectly share legal fees with a nonlawyer except in certain situations not involved here."

IV
ANALYSIS

One could, without too much reflection, conjure up several problems that conceivably could arise through the use of credit cards. Arguably, the percentage discount which a credit card company would extract could be construed as a partial division of fees in violation of Canon 34. On the other hand, the use of credit cards would seem to be acceptable if maintained within certain restricted guidelines.

This opinion is advisory only. It is not binding upon the State Bar, the Board of Governors, its agents or employees.

EDITOR'S NOTE: The Board of Governors of the State Bar issued a Policy Statement in the State Bar Reports of February 1975 which stated that they do not oppose the use of credit cards for the payment of legal fees and expenses provided that provisions of the State Bar Act and Rules of Professional Conduct are fully and completely observed. The Statement listed those areas which should be given particular care. Also see A.B.A. Formal Opinion No. 338. Effective 1/1/75, the division of fees with a nonlawyer is covered by California Rules of Professional Conduct 3-103. The subject matter of the A.B.A. Canons cited is now found in Canon 3 and DR 3-102 of the Code of Professional Responsibility.

 

Disclaimer: This opinion was issued by the Legal Ethics Committee of the San Diego County Bar Association. It is advisory only and is not binding upon any member of the SDCBA, any other member of the State Bar of California, the State Bar of California or its Board of Governors, or any persons or tribunals charged with regulatory responsibilities. The SDCBA, its officers, directors, agents, and the Legal Ethics Committee members assume no responsibility or liability in rendering this opinion.