In Kentucky, may a lawyer participate in LAWCARD, a credit-card program that finances the payment of legal fees?

Plain-English summary

The Committee was asked whether Kentucky lawyers could enter into an arrangement with LAWCARD, a credit-card program that finances the payment of legal fees. It answered yes. The opinion characterized LAWCARD as a credit-card plan rather than a for-profit lawyer referral service, noting that several jurisdictions had approved it (citing Maine Op. 138 (1994) and Alabama Op. 93-19 (1993)).

Because ABA and KBA opinions already allowed law firms to accept credit cards as payment for their own legal services (ABA Formal Op. 338; KBA Op. E-172), the Committee found no reason to answer otherwise, provided LAWCARD and participating lawyers comply with KBA E-172 and all governing laws and rules, expressly including Rule 5.4(a) against fee-splitting with non-lawyers. The opinion added that it could not constitute legal advice to, or an endorsement or certification of, LAWCARD or any lawyer, and it appended KBA E-172 (1977) for the reader's convenience.

Currency note

This opinion was issued in 1994, before Kentucky's adoption of the 2002 Ethics 2000 revisions to the Rules of Professional Conduct (SCR 3.130). The Kentucky Bar Association notes the rules are amended periodically and that KBA E-426 also addresses the issue raised here; lawyers should consult the current version before relying on this opinion. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a Kentucky lawyer participate in LAWCARD?

A: Yes. The opinion concluded lawyers may participate, treating LAWCARD as a credit-card plan rather than a for-profit referral service.

Q: What conditions did the opinion attach?

A: Compliance with KBA E-172 and all governing laws and rules, including Rule 5.4(a)'s prohibition on fee-splitting with non-lawyers.

Q: Did the opinion endorse LAWCARD?

A: No. The Committee stated its opinion was not legal advice and not an endorsement or certification of LAWCARD or of any participating lawyer.

Background and rules framework

The opinion treats the question under the rules governing fees and the bar on sharing legal fees with non-lawyers, Rule 5.4(a) (Model Rule 5.4), reading the credit-card financing arrangement as consistent with prior authority allowing lawyers to accept credit-card payment for their services.

Citations and references

Rules of Professional Conduct:

• MR 5.4(a) / KRPC 5.4(a) (sharing legal fees with non-lawyers)
• MR 1.5 / KRPC 1.5 (fees)

Other opinions cited:

• ABA Formal Op. 338: law firms may accept credit cards for legal services
• KBA E-172 (1977): conditions for accepting credit-card payment, appended to this opinion
• KBA E-426: also addresses LAWCARD-type financing
• Maine Op. 138 (1994); Alabama Op. 93-19 (1993): approving LAWCARD

See also

• KBA Ethics Op. E-426: Credit-Card Payment of Earned and Unearned Fees
• KBA Ethics Op. E-380: Non-Refundable Retainers and the Trust Account
• KBA Ethics Op. E-366: Dividing Fees With a Referring Lawyer

Source

• Landing page: https://kybar.org/For-Members/Rules-Ethics-Information/Ethics-Opinions
• Original PDF: https://kybar.org/Portals/0/Admin/Ethics%20Opinions/KBA_E-370.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-370
Issued: September 1994

The Rules of Professional Conduct are amended periodically. Lawyers should consult
the current version of the rules and comments, SCR 3.130 (available at
http://www.kybar.org), before relying on this opinion. KBA E-426 also addresses the
issue raised by this opinion.

Question:

May Kentucky Lawyers enter into an arrangement with LAWCARD, a
credit card program that finances the payment of legal fees?

Answer:

Yes

References:

ABA Op. 338 (1972); KBA Op. E-172 (1974); Main Op. 138 (1994); Alabama
Op. 93-19 (1993).
OPINION

LAWCARD is a credit card plan and not a for-profit lawyer referral service. Use of
LAWCARD has been accepted in a number of jurisdictions, and there are several ethics opinions
explicitly approving of LAWCARD. See Main Op. 138 (1994); Alabama Op. 93-19 (1993).
ABA and KBA opinions allow law firms to accept credit cards as a method of payment
for legal services performed by that firm. ABA Formal Op. 338 (1974); KBA Op. E-172 (1977).
So long as LAWCARD and the lawyer participating in the LAWCARD program comply with
KBA E-172, as well as all governing laws and rules (e.g., Rule 5.4(a) prohibiting fee-splitting
with non-lawyers), the Committee finds no reason to answer the question in any way but the
affirmative.
We do note that our opinion does not and cannot constitute legal advice or a legal opinion
to the lawyer, to LAWCARD, or to any other person, nor an endorsement or certification of
LAWCARD or lawyers accepting LAWCARD. The Committee does not give legal advice; nor
does it review and certify compliance with the law.
For the convenience of the reader we append KBA E-172 (1977).

Note to Reader
This ethics opinion has been formally adopted by the Board of Governors of the Kentucky
Bar Association under the provisions of Kentucky Supreme Court Rule 3.530 (or its predecessor
rule). The Rule provides that formal opinions are advisory only.