Could a lawyer collect legal fees through a bank credit-card plan, validating and depositing the bill for immediate payment?

Plain-English summary

The inquiry asked about the ethical propriety of lawyers participating in a plan for the collection of legal fees, under which a bill rendered to a client is processed in the attorney's office using a validator machine and the validated bill is deposited at the local bank, immediately crediting the attorney's account. The plan, identified as the BankAmericard, was a broad-based credit card circulated by lending institutions, at a cost to the attorney of an annual validator rental plus a percentage of the bills collected.

The Committee noted that a similar plan had been considered by the ABA Committee on Professional Ethics in Informal Opinion 1120 (1969), which held it unprofessional for a lawyer to subscribe to a credit-card plan of this nature. As that opinion stated, such plans are primarily aimed at facilitating the sales of merchandise and non-professional services, all the publicity is directed to that end, the general public understands this, and it is wrong to put professional services in those categories. The Committee adopted that view.

Currency note

This opinion was issued in February 1970, before New Jersey's September 13, 1971 adoption of the Disciplinary Rules (Code of Professional Responsibility), so the Committee was applying the Canons of Professional Ethics and an ABA opinion. It also predates the 1984 Rules of Professional Conduct and all later revisions; the ABA and many states later relaxed their views on lawyers accepting credit-card payment, so this categorical prohibition does not reflect current practice. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Could a lawyer take legal fees by credit card under this opinion?

A: No. The Committee, following ABA Informal Opinion 1120, concluded it was unprofessional for a lawyer to subscribe to a bank credit-card plan for collecting legal fees.

Q: Why was the credit-card plan considered improper at the time?

A: Because such plans were aimed at facilitating sales of merchandise and non-professional services, and the Committee viewed it as wrong to place professional services in those commercial categories.

Background and rules framework

The opinion applied the Canons' commercialization concerns, adopting ABA Informal Opinion 1120 (1969), to a bank credit-card fee-collection plan. In current New Jersey terms questions about how lawyers may collect fees fall under RPC 1.5, and later authorities have permitted credit-card payment.

Citations and references

Other opinions cited:

• ABA Committee on Professional Ethics, Informal Opinion 1120 (1969)

See also

• NJ ACPE Op. 180: A Legal-Service Financing Plan and Commercialization
• NJ ACPE Op. 178: Finder's Fees and Disclosure to the Client

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp175-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

93 N.J.L.J. 132, February 26, 1970

OPINION 175

Credit Card Collection Plan for Attorneys

Inquiry has been made as to the ethical propriety of lawyers participating in a plan for the collection of legal fees, which operates as follows:

Upon rendering a bill to a client, the bill is processed in the attorney's office by the use of a validator machine and a validated bill is deposited at the local bank, resulting in immediate crediting of the deposit to the attorney's account. The plan, known as the Bank Americard, is apparently a broad based credit card being circulated by lending institutions throughout the country. The cost of the service to the attorney would be $10 per year for the rental of the "validator" and 5% of the bills collected through the plan.

A similar plan was considered by the A.B.A. Comm. on Professional Ethics, Informal Opinion 1120 (1969), where it was held that it would be unprofessional for a lawyer to subscribe to a credit card plan of this nature. It was stated in that opinion: Such plans are primarily aimed at facilitating the sales of merchandise and sales of non-professional services. All the publicity is directed to that end. The general public understands this to be the case. It is wrong, in our opinion, to put professional services in those categories.