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Ethics Advisory Opinions
UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 98-08Attorney plans to obtain the ability to accept credit cards so clients may charge bills and retainer fees to their credit card. Under Attorney's agreement with the credit card company, the company keeps 3.75% of the amount charged as its service fee.

QUESTION:
1. May Attorney charge back the 3.75% administrative fee charged by the credit card company to her clients as a cost inherent to representation or must Attorney bear the cost of the service fee?
2. Will the answer to the above question be affected if the retainer fee is nonrefundable?

SUMMARY:
1. Attorney may charge the client any amount for a fee or retainer that is objectively reasonable.

A. Attorney may charge a client's credit card for fees and retainers so long as Attorney notifies Client of these charges before they are billed to the credit card.
B. The reasonability factors set forth in RPC 1.5 (a) do not preclude charging actual credit card service fees to Client so long as there is full and prior disclosure of all charges.
C. Where Attorney plans to charge Client's credit card for fees or a retainer, she should first provide Client with the opportunity of payment by other methods.
2. The answer to the above is not affected where the retainer fee is nonrefundable.

DISCUSSION:
In advisory opinion 96-06, this committee held that an attorney may charge a client's credit card for fees and retainers so long as the attorney notifies the client of charges before they are billed to the credit card, and offers the client an opportunity to question any errors. Attorney must comply with RPC 1.5 regarding fees. So long as the fee is reasonable under the factors set forth in 1.5(a), then Rule 1.5 (b) implies that the only other requirement pertinent in this case is that the fee be clearly communicated to the client. The reasonableness factors outlined in RPC 1.5(a) do not appear to preclude charging back credit card service fees to the client. This is particularly true where the attorney gives a client the option of payment either by credit card, with an additional service fee, or by cash. The comments to RPC 1.5 state that "...where there is doubt whether a contingent fee is consistent with the client's best interest, the lawyer should offer the client alternative bases for the fee and explain their implications." This requirement may be applied by analogy to the situation of payment by credit card. Where an attorney plans to charge a client's credit card for fees or retainer, she should first provide the client with the opportunity of payment by other methods. Where the retainer is refundable and amounts to more than the charges to the client, the attorney is not required to refund the service fee already paid to the credit card so long as the original amount set for the retainer was reasonable under RPC 1.5.