[WSBARP] Extra charges

Thu Mar 3 13:11:09 PST 2022

I don’t believe passing along merch. fees is an ethical violation (though it may be a violation of operating agreements issued by certain credit card companies).  WSBA Advisory Opinion No. 2214 provides as follows:

This opinion addresses whether credit card transaction fees may be charged to the client.

Question: A lawyer accepts payments from a client by credit card. The client pays the lawyer with a credit card and the credit card company then charges the lawyer a fee for the transaction. May the lawyer charge the client an additional amount to cover the fee charged the lawyer for the credit card transaction?

Answer: It is not prohibited under the Rules of Professional Conduct, PROVIDED that the lawyer notifies the client in advance of such charges and does not charge the client any more than a fee that reasonably reflects the actual cost incurred by the lawyer for the credit card transaction. HOWEVER, the attorney should consult the merchant services agreement from their credit card processor, as it is typically prohibited to charge these fees back to the customer.

Analysis: Lawyers may charge clients reasonable amounts for expenses. RPC 1.5(a). The lawyer should communicate with the client in writing the basis for expenses for which the client will be responsible. RPC 1.5(b). Comment 1 to RPC 1.5 further explains that a lawyer may charge a client “for the cost of services performed in-house, such as copying, or for other expenses incurred in-house, such as telephone charges, either by charging a reasonable amount to which the client has agreed in advance or by charging an amount that reasonably reflects the cost incurred by the lawyer.”

At the time of issuance, of this opinion, the operating agreements used by most of the major credit card companies prohibit charging customers extra fees to cover the cost of such credit card transaction fees and attempting to do so may place a lawyer in violation of obligations imposed by the credit card provider agreements. [note 1]. Before attempting to charge a client any fee to recover the costs imposed by credit card providers, the lawyer should carefully consult all applicable agreements and the contracting bank.

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Inge A. Fordham | Attorney
Fordham Law, PLLC
3218 Sixth Avenue | Tacoma, WA 98406
Office: (253) 348-2657 | Mobile: (206) 778-3131
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From: <wsbarp-bounces at lists.wsbarppt.com> on behalf of Sara Longley <sara at ivylawgroup.com>
Reply-To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Date: Thursday, March 3, 2022 at 12:57 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Extra charges

I understand it is a violation of the ethics rules to penalize clients for their mode of payment (e.g. charging extra to cover our merchant service fees), but one can give a discount for cash payments.

As far as charging for copies, I always figured the charge for the staff time to make the copies includes the cost of the paper used. But maybe I’m missing out on a great cash cow.

Best,
Sara

Sara D. Longley
Senior Attorney
Ivy Law Group, PLLC
1734 NW Market Street
Seattle, WA 98107
Phone: (206) 706-2909
sara at ivylawgroup.com<mailto:sara at ivylawgroup.com>
Pronouns: she, her, hers

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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Kary Krismer
Sent: Thursday, March 3, 2022 12:47 PM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] Extra charges

Having had the opportunity to review billings from many different firms as a result of bankruptcy fee applications I used to joke some made more money off the copiers and printers than the attorneys.  The threshold to bill was one piece of paper or one stamp.

Kary L. Krismer

206 723-2148
On 3/3/2022 12:44 PM, Ken Luce wrote:
Is there a common practice to bill clients for copies above a certain number or the charge by the credit card companies if they  pay with credit card  or postage above a certain amount?

Kenyon Luce
Luce & Associates, P.S.
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