(CANONS 1, 5, 9;

(DR 1-102(A)(I), (2);

(EC 1-5, EC 5-1, EC 9-2,6


May a lawyer subscribe to a Master Charge Plan under which his clients may pay his fees by using their Master Charge Cards?


The Master Charge Plan, as submitted, requires the subscriber to execute a printed form of agreement with a Bank member of an Association of Banks authorized to issue “‘Master Charge Cards”‘, which agreement is titled “‘Master Charge Merchant Agreement”‘, The “‘Merchant”‘ (in this case it would be the lawyer) agrees to participate in the Program to enable a Cardholder to “‘purchase goods and/or services from Merchant”‘ by use or means of a Charge Card, and the Merchant agrees that he “‘will honor properly tendered Charge Cards issued by any Association member or any Compatible Issuer (Card Issuer), will not discriminate between Cardholder and cash customers or between Cardholders of different Card Issuers, i.e., Merchant, will sell Merchants goods and/or services at Merchant’s regular cash prices, including any special sales prices then in effect, without service or carrying charges of any kind to Cardholders , and without otherwise requiring any Cardholder to pay any part of the discount charged Merchant hereunder and will not refuse to exchange, return or adjust on merchandise purchased if any exchange, return or adjustment is permitted to Cash customers”‘.


The Merchant is required to maintain a regular checking account in the Bank and deposit all “‘Sales Slips” ‘in said account. The Bank in turn would credit Merchant’s Account with the total Sales Prices thereof, and either deduct a set discount there from or charge the Merchant’s Account monthly for such discount.


Further, the terms of the agreement require, among many other provisions,


  1. that the Merchant set forth upon each “‘Sales Slip”‘ – “‘a brief description of the goods and/or services involved and cost thereof in sufficient detail to identify the transaction”‘; and


  1. that “‘Merchant will not deliver a Sales Slip to ‘Bank’ until such time as Merchant has performed Merchant’s obligations to purchaser in connection with the transaction evidenced thereby”‘; and


  1. that “‘‘bank’ has sole right to receive payments on Sales Slips. . . and Merchant hereby assigns to ‘Bank’ all its right, title and interest in and to all Sales Slips.”‘; and


  1.  that “‘all Sales Slips . . . are subject to . . . verification by ‘Bank’”‘; and that Merchant will “‘preserve all records pertaining to Charge Card Sales . . . . Sales Slips . . . for one year from date thereof and permit ‘Bank’ to examine and verify same”‘; and


  1. that “‘Merchant will adequately exhibit such advertising displays as ‘Bank’ may provide for advising the public that Charge Cards will be honored by Merchant”‘; and


  1. that “‘Merchant will use such forms and equipment as ‘Bank’ may provide or approve”‘; and “‘observe and comply with the applicable Rules and Regulations promulgated under the Program and such procedures as ‘Rank’ or Association may prescribe for Charge card Sales”‘



The practice of law is not a business. It is obvious that in a number of respects the provisions of the proposed Master Charge Plan should not be applicable to lawyers’ fees. Primarily the Flan covers charges of a Merchant for goods sold or charges of firms or individuals who perform various types of services, such as repairs and installations of all kinds. Although the Plan may be very suitable in general business transactions, it is not appropriate to the legal profession.


Thus, the information which the lawyer is required to disclose to the bank may include client’s confidences which it is the lawyer’s duty to preserve. Canon 4; EC 4-1, 2, 3; DR 4-101. Even client’s prior consent, exacted as the price of obtaining credit for the payment of his lawyer’s fee should not justify this, absent safeguards which the Plan does not provide. Cf. EC 2-25. The provision obligating the lawyer to assign his right to his fee, without an express recapture privilege, constitutes a surrender by the lawyer of control over an essential feature of his professional relationship with his client, viz: the power to determine whether or not or when to enforce payment by the client. EC 2-23. Additionally, the requirement that the lawyer participate in advertising the bank’s credit service does not conform with the standards of dignity expected of members of the bar.


This is not to say that every plan for financing of attorneys’ fees necessarily would violate the provisions of the Code.


In ABA 320 (1968) it was stated that a plan for financing legal fees “‘if formulated and administered in accordance with the canons of ethics as intepreted in this opinion, is not per se unethical”‘


Again, as stated in N.Y. State 117 (1969):


“‘Within proper safeguards, bank charges plans may be used for payment of professional fees. ‘


However, in the opinion of this Committee, an attorney should not participate in a Master Charge Plan in the form proposed for the reason that it is not formulated and clearly would not be administered within the framework of the Code of Professional Responsibility.


May 10, 1972.