Here is a recent Daily Record column. My past Daily Record articles can be accessed here.
Florida Bar on The Ethics of Accepting Venmo and Other Online Payments
The effects of the pandemic on the practice of law – and on our society overall – will be long lasting and significant. It will likely take years to fully appreciate how much things have changed. That being said, many of the structural modifications to our work culture are already apparent, and have been caused by the increased prevalence of remote work, social distancing requirements, and economic turbulence.
During the pandemic, many law firms initially struggled to stay afloat because of the high levels of uncertainty and the need to avoid in-person interactions. Business processes were interrupted, and traditional forms of payment collection were stalled as a result of the touchless requirements of the pandemic. Out of necessity, however, law firms quickly pivoted and many that had staunchly resisted accepting credit cards using online payment tools suddenly shifted gears.
Of course, there are many different ways to accept online payments from clients, and the functionality and privacy features of these tools vary greatly. That’s why it’s no surprise to learn that lawyers who wanted to ethically use online payment tools turned to their local ethics committees for guidance.
For example, in March the Florida Bar Professional Ethics Committee released Proposed Advisory Ethics Opinion 21-2,which squarely addressed this issue. (Note: it has yet to be approved for release as a final opinion).
In that opinion, the Committee acknowledged the increase in inquiries of this nature since the start of the pandemic: “The Florida Bar Ethics Department has received several inquiries whether lawyers may accept payment from clients via Web-based payment-processing services..This also is an increasingly frequent question on the Bar’s Ethics Hotline. Accordingly, the Professional Ethics Committee issues this formal advisory opinion to provide Florida Bar members with guidance on the topic.”
In reaching its determination as to whether lawyers can ethically use online payment tools, the Committee explained that accepting credit and debit cards via online payments is commonplace for businesses in 2021. Therefore it makes no sense to preclude lawyers from accepting this type of payment: “The Rules of Professional Conduct are ‘rules of reason’ and ‘should be interpreted with reference to the purposes of legal representation and of the law itself’…When reasonable to do so, the rules should be interpreted to permit lawyers and clients to conduct business in a manner that society has deemed commercially reasonable while still protecting clients’ interests. Permitting lawyers to accept payments via payment-processing services under the conditions expressed in this opinion satisfies those objectives.”
Because the Committee readily acknowledged that permitting attorneys to accept online payments simply made sense, the Committee concluded that it is ethical for lawyers to accept this type of payment from clients, but with certain caveats: “A lawyer ethically may accept payments via a Web-based payment-processing service (such as Venmo or PayPal), including funds that are the property of a client or third person, as long as reasonable steps are taken to protect against inadvertent or unwanted disclosure of information regarding the transaction and to safeguard funds of clients and third persons that are entrusted to the lawyer.”
The Committee explained that lawyers must protect confidentiality when using online payment tools and cautioned lawyers to familiarize themselves with their online payment platform of choice and then take steps to ensure that client confidentiality is preserved. For example, the Committee advised that if lawyers choose to use Venmo to accept payments, the app’s privacy settings will need to be adjusted in order to ensure confidentiality: “If, as with Venmo, the service being used permits the recipient to control the privacy setting, the lawyer must select the most secure setting to mitigate against unwanted disclosure of information relating to the representation.”
The Committee also recommended that lawyers who choose to accept online payments from clients consider including language like this in their retainer agreements:
“As a convenience to our clients, we accept payment for our services via certain online payment-processing services. The use of these services carries potential privacy and confidentiality risks. Before using one of these services, you should review and elect the privacy setting that ensures that information relating to our representation of you is not inadvertently disclosed to the public at large.”
Finally, the Committee wisely acknowledged that technology is always changing and thus their recommendations regarding specific products were not intended to be inelastic: “The discussion about specific applications in this opinion is based on the technology as it exists when this opinion is authored and does not purport to address all such available technology. Web-based applications and technology are constantly changing and evolving. A lawyer must make reasonable efforts to become familiar with and stay abreast of the characteristics unique to any application or service that the lawyer is using.”
While this opinion is not yet in its final form, it offers lots of instructive insight and guidance for lawyers seeking to accept online payments in their firms. It covers a lot of ground, so make sure to read it in its entirety for advice regarding trust account reconciliation and other issues unique to accepting credit card payments for legal services.
And finally, if your firm isn’t already accepting online payments, what are you waiting for? There’s no better time than now to make that leap.
Nicole Black is a Rochester, New York attorney, author, journalist, and the Legal Technology Evangelist at MyCase law practice management software for small law firms. She is the author of the ABA book Cloud Computing for Lawyers, co-authors the ABA book Social Media for Lawyers: the Next Frontier, and co-authors Criminal Law in New York, a Thomson Reuters treatise. She writes legal technology columns for Above the Law and ABA Journal and speaks regularly at conferences regarding the intersection of law and technology. You can follow her on Twitter at @nikiblack or email her at email@example.com.