Opinion 16-2

FLORIDA BAR ETHICS OPINION
OPINION 16-2
October 21, 2016
Advisory ethics opinions are not binding.
A lawyer may provide clients with information about a financing company in which the lawyer
has no ownership or other interest, which will loan the lawyer’s clients’ money to pay the
lawyer’s fees for criminal defense representation in which the financing amounts, charge and
interest vary, in which the financing charge is a varying percentage of the loan, if the lawyer
offers clients all available fee options including payment plans and credit cards, does not charge
participating clients any higher fee, does not recoup the finance charge from the client, will
continue the representation regardless of whether the client repays the loan to the financing
company, and receives no benefit from the financing company for any client’s participation other
than the lawyer’s fees for representation for which the client will repay the finance company.
RPC:
Opinions:

4-1.5(h), 4-1.6, 4-1.7(a)(2), 5-1.1(a)(1)
93-2

A member of The Florida Bar has requested an advisory ethics opinion. The operative
facts as presented in the inquiring lawyer’s letter and subsequent response to the committee’s
questions are as follows.
The inquirer has been approached by a finance company that offers to provide loans to
the inquirer’s clients to pay for legal fees for representation in criminal defense cases. The
inquirer has no ownership interest in the finance company and no existing relationship with the
finance company. The inquirer would offer criminal defense clients all available options to pay
for representation in addition to the finance company, including payment plans and credit cards.
If the client opts to pay the inquirer’s fees through the finance company, the client would apply
on-line through the finance company. Loan amounts range from $1,000 to $10,000, repayment
of the loan ranges up to 5 years, and the financing company charges a financing fee and interest
rate that vary depending on the client’s credit score. The finance company alone determines the
loan amount, financing fee, repayment plan, and interest rate. The financing fee is between 5%
and 15% of the loan amount. If the loan is approved, the inquirer’s account is credited with the
full amount of the loan, less the financing fee. On approval, the inquirer’s client has 6 months to
repay the full amount of the loan with no interest or penalty. After 6 months, the client must
make monthly payments and repay the full amount of the loan and interest directly to the finance
company. The finance company assesses no penalty for early repayment. The inquirer receives
nothing from the finance company for any client’s participation in the finance company. The
inquirer’s fee agreement with individual clients would explain the inquirer’s fees, the financing
fees, and the loan process. The inquirer states that the inquirer will continue representation of
the client regardless of whether the client defaults on the loan, as the inquirer’s fees will have
been paid in full at the outset of representation.
The inquirer asks whether the company’s retention of a percentage of the loan amount as
a financing fee constitutes improper division of fees with a nonlawyer, or whether any other
aspect of the arrangement is improper.

The committee is of the opinion that the loan arrangement is not an impermissible
division of fees and that the inquirer may provide clients with information about the finance
company under the circumstances described above, and with the caveats below.
Rule 4-1.5(h) is applicable and provides as follows:
(h) Credit Plans. A lawyer or law firm may accept payment under a
credit plan. No higher fee shall be charged and no additional charge shall be
imposed by reason of a lawyer’s or law firm’s participation in a credit plan.
Credit plans, including major credit cards, typically charge a percentage of a charge to the
vendor in addition to interest to the debtor. Rule 4-1.5(h) specifically permits credit plans,
including credit cards, despite the fact that most deduct a percentage of the charge from the
amount paid to the vendor, in addition to charging interest to credit card holders. Additionally,
the risks associated with sharing legal fees with a nonlawyer are not present in this situation as
long as the finance company does not direct or influence the lawyer’s independent legal
judgment in the representation or adversely impact the lawyer-client relationship, and the
inquirer does not disclose confidential information to the finance company in violation of Rule 41.6. The inquirer should only refer clients to the finance company where the referral is in the
best interests of those clients. See Rule 4-1.7(a)(2). Additionally, the inquirer should explain the
inquirer’s role in the financing transaction and may recommend that the client obtain
independent legal advice in the financing transaction or obtain information directly from the
financing company.
If the inquirer charges a flat nonrefundable fee and no portion of the funds deposited with
the lawyer from the financing company constitute advances on either fees or costs, then the funds
must be deposited into the inquirer’s operating account, as the funds are considered earned on
receipt and therefore the property of the inquirer, which must not be commingled with client
property. See, Florida Ethics Opinion 93-2 and Rule 5-1.1(a)(1).
In summary, the committee’s opinion is that the inquirer may provide clients with
information about the financing company under the circumstances set forth above if the inquirer
does not charge participating clients any higher fee, does not recoup the finance charge from the
client, and receives no benefit from the financing company for any client’s participation other
than the inquirer’s fees for representation for which the client will repay the finance company.
Finally, in order for the inquirer to provide clients with information about the financing
company, the terms of the loan must comply with applicable law, which is outside the scope of
an ethics opinion.