Ethics Opinion

Opinion 21-2

FLORIDA BAR ETHICS OPINION
OPINION 21-2
March 23, 2021
Advisory ethics opinions are not binding.
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.
RPC:
I.

4-1.1, 4-1.6(a), 4-1.6(e), 4-1.15, 5-1.1(a), (g)

Introduction

The Florida Bar Ethics Department has received several inquiries whether lawyers may
accept payment from clients via Web-based payment-processing services such as Venmo and
PayPal. 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.
Several Web-based, mobile, and digital payment-processing services and networks
(“payment-processing services”) facilitate payment between individuals, between businesses, or
between an individual and a business. Some are specifically designed for lawyers and law firms
(e.g., LawPay and LexCharge), while others are not (e.g., Venmo, PayPal, ApplePay, Circle, and
Square). These services operate in different ways. Some move funds directly from the payor’s bank
account to the payee’s bank account, some move funds from a payor’s credit card to a payee’s bank
account, and some hold funds for a period of time before transferring the funds to the payee. Service
fees differ for various transactions, depending on the service’s terms of operation. Some offer more
security and privacy than others.
The Committee sees no ethical prohibition per se to using these services, as long as the
lawyer fulfills certain requirements. Those requirements differ depending on the purpose of the
payment—i.e., whether the funds are the property of the lawyer (such as earned fees) or the
property of a client or third person (such as advances for costs and fees and escrow deposits). The
two principal ethical issues are (1) confidentiality and (2) safeguarding funds of clients and third
persons that are entrusted to the lawyer.
II. Analysis
A. Confidentiality
1. The Issue
The use of payment-processing services creates privacy risk. This arises from the potential
publication of transactions and user-related information, whether to a network of subscribers or to a
population of users interacting with an application. For example, Venmo users, when making a

payment, are permitted to input a description of the transaction (e.g., “$200 for cleaning service”).
Transactions then are published to the feed of each Venmo user who is a party to the transaction.
Depending on the privacy settings of each party to the transaction, other users of the application
may view that transaction and even comment on it.
For lawyers, accepting payment through a payment-processing service risks disclosure of
information pertaining to the representation of a client in violation of Rule 4-1.6(a) of the Rules
Regulating The Florida Bar. Rule 4-1.6(a) prohibits a lawyer from revealing information relating to
representation of a client absent the client’s informed consent. This prohibition is broader than the
evidentiary attorney-client privilege invoked in judicial and other proceedings in which the lawyer
may be called as a witness or otherwise required to produce evidence concerning a client. The
ethical obligation of confidentiality applies in situations other than those in which information is
sought from the lawyer by compulsion of law and extends not only to information communicated
between the client and the lawyer in confidence but also to all information relating to the
representation, whatever its source. R. Regulating Fla. Bar 4-1.6 cmt. para. [4]. Likewise, a lawyer
must make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or
unauthorized access to, information relating to the representation. Id. R. 4-1.6(e); see also id. R. 41.6 cmt. paras. [24], [25]. The obligation of confidentiality also arises from a lawyer’s ethical duty
to provide the client with competent representation. See id. R. 4-1.1 cmt. para. [3]. This includes
safeguarding information contained in electronic transmissions and communications. Id.
Rule 4-1.6(c)(1) permits a lawyer to reveal confidential information to the extent the lawyer
reasonably believes necessary to serve the client’s interests. Although receipt of payment in
connection with legal services benefits the client, the disclosure of information about the payment to
a community of users would not. Wide publication of a Venmo payment “for divorce
representation” hardly would serve the client’s interest. 1
2. Recommended and Required Actions
Payment-processing services typically offer various privacy settings. Venmo, for example,
enables users to adjust their privacy settings to control who sees particular transactions. The options
are (1) “Public,” meaning anyone on the Internet will be able to see it, (2) “Friends only,” meaning
the transaction will be shared only with the “friends” of the participants to the transaction, and (3)
“Private,” meaning it will appear only on the personal feeds of the user and the other participant to
the transaction. Venmo has a default rule that honors the more restrictive privacy setting between
two users: if either participant’s account is set to Private, the transaction will appear only on the
feeds of the participants to the transaction, regardless of the setting enabled by the other participant. 2
Revealing to a bank the limited information needed to make a deposit to the lawyer’s account
serves the client’s interest. In addition, financial institutions are subject to federal and state laws
regarding disclosure of financial information.
1

See Venmo Help Center, “Payment Activity & Privacy” available at https://help.venmo.com/hc/enus/articles/210413717-Payment-Activity-Privacy.
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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.
Venmo is only one example of a payment-processing service. Each application has its
unique privacy settings and potential risks. The lawyer should be aware that these options can and
likely will change from time to time. Prior to using a payment-processing service, the lawyer must
diligently research the service to ensure that the service maintains adequate encryption and other
security features as are customary in the industry to protect the lawyer’s and the client’s financial
information and to preserve the confidentiality of any transaction. The lawyer must make
reasonable efforts to understand the manner and extent of any publication of transactions conducted
on the platform and how to manage applicable settings to preempt and control unwanted
disclosures. See R. Regulating Fla. Bar 4-1.6(e); id. R. 4-1.1 cmt. para. [3]. The lawyer must take
reasonable steps to avoid disclosure by the lawyer as well as by the client, including advising clients
of any steps that they should take to prevent unwanted disclosure of information. Although not
ethically required, inserting such advice in the lawyer’s retainer or engagement agreement or on
each billing statement is wise. For example:
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.
The foregoing is just an example. Variations to fit the circumstances may be appropriate.
These confidentiality obligations apply to any payment that relates to the lawyer’s
representation of a client, regardless of the purpose of the payment.
B. Safeguarding Funds of Clients and Third Persons
1. The Issue
A customer’s account with most payment-processing services such as Venmo and PayPal
does not qualify as the type of bank account in which the trust-accounting rules require the funds of
clients or third persons in a lawyer’s possession be held. Indeed, with limited exceptions, they are
not bank accounts at all, rather they are virtual ledgers of funds trading hands, with entries made by
the service in the customers’ names.
Rule 5-1.1(a)(1) of the Rules Regulating The Florida Bar establishes the fundamental anticommingling requirement that a lawyer hold in trust, separate from the lawyer’s own funds, funds
of clients or third persons that are in a lawyer’s possession in connection with a representation
(“entrusted funds”). It requires that all such funds, including advances for fees, costs, and expenses,
“be kept in a separate federally insured bank, credit union, or savings and loan association account
maintained in the state where the lawyer’s office is situated or elsewhere with the consent of the
client or third person and clearly labeled and designated as a trust account.”

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All nominal or short-term entrusted funds must be deposited in an IOTA account. R.
Regulating Fla. Bar 5-1.1(g)(2). 3 The IOTA account must be with an “eligible institution,” namely,
“any bank or savings and loan association authorized by federal or state laws to do business in
Florida and insured by the Federal Deposit Insurance Corporation, any state or federal credit union
authorized by federal or state laws to do business in Florida and insured by the National Credit
Union Share Insurance Fund, or any successor insurance entities or corporation(s) established by
federal or state laws, or any open-end investment company registered with the Securities and
Exchange Commission and authorized by federal or state laws to do business in Florida.” Id.
R. 5-1.1(g)(1)(D).
2. Recommended and Required Actions
The Committee concludes that it is permissible for a lawyer to accept entrusted funds via a
payment-processing service. To avoid impermissible commingling, the lawyer must maintain
separate accounts with the service, one for funds that are the property of the lawyer (such as earned
fees), which normally would be deposited in the lawyer’s operating account, and one for entrusted
funds (such as advances for costs and fees and escrow deposits), which when in a lawyer’s
possession are required to be held in a separate trust account. The lawyer must identify the correct
account for the client or third party making the payment.
Rule 5-1.1 applies to funds of clients and third persons that are “in a lawyer’s possession”
and requires that any such funds be “kept” in a particular type of account. It does not require that
the funds be “immediately” or “directly” deposited into a qualifying account. A payee does not
acquire possession—access to and control over—funds transmitted via a payment-processing
service until the service makes those funds available in the payee’s account. If the funds are the
property of the lawyer, the lawyer may leave those funds in that account or transfer them to another
account or payee at the lawyer’s discretion. The lawyer, however, must transfer entrusted funds
from the service account into an account at a qualifying banking or credit institution promptly upon
their becoming available to the lawyer. By transferring entrusted funds from the service account
into a qualified trust account promptly upon acquiring access to and control over those funds, the
lawyer complies with the requirement that those funds be kept in a qualified account.
Many banks do not permit linking an IOTA account to an account with a paymentprocessing service such as Venmo or PayPal. In those situations, the lawyer should establish with
the banking institution some type of suspense account to which the account established with the
payment-processing service can be linked and into which the payments are transferred, then
promptly swept into the lawyer’s IOTA account.
Depending upon how quickly the funds are released or other factors, a payment-processing
service may charge the payee a transaction fee. Unless the lawyer and the client otherwise agree, the
“Nominal or short-term” describes funds of a client or third person that the lawyer has
determined cannot earn income for the client or third person in excess of the costs to secure the
income. R. Regulating Fla. Bar 5-1.1(g)(1)(A). That determination involves consideration of several
factors, such as the amount of the funds and the period of time that the funds are expected to be
held. See id. R. 5-1.1(g)(3); see also id. R. 5-1.1(g)(1)(C) (definition of “IOTA account”).
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lawyer must ensure that any such fee is paid by the lawyer and not from client trust funds. Likewise,
the lawyer must ensure that any chargebacks are not deducted from trust funds and that the service
will not freeze the account in the event of a payment dispute. As with the concern for
confidentiality, a lawyer must make a reasonable investigation into a payment-processing service to
determine whether the service employs reasonable measures to safeguard funds against loss or theft
and has the willingness and resources to compensate for any loss.
III. Conclusion
In sum, the Committee concludes that a lawyer ethically may accept payments via a
payment-processing service (such as Venmo or PayPal), including funds that are the property of a
client or third person that must be held separately from the lawyer’s own funds, under the following
conditions:
1. The lawyer must take reasonable steps to prevent the inadvertent or unwanted disclosure of
information regarding the transaction to parties other than the lawyer and the client or third person
making the payment.
2. If the funds are the property of a client or third person (such as advances for costs and fees
and escrow deposits), the lawyer must direct the payor to an account with the service that is used
only to receive such funds and must arrange for the prompt transfer of those funds to the lawyer’s
trust account at an eligible banking or credit institution, whether through a direct link to the trust
account if available, through a suspense account with the banking or credit institution at which the
lawyer’s trust account is maintained and from which the funds automatically and promptly are
swept into the lawyer’s trust account, or through another substantially similar arrangement.
3. Unless the lawyer and client otherwise agree, the lawyer must ensure that any transaction fee
charged to the recipient is paid by the lawyer and not from client trust funds. Likewise, the lawyer
must ensure that any chargebacks are not deducted from trust funds and that the service will not
freeze the account in the event of a payment dispute.
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.” R. Regulating Fla. Bar ch. 4,
pmbl. (“Scope”). 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. 4
Note: 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
The quoted language comes from the Preamble to the Rules of Professional Conduct, which
are found in Chapter 4 of the Rules Regulating The Florida Bar. Rule 5-1.1 is part of the Rules
Regulating Trust Accounts, which are found in Chapter 5 of the Rules Regulating The Florida Bar).
Chapter 5 is incorporated into Chapter 4 by Rule 4-1.15.
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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.

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