Practical and Ethical Considerations of Debit and Credit Card Payments for Ohio Law Firms

As law firms continue to streamline billing and improve collections, many have turned to electronic payments including credit cards, debit cards, and eChecks. While this shift can reduce accounts receivable and offer greater convenience to clients, topline pressure also has attorneys considering how to navigate overhead expenses such as payment processing fees. Ohio attorneys must carefully navigate both card issuers’ rules, federal and state laws, and professional ethics rules when determining payment policies.

Payments on Plastic: Card Surcharging Permissible with Disclosure

Ohio attorneys may ethically accept credit card payments for legal fees and expenses. According to the Ohio Board of Professional Conduct’s Ethics FAQs, a lawyer may charge the client the fees associated with the use of a credit card provided the client agrees to the charges, preferably in writing. This is consistent with Ohio Rule of Professional Conduct 1.5, which governs the communication and reasonableness of fees and expenses. OBLIC recommends a more prudent and risk-averse approach: always reduce the fee and expense agreement to writing.

Surcharges on credit card transactions, which pass the credit card processing fee directly to the client, must be handled with care. While legal in Ohio (but prohibited in other states), such charges have often been discouraged in the legal profession due to concerns over client fairness and the duty to avoid unreasonable fees. Furthermore, the Board’s Advisory Opinion 2007-03 clearly prohibits using client trust funds (IOLTA) to pay for processing fees. Any such fees must be withdrawn from the firm’s operating account, not from client funds.

Best Practices for Managing Fees and Trust Funds

• Never deduct fees from client trust funds. Processing companies should be configured to deposit 100% of the client’s payment into the trust account (IOLTA) and withdraw fees separately from the firm’s operating account.
• Disclose all fees in advance—and in writing. While ethics rules suggest that client agreement to processing fees may be “preferably in writing,” it is a best practice to ensure that every client signs a written fee agreement that includes a clear explanation of any additional charges.
• Consider alternatives and the benefits of accepting cards. If your firm is weighing out the pros and cons of passing along processing fees to clients, consider all the benefits of accepting electronic and credit transactions. By accepting credit, debit and electronic payment forms, firms can set up regular, recurring payments to facilitate an evergreen retainer or installments on a past-due balance. This can reduce accounts receivable and ensure sufficient funds in trust as the client’s matter progresses.
  • If your firm chooses to charge a flat “convenience fee” for any payment method that is not cash or check, that fee must be reasonable, disclosed in advance, and not disproportionate to the actual cost incurred by the firm. Firms must also be alert to merchant rules set by card issuers.

A Practical Perspective

Many attorneys choose not to pass along transaction fees to clients, viewing these costs as part of the firm’s overhead – similar to office rent, postage, or legal research tools. While credit card processing fees can range from 2–4%, the financial benefits of accepting electronic payments such as improved cash flow, reduced accounts receivable, and the ability to implement recurring payment plans often outweigh the modest cost.

Beyond financial considerations, there are client service and reputational factors at play. Passing along small transaction fees, particularly when clients are already paying for professional services, can risk creating the impression that the firm is nickel-and-diming. This perception can undermine trust and goodwill, especially in sensitive or high-stakes matters where clients are already feeling financial or emotional strain.

Instead, treating transaction costs as a standard business expense can foster stronger client relationships, reduce friction at billing time, and position the firm as modern, efficient, and client-focused. Even when a firm does choose to recover processing costs, the approach must be thoughtful, transparent, and proportionate, never hidden or excessive.

In all cases, clearly written fee agreements and strict adherence to trust accounting rules are essential. Remaining questions? Don’t hesitate to reach out.

This information is made available solely for loss prevention purposes, which may include claim prevention techniques designed to minimize the likelihood of incurring a claim for legal malpractice. This information does not establish, report, or create the standard of care for attorneys. The material is not a complete analysis of the topic and should not be construed as providing legal advice. Please conduct your own appropriate legal research in this area. If you have questions about this email’s content and are an OBLIC policyholder, please contact us using the information above.