New Retainer Clause Alert – Payment Apps + Engagement Agreement = Quick Cash for Lawyers
By 2021, most law firms universally accept credit card payments from client with the blessing of regulators. Nevermind that lawyers lagged behind other small businesses and other professionals, and that regulators had to be pulled along kicking and screaming, but we lawyers are well accustomed to the wheels of justice grinding slowly after all.
Yet just as we’ve solved the credit card problem, wouldn’t you know it…a host of online payment apps – most recently Venmo – are gaining popularity fast and furiously, while many lawyers are forced to wait for ethics guidance from regulators.
Fortunately, on this go round, there’s a hero in the form of the Florida Bar. As Bloomberg Law reports,a few months back, Florida regulators proposed helpful guidance for lawyers seeking to accept payments through the apps. Florida found that:
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 32 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.
To ensure that lawyers address these ethical issues, Florida proposed that lawyers include the following clause in their retainer agreements with clients:
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.
And I’d suggest this clause as well simply to explain to clients that there might be some lag between payment and placement of funds into the trust account:
Funds received through online payment processing services will be transferred to the Firm’s trust account promptly after these funds become available to the Firm.
As I wrote in my digital product, The Legal ClauseIt, lawyers can use retainer agreements to minimize risk in innovating. Even if you don’t practice in Florida, consider whether including these clauses in your retainer agreement will give you a sufficient level of comfort to begin accepting payments through online processors from clients.
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