No. 17-01
KBA Legal Ethics Opinion No. 17-01
Kansas Ethics Opinions
March 20, 2017
J.
Nick Badgerow, Chairman
TOPICS:
Use and allocation of credit card reward points or miles for
expenses charged on personal or firm credit cards for client
advances.
DIGEST:
In most instances, it is not inappropriate or unethical for a
lawyer or law firm to keep and use credit card reward points
or miles generated from using the lawyer's or law
firm's credit card to charge expenses advanced on behalf
of a client. In cases where the advances for a particular
client are significant and/or repetitive, it is recommended
that disclosure be made to the client, so the client may
determine whether to pay the expenses directly, and thereby
generate and keep the rewards for itself.
DATE OF
REQUEST: March 6, 2017
REFERENCES:
Rules 1.5(a), 1.7(a), 1.4, and 1.8(a), Kansas Rules of
Professional Conduct, Rule 226, Rules of the Kansas Supreme
Court (hereinafter "KRPC").
QUESTION:
Is it appropriate for a lawyer or law firm to keep and use
credit card points, rewards, or miles generated from using
the lawyer's or law firm's credit card to advance
payment for charges incurred by the client, e.g. for filing
fees or travel, or must the credit card points, rewards and
miles be given to the client?
ANALYSIS:
Literally
hundreds of credit cards give cashback, reward points,
mileage towards future airline tickets, or other perquisites
for the use of the credit card. 1Lawyers and law firms are
often called upon to advance charges on behalf of clients,
such as for filing fees or for travel on behalf of the
client. Lawyers most frequently use credit cards to make
these advances for clients, and then bill the clients later
for the actual expense incurred. Usually, the lawyer or law
firm pays the credit card bill, and then invoices the client
for the expense at the next billing cycle. In such a
situation, the lawyer or law firm receives the reward points,
mileage or other perquisites generated by paying the credit
card charge.
The
inquirer states that, consistent with this practice, his law
firm's lawyers use personal credit cards to charge client
expenses, and each lawyer keeps and uses the rewards points
or miles generated thereby, though the actual filing fees or
travel are charged to the client. The inquirer's law firm
is considering a change in policy by which the firm would
supply firm credit cards to its attorneys for the purpose of
charging client expenses, and then the firm would reap the
rewards or miles. The inquirer asks if this practice,
including the proposed change in policy, would be ethical, or
whether the rewards and miles should be given to the client
for whom the expense was incurred.
Rule
1.5, KRPC, provides in pertinent part: "(a) A
lawyer's fee shall be reasonable." It would not be
appropriate or ethical for a lawyer or law firm to add a
surcharge for expenses advanced which is not actually charged
to the user of the card. See...
