89-8.

• Court: Kansas

Kansas Ethics Opinion 1989. 89-8. 1989KBA Legal Ethics Opinion No. 89-8You requested an opinion on the ethical considerations of offering unsecured financing, similar to credit cards, for legal services. The following opinion is based upon the facts indicated in your letter of June 21, 1989. FACTS Legal Services Funding, Inc. (LSF) will solicit attorneys to participate in the program. LSF would provide unsecured loans to clients of the participating attorneys. The attorney must pay LSF a one time enrollment fee. The loan applications and other materials would then be provided to the attorney. The attorney would suggest this financing option to the client and assist them in completing the loan application. LSF will handle all billing procedures. After approval, the attorney will submit a service voucher to LSF for the estimated fees, which would pay the attorney ninety percent of the amount shown on the voucher. A client may choose to finance only a portion of the fees through LSF. If the attorney carries the remainder, the attorney may be required to subordinate collection of that amount to the amount financed by LSF. Additional facts were stated in your request to the Missouri Bar Administration and are considered in this opinion. No participating attorneys will have any ownership interest in LSF. If the client refuses to pay the amount owed to LSF because of an asserted claim or defense relating to the quality or quantity of the attorney's services and if the dispute cannot be resolved between the client and attorney, the attorney must repurchase the voucher and LSF will release its rights to collect the balance from the client. ANALYSIS Kansas Supreme Court Rule 7.2 implicitly recognizes, in the comment, the right of the attorney to state credit arrangements in the attorney's advertising. Rule 5.4(a) prohibits, with some exceptions, sharing fees with a nonlawyer. Rule 5.4(c) states, a lawyer shall not permit a person who ... pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services. Rule 1.7(b) states, A lawyer shall not represent a client if ... materially limited by the ... or by the lawyer's own interest ... ABA Formal Opinion No. 338 addressed the issue of credit arrangements under the Code of Professional Responsibility. The ABA...