1972, October, Pg. 22. ETHICS.

1 Colo.Law. 22

Colorado Lawyer

1972.

1972, October, Pg. 22.

ETHICS

22Vol. 1, No. 12, Pg. 22

ETHICSOpinions of the Ethics Committee of the Colorado Bar Association are published here for the information of the members of the Association. Formal opinions are given on matters of general and continuing interest to the Bar. Informal opinions are given in response to specific inquiry.

NOTE: The Ethics Committee has received numerous inquiries during the past two years concerning the propriety of financing legal fees through the use of credit cards, and the charging of interest by attorneys on overdue accounts for services rendered. In an effort to clear up any uncertainty which may exist as to the opinion of the Committee on these subjects, the following informal opinions are published for the information of the members of the Bar.

Informal Opinion: 12-3-71

Topic: Interest charges on legal fees.

Digest: It is unethical for a lawyer to charge interest on overdue accounts for professional services rendered.

OpinionProbably the most direct authority bearing on this question is Informal Decision No. C741 (March 31, 1964) of the Standing Committee on Professional Ethics of the American Bar Association. That decision, which relies on formal Opinion 151 (February 15, 1936) of the ABA Committee, states as follows:

"It is the opinion of the Committee that such practice would be improper, both where the clients have agreed upon the amounts of the fees and where they have not.

"In the latter case, it might appear that the claimed accrual of interest on fees upon which clients have not agreed, either in advance or upon conclusion of the services, constituted a bargaining weapon an attorney might use in reaching agreement as to the amounts of the fees.

"Whether or not the amounts of the fees have been agreed upon, the effect would appear to be an inducement (the saving of interest) to pay promptly. The effect is not dissimilar to offering a discount for prompt payment of attorneys' fees, and this practice was specifically disapproved by the Committee in Opinion 151 (February 15, 1936) in which the Committee quoted from Canon 12 as follows:

'In fixing fees it should never be forgotten that the profession is a branch of the administration of justice and not a mere money getting trade;' and condemned the discount practice as...