Payment Processing · Buyer guide
A client pays a $5,000 retainer by card. In a shop that is a sale. In a law firm it is a deposit of someone else's money, and three rules attach to it before the money has cleared: all of it must reach the client trust account, the card fee must be paid from the firm's own funds, and nothing the card company later does — a refund, a dispute, a chargeback — may reach into that account and take money belonging to a different client.
Most payment processors cannot promise any of the three, because they were built to do the opposite: deduct the fee, deposit the net, and reserve the right to debit the same account when a customer disputes a charge. This article sets out what the rules actually say, using the bar opinions themselves rather than processors' summaries of them, and then what the processors that can meet them charge, as of September 2026.
The foundation is Model Rule 1.15. Paragraph (a) requires client property to be held separate from the lawyer's own, in a separate account. Paragraph (c), added in 2002, is the one that matters for cards: 'A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses are incurred.' The ABA's Ethics 2000 Commission added it because the taking of unearned fees was the single largest class of claims made to client protection funds. Every state has adopted some version of the rule.
ABA Formal Opinion 505, issued on 3 May 2023, closed the door that some firms had left open. It holds that a fee paid in advance for work not yet done is an advance fee that belongs in trust until earned, and that calling it a 'flat fee', a 'nonrefundable retainer' or 'earned on receipt' does not change that. The only money that is earned when paid is a true general retainer, which buys the lawyer's availability rather than any work, and even that must be refunded if the amount is unreasonable or the lawyer is not available. The opinion acknowledges that a minority of jurisdictions differ — California lets a flat fee under $1,000 skip trust, Missouri under $2,000 — but for a firm that has not checked, the default is trust.
The consequence for card acceptance is that the question is not whether a firm may take cards, but where the money lands. A card payment for an invoice already rendered is the firm's money and can go straight to operating; a card payment for a retainer, a flat fee for work to come, a filing fee or a settlement is client property and must land in trust in full.
The state opinions on credit cards read as a chain, each citing the last, and they converge on the same conditions. The District of Columbia's Ethics Opinion 348, from 2009, permits cards for advance fees but insists that before doing so 'the lawyer must ensure that under no circumstances can the credit card company invade her trust account'. Its worked example is the one that keeps bar counsel up at night: a $50,000 advance deposited to trust and partly earned, then charged back in full by the card issuer, leaving the pooled account short of what it owes everyone else.
Tennessee's Formal Ethics Opinion 2023-F-170, adopted on 7 August 2023, is the most recent full treatment and the most useful, because it lists the conditions as a checklist. Relying on Florida's Opinion 21-2 and its own rules, the Board concluded a lawyer may take cards and payment apps for client funds only if the lawyer takes reasonable steps to prevent disclosure of the transaction to anyone but the client; directs the payment to 'a trust account set up for the sole purpose of receiving advance payments, which are then swept into the lawyer's IOLTA account, or through a substantially similar arrangement'; ensures 'that any chargebacks are not deducted from trust funds and that the service will not freeze the account in the event of a payment dispute'; and, if a convenience fee is charged, gets prior consent and charges 'an amount no larger than the actual transaction cost'.
Two of those conditions are about the processor, not the lawyer. A processor that deducts its fee before depositing fails the first rule on day one. A processor that settles everything to one linked account and reserves the right to debit it for disputes fails the second. The Tennessee opinion notes that Oregon's answer to the whole problem is simpler still: take cards only for earned fees, and let a client who wants to fund a retainer by card take a cash advance and pay it into trust. That is compliant, and it is also how a firm loses the client who wanted to pay by card.
The confidentiality point is easy to overlook. Tennessee, quoting Florida, singles out payment apps that publish transactions to a social feed — Venmo can publish a payment, with whatever description the payer typed, to the feeds of both parties' contacts — and says a lawyer must advise clients to select the most restrictive privacy setting. A client's identity is itself confidential.
The failure is mechanical, not a matter of policy. Square's help centre states that 'Square's processing fees are deducted before funds are transferred to your linked bank account', and the same for invoices. Stripe's standard pricing deducts 2.9 percent plus 30 cents from each successful charge before the money reaches the balance that pays out. PayPal nets its fee the same way. A $5,000 retainer through any of them arrives short — by $145.30 at Stripe's rate, by $165.30 at Square Invoices' 3.3 percent plus 30 cents. The shortfall is a firm expense paid with client money, and topping the account up from operating afterwards does not cure it — Texas's rules, as the state's lawyers' insurer reads them, forbid replenishing a trust account after the fact, and the deduction has already happened.
The second problem is the single linked account. These processors deposit to one bank account and, under their terms, debit that account for refunds, disputes and reserves. If the linked account is the IOLTA account, a chargeback by one client is recovered from all of them; if it is the operating account, the retainer never reached trust at all. A firm cannot have it both ways with one destination. Tennessee's sweep account is a workaround for exactly this — a trust account holding nothing but today's card receipts, emptied into the main IOLTA account as they arrive — but it depends on the firm sweeping it every day, and the fee deduction is still there.
There is a further exposure these processors carry that the bar opinions name directly: the frozen account. Square approves accounts instantly and underwrites afterwards, and holds on funds during risk reviews are its dominant complaint; Stripe's new accounts face the same verification friction. A hold on the firm's operating balance is a cash-flow problem. A hold on money that belongs to clients is a trust violation the firm did not choose. We covered how those holds work in our piece on reserves and holds; the Tennessee condition that a service 'will not freeze the account in the event of a payment dispute' is written for exactly this.
LawPay exists because of these rules. It is the payment product of 8am, the Austin company formerly called AffiniPay, and it is one of the two products the Tennessee opinion names as designed for lawyers. Its pricing is published in full: $19 a month with no contract, 2.99 percent plus 30 cents on Visa, Mastercard and Discover, 3.90 percent plus 30 cents on American Express, 1 percent on eCheck, 5.95 percent on its Pay Later legal-fee financing, a $7.99 monthly card-brand pass-through, and 1.75 percent extra on foreign cards. The compliance mechanics are stated just as plainly: 'all processing fees are automatically tracked and debited from your operating account at the end of the month' and 'LawPay strictly prohibits debits from your trust account for any reason'. Our review grades it B+: the trust protection is the point, next-business-day funding has been guaranteed since April 2026, and the costs are an Amex rate near four percent and a pass-through fee that reviewers say catches firms unawares.
TimeSolv comes at it from the billing side. It is time-and-billing software with trust accounting built in — three-way reconciliation, LEDES billing, ABA task codes — and a payments product, TimeSolvPay, that sits inside it. The trust accounting is the strength; the weakness our B+ review records is that TimeSolvPay's processing rates are not published anywhere, so the software price is transparent and the payments price is not. A firm already on TimeSolv gets a compliant flow without a second vendor. A firm choosing a processor first should ask for the rate in writing before assuming it matches LawPay's.
The interchange-plus option is Helcim. Its pricing is interchange plus 0.40 percent and 8 cents in person and interchange plus 0.50 percent and 25 cents keyed or online, with no monthly fee, and since September 2020 it has offered what it calls split deposits for lawyers: 'you can specify which account will be used for funds being held in trust, and your payments will be deposited for the full amount while all fees are withdrawn from your designated operating account', included at no extra charge on a legal account. That satisfies the two rules about money. What Helcim's announcement does not address is chargebacks and refunds — which account a disputed retainer is recovered from — so a firm taking that route should get the answer in writing and, if it is not the operating account, run Tennessee's sweep-account arrangement alongside it. Helcim's own complaint pattern, our A- review notes, includes funds held during risk reviews, which is the same exposure as the flat-rate processors' and worth raising before any client money flows through it.
The arithmetic between the two models is straightforward. On a $5,000 retainer LawPay costs $149.80. Helcim costs interchange plus $25.25 — roughly $115 on a consumer credit card at about 1.8 percent interchange, well under $50 on a regulated debit card. The gap widens with volume and closes for a solo practice taking a few thousand dollars a month by card, where LawPay's $26.99 of fixed monthly cost is the larger number. Either is defensible. A processor that nets its fee and settles to one account is not, once unearned money arrives by card.
Whether a firm can charge the client for paying by card is a question with three layers, and the ethics layer is only one of them. On ethics, the opinions are increasingly permissive: New York's Opinion 1258A of 23 April 2024 allows it 'provided that both the amount of the legal fee and the amount of the processing fee are reasonable', explained in advance and consented to; DC and Tennessee agree, with Tennessee capping the charge at the actual cost. A firm should read its own state's opinion before deciding rather than assume it follows the trend. On statute, Oklahoma's Senate Bill 677, effective 1 November 2025, caps a lawyer's surcharge at the lesser of 2 percent or the actual processing cost and prescribes where it must be disclosed. And on top of both sit the card-network rules and the state surcharge laws that bind every merchant, lawyers included — the 3 percent network cap, the states where surcharging credit is banned outright, the universal prohibition on surcharging debit — which we set out in our guide to surcharge rules.
The simplest compliant position remains the one most firms take: absorb the fee as overhead and price the work accordingly, which Tennessee confirms the rules allow, subject only to the fee being reasonable. A firm that does pass it on should charge no more than it pays, put the amount and the client's consent in the engagement letter, and remember that a 2.99 percent card charge is a 1 percent eCheck charge for the same retainer. Steering large payments to eCheck saves more than any surcharge recovers.
