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Opinion #87 - 07/16/1968 (15-68)

Overruled (in part) by 399

Topic: Fees

Digest: Interest charges on delinquent accounts

Canons: Former Canon 12, 14

QUESTION

May an attorney charge interest on a delinquent account?

OPINION

Canon 14 of the American Bar Canons of Ethics states "controversies with clients concerning compensation are to be avoided by the lawyer so far as shall be compatible with his self-respect and with his rights to receive reasonable compensation for his services, and lawsuits with clients should be resorted to only to prevent injustice, imposition or fraud".  It has been held in prior opinions that the changing of interest is improper.  The effect of such changes would appear to be an inducement to pay promptly and the effect of this is not dissimilar to offering a discount for prompt payment of attorney's fees, which practice was specifically disapproved also in prior opinions.   Mere carelessness on the pair of a client in the prompt payment of a fee should not be a basis for the charging of interest.           

If, however, it appears that the client is willfully delinquent in making payments on fees for services rendered, it is the opinion of this Committee that an attorney might reasonably press for payment of this fee using such methods as might be reasonable under the circumstances to collect the balance of the fees involved.  This reasonableness might include the bringing of a suit to recover the same in which event the inclusion of interest and costs could properly be included in the recovery.  If the client is financially pressed, then the attorney should use good judgment, having in mind that the profession of law is not a mere money-making trade.  So far as the attorney's course of action is concerned in this respect, what methods are necessary and appropriate, and what interest rate might be charged, should be a matter of the attorney’s sense of decency and propriety.