Is that ethical for a lawyer to accept earnest money through PayPal? The SC Ethics Advisory Committee opined that it is with certain caveats.
In Opinion 18-05 (“Lawyer accepting earnest money deposits from a client through PayPal” the Committee opined that
A lawyer is required to hold property of clients or third persons in connection with representation separate from the lawyer’s own property, but can comply with that obligation if the PayPal account in question does not contain Lawyer’s own property and appropriate records are maintained. If the funds received into that account are nominal or short-term funds, Lawyer would then be required to transfer those funds to an IOLTA account for safekeeping, in a manner and timing consistent with Rule 1.15(f) obligations prohibiting disbursement from a trust account until funds are deposited and collected. Summary from the opinion, South Carolina Ethics Advisory Opinion 18-05
Questions Presented:
- May a lawyer accept an earnest money deposit through PayPal?
- If a lawyer may accept an earnest money deposit through PayPal, when does the lawyer have to transfer the money from PayPal?
South Carolina Rule of Professional Conduct: 1.15
South Carolina Ethics Advisory Opinion 18-05 is available at https://www.scbar.org…