South Carolina Bar Ethics Opinions
Free plain-English summaries of legal ethics opinions issued by the South Carolina Bar, with full citations and source links on every page.
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Can a lawyer authorize a government portal like Pay.gov to debit the trust account to pay a client's medical lien by ACH, and how is recordkeeping satisfied?
Yes. Comment 9 to Rule 1.15 is not an exclusive list, so a lawyer may authorize an ACH debit from the trust account to pay a lien or other client obligation; the lawyer must keep full documentation of…
Can a lawyer charge a payee to recover the stop-payment and reissuance costs for a trust-account check that was never cashed?
Yes. A lawyer may charge a check recipient an amount covering the administrative cost of resolving an uncashed trust-account check (such as stop-payment and postage fees) if the amount is not unreason…
When a prior law firm asserts a charging lien on a settlement, how much must successor counsel hold in trust, and does Rule 1.5(e) fee-sharing apply?
Successor counsel must hold in trust an amount equal to the prior firm's charging-lien claim until the dispute is resolved, unless the claim is frivolous under applicable law. The matter is governed b…
Can a lawyer accept client earnest-money deposits through PayPal, and when must those funds be moved into a trust account?
Yes. A lawyer may take earnest-money deposits through PayPal if the account holds no funds of the lawyer's own and records are kept; nominal or short-term funds must then move to an IOLTA account, and…
If a personal injury lawyer believes a hospital's claimed lien or assignment on the settlement is invalid and frivolous, must the lawyer still hold back funds to protect it?
No. Under Rule 1.15(e) a lawyer may refuse to protect a third party's claim on settlement funds if the lawyer believes in good faith that the claim is frivolous or without substantial grounds, though …
When a nonprofit pays into a lawyer's trust account to fund a client's representation, who owns and controls the money, and what must the lawyer tell the client?
The payor and client must sort out ownership between themselves; the lawyer must not arbitrate disputed funds. The lawyer decides how to apply the funds to the matter and cannot let the third-party pa…
Can a lawyer treat an ACH transfer into the trust account as 'collected funds' that may be disbursed for a real estate closing?
No, not right away. Because ACH deposits can be reversed, they may not be treated as collected funds under Rule 1.15 at least until five banking days after receipt, when the window to reverse an erron…
Does letting a title insurance company's third-party auditor conduct an off-site desk review of a lawyer's trust account violate the duty of confidentiality?
It depends on how the audit is conducted. A properly conducted off-site audit does not violate Rule 1.6. The lawyer may share overall account balances and basic reconciliation (no client-identifying d…
Can an out-of-state partner who is not licensed in South Carolina be the sole signatory on the firm's South Carolina IOLTA trust account?
No. The arrangement satisfies Rule 1.15 and Rule 412, SCACR, but it violates Rule 417, SCACR, as amended in 2011, which lets only a lawyer admitted in South Carolina, or someone under that lawyer's di…
Can a lawyer apply a client's unearned retainer surplus left in trust on one matter to cover the client's unpaid fees on a different matter?
No. Unearned fees in a client trust account may be withdrawn only as fees are earned on the matter for which they were advanced or refunded to the client; a lawyer may not move them to offset an unpai…
May a lawyer use a 'daily deal' website (like Groupon) to sell vouchers redeemable for discounted legal services such as preparing a will?
Yes. Using a daily-deal website to sell vouchers for discounted legal services does not violate the Rule 5.4(a) bar on sharing fees with a non-lawyer; the site's percentage is a permitted advertising …
When a county uses e-recording and debits a lawyer's account for recording and transfer fees, is that account a trust account, and may a lawyer share control of it with a non-lawyer (the Clerk or Register)?
An account holding client or third-party funds is a trust account governed by Rule 1.15 and ACR 417. A lawyer may share control of an account with a non-lawyer only if it holds neither client funds no…
When a landlord and the lawyer's own client both claim money held in the lawyer's trust account, may the lawyer release it, and to whom?
If the third party's (landlord's) claim to the funds is not frivolous, Rule 1.15 requires the lawyer to keep the disputed funds in trust until the dispute is resolved; the lawyer may not release them …
Must a South Carolina lawyer obtain extra insurance for client trust funds that exceed the FDIC coverage limit, or place them across multiple banks?
No. Rule 1.15 requires only reasonable steps to safeguard client funds. It does not require a lawyer to insure trust funds above the FDIC limit or to spread deposits across several banks; whether to i…
Can a law firm act as escrow agent for a developer client's real estate deals (for which the firm is not closing counsel) and hold large earnest-money deposits in a non-IOLTA interest-bearing account, and may it charge a percentage holding fee?
Yes. Because the large deposits will be held for months to two years and can earn income for the client exceeding the cost of securing it, they are not 'nominal or short-term,' so under Rule 412(d) th…
Can a lawyer treat cashier's checks and certified checks drawn on credit unions and other non-bank institutions as 'collected funds' under Rule 1.15(f), which by its terms refers only to a 'bank'?
Yes. Subject to future clarification from the South Carolina Supreme Court, the committee reads 'bank' in Rule 1.15(f) to include credit unions and other financial institutions as defined in IOLTA Rul…
Can a firm let a satellite-office bookkeeper be the only person on site with access to the IOLTA account, and can the associate rely on the owner to supervise?
Possibly, but only if a lawyer actually supervises the bookkeeper with real access to the books and the trust account. The opinion concludes the duties under Rules 1.15(f), 5.3, and 5.4(c) are not 'ar…
When a pro se plaintiff's former lawyer claims a charging lien on the settlement, must defense counsel hold the disputed funds in trust even though neither claimant is her client?
Yes. The opinion concludes defense counsel may not pay all settlement proceeds to the pro se plaintiff; under Rule 1.15(e) she must keep the disputed portion separate in trust until the lien dispute i…
Can a real estate closing lawyer disburse at the closing table up to the amount of collected funds already deposited, before depositing the remaining cash-equivalent funds?
Yes. The opinion concludes a closing lawyer may 'table fund' a transaction by disbursing up to the amount of collected funds (or collected-fund equivalents) that have been deposited, even though other…
Can a closing firm move marked-up recording fees into a non-trust 'Recording Account' before disbursement, and keep the overcharge as profit?
Until the funds are disbursed they remain client funds and must stay in the trust account; a 'Recording Account' holding only the firm's own money is fine and the firm may tender a trust check directl…
What should a lawyer do with trust-account funds for a settlement check that an insurer never cashed years ago?
The lawyer must safeguard the funds under Rule 1.15, take all notification steps in Rule 1.15 and Opinion 02-05 (including notice by publication), and then, because an uncashed mailed check is unclaim…
If a health insurer asserts a subrogation claim on settlement funds and the client tells the lawyer not to pay it, what must the lawyer do?
Because the lawyer has actual knowledge of the subrogation claim, Rule 1.15 requires holding the disputed funds in trust until the dispute between the client and the carrier is resolved, and the lawye…
Can a lawyer hold a client's alimony checks to collect unpaid process-server costs the client incurred during the case?
The lawyer may assert an equitable charging lien and hold only the disputed amount until the dispute is resolved, but the opinion warns the approach is risky here because the checks are payable to the…
When a client fires one of two lawyers who agreed to split a fee and then objects to paying the discharged lawyer, can the other lawyer honor the agreed split, and what should happen to the disputed money?
The committee concluded that, absent the client's genuine written agreement to joint responsibility, a fee division under Rule 1.5(e) must be proportional to each lawyer's services; merely sending the…
Can a lawyer employed by a nonprofit run by nonlawyers represent the people it serves, and how do letterhead, the trust account, file custody, and conflicts work in that setup?
The committee concluded a lawyer may, as an employee of a nonlawyer nonprofit, represent third parties on its behalf: the corporation's name and logo may appear on letterhead under Rules 7.1 and 7.5 i…
When a relative pays a lawyer's flat fee for a client who then fires the lawyer and demands a refund, who gets the unearned portion, the client or the relative who paid?
The committee concluded the lawyer must not unilaterally decide whether the client or the third-party payor is entitled to the unearned fee; because both may have a claim (depending on whether the pay…
How can a lawyer close an old escrow account that still holds funds for stale, uncashed checks to clients who can't be located?
The committee concluded the lawyer may close the old account but may never keep the funds; after meeting Rule 1.15 (records and notice, including notice by publication) and waiting at least a year for…
If a doctor sends a form letter claiming Rule 1.15 gives him a lien on a client's settlement, must the lawyer pay the doctor's bill out of the recovery?
The committee concluded Rule 1.15 does not itself create a lien for the physician; the Rules of Professional Conduct do not create substantive rights, so without a valid lien or assignment the lawyer …
Does the six-year clock for keeping a client's financial records run from each matter ending or from the whole relationship ending?
The committee concluded that Rule 1.15(a)'s six-year record-retention period runs from the conclusion of each particular matter, not from the termination of the entire attorney-client relationship; ot…
When a lawyer leaves a firm and agrees to split fees with the old firm without telling the client, can the lawyer pay the old firm over the client's objection?
Rule 1.5(e) requires telling the client about a fee split that is not in proportion to the work performed. Because the client was not informed and objects, the committee advised the lawyer to hold the…
Can a South Carolina lawyer run a separate non-legal business under the law firm's name and deposit its income in the firm operating account?
The committee concluded the Rules do not bar depositing the side business's commissions in the firm's general operating account (but not the trust account), so long as the lawyer carefully accounts to…
When a client disputes a medical lien on settlement proceeds, can the lawyer set a deadline for the lienholder to act and then pay the client?
The committee concluded a lawyer holding settlement proceeds subject to a valid assignment or lien may not impair the third party's rights by imposing a time limit on enforcement, and may not disburse…
What can a South Carolina lawyer do with stale, never-cashed trust-account checks owed to medical providers?
The committee concluded the lawyer may not donate the leftover trust funds to the Office of Appellate Defense or any other entity, because the uncashed checks belong to third parties under Rule 1.15(b…
If a client signed a doctor's lien but the fee contract is silent on it, can the lawyer follow the client's instruction to disregard the lien and pay the client?
The committee concluded a lawyer who knows the client made a valid assignment of litigation proceeds to a medical provider may not ignore the assignee's rights and pay the funds to the client, even if…
If a client signs a doctor's lien and later tells the lawyer to ignore it at disbursement, what must the lawyer do with the settlement money?
The committee concluded the lawyer may refuse the client's instruction to disregard a doctor's lien, but if the client disputes the provider's right to payment, the lawyer must notify the provider and…
Can a lawyer deposit the firm's own money into a client trust account to cover or avoid bank service charges?
The committee concluded that a lawyer or firm could deposit firm funds in a client trust account to pay or avoid bank service charges, so long as records were kept that identified the ownership of all…
Can a lawyer give another state's bar copies of escrow-account checks to help investigate a different lawyer?
The committee concluded that, absent a court order, releasing copies of escrow-account checks that reveal client information to another state bar without the clients' consent would violate Rule 1.6, b…
How long must a South Carolina law firm keep a closed client's file, and when may it destroy the contents?
The committee concluded there is no fixed minimum retention period; to the extent the file is the client's property, Rule 1.15 calls for keeping records six years after the representation ends, but co…
If a court-ordered attorney's fee award is reversed on appeal, must the lawyer who already received and applied it to the client's bill refund it?
The committee concluded the attorney need not repay either the opposing party or the client; once the client directed the voluntarily paid funds to satisfy her fee contract they became the attorney's …
If a client tells the lawyer not to pay a medical provider's lien out of a settlement, must the lawyer honor that, and what changes if the lawyer signed the assignment?
The committee concluded that where the lawyer did not sign the client's medical lien/assignment, his duty of loyalty requires paying the settlement proceeds to the client, and Rule 1.6 bars revealing …
Can a lawyer trade help collecting a doctor's bills for patient referrals, and can a non-law business tell customers its lawyer escrows all sale proceeds?
The committee concluded that a lawyer may not exchange assistance in collecting a doctor's medical fees for referral of clients, because that gives something of value for a recommendation contrary to …
Can a lawyer post cash in lieu of a surety bond for a client, and from what kind of account should the check be drawn?
The committee concluded that a lawyer may not advance his own money as cash in lieu of a surety bond (that is prohibited financial assistance), but may post the client's own funds if the client is giv…
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Legal ethics opinions from the South Carolina Bar interpret the rules of professional conduct for working lawyers, in response to inquiries from members and committees. They are not binding like court discipline decisions, but courts and discipline boards treat formal opinions as substantial guidance on how the rules apply. Every opinion above has a plain-English question and short answer, plus a link to the original source on the bar's site.