Lawyers may refer clients to fee financing companies or brokers in which the lawyers have no ownership or other financial interests provided they comply with Model Rules 1.2(c), 1.4(b), 1.5(a) and (b), 1.6, 1.7(a)(2), and 1.9(a). If a lawyer were to acquire an ownership or other financial interest in a finance company or brokerage and thereafter refer clients to that entity to finance the lawyer’s fees, the lawyer would be entering into a business transaction with a client, or obtaining a security or pecuniary interest adverse to the client, or both. In that instance, the lawyer would also be required to comply with Model Rule 1.8(a).
Friday, December 14, 2018
ABA Opinion 484: can a lawyer refer a client to a financing company in which the lawyer owns a financial interest?
At the end of November, the ABA Committee on Professional Responsibility issued Formal Opinion 484 on whether a lawyer may refer a client to a fee financing companies in which the lawyer owns a financial interest. I have not read the opinion in full, so I can't comment on it at this time. Here is the summary: