Can a legal-services lawyer personally give or solicit money or goods for a client's living and medical expenses during litigation?

Plain-English summary

The opinion addressed a lawyer at a legal services agency handling domestic relations matters who asked whether the lawyer could personally give clients, during pending litigation, money or in-kind gifts for living and medical expenses, examples being cash to comply with a custody order, transportation to therapy in an abuse and neglect matter, and donated furniture or household items to qualify for visitation. The lawyer proposed using personal funds or soliciting colleagues.

The Committee applied MRPC 1.8(e), which bars a lawyer from providing financial assistance to a client in connection with pending or contemplated litigation, with two exceptions: advancing court costs and litigation expenses repayable by the client, and paying court costs and litigation expenses for an indigent client. The Committee explained that the rule grows out of the common-law bars on champerty and maintenance, and reflects the concern that a lawyer's financial stake can compromise loyalty and interfere with settlement. It stressed that MRPC 1.8(e) draws no distinction between private practitioners and legal-aid staff attorneys and reaches only costs associated with litigation, not living expenses.

The Committee concluded that the rule does not allow a Michigan lawyer to personally donate or solicit money or in-kind gifts for a client's living expenses during pending litigation, even when needed to comply with a court order. It added that the lawyer may instead refer the client to appropriate social services agencies and may help those agencies secure resources, since no rule prohibits that.

Currency note

This opinion was issued in 1989 and interprets the Michigan Rules of Professional Conduct as they then stood; the official version carries a note that it predates the enactment of MRPC 1.8(e)(3). The MRPC have since been amended, and later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer pay a client's living or medical expenses during a case?

A: No. The opinion concluded that MRPC 1.8(e) bars a lawyer from providing financial assistance for living or medical expenses during pending litigation; only court costs and litigation expenses may be advanced.

Q: Does the rule treat legal-aid lawyers differently from private lawyers?

A: No. The opinion concluded that MRPC 1.8(e) makes no distinction between private practitioners and legal-services staff attorneys.

Q: What could the lawyer do instead?

A: Per the opinion, the lawyer may refer the client to appropriate social services agencies and assist those agencies in securing resources, which no ethics rule prohibits.

Background and rules framework

The opinion interprets MRPC 1.8(e)(1) and (2) / Model Rule 1.8(e) (financial assistance to a client in connection with litigation, limited to advancing court costs and litigation expenses). The Committee traced the rule to the common-law doctrines of champerty and maintenance.

Citations and references

Rules of Professional Conduct:

• MRPC 1.8(e)(1) / Model Rule 1.8(e) (advancing court costs and litigation expenses, repayable by client)
• MRPC 1.8(e)(2) / Model Rule 1.8(e) (paying court costs and litigation expenses for an indigent client)

See also

• Mich Ethics Op. RI-189: Avoiding a Trust Account by Routing Proceeds
• No further sibling opinions yet indexed.

Source

• Landing page: https://www.michbar.org/opinions/ethics/numbered_opinions?OpinionID=884&Type=6

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

NOTE: This opinion was drafted prior to the enactment of MRPC 1.8(e)(3). Please see the rules for further guidance.

RI-14

January 26, 1989

SYLLABUS

The ethical prohibition against attorneys advancing living or medical expenses to a client applies to lawyers employed by legal service organizations.

References: MRPC 1.8(e)(1) and (2).

TEXT

A lawyer employed by a legal services agency and specializing in domestic relations matters asks whether it is permissible to personally give clients, during pending litigation, monetary or in-kind gifts for living and medical expenses, such as (a) $150 to an indigent to enable a client to comply with the court's custody order; (b) the cost of transportation for a client in an abuse and neglect matter to attend occasional therapy sessions when the social caseworker is unavailable; (c) donation of furniture to an indigent and/or solicitation of household items needed to establish a satisfactory home environment to qualify for child visitation rights.

The lawyer proposes to donate the necessary funds from personal resources and/or to solicit contributions from professional colleagues and other persons.

MRPC 1.8(e)(1) and (2) state:

"(e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:

"(1) A lawyer may advance court costs and expenses of litigation, the repayment of which shall ultimately be the responsibility of the client; and

"(2) A lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client."

MRPC 1.8(e)(1) permits a lawyer to advance court costs and litigation expenses, provided the client remains ultimately liable for repayment of all advances, regardless of the outcome of the litigation. MRPC 1.8(e)(2) is more liberal in the case of an indigent client, since a lawyer is permitted to pay court costs and litigation expenses on behalf of an indigent client without any requirement of client reimbursement, but MRPC 1.8(e) applies only to costs associated with litigation.

MRPC 1.8(e) is the result of the common law rules against champerty and maintenance. Champerty is an investment in the cause of action of another by purchasing a percentage of any recovery. Maintenance is another form of investment by providing living or other expenses to finance litigation. When a lawyer has a financial stake in the outcome of a client's lawsuit, there is a legitimate concern that the lawyer's undivided loyalty to the client may be compromised in an effort to protect the lawyer's personal financial investment in the outcome. Also financial support to a client could interfere with settlement efforts, by enabling the client to prolong the dispute. MRPC 1.8(e) makes no distinction between private practitioners and legal aid staff attorneys. The Rule does not allow attorneys practicing in Michigan to personally donate and/or solicit monetary or in-kind gifts for clients to meet living expenses during pending litigation, even when necessary to comply with court orders.

If an indigent person is unable to secure financial assistance needed to comply with court orders, qualify for child visitation rights, obtain necessary medical treatment incident to an abuse proceeding or other similar necessities of life during pending litigation, the client may be referred to the appropriate social services agencies, and there is no ethical rule prohibiting the lawyer or the legal services agency from assisting those agencies in securing resources necessary to make social services available to needy members of the community.

In conclusion, it is unethical for an attorney employed by a state-funded legal services agency to personally donate and/or solicit monetary or in-kind gifts to clients for living and medical expenses during pending litigation.