When may a Missouri lawyer accept third-party payment of a client's fee, and who receives a refund?

Plain-English summary

Rule 4-1.8(f) governs payment by anyone other than the client, including a co-client or indemnitor. The client must consent after adequate information, the payer cannot interfere, and Rule 4-1.6 confidentiality remains intact.

The consent discussion should decide who receives an unearned-fee refund, explain Rule 4-1.15(e) handling if client and payer both claim it, and address the possible effect of a payer demanding return before the work ends.

If the arrangement creates a Rule 4-1.7 conflict, that rule also applies, and some conflicts cannot be consented to.

In practice

Under this opinion, identifying the payer is only the start. Refund ownership, disputes, early repayment, independence, confidentiality, and consentability are part of the arrangement.

Common questions

Q: Must the client consent?

A: Yes, with adequate information.

Q: Who receives an unearned refund?

A: The arrangement should resolve that during informed consent; disputes remain in trust under Rule 4-1.15(e).

Q: Can every conflict be consented to?

A: No.

Background and rules framework

Rule 4-1.8(f) governs third-party payment, Rule 4-1.6 protects information, Rule 4-1.15(e) governs disputed funds, and Rule 4-1.7(b) governs consentable conflicts.

Citations and references

• Missouri Rules 4-1.0(e), 4-1.6, 4-1.7(b), 4-1.8(f), and 4-1.15(e); Rule 4-1.8 Comments [11] and [12]

See also

• Missouri Informal Op. 2018-10: Crowdfunding Fees
• Alabama Ethics Op. 1990-12: Third-Party Fee Payment

Source

• Landing page: Missouri Informal Opinion 2018-12

Original opinion text

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

Question: May Attorney accept payment of a client’s fee from someone other than the client? If so, to whom should Attorney refund any unearned fee at the termination of representation?

Answer: Attorney must not accept compensation for representing a client from someone other than the client (including a co-client or indemnitor) unless Attorney complies with Rule 4–1.8(f). The client must give informed consent, the arrangement must not interfere with Attorney’s independence of professional judgment or with the client-lawyer relationship, and the client’s confidential information must be protected as required by Rule 4–1.6. In obtaining the client’s informed consent, Attorney should discuss with the client all information that will allow the client to make an informed decision, including, but not limited to: to whom any necessary refund should be issued at the termination of representation; that Attorney will follow the procedure in Rule 4–1.15(e) and Comment [8] for the handling of disputed funds if both the client and the third-party payer claim an interest in the funds; and the possible impact on the representation if the payer demands a return of the funds before the scope of the representation is concluded. If the fee arrangement creates a conflict of interest for Attorney, Attorney must comply with Rule 4–1.7(b). It should be noted that not all conflicts of interest are consentable. See Rule 4–1.8, Comments [11] and [12].