May a Missouri lawyer follow a client's directions under a consumer legal funding agreement?

Plain-English summary

The client sought funding under Missouri's Consumer Legal Funding Act and had agreed by contract to directions involving the lawyer. Earlier Missouri opinions treated participation in loans constituting champerty or maintenance as conduct prejudicial to the administration of justice under Rule 4-8.4(d).

The opinion does not decide whether an agreement under the Act is champerty or maintenance, because that is a substantive legal question outside the professional-conduct rules. The lawyer must make that legal determination before participating.

If the agreement is not champerty or maintenance, the lawyer may comply with the client's directions. Rule 4-2.1 still requires independent professional judgment and candid advice, and Rule 4-1.4(b) requires communication sufficient for informed client decisions, including explanation of the agreement's effect on Rule 4-1.6 confidentiality.

In practice

Under this opinion, the ethical permission depends first on the agreement's legal validity. A lawful agreement does not remove the lawyer's advisory, communication, independent-judgment, or confidentiality duties.

Common questions

Q: Does the opinion decide whether Consumer Legal Funding Act loans are champerty or maintenance?

A: No. It identifies that as a substantive-law question outside its scope.

Q: What if the agreement is champerty or maintenance?

A: The cited prior opinions treat lawyer participation as prejudicial to the administration of justice under Rule 4-8.4(d).

Q: May the lawyer follow directions under a lawful agreement?

A: Yes, subject to the lawyer's independent judgment and duties under Rules 4-2.1, 4-1.4(b), and 4-1.6.

Q: What must the client be told?

A: The agreement's effect on the representation, including its effect on confidentiality, so the client can make informed decisions.

Background and rules framework

The opinion addresses RSMo sections 436.550 through 436.572 but leaves their substantive application unresolved. It applies Rule 4-8.4(d) to champerty or maintenance, Rule 4-2.1 to independent judgment and candid advice, Rule 4-1.4(b) to informed decisions, and Rule 4-1.6 to confidentiality.

Citations and references

Rules of Professional Conduct:

• Missouri Rule 4-8.4(d) (conduct prejudicial to the administration of justice)
• Missouri Rules 4-2.1, 4-1.4(b), and 4-1.6 (advisor, communication, and confidentiality)

Statutes:

• RSMo §§ 436.550-436.572, Missouri Consumer Legal Funding Act

Other opinions cited:

• Missouri Informal Opinions 20030022 and 20000229: litigation loans, champerty, and maintenance

See also

• Hawaii Ethics Op. 34: Loan Financing for Clients
• Georgia Formal Advisory Op. 05-5: Borrowing for Litigation Expenses
• North Carolina 2018 Formal Ethics Op. 4: Legal-Fee Financing

Source

• Landing page: Missouri Informal Opinion 2023-10

Original opinion text

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

Question: When Client seeks a loan through a consumer legal funding company pursuant to RSMo § 436.550 to §436.572, may Lawyer ethically comply with the client’s contractual agreement with the consumer legal funding company?

Answer: Prior Informal Opinions 20030022 and 20000229 note that lawyers should not participate in litigation loans that may be considered to constitute champerty or maintenance, as such conduct would violate Rule 4–8.4(d) as conduct prejudicial to the administration of justice. This office cannot make a determination as to whether a loan pursuant to the Consumer Legal Funding Act would constitute champerty or maintenance under Missouri law. That is a question of law that is beyond the scope of the Rules of Professional Conduct.

If Lawyer determines that such consumer legal funding agreements do not constitute champerty or maintenance, Lawyer may ethically adhere to Client’s directions per the agreement Client entered into with the consumer legal funding company. However, Lawyer, upon receiving such direction from Client, should consider Lawyer’s role as an advisor pursuant to Rule 4–2.1 by exercising independent professional judgment and rendering candid advice to the client. This includes clearly communicating to Client the impact of such an agreement on the representation such that client may make informed decisions regarding the representation in accordance with Rule 4–1.4(b), including the impact on confidentiality pursuant to Rule 4–1.6.