Can a law firm that is itself the plaintiff solicit contributions for its fees and expenses from others interested in the outcome?

Plain-English summary

A law firm that was the plaintiff in a damages suit of potentially broad commercial significance asked whether it could accept or seek contributions toward its fees and expenses from persons interested in the issue being litigated. The committee began with the settled point that a client in litigation may gather others to share legal fees and expenses, and that there is no impropriety in a lawyer rendering services to a client that are paid for by others solicited by the client (DR 5-107(A) and (B); EC 5-21 to 5-23). It noted that, in a client's interest, a lawyer may even solicit cooperation from others similarly situated, provided the motive is not to benefit the lawyer (citing N.Y. State 499 (1978) and N.Y. City 717 (1948)).

The committee stressed the limits: real interests must be involved, the persons approached must have a legitimate interest in the outcome, and solicitation may never be used to generate a clientele. The common element in all the permitted situations is that there is both a lawyer and a client, with the client (not the lawyer or the contributors) controlling the litigation (EC 7-8).

Turning to the firm's situation, the committee acknowledged that lawyers are as free as anyone to pursue legal remedies for their own injuries and may serve as their own client. But it found the absence of a separate client, exercising independent judgment and control, a critical distinction from the cases where soliciting contributions is permitted. Drawing on court decisions holding that class-action plaintiffs who would obtain court-awarded fees cannot proceed pro se because of the appearance of impropriety under Canon 9 (citing Lowenschuss v. Bluhdorn and Kramer v. Scientific Control Corp.), the committee answered the question in the negative.

Currency note

This opinion was issued in 1980, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (a third party paying a lawyer's fees is now governed by Rule 1.8(f) and 5.4(c)). Subsequent rule amendments or 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 Treat this page as historical context, not current guidance.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 law firm raise money from interested outsiders to fund its own lawsuit?

A: No. The committee held that a firm suing on its own behalf may not solicit or accept contributions for its fees and expenses, because that is tolerated only in the interest of a client.

Q: Why can a client solicit such contributions but a self-representing firm cannot?

A: The committee found the key distinction is the presence of a separate client who exercises independent judgment and controls the litigation; a firm serving as its own client lacks that separate check.

Q: Does it matter that the suit had broad public or commercial significance?

A: The committee did not rest on the suit's importance; it grounded the answer in the absence of a separate client and the appearance of impropriety, citing class-action pro se cases under Canon 9.

Background and rules framework

The opinion applied DR 5-107(A) and (B) (compensation from one other than the client; influence by a third-party payor), under EC 5-21 to 5-23 and EC 7-8, together with the Canon 9 appearance-of-impropriety reasoning of the class-action pro se cases, to a firm soliciting funds for its own suit. The closest current Model Rule analogues are Rule 1.8(f) (third-party payment of fees) and Rule 5.4(c) (professional independence from a payor).

Citations and references

Rules of Professional Conduct:

• MR 1.8 (conflicts; third-party payment of fees)
• MR 5.4 (professional independence of a lawyer)
• NY DR 5-107(A), DR 5-107(B), EC 5-21, EC 5-22, EC 5-23, EC 7-8

Cases:

• Lowenschuss v. Bluhdorn, 613 F.2d 18 (2d Cir. 1980), pro se class plaintiff and fees
• Kramer v. Scientific Control Corp., 534 F.2d 1085 (3d Cir.), cert. denied, 429 U.S. 830 (1976), appearance of impropriety

Other opinions cited:

• N.Y. State 499 (1978), 449 (1976): soliciting cooperation only in a client's interest
• N.Y. City 717 (1948): solicitation tolerated only for a client, not the lawyer

See also

• NY State Bar Op. 553: Attorney loan to a client
• NY State Bar Op. 533: Public defender's office conflict on an ineffective-assistance appeal

Source

• Landing page: https://nysba.org/opinion-527/