Lawyers do not come cheap. As a result, it is not uncommon for clients to have someone else assist with their legal bills. If the lawyer is aware of an arrangement for someone else to pay, however, this raises some ethical questions. For this reason, lawyers in Oregon and Washington, and probably most states, are required to give clients a written notice of the ethical issues before accepting such payments.
There are two major concerns I have identified in most of these situations.
First, there is a risk the payor may try to direct the case. Therefore, everyone involved must be clearly informed that between the client and the payor, the client calls the shots. The client is the one with a legal problem, and the lawyer’s job is to manage or resolve the problem. The payor should not try to pressure the client or the lawyer by threatening to cut off payment.
The second issue is the client’s right to confidentiality of information obtained by the layer. Lawyers are required to keep secrets secret. The importance of this principle is illustrated by a case from New York. A lawyer was told by his client of a murder. After visiting the crime scene to verify the report, the lawyer did not report the crime to police or prosecutors. The New York Bar stated that the lawyer had done nothing unethical because of his obligation to preserve confidentiality. When someone other than the client pays, however, they may want information about the case. Whether to authorize the lawyer telling to payor is the client’s decision.
I usually write a disclosure letter when a client informs me that a third party may be paying for them, and I prefer to send the letter before the client hires me. The letter goes to the client and the payor. It advises the client to get an independent opinion from another lawyer before signing and asks the client to sign an approval before I begin (or continue) work. If you are going to have someone else pay your legal bills, you should tell the lawyer as soon as you know and ask for a disclosure.