Maine Ethics Opinion

State of Maine

ETHICS OPINION #177

1. It is ethical for an attorney to borrow funds from a third party lending company to cover litigation expenses, or to fund his law practice

The costs, fees and interest from the litigation loan may be passed on to the client, provided that:

A. The interest rate is reasonable, and the lawyer does not profit financially from the third party lending arrangement.

B. The lawyer must explain the terms of the loan to the client.

C. Client confidences may not be disclosed without the client´s informed written consent, and the lawyer must not acquire a proprietary interest in the subject matter of litigation.

D. From Ethics Opinion #177 – Other than the agreed-upon fee “[t]he lawyer must not attempt to obtain any interest in the client´s settlement or judgment to secure the lawyer´s obligation to repay the financing company.”

Please reference your local state ethics rules.