Multistate Professional Responsibility Exam Practice Question
A lawyer represents a painter who was severely injured by falling debris during a building renovation. The painter is struggling to afford prescribed medical procedures. The lawyer proposes to pay for the painter’s procedures if the painter grants the lawyer a portion of potential recoveries in the lawsuit. Is the lawyer’s proposal permissible?
It is not permitted because supplying additional funding in exchange for a stake in the outcome is beyond recognized fee or expense arrangements
Call the ethics hotline.
It is acceptable if the transaction is documented and the client agrees, because the lawyer has discretion to invest in a client’s case
It is acceptable as long as the agreement is incorporated into a standard fee contract
Rules generally prohibit a lawyer from purchasing an interest in a client’s matter beyond approved exceptions, such as a standard contingency fee or statutory lien for fees. Lawyers may advance court costs and litigation expenses, but paying other expenditures in exchange for an interest in the matter violates professional standards. The correct response points to the rule that disallows this type of arrangement except for narrowly defined scenarios. Other responses are incorrect because they overlook the prohibition against acquiring a stake in the case beyond customary provisions or suggest that client consent is enough by itself, which does not cure the violation.
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What are the ethical rules regarding a lawyer's financial involvement in a client's case?
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What constitutes a contingency fee, and how does it differ from other payment arrangements?
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What are common reasons for prohibiting financial arrangements like the one proposed by the lawyer?