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Can Lawyers Represent Clients Paying With Crowdfunding?

In the world of online fundraising, otherwise basically known as crowdfunding, the opportunities are seemingly endless. In fact, lawyers and clients have successful crowdfunded litigation.

However, due to the relative newness of the crowdfunding sensation, those in the legal profession embracing it, have sort of been operating in murky ethical waters ... that is, until now. A recent ethics opinion issued by the District of Columbia's legal ethics committee explains that lawyers can in fact represent clients who pay via crowdfunding, but, as the ABA Journal reported, there are a few important caveats.

Caveat No Emptor

Generally, the caveats revolve around how involved the lawyer is with the fundraising campaign, and whether supporters are promised anything in return. Basically, so long as it is exceedingly clear to those putting up the funds that they are making a no-strings-attached donation to someone to pay attorney fees, court or other case costs, then there shouldn't be a problem.

Additionally, the opinion explains that the crowdfunding supporters shouldn't have a say in the litigation strategy, or even have the opportunity to influence strategy. Furthermore, it discusses issues surrounding confidentiality, explaining that lawyers should not divulge confidential information to assist with fundraising (especially without specific and informed client consent).

Problems With Crowdfunding

Notably, crowdfunding has the potential to raise more funds than are requested or needed. And in the event a crowdfunding campaign does so, or even when it just barely gets enough, serious issues can abound surrounding lawyers paying themselves from crowdfunded money.

Apart from the social stigma of lawyers being seen as greedy (because they are bold enough to want to be paid for their work out of crowdfunded money), the billing issue is rather serious because it involves clients not scrutinizing their lawyers bills because they're not the ones paying'em, which, in theory, might allow an attorney to overbill or bill for non-billable work. But then again, this sort of a problem just falls under the same sort of ethical dilemma you might see in traditional third party litigation funding situations.

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