San Jose Business Lawyers Blog
Most attorneys are familiar with the Model Rules of Professional Responsibility. Beyond studying for the MPRE, these rules are important in practice and attorneys who do not understand how they apply can face disciplinary issues with the State Bar.
A new change to an old rule may allow pro bono providers to help their clients in more effective ways. Learn more about the changes to ER 1.8(e) and how they can affect your organization’s pro bono policies.
The History of Model Rule 1.8(e)
Historically, Model Rule of Ethics 1.8(e) allowed attorneys to provide payments or loans to clients but only to pay for litigation expenses and court costs. Any other financial assistance was prohibited. The intent of this prohibition was to prevent attorneys from having too great of a financial stake in the litigation. It was also intended to discourage attorneys from pursuing lawsuits that would not be brought to court but for these financial gifts. While these are legitimate concerns, the rule caused illogical results in practice. Attorneys offering pro bono legal services were technically prohibited from merely buying lunch for their clients or offering cab fare to get to the courthouse.
The Changes to the Rule
Thanks to the advocacy of dedicated pro bono attorneys, the American Bar Association has revised the rule to make it more practicable. According to the ABA, pro bono attorneys may now offer “modest gifts” for food, rent, transportation, medicine, and other basic living expenses to clients. Though “modest” is not defined by a specific dollar amount, the rule still limits the overall financial stake an attorney can have in a case so as to prevent improper conflicts of interest. These “modest gifts” are a lifeline to many clients who would be unable to pursue valid legal claims without this minimal assistance for basic necessities.
What This Change Means for Law Firms
This rule has many different implications for large law firms and legal organizations. First, the exception only applies to nonprofit legal services organizations and law school clinical programs that represent clients pro bono. Large law firms that perform occasional pro bono work are not allowed to make modest gifts directly to clients under the rule. Second, the availability of these “modest gifts” cannot be advertised to prospective clients. The rule clearly intends to prohibit attorneys from inducing clients to hire them with the promise of financial aid.
Law firms that are interested in providing assistance under the new rule may have other options for doing so. Attorneys can provide pro bono services through their local nonprofit legal aid organizations. These organizations are in constant need of financial support, so donations are always appreciated (and tax-deductible). Before making any changes to the pro bono policies within your organization, be sure to consult with the corporate attorneys at Structure Law Group. Our California corporate attorneys help legal business owners limit both professional and financial liability in all areas of practice. Call (408) 441-7500 to schedule a consultation or contact us online.