Representing a client in a matter funded in whole or in part through donation-based crowdfunding is not unethical per se. Lawyers are encouraged to exercise substantial caution when undertaking a crowdfunded matter, however, as ethical concerns abound and increase as an attorney’s involvement with the fundraising increases.
Lawyers contemplating undertaking a crowdfunded matter are encouraged to exercise caution.
Lawyers are encouraged to employ a written engagement letter and must satisfy the client consent and other duties arising where a third-party funds litigation. Lawyers should understand a contemplated crowdfunding platform’s functionality, and alternatives, sufficiently to enable them to reasonably counsel the client about the potential impact on the client’s matter, with particular attention to privilege.
Lawyers should consider their duties to potential donors, including truthful disclosure.
Lawyers should consider how funds will make their way from the platform to the lawyer’s operating account and how funds raised in excess of the cost of the representation will be disposed of. Bear in mind that at the end of the day, fees and expenses must be “reasonable” and “earned.”
By the NHBA Ethics Committee
This opinion was submitted for publication to the NHBA Board of Governors at its June 17, 2022 meeting.