Can I Get Pre-Settlement Funding From My Attorney?

Attorneys are generally prohibited from providing financial assistance to clients beyond limited exceptions for litigation costs. Pre-settlement funding comes from a third-party funder, not your attorney.

Under ABA Model Rule of Professional Conduct 1.8(e), attorneys are prohibited from providing financial assistance to a client in connection with pending or contemplated litigation — with two narrow exceptions: advancing court costs and expenses of litigation (repayable contingent on case outcome), and covering costs for indigent clients. Living expenses, medical bills, rent, and other personal costs cannot be advanced by the attorney under this rule.

This is why third-party pre-settlement funding exists as a separate industry. The ethical rules that apply to attorneys — designed to preserve attorney independence and prevent improper financial entanglements with clients — create a gap in available financing that non-attorney funders fill. The funder is not subject to the same ethical rules and can provide financial assistance that attorneys cannot.

Some attorneys suggest other options: payment plans with medical providers, letters of protection, or referrals to third-party funders. These are not the same as attorney-provided financing — they are separate arrangements that do not implicate Rule 1.8(e). An attorney who refers you to a pre-settlement funder is not providing the funding themselves.

If an attorney offers to advance you personal funds — cash, a personal loan, or any financial assistance beyond the narrow exceptions in Rule 1.8(e) — that is an ethics violation. You should not accept such an offer and should consider whether it affects your confidence in the attorney's overall representation.

Source: ABA Model Rule of Professional Conduct 1.8(e) — Conflict of Interest: Financial Assistance to Clients. ABA Formal Opinion 484 (2019).

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