The Case For Lawyer-Directed Litigation Funding In NY: Part 1

Law360 (January 10, 2019, 3:07 PM EST) -- Last year, the New York City Bar Association Ethics Opinion 2018-5 came to the conclusion that lawyer-directed, nonrecourse commercial litigation funding (or lawyer-directed funding, for short) violates the prohibition in New York RPC 5.4(a), and by extension ABA Model Rule 5.4(a) on sharing fees with nonlawyers. In this two-part article, we will explain our concerns with this opinion.[1] Part one reviews the language and history of Rule 5.4(a) and points out that neither the language nor the history of the rule compels the conclusion that lawyer-directed funding violates the rule. Part two will then explain how and why lawyer-directed funding is,...

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