Question: May Attorney use a crowdfunding platform to solicit donations to cover Attorney’s fees and/or expenses in a matter in which Attorney’s client cannot afford to pay Attorney?
Answer: Attorney’s use of a crowdfunding platform to solicit donations for a client’s fees and/or expenses must be in accord with a lawyer’s obligations not to accept compensation from a third party except in compliance with Rule 4-1.8(f); to hold client and third party funds in compliance with Rule 4-1.15 and Formal Opinion 128; to protect confidential information (Rule 4-1.6); to be truthful (Rule 4-4.1); to refund unreasonable or unearned fees and/or expenses at the termination of representation (Rule 4-1.16(d) and Rule 4-1.5); not to share legal fees with a non-attorney (Rule 4-5.4); and to make no false or misleading statements about the lawyer or the lawyer’s services (Rule 4-7.1). Attorney may not accept compensation for representation from someone other than the client (including from donors to a crowdfunding platform) unless the requirements of Rule 4-1.8(f) are met. The client must give informed consent, the donation model must not interfere with Attorney’s independent professional judgment or with the client-lawyer relationship, and confidential information must be protected as required by Rule 4-1.6. If donations are used to fund an advanced payment of Attorney’s fee or expenses, the donations must be held in a client trust account in compliance with Rules 4-1.145 – 4-1.155 and Formal Opinion 128. Attorney may not hold property belonging to a client or third persons in an account held by the crowdfunding platform, even temporarily. See Rule 4-1.15(a). Before using a crowdfunding platform, Attorney must ensure donations are refundable and can be proportionally issued. Full or partial refunds must be provided to donors if all or part of an advanced payment of fees or expenses must be returned at the termination of the representation per Rule 4-1.16(d), or if upon the completion of the representation, the fees collected would constitute an unreasonable fee per Rule 4-1.5. In soliciting donations, Attorney must fully disclose any payment processing fees the platform will charge donors, including whether the donations will be debited for the processing fees. Attorney must not use a crowdfunding platform to solicit donations for legal fees if the crowdfunding platform retains a percentage of the funds raised as compensation for the platform’s services. See Rule 4-5.4(a). In soliciting donations, Attorney must protect the confidentiality of client information as required by Rule 4-1.6; be truthful (Rule 4-4.1); and make no false or misleading communication (Rule 4-7.1). Attorney must comply with applicable law, including, but not limited to, any tax law that may govern the reporting of donations.

Informal Opinions are ethics advisory opinions issued by the Office of Legal Ethics Counsel to members of the Bar about Rule 4 (Rules of Professional Conduct), Rule 5 (Complaints and Proceedings Thereon), and Rule 6 (Fees to Practice Law) pursuant to Missouri Supreme Court Rule 5.30(c). Written summaries of select Informal Opinions are published for informational purposes as determined by the Advisory Committee of the Supreme Court of Missouri pursuant to Rule 5.30(c). Informal opinion summaries are advisory in nature and are not binding. These opinions are published as an educational service and do not constitute legal advice.

To request an Informal Opinion, please visit: https://mo-legal-ethics.org/for lawyers/requesting-an-informal-advisory-opinion/.

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