MBE Rules · Professional Responsibility

Financial Assistance to Clients

Cal. Rule 1.8.5

The rule

A lawyer may advance litigation costs repayable regardless of outcome and, in California — unlike the ABA — may lend money to a client for any purpose after employment with a written loan agreement; paying personal expenses of an indigent client is permitted.

In plain English

A lawyer can help cover litigation costs for a client, and in California, they can also lend money to clients for any reason as long as there is a written agreement. Additionally, lawyers are allowed to pay for personal expenses of clients who cannot afford them.

Worked example

A lawyer agrees to advance $5,000 for a client's litigation costs, which the client will repay regardless of the case outcome. After the case begins, the lawyer also lends the client $2,000 for personal expenses, documented in a written loan agreement. The client wins the case and repays both amounts. The lawyer's actions are permissible under California rules.

Memory hook

In California, lawyers can lend money for any purpose, not just litigation costs!

The trap

Exams may confuse students by presenting scenarios where a lawyer's financial assistance seems to blur ethical lines, leading candidates to overlook California's unique allowances.

How examiners test it

Questions often present fact patterns involving financial assistance to clients, testing whether candidates recognize the differences between ABA and California rules regarding loans and personal expenses.

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