Can a lawyer advance money to a client after a case settles but before the settlement proceeds are received?

Plain-English summary

The inquiry asked whether a lawyer could advance funds to a client after a lawsuit settled but before the funds due the client had been received. The committee based its answer on the assumption that the amount of the settlement or recovery was known and not subject to further proceedings, and that the only event that needed to occur for the client to receive the money was the actual transmittal of the funds.

On those facts, the committee was of the opinion that the lawyer could make the advance. It reasoned that, as presented, there was no contemplated or pending litigation, and that such an advance would therefore not be prohibited by RPC 1.8(e).

Currency note

This opinion was issued in 1988, before the 2006 revisions to the Washington Rules of Professional Conduct. The rule then numbered RPC 1.8(e), restricting a lawyer from providing financial assistance to a client in connection with pending or contemplated litigation, corresponds to Model Rule 1.8(e) and was later amended. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.

Common questions

Q: Can a lawyer give a client an advance against a settlement before the check comes in?

A: Per the opinion, yes on these facts. The committee was of the opinion that a lawyer could advance funds after the lawsuit settled, where the recovery amount was known and only the transmittal of the funds remained.

Q: Why didn't RPC 1.8(e) prohibit the advance?

A: The committee reasoned that, as presented, there was no contemplated or pending litigation. Because RPC 1.8(e) restricts financial assistance in connection with pending or contemplated litigation, an advance made after the case had settled fell outside the prohibition.

Q: What assumptions did the committee build into its answer?

A: That the settlement or recovery amount was known and not subject to further proceedings, so that the only remaining event was the actual transmittal of the funds to the client.

Background and rules framework

The opinion applies the rule then numbered Washington RPC 1.8(e), corresponding to Model Rule 1.8(e), which restricts a lawyer from providing financial assistance to a client in connection with pending or contemplated litigation. The committee read the rule's reach as limited to pending or contemplated litigation and concluded that an advance made after settlement, where only transmittal of a known sum remained, did not fall within it.

Citations and references

Rules of Professional Conduct:

• Washington RPC 1.8(e) (financial assistance to a client in connection with litigation), corresponding to Model Rule 1.8(e).

See also

• WSBA Ethics Op. 1145: whether a lawyer may personally guarantee a client's settlement payment
• WSBA Ethics Op. 1044: taking a deed of trust and note from a client to secure future fees

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=242

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Advisory Opinion: 1162
Year Issued: 1988
RPC(s): RPC 1.8(e)
Subject: Advancing funds to client after settlement but before settlement proceeds received

The Committee was of the opinion, that based upon the facts in your memorandum, a lawyer could advance funds to a client after a settlement of lawsuit but before the funds due the client had been received, based upon the assumption that the amount of the settlement or recovery is known and not subject to further proceedings and the only event which needs to occur so that the client receives the money is the actual transmittal of the funds. The Committee based this opinion on its conclusion that, as presented, there was no contemplated or pending litigation and therefore such an advance would not be prohibited by RPC 1.8(e).