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Fee-sharing unethical, says New York City Bar (CDR News)

CDR News, September 6, 2018

Fee-sharing unethical, says New York City Bar

“A formal opinion publish by the New York City Bar Ethics Committee, addressing litigation funders’ contingent interest in legal fees, has found the practice of fee-sharing between lawyers and third-party funders unethical. At a time when lawyers and their firms are taking on more of the financial risk in disputes, the New York City Bar Ethics Committee has said the practice of lawyers and law firms entering into an agreement with a litigation funder (a non-lawyer), whereby the lawyer’s future payments to the funder are contingent on the lawyer’s receipt of legal fees or on the amount of legal fees received in one or more specific matters, violates the New York Rule 5.4 on Professional Conduct, despite the New York State courts having condoned such arrangements on numerous occasions.”

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