attorney-client-privilege
What would be the legal ramifications in regards to someone else paying your legal bills?
<p>In regards, to, establishing attorney-client privilege, and the related attorney-client confidentiality. What would happen if someone else paid for your legal counsel?</p>
<p>Do all the rules remain the same regardless of who pays the bill, or is it maybe in your best interest to have your noble benefactor send you the money and just pay the bill yourself. (If at all possible.)</p>

<p>There have been cases in the UK where paying someone's legal bills was interpreted as joining their case. So when A with no money libels someone, and B with deep pockets pays A's lawyer, then B risks being held liable for damages if A gets convicted. So B should be very careful. Just giving you money is probably the safest.</p>
<p>But attorney-client privilege is between attorney and client. I have been laid off twice with my company asking me to take an employment lawyer and paying for it. (Interestingly each time the bill was exactly the maximum amount the company was willing to pay :-) It would have been absurd if my company could demand information that is under attorney-client privilege just because they paid the bill.</p>
<p>Why did two companies pay the lawyers bill? Because that way they ensure that the separation is without problems. The lawyer explained the settlement contract and what it meant exactly. They also checked that the contract didn’t contain anything unacceptable which the company would have fixed. So if I had tried to sue them later I would have no chance to win (but there was no reason to sue). Another reason not to sue was that the company offered I settlement that was very significantly more than was legally required, but if you sued them you would only get what you got in court - most likely less than you would get without suing.</p>
<p>So basically they paid to make sure I would have no reason to sue them later.</p>

<p>As someone who was in this situation in real life (A third party in the form of an uninvolved family member paid my legal fees), attorney-client privelege remained with me in full.  There was a limited privelege that existed between the attorney and the third party that only was on matters related to the financing of my specific case (i.e. the bills, the payment options, ect).  It would not cover any discussion of our legal strategy if I had told that third party and I informed this person that I was not able to discuss conversations I had with my attorney and the reason why while the case was ongoing but would be able to discuss upon resolution.</p>
<p>While my attorney did comment that the situation was unusual, it was only unusual in that there was a little more paperwork that we had to do and wasn't that intrusive beyond that.</p>

<p>Generally speaking, the rules remain the same regardless of who pays the bill.</p>
<p>The American Bar Association's <a href="https://www.americanbar.org/groups/litigation/committees/commercial-business/practice/2019/when-a-third-party-pays-legal-fees/" rel="nofollow noreferrer">Model Rule of Professional Responsibility 1.8(f)</a> confirms that the lawyer's duty to act in the <em>client's</em> best interest and preserve the <em>client's</em> confidences must not be interfered with when the lawyer is paid by one other than the client:</p>
<blockquote>
<p>A lawyer shall not accept compensation for representing a client from one other than the client unless:</p>
<ol>
<li><p>the client gives informed consent;</p>
</li>
<li><p>there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and</p>
</li>
<li><p>information relating to representation of a client is protected as required by Rule 1.6 [confidentiality].</p>
</li>
</ol>
</blockquote>
<p>This means that the lawyer must advise the client to act against the interests of the person paying the bill, if that is in the best interests of the client. For example, in the situation where a company pays for an employee to get independent legal advice about a settlement with the company, the lawyer would have to advise the client (employee) not to settle if the company was offering a bad deal.</p>
<p>Of course, the real world is complex and people do not usually provide <em>carte blanche</em> to a law firm to represent potentially hostile third parties. The situation may arise where the lawyer's duty to act in the client's best interest conflicts with their desire to maintain a relationship with the person paying the bills. In this case, the lawyer must end one of the relationships. Such ethical issues are further discussed in the ABA article <a href="https://www.americanbar.org/groups/litigation/committees/commercial-business/practice/2019/when-a-third-party-pays-legal-fees/" rel="nofollow noreferrer">When a Third Party Pays the Legal Fees</a> (2019).</p>
