Are you driving your client to loan sharks needlessly?

There are a number of companies that are loaning money to clients of attorneys on pending litigation. If you visit their web sites you will find statements that attorneys cannot ethically loan money to their clients. Some of these firms are charging credit card rates or higher for these loans. Many attorneys think that they cannot loan money to clients even for necessary medical or living expenses. This is not true in Texas. DR Rule 1.08(d)(1) provides that an attorney may advance money to a client for "necessary medical treatment or living expenses...". The attorney cannot charge interest on the transaction unless the client consents is in writing, the rate is fair to the client and the client is given the opportunity to contact another attorney (the latter may be a deal killer. You can still loan the money. You just cannot charge interest). DR Rule 1.08(a). For a more in depth analysis see this article from the University of California Law Review article on the ethics of loaning money to clients. It would be a good idea to check the law of the state where venue lies as some states flatly prohibit loans to clients.