Benefactor: What Happens When a Third Party Pays for Legal Services?

It happens from time to time, when a third party pays for the legal services of another.  Though, it’s still a fairly unusual situation.  So, the question is: What do you do when it happens? 



Ideally, two things: 

 

First, you want to clearly explain to both the payor and the client that the payor is not the client, the client is – which sounds like an obvious thing for lawyers, but won’t be for your clients and the person paying the legal fees.  There’s just a lot of potential for undue influence here; when someone pays for legal services, they’ll likely feel like they can control the representation – but, that’s just not how it goes. 

 

Second, you’ll want to memorialize some of that discussion, as well as the payment arrangement, in a document that is separate from the standard engagement agreement. 

 

Here is a great discussion, and a template contract, for you to potentially utilize, in these situations. 

 

. . . 

 

If you’d like to talk law firm fees, and managing same – contact us today! 

Through a unique partnership between the bar association and Jared Correia's Red Cave Law Firm Consulting, National Creditors' Bar Association members have access to experienced law practice management consultants at a special discount rate.

To get started, visit Red Cave's NCBA landing page, and start running your law practice like a business.

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