By Michael Shemtoub, trial attorney, Beverly Law. Updated November 2026.
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What the ABA Model Rule says
ABA Model Rule 1.8(e) bars a lawyer from giving a client financial assistance in connection with pending or contemplated litigation. The rule has three exceptions. A lawyer may advance court costs and litigation expenses, and repayment can depend on how the case ends. A lawyer representing an indigent client may simply pay those costs. And since August 2020, a lawyer representing an indigent client pro bono, through a nonprofit legal services or public interest organization or a law school clinic or pro bono program, may give modest gifts for food, rent, transportation, medicine and other basic living expenses (ABA Journal report on the 2020 amendment; Delaware Supreme Court order adopting the same change).
The 2020 exception is narrow. The lawyer cannot promise the gifts before being hired or use them to keep a client, cannot ask the client or the client’s family to pay them back, and cannot advertise them. The help cannot be a loan, and a private injury lawyer working on a contingency fee is outside the exception. Each state decides whether to adopt the Model Rule and in what words.
California: a written loan after you hire the lawyer
California Rule 1.8.5(a) starts with a ban: a lawyer may not directly or indirectly pay, or agree to pay, the personal or business expenses of a prospective or existing client (California Rules of Professional Conduct). Paragraph (b) then lists four exceptions:
- with your consent, the lawyer may pay your expenses to third persons out of money collected or to be collected for you in the case (b)(1)
- after you have hired the lawyer, the lawyer may agree to lend you money based on your written promise to repay, if the lawyer first complies with Rules 1.7(b), 1.7(c) and 1.8.1 (b)(2)
- the lawyer may advance the costs of the case, with repayment contingent on the outcome (b)(3)
- the lawyer may pay those costs for an indigent client (b)(4)
The loan exception has real conditions. Rule 1.8.1 covers business deals between a lawyer and a client: the terms must be fair and reasonable and fully disclosed in writing, the client must be advised in writing to consult an independent lawyer and given a chance to do so, and the client must give informed written consent. The rule calls for a written promise to repay. Unlike the cost exception in (b)(3), it does not say repayment depends on winning. Because (b)(2) applies only after you hire the lawyer, a loan cannot be offered as a reason to sign up.
California’s 2026 funding statute adds a separate limit. A lawyer you hire, and the lawyer’s immediate family, may not own a financial interest in a consumer legal funding company or provide consumer legal funding to you directly (Bus. & Prof. Code 6256(a)). That statute covers nonrecourse deals in which a company buys a right to part of your case proceeds (section 6250(c)), a different arrangement from a loan you promise in writing to repay.
Texas: medical and living expenses
Texas Rule 1.08(d) is broader than the Model Rule. A Texas lawyer may advance court costs and litigation expenses “and reasonably necessary medical and living expenses, the repayment of which may be contingent on the outcome of the matter” (Texas Rule 1.08). The rule also lets the lawyer promise a third party that those expenses will be paid. The words “reasonably necessary” limit what qualifies, and the rule says “may,” so a Texas lawyer can decline.
Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou.
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Washington: no living-expense loans
Washington RPC 1.8(e) bars a lawyer from advancing or backing financial assistance to a client in contemplated or pending litigation, with two exceptions (Washington RPC 1.8). The lawyer may advance litigation expenses such as court costs, investigation, medical examinations and evidence, but the client stays ultimately liable for them. Only in class actions may repayment of those expenses depend on the outcome. Washington’s Comment [10] says lawyers may not make loans to clients for living expenses or co-sign them, because that help would encourage suits that might not otherwise be brought and give the lawyer too large a stake in the case. The current official rule has no version of the ABA’s 2020 gift exception.
The four rules side by side
| Rule | Money for living costs | Case costs |
|---|---|---|
| ABA Model Rule 1.8(e) | No, except modest gifts from pro bono lawyers to indigent clients (since 2020) | May be advanced; repayment can depend on outcome |
| California Rule 1.8.5 | Loan allowed after you hire the lawyer, with a written promise to repay and Rule 1.7 and 1.8.1 compliance | May be advanced; repayment can depend on outcome |
| Texas Rule 1.08(d) | Reasonably necessary medical and living expenses may be advanced; repayment can depend on outcome | Same |
| Washington RPC 1.8(e) | No; Comment [10] bars living-expense loans | May be advanced, but the client stays liable except in class actions |
Other states, and why a lawyer may still say no
Other states vary. Some use the Model Rule word for word, some adopted the 2020 gift exception (Delaware did), and some wrote their own versions. Your state bar website posts the current rule. Statutes that regulate funding companies are a separate body of law, collected in the state law table.
Where a rule allows help, a lawyer can still decline. Lending to a client makes the lawyer the client’s creditor, which brings conflict rules, written disclosures and consent forms into the relationship. The lawyer’s own money then rides on the case, the concern Washington’s comment names. None of these rules requires a lawyer to lend or advance living expenses.
What this means for you
- In California, ask whether a provider can be paid later out of the settlement with your consent under Rule 1.8.5(b)(1). Our page on funding and medical liens explains how those claims are paid.
- If anyone offers you a loan or gift to hire a lawyer, the California and ABA rules above do not allow that.
- If you look at an outside company instead, read what pre-settlement funding is, the alternatives, and whether your lawyer has to sign the contract. Texas readers can start with the Texas page, and the lawsuit cash advance guide covers the rest.
Common questions
Can my lawyer pay my rent while my case is pending?
Under the ABA Model Rule and Washington’s rule, no. In California, generally only as a written loan made after you hire the lawyer and after the conflict rules are met, or as a payment to a third person out of money collected or to be collected in your case, with your consent. In Texas, the rule allows advances for reasonably necessary living expenses, but the lawyer does not have to make them.
Can my lawyer pay for a medical exam or records for my case?
Yes, in all four rule sets, because those are litigation expenses. In Washington you stay liable for them outside class actions.
Is a loan from my lawyer the same as a lawsuit advance?
No. A California Rule 1.8.5 loan rests on your written promise to repay. Most funding company advances are nonrecourse, meaning repayment comes only from the case proceeds.
Can my lawyer give me a gift instead of a loan?
Under the ABA Model Rule, only the modest pro bono gifts described above, and they cannot be promised in advance. California’s rule bars paying a client’s personal expenses outside its four listed exceptions. Beverly Law does not offer or arrange lawsuit funding and receives no payment from funding companies. Beverly Law offers a free case review in English or Spanish at (310) 552-6959 if you have questions about your injury case. You owe no fees or costs unless we win.
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Related pages
Cash advance on a lawsuit · Laws by state · Injury law FAQs
Sources
- ABA Journal, Model rule revision allows attorneys to help pro bono clients in need (2020 amendment to Model Rule 1.8(e)) (abajournal.com)
- Delaware Supreme Court order amending Rule 1.8(e) consistent with the ABA Model Rule (courts.delaware.gov)
- California Rules of Professional Conduct (Rules 1.8.5, 1.8.1) (calbar.ca.gov)
- California AB 931 (Bus. & Prof. Code 6250, 6256), official bill text (leginfo.legislature.ca.gov)
- CalMatters Digital Democracy, chaptered text of AB 931 (Stats. 2025, ch. 565) (calmatters.digitaldemocracy.org)
- Texas Disciplinary Rules of Professional Conduct, Rule 1.08 (Texas Center for Legal Ethics) (legalethicstexas.com)
- Washington RPC 1.8 with comments (Washington Courts) (courts.wa.gov)
Important: This page is general information, not legal or medical advice, and reading it does not create an attorney-client relationship. Every case is different; talk to a lawyer about yours. Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou. Last reviewed: November 7, 2026.