By Michael Shemtoub, trial attorney, Beverly Law. Updated November 2026.
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States that require the lawyer’s acknowledgment
The wording differs from state to state, but the same items come up again and again. This table covers statutes we read directly. Other states are listed in the state law table.
| State and law | What your lawyer confirms | Without it |
|---|---|---|
| California, Bus. & Prof. Code 6251(c)-(d) | Reviewed the required disclosures with you; paid on contingency under a written agreement; all proceeds go through the client trust account or a separate settlement fund; will pay out under the contract; no referral fee or other consideration from the funder, now or later | Contract is null and void |
| Illinois, 815 ILCS 121/10 | To the lawyer’s knowledge, all costs and charges were disclosed; contingency fee; trust account or settlement fund; following your written instructions; no referral fee | Contract is null and void |
| Nevada, NRS 604C.350 | Items including the contingency fee and no referral fee | Contract is void |
| Georgia, O.C.G.A. 7-10-6(e) | Neither the lawyer nor the firm has paid or received a referral fee or other consideration, or must do so later | The Act has a separate section (7-10-8) on agreements that violate it |
| Nebraska, 25-3303 | Reviewed the contract and all costs, including the annualized rate of return; contingency fee; trust account; following your written instructions; no commissions or referral fees; whether the lawyer has a financial interest in the company | Section read does not say |
| Maine, 12-104(9) | Reviewed the contract and costs; written fee agreement; trust account; following your written instructions | Section read does not say |
| Tennessee, 47-16-104 | If you have a lawyer: had a chance to review it; whether paid on contingency; trust account or settlement fund; represents you; no referral fee | Section read does not say |
California adds a protection that matters if you switch lawyers: the contract stays valid and enforceable if you later fire the lawyer who signed the acknowledgment (section 6251(e)). Illinois and Nevada have the same rule.
States that use a different approach
Some laws keep the lawyer involved without a signed acknowledgment. Missouri requires the funding company to send your lawyer written notice of the contract within three business days of funding. It also requires you to give your lawyer a written direction you cannot revoke: the lawyer tells the company when the case resolves and, after the company confirms the amount due in writing, pays it from the proceeds within ten business days (RSMo 436.554).
Many states have no consumer funding statute at all. There, whether your lawyer signs anything depends on the contract and on the company’s own practice.
What your lawyer is confirming
Read the list in the table closely and a pattern shows up. The lawyer is confirming facts within the lawyer’s own knowledge:
- how the lawyer is being paid (a contingency fee under a written agreement)
- where the settlement money will land (the trust account) and that it will be paid out as the contract says
- that the funding company has not paid the lawyer and will not
- in some states, that the lawyer reviewed the disclosures or the contract with you
The California version, like Nevada’s, goes further than most. The lawyer agrees to “take any steps necessary” to see that the terms of the funding contract are fulfilled. In practice, that commits the lawyer to pay the company from your settlement before the rest goes to you. Our page on how an advance is paid back walks through that step.
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What the signature does not mean
None of the statutes above asks the lawyer to say the deal is fair, that the price is reasonable for you, or that you should take it. The State Bar of California’s Formal Opinion 2020-204 says a lawyer must understand how a funding agreement affects the case. If the client asks for advice on the contract or help negotiating it, the lawyer must have that skill, gain it, or decline. So ask your lawyer directly whether they are advising you on the terms or only signing the acknowledgment.
The acknowledgment also does not change your own rights under the contract. In California you still have five business days after funding to cancel by returning the money, and the first page must show the funded amount, one-time charges, the most you can owe and a repayment schedule (section 6252). See the right to cancel for other states.
Lawyer conflicts and referral fees
California’s statute draws hard lines between lawyers and funders:
- the lawyer you hire, and the lawyer’s immediate family, may not have a financial interest in a consumer legal funding company or fund you directly (6256(a))
- a lawyer who referred you to your lawyer may not have a financial interest in the company funding you (6256(b))
- the company may not pay referral fees to lawyers or accept them from lawyers, and may not steer you to a particular lawyer except through a bar referral service (6254(a)(1), (2), (4))
- the company may not condition funding on you firing your lawyer and hiring one it recommends (6254(a)(9))
- lawyers who violate section 6256 face State Bar discipline (6256(e))
Illinois bars your lawyer and any referring lawyer from holding a financial interest in the funding company, and a funding that violates that rule is void (815 ILCS 121/45). Nebraska makes the lawyer state in the acknowledgment whether such an interest exists.
Ethics rules cover the gaps. Formal Opinion 2020-204 says a lawyer’s prior relationship with a funder, or payments from one, can create a conflict that requires telling the client and getting informed written consent, and that owning part of a funding company turns the deal into a business transaction with the client under Rule 1.8.1. More on the lawyer’s side of this is on our California page.
What to ask before you sign
- Does my state require your acknowledgment, and will you sign it?
- Are you advising me on the terms, or only confirming the facts in the acknowledgment?
- Do you or anyone at the firm have any relationship with this company?
- What is the most I could owe, and when do charges stop?
- If I change lawyers, what happens to this contract?
- What case information will the company ask for? Our page on funding and attorney-client privilege explains the risk.
The contract red flags page has a longer checklist.
Common questions
Can my lawyer refuse to sign the acknowledgment?
These statutes make the acknowledgment a condition of a valid contract; they do not order a lawyer to give it. In California a contract without it is void, so a refusal stops that contract.
Does the funding company pay my lawyer for signing?
In California, Illinois and Georgia, no. The lawyer’s acknowledgment itself states that no referral fee or other consideration was received.
Does my lawyer's signature mean the case will win?
No. The acknowledgment is about the fee, the trust account and referral payments. Funding companies make their own decision about your case.
Do I need a lawyer to get pre-settlement funding?
Where the law requires a lawyer’s acknowledgment, the contract assumes you have one. Tennessee’s acknowledgment applies if you tell the company you are represented.
Who makes sure the company gets paid?
In California and Nevada, the lawyer confirms the money will run through the trust account or a settlement fund and that the lawyer will pay it out under the contract. In Illinois, the lawyer confirms the trust account or settlement fund and that the lawyer is following your written instructions. The lawsuit cash advance guide has the rest of this section. 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
- California AB 931 (Bus. & Prof. Code 6250-6256), official bill text (leginfo.legislature.ca.gov)
- Bus. & Prof. Code 6251 (2025 California Code, Justia) (law.justia.com)
- CalMatters Digital Democracy, chaptered text of AB 931 (calmatters.digitaldemocracy.org)
- Illinois Consumer Legal Funding Act, 815 ILCS 121 (ilga.gov)
- Nevada NRS Chapter 604C (leg.state.nv.us)
- Georgia SB 69 (2025), as signed (O.C.G.A. 7-10-1 to 7-10-11) (gov.georgia.gov)
- Nebraska Rev. Stat. 25-3303 (nebraskalegislature.gov)
- Maine 9-A M.R.S. 12-104 (legislature.maine.gov)
- Tennessee Code 47-16-104 (Justia, 2025) (law.justia.com)
- Missouri RSMo 436.554 (revisor.mo.gov)
- State Bar of California Formal Opinion 2020-204 (Litigation Funding) (calbar.ca.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.