An attorney can advance money to a client for litigation costs — things like court filing fees, deposition transcripts, and expert witness fees — but generally cannot advance money for personal living expenses like rent, groceries, or car payments. This line comes from ABA Model Rule 1.8(e), which most states have adopted in some form.1American Bar Association. Model Rules of Professional Conduct – Rule 1.8: Current Clients: Specific Rules A few states go further, and a separate industry of pre-settlement funding companies exists to cover personal expenses that lawyers legally cannot.
What Your Attorney Can Pay For
Rule 1.8(e) permits a lawyer to advance court costs and litigation expenses, and repayment can be made contingent on the outcome of the case.1American Bar Association. Model Rules of Professional Conduct – Rule 1.8: Current Clients: Specific Rules This is the exception that makes contingency-fee representation possible. If you had to pay every filing fee and deposition bill out of pocket, most personal injury cases would never get off the ground.
Costs your attorney can front include:
- Court filing fees, typically $100 to $400 or more depending on the court and case type.
- Certified medical records, which can run from $40 to several hundred dollars depending on how extensive treatment has been.
- Depositions, where court reporter fees, transcripts, and video often total $1,000 to $5,000 or more per witness.
- Expert witnesses, ranging from a few thousand dollars in a straightforward case to $50,000 or more in complex litigation.
For a client who genuinely cannot pay at all, the rule also allows the attorney to cover litigation costs outright, with no expectation of repayment.1American Bar Association. Model Rules of Professional Conduct – Rule 1.8: Current Clients: Specific Rules
Why the Rule Blocks Personal Expenses
The concern is judgment. An attorney who has been paying a client’s mortgage and grocery bills has a financial incentive to push for a quick settlement to recoup that money, even when waiting or going to trial would produce a better result. Rule 1.8(e) keeps the attorney’s advice tied to the merits of the case rather than to their own exposure.
Litigation costs are different because they serve the case itself. Paying for a deposition helps pursue the claim. Paying the client’s electric bill does not.
How Repayment of Advanced Costs Works
Advanced litigation costs typically come out of the client’s recovery at the end of the case. In a standard personal injury contingency arrangement, the attorney first takes their percentage — usually somewhere between 33% and 40%, depending on factors like whether the case goes to trial — and advanced costs are then deducted from what remains.
The fee agreement controls what happens if you lose. Rule 1.8(e)(1) says repayment “may be contingent on the outcome of the matter,” but does not require it.1American Bar Association. Model Rules of Professional Conduct – Rule 1.8: Current Clients: Specific Rules That word “may” gives the attorney discretion. Some agreements say you owe nothing for advanced costs if the case is unsuccessful. Others make you responsible for repayment regardless of outcome. Read the agreement before signing, and ask directly: if we lose, do I still owe you for the costs you advanced?
Interest is a second question. The Model Rules do not flatly prohibit charging interest on advanced costs, but any interest must be reasonable and disclosed in writing before it starts accruing. If your fee agreement is silent on interest, ask.
The Narrow Pro Bono Exception for Living Expenses
In August 2020, the ABA added a third exception to Rule 1.8(e). An attorney representing an indigent client on a pro bono basis through a nonprofit legal services organization, public interest organization, or law school clinical program may provide “modest gifts” for food, rent, transportation, medicine, and other basic living needs. These are gifts, not loans, and the attorney cannot advertise the availability of such assistance, offer it as an inducement to hire or stay, or seek reimbursement from the client or the client’s family.1American Bar Association. Model Rules of Professional Conduct – Rule 1.8: Current Clients: Specific Rules
If you are paying an hourly rate or your attorney is taking a percentage of your recovery, this exception does not cover your situation.
State Rules Vary
The ABA Model Rules are a template. Each state adopts its own version, and a handful have broken from the Model Rules to give attorneys more flexibility. Some states allow advances for living expenses under tight conditions — a waiting period after retention, a dollar cap, ethics reporting, and a limit to emergencies like avoiding foreclosure or paying for necessary medical care. Others permit outright loans to clients for personal expenses when documented in writing and consistent with conflict-of-interest rules. At least one state allows an attorney to guarantee a loan that helps a client avoid settling under financial pressure, though the client remains liable for repayment regardless of case outcome.
What your attorney can actually do depends on your state’s version of the rules. Ask directly.
Pre-Settlement Funding for Personal Expenses
Because most attorneys cannot legally help with rent or groceries, many clients turn to pre-settlement funding companies. These companies evaluate the strength of your case and advance you a portion of the expected recovery, typically 10% to 20% of what they estimate you will win. They are not banks, and in most jurisdictions this is not technically classified as a loan.
The defining feature is that pre-settlement funding is usually non-recourse: if you lose the case, you owe nothing back. The trade-off is cost. Reputable companies charge simple interest in the 15% to 20% per year range, but rates vary widely. Some compound interest or add fees that push the effective cost much higher, especially if the case takes years to resolve. A $10,000 advance on a case that takes three years could cost significantly more than the original amount by the time interest is calculated.
Regulation is uneven. Some states require licensing and fee disclosures; others have minimal oversight. Before signing, get the full cost in writing: the interest rate, whether it compounds, and every fee. Have your attorney review the agreement. Most funding companies expect the attorney’s cooperation anyway, because repayment comes directly out of the settlement.
Pre-settlement funding fills a real need, but it is expensive money. Personal savings, help from family, and payment plans with medical providers or creditors are worth exhausting first.