Legal ethics

A Penny for My Thoughts

Someone last week reached out on Twitter and wanted my thoughts on the crowdfunding effort launched by a New York law firm to raise money for the legal defense of Daniel Penny.

Thought #1 — not unique to me as I’ve seen others say the same thing — very few things indicate how bad things are getting in the United States like the fact that the GiveSendGo effort for this guy’s legal defense has raised over $2 million dollars while the GoFundMe for the family of the person who was killed has raised only $125,000 or so.

Thought #2 – when I last wrote about the ethics of using crowdfunding to raise funds for someone to pay attorney fees in 2019, the jumping off point was a good D.C. ethics opinion covering the landscape. Looking back to my prior post, I see some link rot and have tried to fix the link to the D.C. Opinion to catch the correct, updated URL.

Thought #3 – it is certainly interesting in terms of the approach for the funds to be directly raised by, and paid to, the law firm rather than the client. The various ethical authorities do not prohibit that approach but doing it that way will add to the obligations that the firm has, and the risks associated with it, rather than having the client raise the money and then use it to pay fees and expenses in the ordinary course. Given the amounts being raised, it certainly seems likely that more funds will be raised than needed and the firm has indicated on the platform that the remaining funds will be donated to a charity focused on mental health issues.

Thought #4 – because the firm is doing this directly there are lots of possible questions to ask. At least two things have to be assumed or else the firm is going to have many problems – it has to be assumed that the client authorized and approved this, and it has to be assumed that the firm is putting all of this money into a trust account. Beyond that, questions can arise from things donors may have asked or may ask. While the firm must ethically make certain that the people providing the funding do not attempt to control the litigation or interfere with the professional judgment of the lawyers, the firm will have to be careful if people ask reasonable questions you might expect before turning over money like: what hourly rates will you be charging the client? Are these rates higher or lower than what you normally charge other clients? Who decides which charity gets the money in the end? I think all of those questions are ones that can only be answered if the client gives consent.

Thought #5 – the description of the underlying event is a highly controversial assertion of fact: that their client is “facing a criminal investigation stemming from him protecting individuals on a NYC subway train from an assailant who later died.” If, the facts are ever proven in a criminal court (or otherwise) to be much less favorable to their client — particularly referring to the deceased as “an assailant” — it will be interesting to see if anyone asks for their money back or if any other forms of liability might attach as against the law firm.