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Disclosure and Consent: Third Party Payor Payment of Attorney’s Fees and Costs
Under California Rules of Professional Conduct an attorney may not accept compensation from one who is not the client (Third Party Payor) without: (1) assuring the arrangement does not interfere with the attorney’s independence or professional judgment on behalf of the client or with the attorney-client relationship, (2) providing for protection of client confidential information and secrets, (3) providing the client with a written disclosure of the relevant circumstances and the actual and foreseeable adverse consequences arising from the arrangement, and (4) obtaining the client’s informed written consent.
The potential adverse consequences of having a Third Party Payor responsible for payment of attorney’s fees and costs is that the Third Party Payor may: (1) attempt to interfere with the attorney-client relationship between the attorney and client, (2) attempt to interfere with the attorney’s exercise of independent professional judgment on behalf of the client, (3) seek access to client confidential information or secrets contrary to the wishes of the client, or (4) use payment or withhold payment to attempt to influence attorney’s representation of the client.
Third Party Payor acknowledges that payment for Client’s legal fees and costs does not make Third Party Payor a client of Attorney and that an attorney-client relationship will exist only between Attorney and Client. Third Party Payor further agrees that they will not interfere with the attorney-client relationship and will not interfere with Attorney’s exercise of independent professional judgment on behalf of Client. In furtherance of the independent nature of the attorney-client relationship, the Third Party Payor acknowledges that they have no right to direct Attorney’s handling of Client’s matter.
A Third Party Payor has no right to information regarding the representation. Attorney will not communicate with nor disclose any confidential or privileged information to Third Party Payor unless Client gives written permission to discuss some or all of their matter with Third Party Payor.
Client will remain responsible for and will pay Attorney’s bills in the event that Third Party Payor fails for any reason to pay invoices as they become due. If a refund is due at the conclusion of the representation, the refund will be paid to the person or entity who paid the fees and costs. All billing objections must be submitted by Client in accordance with the Attorney-Client Agreement. Objections submitted by Third Party Payor will not be accepted.
Client may ask for Third Party Payor to participate in consultations with Attorney and may continue to do so with the understanding that Third Party Payor’s involvement in any communications with Attorney is solely to further the interests of Client. Communications involving Third Party Payor are therefore intended to remain confidential and privileged as against persons or entities other than Attorney, Client, and Third Party Payor. It is further understood and agreed that Attorney may share confidential information with Third Party Payor except when Client directs Attorney to keep information confidential. To the extent Client desires communications and information to remain confidential, the Third Party Payor agrees that payment and receipt of Client confidential information or secrets shall not in any way limit Client’s confidentiality rights or waive any privilege.