Comments in Law Journal Article Make Connection Between Rule Against Private Investment in Law Firms, Need for Litigation Funders to ‘Tread Carefully’

Comments in Law Journal Article Make Connection Between Rule Against Private Investment in Law Firms, Need for Litigation Funders to ‘Tread Carefully’

The New York Law Journal has reported that a federal appeals court this month “rejected an attempt to loosen restrictions on private investment in the legal industry, dismissing arguments that ethics rules on so-called fee splitting’ impinge on lawyers’ First Amendment rights.”

In the article, headlined Second Circuit Upholds Ban on Private Investment in Law Firms, the report also describes a lawyer’s comments about how “restrictions on the legal industry’s access to capital is one of the driving forces behind the rise in third-party litigation funding” and that in “that industry, too, litigation funders have had to tread carefully in navigating around the fee-splitting rule.”

The article is available here.

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