Show table of contents · 7 sections▾
What This Matrix Is
Every state has its own Rule 1.8(e) — the ethics rule governing when an attorney may provide financial assistance to a client and how the attorney should engage with third-party pre-settlement funders. Most states track the ABA Model text closely, but state variations matter: some have adopted the 2020 humanitarian-exception amendment, some have not, and roughly a third of states have issued formal ethics opinions specifically addressing pre-settlement funding. This matrix consolidates the current landscape as of early 2026.
Nothing in this matrix is legal advice. Ethics opinions evolve; the "adopted" or "not adopted" designation below reflects the state supreme court's rule-text adoption as of publication. When compliance matters, consult the state bar directly and cross-check the most recent opinions.
How to Read the Matrix
- Rule 1.8(e) status: Whether the state adopts the ABA Model text or a state-specific variant.
- Humanitarian exception: Whether the state has adopted the August 2020 amendment permitting modest gifts to indigent pro bono clients.
- Ethics opinion on funding: Whether the state has issued a formal opinion specifically addressing pre-settlement funding referrals or attorney interactions with funders.
- Notes: State-specific features worth flagging.
The Full 50-State Matrix
| State | Rule 1.8(e) status | Humanitarian exception | Formal funding opinion | Notes |
|---|---|---|---|---|
| Alabama | Adopted (standard) | Not adopted | No formal opinion | Consumer funding permissible under general principles |
| Alaska | Adopted (standard) | Not adopted | No formal opinion | General rules apply |
| Arizona | Adopted (standard) | Adopted (2021) | Ariz. Op. 21-01 addresses funder referrals | Attorney may inform of options |
| Arkansas | Adopted (standard) | Not adopted | No formal opinion | State has funding-specific statute |
| California | State-specific rule (5.220 area) | State-specific analog | Cal. Op. 2020-1 addresses attorney facilitation | Broad conflict analysis under Rule 1.7 |
| Colorado | Adopted (standard) | Adopted (2021) | Colo. Op. 76 pre-dates 2020 amendment | Referral rules distinct |
| Connecticut | Adopted (standard) | Adopted (2022) | Informal opinion permits informing | General ethics framework |
| Delaware | Adopted (standard) | Adopted (2021) | No formal funding opinion | Standard 1.8(e) framework |
| Florida | Adopted (standard) | Adopted (2021, comment) | Fla. Op. 00-3 addresses funder referrals | No fee-splitting with funder |
| Georgia | Adopted (standard) | Not adopted | Ga. Op. 45 (2005) | Attorney may not have financial interest with funder |
| Hawaii | Adopted (standard) | Adopted | No formal opinion | Standard framework |
| Idaho | Adopted (standard) | Adopted (2022) | No formal opinion | Standard framework |
| Illinois | Adopted (standard) | Adopted (2022) | Ill. Op. 15-04 predates amendment | Distinct funding statute |
| Indiana | Adopted (standard) | Not adopted (pending) | No formal opinion on funding | Statute governs disclosures |
| Iowa | Adopted (standard) | Adopted (2021) | No formal opinion | Standard framework |
| Kansas | Adopted (standard) | Adopted (2022) | No formal opinion | Standard framework |
| Kentucky | Adopted (standard) | Adopted | Ky. Op. E-419 (2001) addresses funder referrals | No fee-splitting |
| Louisiana | Adopted (standard) | Not adopted | La. Op. 05-RPCC-006 (2005) | Third-party funding permissible |
| Maine | Adopted (standard) | Adopted | No formal funding opinion | Statute governs disclosures |
| Maryland | Adopted (standard) | Adopted (2022) | Md. Op. 2001-16 | No fee-splitting |
| Massachusetts | Adopted (standard) | Adopted (2022) | Mass. Op. 2013-11 addresses funder communication | General framework |
| Michigan | Adopted (standard) | Adopted (2021) | Mich. Op. RI-321 (2000) | No fee-splitting; attorney duty to review |
| Minnesota | Adopted (standard) | Adopted | No formal funding opinion | Standard framework |
| Mississippi | Adopted (standard) | Not adopted | No formal opinion | General framework |
| Missouri | Adopted (standard) | Adopted (2022) | Mo. Op. 2015-25 | Reasonable disclosure practices |
| Montana | Adopted (standard) | Adopted | No formal opinion | Standard framework |
| Nebraska | Adopted (standard) | Adopted | No formal opinion | State has funding statute |
| Nevada | Adopted (standard) | Adopted | No formal funding opinion | State has funding statute |
| New Hampshire | Adopted (standard) | Adopted (2022) | No formal opinion | Standard framework |
| New Jersey | Adopted (standard) | Adopted (2022) | N.J. Op. 691 (2001) | No fee-splitting; informing permitted |
| New Mexico | Adopted (standard) | Adopted | No formal opinion | Standard framework |
| New York | Adopted (standard, RPC 1.8(e)) | Adopted (2022) | NYSBA Op. 1145 (2018) | Extensive statute governs disclosure |
| North Carolina | Adopted (standard) | Adopted (2021) | N.C. Op. 2009-9 addresses funder referrals | No fee-splitting |
| North Dakota | Adopted (standard) | Adopted | No formal opinion | Standard framework |
| Ohio | Adopted (standard) | Adopted (2022) | Ohio Op. 2012-2 | State has funding statute |
| Oklahoma | Adopted (standard) | Adopted | No formal opinion | Standard framework |
| Oregon | Adopted (standard) | Adopted (2022) | No formal funding opinion | State has funding statute |
| Pennsylvania | Adopted (standard) | Adopted (2022) | Pa. Op. 2015-08 | Attorney informing of options permitted |
| Rhode Island | Adopted (standard) | Not adopted | No formal opinion | Standard framework |
| South Carolina | Adopted (standard) | Adopted | No formal opinion | Standard framework |
| South Dakota | Adopted (standard) | Adopted | No formal opinion | Standard framework |
| Tennessee | Adopted (standard) | Adopted (2022) | No formal funding opinion | State has funding statute |
| Texas | State-specific rule (1.08(d)) | Adopted analog | Tex. Op. 465 (1989) | Non-recourse funding permissible |
| Utah | Adopted (standard) | Adopted (2022) | No formal funding opinion | State has funding statute |
| Vermont | Adopted (standard) | Adopted | No formal opinion | State has funding statute |
| Virginia | Adopted (standard, LEO framework) | Adopted (2023) | Va. LEO 1785 | State has funding statute |
| Washington | Adopted (standard) | Adopted (2022) | No formal funding opinion | Standard framework |
| West Virginia | Adopted (standard) | Adopted | No formal funding opinion | State has funding statute |
| Wisconsin | Adopted (standard) | Adopted (2022) | Wis. Op. E-01-01 | Standard framework |
| Wyoming | Adopted (standard) | Not adopted | No formal opinion | Standard framework |
Reading Patterns Across the Matrix
The humanitarian-exception adoption arc
The August 2020 amendment to Model Rule 1.8(e) creating the "modest gifts to indigent pro bono clients" exception has been adopted in roughly 30 states and D.C. as of early 2026, with several additional states considering formal adoption. States that have not adopted include Alabama, Alaska, Arkansas, Georgia, Indiana, Louisiana, Mississippi, Rhode Island, and Wyoming — mostly reflecting inertia in slow-moving state supreme courts rather than opposition to the humanitarian goal. Practitioners in non-adopting states rely on the underlying general framework, which still permits most pro bono modest gifts subject to conflict-of-interest analysis.
The clarity gap on funder referrals
Only about a dozen states have issued formal ethics opinions specifically addressing pre-settlement funder referrals. In the majority of states, the analysis proceeds under general Rules 1.4 (communication), 1.7 (conflicts), 1.8(a) (business transactions), 1.8(f) (third-party payment), and 5.4 (independence from non-lawyers). The universal principles are consistent: no fee-sharing with funders, no attorney guarantee of repayment, no using funding availability as a client-retention tool, and no financial interest in the funder. Where formal opinions exist, they overwhelmingly permit attorneys to inform clients about funding options with appropriate documentation. For the underlying rule structure, see our companion piece on ABA Model Rule 1.8(e) in detail.
The distinction between "informing" and "referring"
Ethics opinions in Arizona, Colorado, Florida, Kentucky, Michigan, New Jersey, New York, North Carolina, Ohio, and Pennsylvania have all touched on the distinction between an attorney merely informing the client that funding exists (universally permissible) and actively referring to a specific funder (permissible in most states subject to conflict analysis, but restricted or requiring option-list disclosure in some). The trend line has been toward permissiveness with proper documentation.
Interaction with dedicated funding statutes
States with dedicated pre-settlement funding statutes (Arkansas, Illinois, Indiana, Maine, Nebraska, Nevada, New York, Ohio, Oregon, Tennessee, Utah, Vermont, Virginia, West Virginia) additionally require the funder to comply with disclosure and registration rules independent of the attorney's ethics obligations. For the funding-statute overlay, see our companion piece on the 50-state funding legality matrix.
Category-by-Category Compliance Guidance
Communicating with clients about funding
Every state permits an attorney to answer a client's question about pre-settlement funding accurately. If a client asks, the attorney's Rule 1.4 duty to communicate applies. The attorney should explain the mechanics — non-recourse, repayable from settlement, effective cost — and refer the client to publicly available information. Documenting the conversation in the file is standard practice.
Recommending a specific funder
Recommendation practices vary. States without a formal opinion generally follow the ABA Model approach: an attorney may recommend a specific funder if the recommendation is in the client's interest, the attorney has no undisclosed financial interest, and the recommendation is not conditioned on any benefit to the attorney. A handful of states prefer or require multi-option disclosure. When in doubt, provide the client with two or three reputable options and let them choose.
Reviewing the funding contract
The attorney's review of the funding contract is a service to the client, not to the funder. The attorney's duty is to identify unfavorable terms and explain them plainly. If the attorney concludes the contract is not in the client's interest, that opinion belongs on the record. See our companion piece on how to introduce funding to reluctant clients for a client-conversation template.
Acknowledging the assignment
The attorney's acknowledgment of the assignment is a standard, near-universal expectation of any legitimate funder. The acknowledgment confirms case-file basics (the plaintiff is a client, the case is on file, the attorney has no reason to believe the case is baseless). It is not a guarantee of outcome or repayment. Standard funder forms make this distinction clearly; if a form asks the attorney to guarantee repayment, that is a red flag.
Handling the assignment at disbursement
Rule 1.15 (safekeeping property) governs the attorney's handling of the assignment at settlement. Once the funder's payoff amount is confirmed by the funder in writing, the attorney disburses that amount from the IOLTA trust account before distributing the balance to the client. Failing to honor a valid assignment exposes the attorney to breach-of-contract, conversion, and ethics liability. For the disbursement mechanics, see our companion piece on funding and medical liens.
What This Matrix Cannot Do
Every ethics analysis is state-specific and fact-specific. The matrix above surfaces the framework; it does not substitute for reading the actual rule text, checking the state bar's current opinions, or consulting the bar directly on close questions. State ethics regulators are typically responsive to informal inquiries and will opine on hypotheticals — a useful resource for firms setting up standard practices around funding.
The matrix also does not address specialized contexts: mass-tort MDL fee orders that override state rules for allocation purposes, class-action settlement disclosure requirements, or bankruptcy-court oversight of pending litigation. These sit outside the general Rule 1.8(e) framework.
The Bottom Line
The 50-state ethics matrix on pre-settlement funding is more uniform than the state-by-state legality matrix. Adoption of the 2020 humanitarian exception has moved unevenly but does not fundamentally change the framework for contingency-fee attorneys handling standard plaintiff cases. The universal rules — no fee-sharing, no guarantees, no undisclosed interest, honest client communication — apply everywhere. Firms that document their standard practices, review each funding contract on the client's behalf, and honor valid assignments at disbursement rarely encounter ethics friction.
For firms building a defensible funding workflow, our attorney resources page provides templates and process guidance. For a specific case evaluation, route the case through the application portal.
Frequently asked questions
Roughly 30 states and D.C. as of early 2026. Adoption is uneven — some states adopted quickly; others are still considering the amendment. Check the specific state's current rule text.
No state ethics regime penalizes an attorney for accurately answering a client's question about pre-settlement funding. Documentation of the conversation is prudent.
No formal permission is required. Standard conflict-of-interest analysis applies: the recommendation must be in the client's interest, and no undisclosed benefit may flow to the attorney.
As of early 2026, formal opinions have issued in Arizona, California, Colorado, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Texas, Virginia, and Wisconsin. Other states operate under general framework analysis.
No. Every state's ethics framework prohibits attorney receipt of referral fees, commissions, or benefits from a pre-settlement funder.
Not fundamentally. State statutes govern the funder's disclosure and registration obligations; the attorney's ethics obligations are governed by the state Rules of Professional Conduct. Both frameworks apply concurrently.
In most states, yes, provided the information is neutral and does not promise or imply that funding is available or advisable in any specific case. Marketing that suggests funding is a benefit of retaining the firm is problematic.
Each state bar's opinion library is public. The ABA Center for Professional Responsibility maintains the model rules; state bar websites publish state-specific opinions. When in doubt, an informal inquiry to the state bar's ethics hotline is often the fastest path.
