Practice Quiz

Paralegal

Category - Ethics

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A paralegal is employed by an attorney who represents injured workers in workers’ compensation cases. The attorney is fond of one of his clients. Because of her injury, the client has not been able to work and is running short of money. The attorney instructs the paralegal to have the firm’s bookkeeper prepare a $500 check from the firm’s business account to the client as a loan. Can the attorney and/or law firm loan the money to the client?
  1. Yes, because the attorney can provide no-interest loans to clients as a pro bono service.
  2. Yes, because the loan is too small to be considered a business transaction with a client.
  3. No, because the client’s compensation award will include back pay from the date of injury.
  4. No, because attorneys may not provide financial assistance to a client.
Explanation
Answer: D - No, because attorneys may not provide financial assistance to a client. “A lawyer shall not provide financial assistance to a client in connection with a pending or contemplated litigation,” except to advance court costs. Model Rule 1.8(e). Answer D is the best choice because it directly reflects the Model Rule. Answers A and B are not the best choice because nothing under the Model Rules allows these exceptions to Rule 1.8(e). Answer C is not the best choice because it does not address the attorney’s ethical obligations.
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