Concept
Why Clients Cannot Waive
Acquiring an interest in litigation
Why Clients Cannot Waive
Rule 1.8(i) forbids a lawyer to acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, and it then lists what the lawyer may do despite the bar.1 The list has two entries: a lien authorized by law to secure the lawyer's fee or expenses, and a reasonable contingent fee in a civil case.2 Client consent is not an entry. An arrangement that fits neither exception therefore stays forbidden, however thoroughly the lawyer prepared the client and however willingly the client agreed. On an exam, a flawless waiver changes nothing once the facts show a stake in the claim or in the thing in dispute.
The instinct to reach for disclosure and signed consent is a sound one in much of Rule 1.8, which is why the contrast matters. Rule 1.8(a) governs business transactions with a client, including a lawyer's knowing acquisition of an ownership, possessory, security, or other pecuniary interest adverse to the client, and it permits them only when its conditions are met.3 It is a consent-plus rule: the client's informed consent is necessary, and the terms of the transaction must also be fair and reasonable to the client.4 Rule 1.8(f), on compensation from someone other than the client, such as a liability insurer or a family member, follows the same pattern. The lawyer may accept that payment only with the client's informed consent, only after assuring herself that the payer will not interfere with her professional judgment, and only if the client's confidences stay protected.5
Rule 1.8(i) has no such consent mechanism, and the safeguards of Rule 1.8(a) cannot be imported to supply one. Compare two lawyers. The first represents a start-up company in exchange for shares of its stock and must comply with Rule 1.8(a); once the lawyer does, the arrangement is permissible.6 The second takes 5% of the land in the title dispute. Both hold an ownership stake, but the second stake attaches to the subject matter of litigation the lawyer is conducting, and the consent that supports the stock deal supports nothing here. What changed the answer is the thing the stake attaches to.
The exceptions Rule 1.8(i) does contain are defined by the nature of the arrangement, not by the client's attitude toward it. A lien qualifies when the law authorizes it. A contingent fee qualifies when it is reasonable and the case is civil.7 A lawyer paid one-third of a civil damages award under a reasonable fee agreement needs no waiver. A client's signature, in turn, cannot make an unreasonable fee reasonable or turn a criminal matter into a civil one. A student who treats the client's agreement as the key to an exception has carried the logic of the consent-based rules into a rule whose text does not use it.
A practical way to see why a waiver option would add little is to ask who is in the room. The lawyer who proposes a stake in the claim is also the person the client relies on to say whether the arrangement is wise, so a consent obtained that way is only as reliable as the lawyer's own candor about a deal that benefits the lawyer. A rule with no waiver option never has to test that consent case by case.
Rule 1.8(i) belongs to a group of non-consentable conflicts in Rule 1.8, alongside Rule 1.8(c) on gifts from clients, including a gift made by being named in the client's will, Rule 1.8(d) on media rights in the client's story, and Rule 1.8(e) on financial assistance to a client in litigation.8 Sorting Rule 1.8 on an exam therefore starts with one question: does this rule offer a consent mechanism? Rules 1.8(a) and 1.8(f) do, with added conditions. Rules 1.8(c), (d), (e), and (i) do not.