Who Is the Client When Someone Else Pays the Bill?
An insurance company pays your legal fees. A parent covers a child’s criminal defense. A wealthy co-defendant offers to fund three lawyers at once. In every one of these situations, California Rule 1.8.6 answers the same threshold question: the person paying the invoice is not automatically the client, and the lawyer’s loyalty does not shift toward whoever signs the check.
California Rule 1.8.6 (mirroring ABA Model Rule 1.8(f)) permits a lawyer to accept payment from a third party only if the payer doesn’t interfere with the lawyer’s independent judgment, the client’s confidences stay protected from the payer, and the client gives informed consent to the arrangement. California requires that consent in writing — the ABA does not.
The Three Conditions, in Plain English
Rule 1.8.6 sets up a structure that protects the represented client from the person funding the representation:
- No control over independent judgment. The payer cannot dictate strategy, force a settlement, or override the lawyer’s professional decisions.
- Confidentiality is untouched. The payer gets no special access to client confidences or privileged communications, regardless of how much money is at stake.
- Informed consent. The client must understand and agree to the arrangement after full disclosure of who’s paying and why it matters.
Where California Diverges From the ABA
| Issue | ABA Model Rule 1.8(f) | California Rule 1.8.6 |
|---|---|---|
| Consent format | Oral consent plus a confirmatory memo can suffice | Informed written consent required |
| No-interference duty | Same | Same |
| Confidentiality protection | Same | Same |
That single difference — written versus oral consent — is the most exam-tested feature of this rule. If a California fact pattern shows a lawyer relying on a verbal “sure, that’s fine” from the client about who’s paying, that’s a red flag.
The Classic Case: Insurance Defense
Insurance defense is the most common third-party-payer scenario tested on the bar exam. The insurer hires and pays the defense lawyer, but the lawyer’s client is the insured, not the insurance company. This distinction drives everything that follows: the lawyer must advocate for the insured’s preferred outcome, cannot let the insurer force a settlement without the insured’s consent, and must refuse to disclose the insured’s confidential admissions to the insurer — even though the insurer is footing the entire bill.
| Interest | Client (Insured) | Third-Party Payer (Insurer) |
|---|---|---|
| Settlement preference | May want to litigate on the merits | May prefer a quick settlement to cap exposure |
| Admissions | Wants damaging facts limited | Wants facts pinned down for evaluation |
| Strategy | May want an aggressive defense | May favor a cost-conscious approach |
When these interests diverge, the client wins. Full stop.
Worked Example: The Co-Defendant Funder
David, Elena, and Marcus are co-defendants in a California civil fraud suit. David is wealthy; Elena and Marcus are not. David offers to pay all three lawyers’ fees so the case can be defended as a team. Before accepting David’s money on behalf of Elena and Marcus, each lawyer must obtain informed written consent from Elena and from Marcus individually — not a group signature, and not David’s assurance that “they’re fine with it.”
Each lawyer must also confirm, independently, that David’s money doesn’t come with strings: David cannot use his role as funder to pressure Elena or Marcus into a unified defense theory if that conflicts with either one’s individual interests, and David gets no access to Elena’s or Marcus’s confidential communications with their respective lawyers. If Elena’s lawyer later finds David dictating trial strategy or demanding briefings on what Elena told her attorney, that’s a clear Rule 1.8.6 violation — the lawyer must cut off the interference immediately or withdraw.
Common Mistakes
- Treating the payer as the real client. Lawyers sometimes drift toward prioritizing the payer’s cost-control preferences over the client’s actual wishes.
- Sharing confidences with the payer. Disclosing admissions, strategy, or settlement posture to an insurer or family funder — even informally — breaches confidentiality regardless of who’s paying.
- Relying on oral consent in California. What satisfies the ABA does not satisfy California; write it down.
- Blurring identities in multi-client, single-funder situations. Each funded client remains a separate client with independent confidentiality rights.
FAQ
Can an insurer ever direct the defense strategy?
No. The insured’s lawyer must exercise independent professional judgment. The insurer can decline to pay for certain tactics under the policy terms, but it cannot dictate how the lawyer defends the case.
Does a nonprofit legal-aid organization need written consent from every client it funds?
Yes in form, though it’s often gathered efficiently at intake because the client sought out the organization specifically for subsidized representation. The lawyer must still independently ensure the organization never controls strategy or accesses confidences.
What happens if a lawyer discovers mid-case that an anonymous third party has been paying the fees?
The lawyer must pause and obtain the client’s informed written consent to the arrangement before continuing to accept the third-party payments. Until documented, continuing to accept the funds is a Rule 1.8.6 violation.
Key Takeaways
- The third party who pays is never automatically the client; fiduciary duty runs to the represented person.
- California requires informed written consent, not just oral agreement, for third-party fee arrangements.
- The payer cannot control strategy or access confidential communications, no matter how much it’s paying.
- Insurance defense is the classic exam scenario: the insured is the client, not the insurer.
- Multi-client, single-funder arrangements require separate written consent from each individual client.
This article is educational and is not legal advice. Consult a licensed California attorney about your situation.
Related guides
- inadvertent privileged documents under California Rule 4.4(b)
- conflicts of interest
- California’s consent rule for aggregate settlements