Startup Lawyers Permitted to Crowdfund

The New York State Bar, in a recent ethics opinion, says that new lawyers, typically with significant college debt, can crowdfund the startup of their practices.

Out of the fives types of crowdfunding, techniques, such as equity or royalties, are not permitted as non-lawyers cannot take split fees.

However, the ethics opinion says that two types can be used: donations and rewards. Suggested rewards include “with informational pamphlets, reports on the firm’s progress, or pro bono work for a third-party nonprofit legal organization.” However, nothing would seem to prohibit giving a backer a mug with a picture of your smiling face on it (or something similar). “Donors” would get only a warm feeling that they’ve helped launch another lawyer into the world.

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at:
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