An administrative panel of New York's top judges on Thursday approved an amendment to state ethics rules allowing attorneys to provide financial aid to poor clients in need of assistance.

The Administrative Board of the Courts adopted a so-called humanitarian exception to Rule 1.8(e) of the New York Rules of Professional Conduct, which permits lawyers, firms and legal service organizations to create a fund to help cover the cost of such basic living expenses as groceries, clothes and medical supplies.

Previously, attorneys had been barred from providing financial support beyond advancing courts costs and covering litigation expenses for pro bono clients. However, the economic damage caused by the COVID-19 pandemic had sparked calls from state and city bar associations to ease those restrictions, while keeping certain ethical guardrails in place.

Under the new rule, funds raised for legal services are not considered for humanitarian purposes, and attorneys will still be barred from offering loans or other forms of assistance that may make a client "beholden" to a legal services provider.

"The amended rule relaxes the ban on providing financial assistance to clients, allowing lawyers to provide humanitarian assistance to their clients in dire need while keeping appropriate ethical safeguards in place," the New York courts said in a press release.

The change was approved by Chief Judge Janet DiFiore and the four presiding justices of the appellate divisions of the state Supreme Court.

The New York City Bar Association wrote the Administrative Board in April, urging it to revisit Rule 1.8(e) in light of the pandemic, which had forced mass closures of businesses and caused an historic rise in unemployment.

According to the April 24 letter, the City Bar began fielding calls "almost immediately" after the pandemic hit from lawyers and nonprofit groups, who wanted to provide small amounts of assistance to indigent clients.

For example, the letter said, one organization asked about helping pay for food and rent in the immigrant communities it served. Another lawyer said that he wanted to contribute to a community restaurant that served low-income residents, but faced potential disciplinary action if he attempted to do so.

The New York State Bar Association likewise had offered "strong support" for the humanitarian exception, which its House of Delegates approved at a Jan. 31 meeting.

The Administrative Board on Thursday also adopted revisions to a rule that had banned law firms from advertising their services under trade or domain names, after a First Amendment challenge argued that the rule was too broad.

The revised rule, which also had the backing of the NYSBA, provided additional clarity regarding proper law firm names, while still prohibiting titles that are "false, deceptive or misleading," the state courts said.

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