A key New York City Bar Association ethics committee's proposal that New York amend its legal ethics rules to explicitly permit litigation finance agreements between lawyers and funders could be a watershed moment for the litigation finance industry.

If the proposal is accepted, New York would become the latest—and the largest—jurisdiction to join a growing chorus of states that are amending their ethics rules to clarify that litigation funding is a permissible and welcome feature of our legal system. And if New York, the country's largest legal market, were to lead on this issue, other jurisdictions would likely soon follow, creating a positive cascade effect for litigation funding and access-to-justice initiatives.