Crowdfunding has finally hit the legal industry. People who cannot afford attorney fees can now use crowdfunding sites similar to Kickstarter or Indiegogo to raise money for legal fees. Several sites offer legal-specific crowdfunding, and generic crowdfunding sites are also being used to raise money for legal needs.
5 crowdfunding options for legal issues
- Background: Founded by former Google executive Hiraa Khan after she spent three years on the board of directors for the American Civil Liberties Union of Northern California. Khan, who saw firsthand how hard it is for ordinary people to secure legal advice, a day in court or a fair trial if they don’t have money to hire an attorney, started CrowdDefend to do something about it.
- Their cut: CrowdDefend takes 7 percent of all donations. Standard payment processing takes another 2.9 percent and $0.30 per donation.
- All-or-nothing fundraising goals? Campaigners keep their funds even if their goal is not met. There is no “all-or-nothing” campaign option.
- Background: Launched by Chicago attorney Michael Helfand in December 2014 to help people raise money to hire attorneys who charge flat legal fees.
- Their cut: Funded Justices takes 5 percent of all campaigns. Standard payment processing takes another 2.9 percent and $0.30 per donation.
- All-or-nothing fundraising goals? Offers both all-or-nothing campaigns and flexible spending campaigns.
- Background: Founded in 2010, FundRazr is not dedicated to funding legal cases but does have a legal category. WikiLeaks used the site to raise money for its founder, Julian Assange, the Australian journalist who published official U.S. documents leaked by Army soldier Chelsea Manning in 2010.
- Their cut: FundRazr takes 5 to 7 percent, depending on the campaign. Standard payment processing takes another 2.9 percent and $0.30 per donation.
- All-or-nothing fundraising goals? Offers both all-or-nothing campaigns and “keep it all” campaigns.
- Terms of service and FAQ
- Background: A personal crowdfunding site with no official legal category but which has been used to fund legal services in addition to charitable donations, business launches and heart-warming campaigns.
- Their cut: GoFundMe takes 5 percent of all campaigns. Standard payment processing takes another 2.9 percent and $0.30 per donation.
- All-or-nothing fundraising goals? Offers either all-or-nothing campaigns or charity fundraising.
- Background: LexShares allows funders to contribute to commercial lawsuits and earn a share of settlements, turning litigation into an investment class.
- How it works: In contrast to the other sites, LexShares is a litigation investment platform. According to their site, the process works like this: A plaintiff and his legal team submit their case; LexShares reviews the merits of the case and posts it to their site. Investors contribute funds, and, once the goal is met, LexShares takes a 10 percent commission on the total fund. If the plaintiff loses the case, he does not repay investors. If the plaintiff wins the case, investors and the litigating attorneys share in the recovery.
3 things to consider before you crowdfund your legal case
Before you explore the options and read the fine print, stop to consider:
- Does your case have real legal merit? It’s always wise to discuss your case with one, or several, attorneys to get their opinion on your case and your chances. You can ask a question for free in Avvo’s Legal Q&A Forum, where experienced attorneys will respond within hours. If you want to speak to an attorney on the phone, you can use the $39 Avvo Advisor service. Select the type of issue you’re having, share your question or a photo, and an attorney will call within minutes to discuss your situation.
- Understand the real costs associated with your legal case. Speaking to an attorney will help with this part, too. Without understanding all potential costs, you may raise enough money for initial legal fees but not for court fees, filing fees or subsequent appeals.
- Be prepared to market your crowdfunding campaign. Asking for donations is not a “set and forget” process. Write a clear request that shows you’ve done your legal homework so far. Remember to stick to the facts and avoid false or defamatory language about other parties. The last thing you want is to have a defamation lawsuit on your hands. Then reach out to your friends, family and their contacts.
More options for affordable legal help
If you don’t have the money for your legal case, crowdfunding may be an option, but it’s not your only option. You can search for legal aid in your community or reach out to an advocacy group such as the American Civil Liberties Union or the Rutherford Institute.
There are also new low-cost legal services to help you take control of your legal issue:
Research your issue: Search for your legal issue and browse almost 7 million legal questions and answers in the Avvo Q&A Forum.
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