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The American Bar Association’s House of Delegates overwhelmingly voted to approve a new set of best practices for litigation funding arrangements Monday, updating their guidance on the increasingly popular tool for the first time since 2012.

The report, which outlines a list of issues lawyers should consider before entering into agreements with outside funders, cleared the body by a vote of 366 to 10.

While the document avoids taking a position on the use of outside funding, it recommends that lawyers detail all arrangements in writing, while making clear the non-recourse nature of the investment. Lawyers are also advised to ensure that the client retains control of the matter.

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Dan Packel

Dan Packel covers change and innovation in the legal services market, and writes a weekly briefing for Law.com, "The Law Firm Disrupted," on these subjects. He is based in Philadelphia. Contact him at [email protected] On Twitter at @packeld

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