Answer ... Third-party funding is gaining prominence in US arbitration. The issue is not expressly addressed by the Federal Arbitration Act. However, most states allow third-party funding as long as client confidences are preserved and the client is in complete control of the case.

The main concern is whether the funding arrangement must be disclosed. If the law firm is the counterparty to the funding agreement, these arrangements raise concerns with respect to its ethical obligations. This is because a lawyer or law firm must not share legal fees with a non-lawyer (Rule 5.4(a) of the Model Rules of Professional Conduct).