Hi Michael, while its been a while since I visited the issue, I do believe it violates the rules of professional responsibility. I remember this from ethics class. So not really a question of "against the law" but more that the lawyer may face a issue. One of the key reasons is because it would highly unfair for a lawyer that may be well positioned to do so to lend money to clients as a way of attracting their business. We do not want people choosing legal providers on the basis of whether they can advance their clients money especially when their financial needs may be very great. This makes them very vulnerable.
Dear Frank: I agree that the legal ethics may be different from "against the law" and I am not licensed in Maryland. In California it would be a contract with one's client, requiring both disclosures, independent representation and "fairness". Our firm certainly does not do so.
You make many good legal points. Thanks.