The Texas State Bar licenses and regulates attorneys in Texas. This entity ensures that lawyers follow the Texas Disciplinary Rules of Professional Conduct. The Texas Rules of Disciplinary Procedure govern lawyer disciplinary proceedings that result from violations of the Disciplinary Rules. Any violations of those rules can lead to disciplinary proceedings before the State Bar.
As a licensed attorney in the state of Texas, you must keep up to date with any changes in the Disciplinary Rules and any other laws that govern your profession. Running afoul of those laws and rules can result in disciplinary proceedings before the State Bar and sanctions that can be highly damaging to your reputation and career. If you are facing disciplinary proceedings, a Texas law license defense attorney can help. Contact the offices of Bertolino LLP at (512) 980-3751 or visit us online today to schedule an appointment.
The Texas Supreme Court recently issued final approval and adoption of amendments to Disciplinary Rules 1.08, 1.09, 3.09, 4.03, 5.01, and 5.05. The Court also added new Disciplinary Rules 1.10 and 1.18 and new Texas Rule of Disciplinary Procedure 13.05. The rules became effective October 1, 2024. The comments to these rules also have been revised extensively to provide additional clarification and explanation.
Rule 1.08 – Conflict of Interest: Prohibited Transaction
This rule previously made it a conflict of interest for a lawyer to enter a business transaction with a client. The amended rule also makes it a conflict of interest for a lawyer to “knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client,” unless:
- the terms of the transaction or acquisition are fair and reasonable to the client, and are fully disclosed and transmitted to the client in a writing that can be reasonably understood by the client;
- the client either is represented in the transaction or acquisition by an independent lawyer of the client’s choice or the client is advised in writing to seek the advice of an independent lawyer of the client’s choice and is given a reasonable opportunity to seek that advice; and
- the client thereafter provides informed consent in writing to the terms of the transaction or acquisition, and to the lawyer’s role in it, including whether the lawyer is representing the client in the transaction.
Rule 1.09 – Conflict of Interest: Former Client
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Rule 1.09, which defines the conflict of interest that may arise involving a former client is revised to focus on whether the prospective representation is in the same or substantially the same matter and whether a person’s interests are materially adverse to the interests of the former client. The previous version of the Rule focused on whether the matter was adverse to the former client and involved specific situations. In that version, whether the matter was same or substantially related was only one situation in which there might be a conflict of interest.
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The newly revised rule also clarifies when a law firm may and may not represent a client when a lawyer with whom their association has terminated would be prohibited from doing so by the Rules, as well as what safeguards the lawyers must take in doing so. In both cases that pose a conflict under this rule, the client can waive the conflict of interests by giving informed consent in writing.
Rule 4.03 – Dealing with Unrepresented Persons
Rule 4.03 is amended to include the following statement:
The lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client.
Rule 5.01 – Responsibilities of a Partner or Supervisory Lawyer
The modified version of Rule 5.01 states that a lawyer who, either individually or with other lawyers, has managerial authority in a law firm must make reasonable efforts to ensure measures are in effect so that the lawyers in the firm comply with the Rules. Likewise, a lawyer with direct supervisory authority over another lawyer must make reasonable efforts to ensure that the other lawyer follows these Rules.
A lawyer will be responsible for another lawyer’s violation of the Rules in the following two instances:
- The lawyer orders, or with knowledge of the specific conduct, ratifies the conduct involved; or
- The lawyer has managerial authority in the law firm or direct supervisory authority over the lawyer and knows of the conduct at a time when the consequences can be avoided or mitigated, but fails to take reasonable remedial action at that time.
Rule 1.10 – Imputation of Conflicts of Interest: General Rule
The newly added Rule 1.10 addresses the imputation of conflicts of interests from one lawyer to others when they are associated in a law firm. None of the lawyers may knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.06 or 1.09, with some exceptions. One exception occurs when the prohibition is based on the personal interest of the disqualified lawyer and does not pose a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm. The other exception occurs when the prohibition arises from the disqualified lawyer’s previous firm and the lawyer is timely screened from any participation in the matter or receiving any fees from the matter, and the affected former client receives proper written notice to determine compliance with the Rules.
Furthermore, when a lawyer’s association with a firm is terminated, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of the lawyer’s former client and not currently represented by the firm. The only exceptions are if the matter is the same or substantially related to the matter in which the former lawyer represented the client or any lawyer remaining in the firm has information protected by the Rules that is material to the matter. However, the client may waive this conflict if done so according to the Rules.
Rule 1.18 – Duties to Prospective Client
This new rule defines a prospective client as a person who consults with a lawyer in good faith about the possibility of forming an attorney-client relationship with respect to a legal matter. The definition specifically excludes individuals who contact lawyers solely to disqualify the lawyer or for some other purpose other than a good faith intention to seek representation.
However, even when no lawyer-client relationship results, if the lawyer learns information from a prospective client, they may not use or reveal that information except as the Rules would allow or require with respect to a client. The other exception would be if the information became generally known or would not be significantly harmful to the former prospective client.
A lawyer generally shall not represent a client with interests materially adverse to those of a prospective client in the same or substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter. If the lawyer is disqualified, so are the lawyers in the firm with which the lawyer is associated.
However, representation is permissible in this situation despite the disqualifying information received if both the affected and prospective clients have given informed consent in writing. Representation is also permissible if the lawyer took reasonable measures to avoid exposure to more disqualifying information than reasonably necessary, is screened from participation in the matter, does not receive fees, and gives written notice to the client.
Rule of Disciplinary Procedure 13.05 – Termination of Custodianship
Newly added Rule of Disciplinary Procedure 13.05 deals with the termination of custodianship. The rule specifies that a custodianship shall be terminated upon one or more of the following events:
- The transfer of all active files and other client property in the possession of the custodian in accordance with the Texas Disciplinary Rules of Professional Conduct, in one or more of the following means:
- To attorneys assuming the responsibility for ongoing matters; or
- To the client or client’s authorized representative, to the extent that the client is lawfully entitled to such materials.
- Entry of an order terminating the custodianship from a court with jurisdiction over the practice under Rules 13.02 and 13.03.
- The return of the appointing attorney to his or her practice prior to completion of the custodianship and resumption of representation of active client matters with the competence to conduct such representation.
If there is any disagreement about whether an attorney is competent to resume representation of a client matter upon return to practice, the appointed custodian or the appointing attorney may petition for a determination and order of the court. An appointed custodian also may petition for an order concerning the disposition of dormant or closed client files, distribution of active files in which the client is nonresponsive or cannot be located, or proper distribution of client property or other property being held pursuant to representation by the appointing attorney.
We Are Here to Represent Your Interests Before the State Bar
The fact that so many lawyers have trusted us to handle formal complaints with the State Bar of Texas speaks volumes. We know that fellow attorneys expect the highest standards of professionalism and care. If you are facing a disciplinary complaint against your law license, we know how much is at stake. We invite you to meet with us to discuss your case and learn how we can help. You’ll meet with one of our experienced law license defense attorneys to discuss the details of the allegations filed against you. If you have received a licensing complaint, BERTOLINO LLP can help. Contact us today or call (512) 980-3751 and schedule a case evaluation.
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