Everything’s bigger in Texas, including rule problems sometimes.

First, no argument from me that I’ve been a bad blogger this week.  I’d offer excuses, but no one likes to hear excuses.

Second, how about some actual substantive content … I’ve written in the past about ethical issues surrounding the verein structure of some of the largest law firms in the world.  Those prior discussions involved conflicts issues stemming from treatment of the verein as one firm for purposes of the ethics rules.

Within the last few weeks the State Bar of Texas Professional Ethics Committee issued Opinion 663 which reveals a new problem for lawyers practicing in a verein but a problem that is relatively specific to Texas given that it involves a pretty antiquated approach to law firm names — an approach that bars “trade names” altogether but that also gets very particular about whether a law firm name can have the name of someone who doesn’t actually practice law in that firm.

Texas still has in place a very persnickety rule about what law firm names, Rule 7.01 which reads:

A lawyer in private practice shall not practice under a trade name, a name that is misleading as to the identity of the lawyer or lawyers practicing under such name, or a firm name containing names other than those of one or more of the lawyers in the firm, except that … if otherwise lawful a firm may use as, or continue to include in, its name the name or names of one or more deceased or retired members of the firm or of a predecessor firm in a continuing line of succession.

So, what particularly was the issue – and the opinion does genericize the firm names involved but you can read this TexasLawyer article if you want to know the real details — well, the issue is a law firm, previously known as Smith, Johnson wants to operate under the name of the verein it has joined – Brown, Jones, Smith — as explained by the Committee is that there has never been a lawyer at the Smith, Johnson firm named Brown or Jones.  Kind of silly, right?  They also say it is misleading because it would make people think that all the lawyers in the firms in the verein are all lawyers in the same law firm when they aren’t really.

The outcome of the opinion also raises an interesting question of larger impact which is why did the Texas committee make the assumption it made in the first place? Everything about the opinion flows from the assumption that the Committee explains to open the “Discussion” portion:

This opinion is based on the Committee’s assumption that the lawyers in the law firms that become members of an organization that includes other law firms (in this instance a verein) are not legally determined to be members of one law firm as defined in the Terminology section of the Texas Disciplinary Rules of Professional Conduct.

The word “firm” in that Terminology section, by the way, defines a firm in an entirely circular fashion as being “a lawyer or lawyers in a private firm; or a lawyer or lawyers employed in the legal department of a corporation, legal services organization, or other organization, or in a unit of government.”

The opinion explains that the facts it had been provided about the verein’s role in a way that would seem to support the conclusion that it was not one firm:

The verein provides some administrative services to each of the member firms and coordinates certain activities of the firms, but it does not provide legal services to clients. The lawyers who are members of the Texas law firm and who are licensed in Texas are not partners or members of the other law firms in the verein. The lawyers in the Texas law firm do not share profits, losses, or liabilities with the lawyers in the other law firms in the verein. The lawyers in the Texas law firm have no authority or vote in the actions of the other law firms in the verein. The law firms who joined the verein are not merged as a result of joining the verein.

So, in an interesting way, this Texas opinion truly is the flipside to the disqualification ruling involving Dentons that I wrote about so long ago.  That judge decided that because Dentons held itself out to the world as one firm, it should be treated that way under the ethics rules as to conflicts.  The Texas opinion says that you can’t hold yourself out to the world as one firm because you aren’t really one.

And, if you happen to be in the Murfreesboro area today and happen to be a legal professional, you could come hear me speak about the “12 Commandments of Social Media for Legal Professionals.”

 

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