Texas Professional Ethics Committee Ethics Opinions
Free plain-English summaries of legal ethics opinions issued by the Texas Professional Ethics Committee, with full citations and source links on every page.
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Can a Texas lawyer hire an unaffiliated 'appearance lawyer' to cover a single hearing or deposition, and what duties does each lawyer take on?
The opinion concludes that a Texas lawyer may hire an appearance lawyer for a discrete task, but the appearance lawyer represents the client (not the hiring lawyer) and owes the full duties of compete…
May in-house counsel for a for-profit company owned by nonlawyers provide legal services to the company's customers if the customers pay only the company's 'actual cost' of employing the lawyer?
The Committee concludes the arrangement is prohibited because the company would be engaging in the unauthorized practice of law and its in-house counsel would be assisting it in violation of Rule 5.05…
May a Texas lawyer pay a nonlawyer-owned support services vendor based on a percentage of the lawyer's or firm's revenues, and may the lawyer own equity in that vendor?
Per the Committee, paying a vendor a percentage of the firm's revenues is impermissible fee sharing under Rule 5.04(a); equity investment in a nonlawyer-owned vendor that does not itself engage in the…
May a Texas lawyer practicing in Texas join a D.C. law firm partnership that includes a nonlawyer partner permitted under D.C. Rule 5.4(b)?
The Committee concludes the Texas lawyer may not join such a firm: Texas Rule 5.04(b) and 5.04(d) prohibit a Texas-licensed lawyer practicing in Texas from being part of a firm that includes a nonlawy…
May a Texas lawyer accept payment from a nonlawyer-owned company for prerecorded and livestreamed educational legal presentations to the public, answer specific fact questions from audience members, and represent viewers who later contact the lawyer?
Per the Committee, yes on each: payments for educational presentations on general legal topics are not 'legal fees' under Rule 5.04(a); providing such presentations is not the practice of law and does…
May a Texas lawyer-defendant settle a malpractice case by assigning future contingent fees to a non-lawyer plaintiff, and does the plaintiff's lawyer violate the Rules by proposing such a settlement that is rejected?
Per the Committee, no on the first: the proposed assignment of future contingent fees to a non-lawyer is impermissible fee sharing under Rule 5.04(a) and the lawyer-defendant properly rejected it. On …
If I have to withdraw from a contingent-fee case because of a nonconsentable conflict, can I still split the fee with the successor lawyer, or at least recover for the work I did first?
Per the Committee, a lawyer who withdraws for a nonconsentable conflict may not divide fees based on joint responsibility (the conflict bars it), and may not divide fees in proportion to services wher…
Can a Texas firm keep a lawyer's name in the firm name when that lawyer takes an out-of-state job that bars private practice, and can the lawyer stay a member?
Per the Committee, no, the firm may not keep the name of a lawyer barred from practicing with it, because that would mislead the public; but the lawyer may remain a member and keep a financial interes…
Can a Texas law firm contract with a for-profit prepaid legal service company to serve its members at discounted rates, and can it take referral fees on matters it refers out?
Per the Committee, a firm may contract with a licensed for-profit legal service contract company to provide discounted services; the company's retained margin is treated as insurance premium, not shar…
Can a Texas lawyer share legal fees with, or honor a referral agreement signed by, a lawyer who was suspended from practice?
No. The Committee concludes a suspended lawyer is a non-lawyer for purposes of Rule 5.04(a), so sharing or promising to share fees with one is prohibited, and a referral agreement with a suspended law…
Can a Texas law firm make a member agree that, if he leaves, he won't solicit the firm's clients and will pay the firm a percentage of fees he later earns from them?
No. The Committee concludes the agreement violates Rule 5.06(a) because it restricts a lawyer's right to practice after leaving, and the fee-payback term separately violates Rule 1.04(f) because it di…
In a Texas DTPA case, can a lawyer use a normal contingent fee agreement even when the client ends up keeping part of the statutory attorneys' fee award?
Yes. The Committee concludes that because a DTPA attorneys' fee award belongs to the client, not the lawyer, a contingent fee that leaves the client part of that award is not improper fee-sharing with…
Can a law firm bill its client a higher hourly rate for a contract or outside lawyer's work than the firm actually pays that lawyer?
It depends on whether the lawyer is 'in' the firm. The Committee concludes a firm may mark up the work of an 'other firm lawyer' (such as of counsel or a contract lawyer who is in the firm) without di…
Can a lawyer in a contingent fee case let a non-lawyer lending company fund litigation expenses in exchange for a funding fee that is a percentage of the recovery?
No. The Committee concludes the arrangement is fee sharing with a non-lawyer barred by Rule 5.04(a), because tying the lending company's funding fee to a percentage of the recovery lets the non-lawyer…
Can a lawyer pay a suspended or disbarred lawyer a share of a contingent fee under a referral or fee-sharing agreement made before the discipline?
Yes, but only if the fee-sharing agreement existed before the suspension or disbarment and the suspended or disbarred lawyer fully performed all of that lawyer's work in the matter before the discipli…
If a lawyer is appointed by a court as a receiver, can the lawyer pay part of the receiver fee to the lawyers for the parties?
No. The Committee concludes a lawyer/receiver may not pay any part of the receiver fee to the parties' lawyers, because accepting it would violate Rule 1.08(e) for those lawyers and would make the rec…
Can a Texas lawyer join a federal GSA schedule program that refers federal agencies to listed lawyers if the lawyer pays the program one percent of fees earned?
Yes, for services to federal agencies. The Committee concludes the one-percent payment is a negotiated fee discount with a single client entity (the Executive Branch), not fee sharing under Rule 5.04(…
Can I borrow money for case expenses from a finance company and agree to pay the lender a percentage of my contingency fee in the case?
No. The Committee concludes that agreeing to pay a finance company or other lender a percentage of the lawyer's contingency fee is sharing legal fees with a non-lawyer in violation of Rule 5.04(a), an…
As insurance defense counsel, can I email my fee statements to the insurer's third-party auditor and pay the auditor a percentage of my fee?
Not without the insured's informed consent, and never the percentage payment. The Committee concludes the fee statement is confidential under Rule 1.05, so disclosing it to the auditor requires the in…
Can our corporate legal department charge our subsidiaries market-rate fees, rather than just cost, for in-house legal work?
The Committee concluded a corporation may not charge its subsidiaries market-based fees (anything above its costs) for legal services rendered by its in-house staff, even if the excess is later rebate…
Can my firm pay class-action clients a share of the court-awarded attorneys' fees we earned by objecting to a settlement on their behalf?
The Committee concluded that a law firm may not distribute to its nonlawyer clients any portion of court-awarded attorneys' fees, even as recognition of the clients' expense and inconvenience; doing s…
Can I sign up with a for-profit contract-lawyer placement agency that places me with firms for short-term projects and takes a cut of the billing?
The Committee concluded a lawyer may use a contract-lawyer placement agency if the lawyer safeguards client confidences, the lawyer and firm comply with the conflict rules, the lawyer is supervised by…
Can a lawyer recommend and participate in a deal where the client pays a nonlawyer investigator a contingent fee out of the recovery, in addition to the lawyer's own contingent fee?
The Committee concluded a lawyer may participate in such an arrangement if four conditions are met: the lawyer fully explains it and the fee agreement contemplates it; the investigator's contingent fe…
Can a law firm lease its lawyers and staff from a nonlawyer-owned employee leasing company that also leases lawyers to other firms, to get cheaper benefits?
The Committee concluded the arrangement does not involve improper fee-sharing (the leasing fee is fixed, not tied to the firm's billings) and is not the unauthorized practice of law (the leasing compa…
Can a law firm agree, as part of settling a case, not to solicit other clients or share fees in the future on claims against the same opposing party?
The Committee concluded that both clauses violate Rule 5.06(b). A settlement term that restricts a lawyer's solicitation beyond what the rules and law already allow, or that bars the lawyer from shari…
Can a nonprofit public-interest legal organization require the volunteer attorneys it refers civil rights cases to, to hand over the attorney's fees they win?
The Committee concluded it cannot. A cooperating attorney may not agree to share legal fees with a nonprofit public-interest organization that referred the case, because Rule 5.04 prohibits sharing le…
Can a lawyer on a nonprofit legal-aid referral panel pay the referral service a set fee plus a share of fees earned on referred cases?
The Committee concluded that a panel attorney may remit a fixed referral charge and a share of earned fees to a nonprofit lawyer referral service operated in compliance with Article 320d (the statute …
Can a lawyer on salary at a non-lawyer-owned company draft estate-planning documents for the company's customers, and can he have nonlawyers gather the client information?
The Committee concluded a salaried lawyer may prepare estate planning documents for a nonlawyer-owned corporation's customers only if the corporation receives no payment, markup, commission, or profit…
Can a Texas lawyer form a limited liability partnership with nonlawyer professionals like engineers and accountants to share revenue from common clients?
The Committee concluded a lawyer may not. Rule 5.04(b) bars forming a partnership with a nonlawyer if any of the partnership's activities is the practice of law, and Rule 5.04(a) bars sharing legal fe…
Can a law firm let clients pay legal fees by borrowing from an independent finance company that pays the firm at least 90% of the amount borrowed?
The Committee concluded the arrangement is not prohibited and is a finance arrangement, not fee-splitting, because the finance corporation neither solicits clients nor performs legal services, so reta…
Can a bank charge loan applicants a fee for mortgage documents its salaried in-house lawyer prepares when the bank keeps the whole fee?
The Committee concluded it cannot. If the bank charges the applicant a fee specifically for the in-house lawyer's preparation of the applicant's loan documents, that is a fee for legal services, and t…
Can a law firm lease office space from a nonlawyer landlord where the rent is a percentage of the firm's gross receipts?
The Committee concluded the arrangement is impermissible. Because a law firm's gross receipts are predominantly legal fees, percentage-of-gross-receipts rent is a sharing of legal fees with a nonlawye…
Can a law firm require a departing associate (or the associate's new firm) to pay it a percentage of fees later earned from former clients, and treat its clients as firm property?
The Committee concluded both are improper. An employment or partnership agreement requiring a departing lawyer to pay the former firm a percentage of fees later earned from former clients is a disguis…
Can a lawyer participate in or recommend that a client sign a contingent-fee contract with a medical-legal consulting firm that supplies expert witnesses?
The Committee concluded that an attorney who aids, assists, or permits a client to enter a contingent-fee contract with a medical-legal consulting firm that provides expert testimony violates DR 7-109…
Do the fee-division rules that limit splitting a fee with an outside lawyer apply when a firm shares legal fees with a lawyer who is 'of counsel' to the firm?
The Committee concluded that DR 2-107(A) does not apply to a firm's sharing of legal fees with a lawyer who is publicly designated 'of counsel' and who has a regular, continuing, and substantial relat…
Can a lawyer take will-and-trust referrals from a financial planning organization and accept part of the fee paid by the organization?
The Committee concluded that, on these facts, an attorney does not violate the disciplinary rules by letting a financial planning organization recommend him to a member and accepting payment of part o…
Can the lawyer who takes over a case pay the original lawyer, who was disbarred during the appeal, a share of the contingent fee or quantum meruit?
The Committee concluded that, where the original attorney was disbarred before completing a contingent fee contract, paying him on the contract or in quantum meruit would violate DR 3-102, because und…
Can a Texas lawyer work for a collection agency and share in its fees, and can the lawyer own part of the agency while representing its creditor clients?
The Committee concluded that a lawyer may accept work from a collection agency only if no fees are split with the agency, the agency does not direct the legal work, and the lawyer acts for the credito…
Can a Texas attorney join a barter association that takes a join-up fee, dues, and a percentage of trades, and guarantees members a level of business?
The Committee concluded that one-on-one bartering for legal services remains permissible, but joining a barter association that guarantees members business or refunds their fees, and takes a join-up f…
Can a lawyer rent office space from a bank under a lease whose rent is a percentage of the lawyer's fees or net profits?
The Committee concluded that a lease paying a nonlawyer landlord rent measured by a percentage of the lawyer's gross fees or net profits violates DR 3-102, and that referral and conference-room featur…
Can a lawyer accept 20% of a bail bond premium as a referral fee from the bonding company the lawyer sends clients to?
A divided Committee (6-3) concluded that a lawyer may accept a percentage of the bond premium for a referral only with full disclosure to the client and the client's consent; the bond premium is not a…
When someone brings a matter to the county attorney's office that the office can't handle, can the county attorney offer to take it privately, refer it out, or accept a referral fee?
The Committee concluded that a county attorney consulted in his official capacity may not offer to represent the person as a private lawyer (solicitation under Canon 24), may ethically refer the perso…
Can a lawyer serving as executor take a referral fee or split the fee of a law firm he hired to defend a will contest?
The Committee concluded that a lawyer acting as an estate's executor may not accept a referral fee or a division of the fee paid to a law firm he hired to defend the will, because he employed the firm…
Can a lawyer and a non-lawyer who serve as co-executors split the statutory executor's commission?
The Committee concluded that a lawyer and a non-lawyer serving as co-executors may divide the statutory executor's commission without violating Canon 31, so long as the lawyer's fee for legal services…
Can a Texas lawyer split a fee on a percentage basis with an out-of-state lawyer who forwarded the matter but is not licensed in Texas?
The Committee concluded that a forwarding fee may ethically be paid to an attorney not licensed in Texas, provided he is authorized to act as a forwarding attorney where he is acting; if his activity …
Can a lawyer pay an assistant county attorney part of a fee for referring a civil case, and must he withdraw when he learns the client already has counsel?
No on the fee, and yes he must withdraw. The Committee concluded that paying part of a fee to the assistant county attorney for referring civil business violates Canon 31 for both lawyers, and that th…
Can a lawyer hired to collect delinquent county taxes pay a layman a percentage of the amount collected without suit?
No. The Committee unanimously concluded that paying a layman a percentage of taxes collected without suit, whether styled as a percentage or as a salary keyed to the prior month's collections, violate…
Can a lawyer office with a bail-bond company, sign under its bail-bonds sign, and be paid by the bondsmen to get habeas writs for their customers?
No. The Committee unanimously concluded that a lawyer who offices with a bail-bond company, places his small professional sign under the company's prominent bail-bonds sign, is employed by the bondsme…
Can an accounting firm keep a lawyer on staff to provide legal services to the firm's clients?
No. The Committee unanimously (8-0) approved ABA Opinion 272: a lawyer may be salaried by an accounting firm to advise the firm itself, but the employment may never be used to enable the accounting fi…
Can a law firm forward a missing-heir search to a non-lawyer locating company and share in that company's contingent fee?
No. The Committee held (8-1) that a law firm may not forward a missing-person search to a non-lawyer locating concern and share in its contingent fee, because Canon 31 permits dividing fees only with …
Did a lawyer violate the fee-division rule by splitting pay with a county auditor for bond-transcript work done before he practiced law?
No. The Committee held (7-5) that a lawyer who assisted the county auditor in preparing bond transcripts, none of it done while holding himself out as practicing law, and who split the compensation wi…
If a lawyer also serves as a court clerk, what legal work can he do, and can he split fees with another lawyer on court matters?
The Committee held unanimously (7-0) that a lawyer who is the clerk of a court of record may do only office practice with no connection, direct or indirect, to court proceedings, and that dividing fee…
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Legal ethics opinions from the Texas Professional Ethics Committee interpret the rules of professional conduct for working lawyers, in response to inquiries from members and committees. They are not binding like court discipline decisions, but courts and discipline boards treat formal opinions as substantial guidance on how the rules apply. Every opinion above has a plain-English question and short answer, plus a link to the original source on the bar's site.