Chapter 1 

Ethics and Professional Conduct

I.  Introduction

§ 1.1Scope of Chapter

This chapter generally addresses the oversight of attorneys and law practice, accountability for professional responsibility, and liability for pro­fessional malpractice in Texas, with emphasis on guardianship practice. Probate attorneys practicing in the area of guardianship must address possible competing interests between the guardian and the ward. By studying the ethi­cal standards to which attorneys must adhere, the attorney may understand and help the client understand how to address these concerns.

II.  The Profession and Its Regulation

§ 1.2The State Bar Act

The State Bar is an administrative agency of the judicial department. Tex. Gov’t Code § 81.011(a). The Supreme Court of Texas exer­cises administrative control over the bar, Tex. Gov’t Code § 81.011(c), and has the power to make rules for the administration of the bar and the discipline of state bar members. Tex. Gov’t Code § 81.024. Disciplinary jurisdiction is divided into grievance districts. Grievance com­mittees in each district investigate any alleged ground for discipline of an attorney and take action appropriate under the disciplinary rules. Tex. Gov’t Code § 81.072.

§ 1.3State Bar Rules

Rules governing the State Bar were initially adopted by the members of the State Bar of Texas and thereafter promulgated by the Supreme Court of Texas on February 22, 1940, and subsequently amended several times. The rules are located in volume 3B of the Texas Government Code in title 2, subtitle G, appendix A, and may also be found in Texas Rules of Court—State (West 2018). Article X deals with discipline and suspension of attorneys; its con­tents, entitled the Texas Disciplinary Rules of Professional Conduct, are discussed in section 1.5 below.

§ 1.4Texas Rules of Disciplinary Procedure

The Texas Rules of Disciplinary Procedure, which are located in volume 3B of the Texas Government Code in title 2, subtitle G, appendix A-1, and at www.legalethicstexas.com/Ethics-Resources/Rules/Texas-Rules-of-Disciplinary-Procedure.aspx, provide these sanctions for professional misconduct: disbar­ment; resignation in lieu of discipline; indefinite disability suspension; suspension for a term cer­tain; probation of suspension, in which proba­tion may be concurrent with the period of suspension, on reasonable terms appropriate under the circumstances; interim suspension; public reprimand; and private reprimand. See Tex. Rules Disciplinary P. R. 1.06Y, reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G, app. A-1.

The term sanction may also include a require­ment of restitution and the payment of reason­able attorney’s fees and direct expenses. Tex. Rules Disciplinary P. R. 1.06Y.

§ 1.5Texas Disciplinary Rules of Professional Conduct

The Texas Disciplinary Rules of Professional Conduct are located in volume 3B of the Texas Government Code in title 2, subtitle G, appendix A, article X, section 9, following section 84.004 of the Government Code. The rules are also available at www.legalethicstexas.com/Ethics-Resources/Rules/Texas-Disciplinary-Rules-of-Professional-Conduct.aspx. The disci­plinary rules are all mandatory. The aspirational goals are grouped in the preamble rather than intermingled with mandatory rules within the body of the Code. Substantial commentary after each rule provides historical background and interpretational guidance.

Judicial decisions in Texas regarding ethical violations are referenced in the annotations to the Texas Disciplinary Rules of Professional Conduct.

A member of the State Bar of Texas can request a formal ethics opinion from the Professional Ethics Committee. To request an opinion, the member must submit a written request that includes (1) a summary of the background facts in the hypothetical situation; (2) the question(s) presented; (3) a discussion of applicable author­ity, including the specific disciplinary rules involved and relevant case law, prior opinions, or opinions from other jurisdictions; and (4) a statement that any questions presented are not in litigation. The request should be submitted to the designated person within the office of the chief disciplinary counsel. The ethics opinions issued by the Professional Ethics Committee provide interpretations of the rules and the Texas Code of Professional Responsibility (the predecessor to the rules). These ethics opinions are published in the Texas Bar Journal and are available online at www.legalethicstexas.com/Ethics-Resources/Opinions.aspx.

Informal explanations of the rules may be obtained by calling the office of the chief disci­plinary counsel of the State Bar. A consultation with a staff member of the disciplinary counsel’s office may be not only informative but also pro­bative of good faith should a question later arise. The telephone number of the attorney ethics line is 1-800-532-3947.

§ 1.6American Bar Association’s Model Rules of Professional Conduct

The text of the Model Rules, approved by the American Bar Association House of Delegates, can be found online at www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/model_rules_of_professional_conduct_table_of_contents.html.

§ 1.7The ACTEC Commentaries

Unfortunately, neither the Model Rules of Pro­fessional Conduct (MRPC) nor the official com­ments to them are designed to specifically address the professional responsibilities of law­yers engaged in trusts and estates practices. The MRPC and its official comments primarily address areas of practice that are more clearly adversarial, and the situations encountered when dealing with families in an estate planning or disability planning setting typically do not fit into this category.

Recognizing the need to fill this gap, the Ameri­can College of Trusts and Estates Counsel (ACTEC) has developed commentaries on selected rules to provide much-needed guidance.

Although the commentaries refer specifically to the MRPC, their content is also usually applica­ble to the Code of Professional Responsibility, which remains in effect in some states and, like the MRPC, does not provide sufficient guidance to trusts and estates lawyers. The commentaries generally seek to identify various ways in which common problems can be dealt with, without expressly mandating or prohibiting particular conduct by trusts and estates lawyers.

The ACTEC Commentaries may be found online at www.actec.org/publications/com­mentaries.

§ 1.8Texas Code of Ethics and Professional Responsibility for Paralegals

The Code of Ethics and Professional Responsi­bility adopted by the board of directors of the Paralegal Division of the State Bar of Texas can be found online at https://txpd.org.

§ 1.9Texas Lawyer’s Creed

Adopted by the Texas Supreme Court and Texas Court of Appeals in 1989, the Texas Lawyer’s Creed is a mandate to the legal profession that goes beyond disciplinary rules and standards. The Texas Disciplinary Rules of Professional Conduct are cast in terms of “shall” and “shall not” and are merely a minimum standard of pro­fessional conduct. The Texas Lawyer’s Creed recognizes that professionalism requires more than mere compliance with these imperatives. The Creed addresses an attorney’s most import­ant relationships in his practice of law: the attor­ney and our legal system, the attorney and client, the attorney and other lawyers, and the attorney and judge.

The Creed requires an attorney to advise clients of the contents of the Creed when undertaking representation. The full text of the Texas Law­yer’s Creed can be found in Texas Rules of Court—State (West 2018).

 

[Section 1.10 is reserved for expansion.]

III.  Professional Responsibility

§ 1.11Professional Misconduct

§ 1.11:1Definitions and Sanctions

Professional misconduct that subjects an attor­ney to disciplinary action includes violation of a disciplinary rule and violation of the barratry statute. Tex. Penal Code § 38.12.

On proof of conviction of a felony involving moral turpitude or of a misdemeanor involving theft, embezzlement, or fraudulent misappropri­ation of money or property, suspension pending appeal is mandatory. An attorney who receives probation will be suspended rather than dis­barred. Tex. Gov’t Code § 81.078(b). On proof of final conviction, the attorney will be dis­barred. Tex. Gov’t Code § 81.078(c); see also Tex. Rules Disciplinary P. R. 8.05.

Moral turpitude is inherently immoral conduct that is willful, flagrant, or shameless and that shows a moral indifference to the opinion of the good and respectable members of the commu­nity. Searcy v. State Bar of Texas, 604 S.W.2d 256, 258 (Tex. App.—San Antonio 1980, writ ref’d n.r.e.).

The term misconduct is defined in both the Texas Rules of Disciplinary Procedure and the Texas Disciplinary Rules of Professional Con­duct. Tex. Rules Disciplinary P. R. 1.06V states that professional misconduct includes—

1.acts or omissions by an attorney, indi­vidually or in concert with another person or persons, that violate one or more of the Texas Disciplinary Rules of Professional Conduct;

2.attorney conduct that occurs in another state or in the District of Columbia and results in the disciplining of an attorney in that other jurisdiction, if the conduct is professional misconduct under the Texas Disciplinary Rules of Professional Conduct;

3.violation of any disciplinary or dis­ability order or judgment;

4.engaging in conduct that constitutes barratry as defined by Texas law;

5.failure to comply with section 13.01 of the Texas Rules of Disciplinary Proce­dure relating to notification of an attorney’s cessation of practice;

6.engaging in the practice of law either during a period of suspension or when on inactive status;

7.conviction of a serious crime or being placed on probation for a serious crime with or without an adjudication of guilt (“Serious crime” means barra­try; any felony involving moral turpi­tude; any misdemeanor involving theft, embezzlement, or fraudulent or reckless misappropriation of money or other property; or any attempt, con­spiracy, or solicitation of another to commit any of these crimes. Tex. Rules Disciplinary P. R. 1.06Z); and

8.conviction of an intentional crime or being placed on probation for an intentional crime with or without an adjudication of guilt (“Intentional crime” means any serious crime that requires proof of knowledge or intent as an essential element or any crime involving misapplication of money or other property held as a fiduciary. Tex. Rules Disciplinary P. R. 1.06T).

Tex. Rules Disciplinary P. R. 1.06V.

Tex. Disciplinary Rules Prof’l Conduct R. 8.04(a), reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G, app. A (Tex. State Bar R. art. X, § 9), states that an attorney shall not—

1.violate the disciplinary rules, know­ingly assist or induce another to do so, or do so through the acts of another, whether or not the violation occurred in the course of an attorney-client rela­tionship;

2.commit a serious crime or commit any other criminal act that reflects adversely on the attorney’s honesty, trustworthiness, or fitness as an attor­ney in other respects (“Serious crime” means barratry; any felony involving moral turpitude; any misdemeanor involving theft, embezzlement, or fraudulent or reckless misappropria­tion of money or other property; or any attempt, conspiracy, or solicitation of another to commit any of these crimes. Tex. Disciplinary Rules Prof’l Conduct R. 8.04(b));

3.engage in conduct involving dishon­esty, fraud, deceit, or misrepresenta­tion;

4.engage in conduct constituting obstruction of justice;

5.state or imply an ability to influence improperly a government agency or official;

6.knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law;

7.violate any disciplinary or disability order or judgment;

8.fail to timely furnish to the chief disci­plinary counsel’s office or a district grievance committee a response or other information as required by the Texas Rules of Disciplinary Proce­dure, unless he in good faith timely asserts a privilege or other legal ground for failure to do so;

9.engage in conduct that constitutes bar­ratry as defined by Texas law;

10.fail to comply with Tex. Rules Disci­plinary P. R. 13.01 relating to notifica­tion of an attorney’s cessation of practice;

11.engage in the practice of law when the attorney is on inactive status or when the attorney’s right to practice has been suspended or terminated, includ­ing but not limited to situations in which an attorney’s right to practice has been administratively suspended for failure to timely pay required fees or assessments or for failure to comply with article XII of the State Bar Rules relating to mandatory continuing legal education; or

12.violate any other Texas laws relating to the professional conduct of attor­neys and to the practice of law.

Tex. Disciplinary Rules Prof’l Conduct R. 8.04(a).

The presence of an attorney-client relationship is not a necessary element in a charge of a viola­tion of rule 8.04, as it is under many other disci­plinary rules. These forms of misconduct are prohibited regardless of whether they involve the practice of law.

§ 1.11:2Examples of Misconduct

An attorney’s attempt to get a client to sign a false affidavit was professional misconduct under former DR 1-102(A)(3)–(5), and this vio­lation, standing alone, warranted suspension for two years, even though it (that is, “attempted perjury”) might not be a violation of the Penal Code. Archer v. State, 548 S.W.2d 71, 76 (Tex. App.—El Paso 1977, writ ref’d n.r.e.); see also Searcy v. State Bar of Texas, 604 S.W.2d 256 (Tex. App.—San Antonio 1980, writ ref’d n.r.e.); Muniz v. State, 575 S.W.2d 408 (Tex. App.—Corpus Christi–Edinburg 1978, writ ref’d n.r.e.).

§ 1.12Attorney’s Fees

§ 1.12:1Determination of Proper Fee

Tex. Disciplinary Rules Prof’l Conduct R. 1.04 cmt. 1 provides that an attorney in good con­science should not charge or collect more than a reasonable fee, but it goes on to acknowledge that a standard of “reasonableness” is too vague to be an appropriate standard in a disciplinary action. The comment then notes that Tex. Disci­plinary Rules Prof’l Conduct R. 1.04(a) adopts, for disciplinary purposes only, a clearer stan­dard: The attorney is subject to discipline for an illegal or unconscionable fee.

A fee is unconscionable if a competent attorney could not form a reasonable belief that the fee is reasonable. The factors set out as guidelines for ascertaining the reasonableness of a particular fee are—

1.the time and labor required, the nov­elty and difficulty of the questions involved, and the skill requisite to per­form the legal service properly;

2.the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the attorney;

3.the fee customarily charged in the locality for similar legal services;

4.the amount involved and the results obtained;

5.the time limitations imposed by the client or by the circumstances;

6.the nature and length of the profes­sional relationship with the client;

7.the experience, reputation, and ability of the attorney or attorneys performing the services; and

8.whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

Tex. Disciplinary Rules Prof’l Conduct R. 1.04(b). These factors are not exclusive.

Rule 1.04 has been cited by Texas courts in determining the reasonableness of a particular fee. See Arthur Andersen & Co. v. Perry Equip­ment Corp., 945 S.W.2d 812, 818 (Tex. 1997); Braswell v. Braswell, 476 S.W.2d 444, 446 (Tex. App.—Waco 1972, writ dism’d). The Texas Supreme Court has held that factors listed in rule 1.04 also apply to determine the reasonable­ness of a guardian ad litem’s fee. Garcia v. Mar­tinez, 988 S.W.2d 219, 222 (Tex. 1999).

In a federal court action decided under Texas law, a client sued his attorney, alleging that the $25,000 fee charged for representation in a criminal action was excessive. The Fifth Circuit reversed and remanded for the jury to decide whether the attorney breached his fiduciary duty to the client and whether, in consideration of former DR 2-106 and other appropriate factors, the fee was clearly excessive. Nolan v. Foreman, 665 F.2d 738, 741 (5th Cir. 1982).

According to Tex. Disciplinary Rules Prof’l Conduct R. 1.04(c), when the attorney has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reason­able time after commencing the representation. This practice will not only prevent later misun­derstanding but will also promote good attor­ney-client relations. Many persons who desire legal services have had little or no experience with attorney’s fees, and therefore the attorney should explain fully the reasons for the particu­lar fee arrangement. Careless fee setting accounts for a large volume of complaints to grievance committees.

Because of the confidential nature of the attor­ney-client relationship, courts carefully scruti­nize all contracts for attorney compensation. “There is a presumption of unfairness or invalid­ity attaching to the contract, and the burden of showing its fairness and reasonableness is on the attorney.” Archer v. Griffith, 390 S.W.2d 735, 739 (Tex. 1964).

For additional discussion on attorney’s fees, see section 10.10 in this manual.

§ 1.12:2Fee Splitting—Forwarding Fee for Client Referral

The rules allow fee splitting, with some limita­tions. Under Tex. Disciplinary Rules Prof’l Conduct R. 1.04(f), the following conditions must be met:

1.The division is in proportion to the professional services performed by each attorney or made between attor­neys who assume joint responsibility for the representation.

2.The client consents in writing to the terms of the arrangement before the time of the association or referral pro­posed. The consent must include (a) the identity of all lawyers or law firms who will participate in the fee-split­ting arrangement, (b) whether fees will be divided based on the propor­tion of services performed or by attor­neys agreeing to assume joint responsibility for the representation, and (c) the share of the fee that each attorney or firm will receive or, if the division is based on the proportion of services performed, the basis on which the division will be made.

3.The aggregate fee does not violate rule 1.04(a).

Tex. Disciplinary Rules Prof’l Conduct R. 1.04(f).

As always, there is an overarching requirement that the aggregate fee is not illegal or unconscio­nable. Tex. Disciplinary Rules Prof’l Conduct R. 1.04(a).

Any agreement that allows an attorney or firm to associate other counsel in representing a person, or to refer the person to other counsel for repre­sentation, that results in such an association with or referral to a different firm or an attorney in a different firm must be confirmed by an arrange­ment conforming to rule 1.04(f). Consent by a client or prospective client without knowledge of the information described above about the terms of the arrangement does not constitute a confirmation. No attorney may collect or seek to collect fees or expenses in connection with any such agreement that is not confirmed in that way except for the reasonable value of legal services provided to the person and the reasonable and necessary expenses actually incurred on behalf of the person. Tex. Disciplinary Rules Prof’l Conduct R. 1.04(g).

§ 1.12:3Attorney’s Liens

Nature of Lien:      Often attorneys mistakenly believe that clients’ attempts to dismiss them can be denied on an attorney’s lien theory. Under Tex. Disciplinary Rules Prof’l Conduct R. 1.15(a)(3), an attorney who is discharged by a client must withdraw from employment. If the attorney has spent money on the case without being reimbursed or has earned a fee at the time of dismissal, he may be able to exercise an attor­ney’s lien on the client’s properties and papers still in his possession. Griffith v. Geffen & Jacobsen, P.C., 693 S.W.2d 724, 728 (Tex. App.—Dallas 1985, no writ).

In Texas, a lien for attorney’s fees has a com­mon-law rather than statutory basis. To perfect and maintain the lien, the attorney must have actual possession of the client’s property and must make a demand for payment. Smith v. State, 490 S.W.2d 902, 910 (Tex. App.—Corpus Christi–Edinburg 1972, writ ref’d n.r.e.).

Assertion of Lien May Be Unethical:       Retaining a client’s property and papers may be unethical either because the attorney’s lien is unenforceable or because enforcement could damage or prejudice the former client’s legal rights. Tex. Comm. on Prof’l Ethics, Op. 411 (1984); Comm. on Interpretation of the Canons of Ethics, State Bar of Tex., Op. 395 (1979).

Under Tex. Disciplinary Rules Prof’l Conduct R. 1.15(d), an attorney withdrawing from repre­sentation must take all reasonable steps to avoid foreseeable prejudice to the rights of the client. Thus, if assertion of an attorney’s lien would result in foreseeable prejudice to the client, the lien should not be exercised.

When clients request payment or delivery of funds or other property to which they are enti­tled, attorneys have a duty to comply promptly. See Tex. Disciplinary Rules Prof’l Conduct R. 1.15(d). One attorney was suspended from prac­tice for three months for refusing to return a cli­ent’s files after repeated requests. Hebisen v. State, 615 S.W.2d 866 (Tex. App.—Houston [1st Dist.] 1981, no writ).

In Smith, the State Bar of Texas sued to disbar an attorney, partially on the basis that he had willfully refused to relinquish certain documents to his former client after being discharged. The attorney finally succeeded, at a second trial, in having specific issues and instructions concern­ing an attorney’s right to assert a possessory lien submitted to the jury. However, the second jury also found that he was not asserting such a lien but was instead willfully and wrongfully refus­ing to relinquish a client’s documents. Smith v. State, 523 S.W.2d 1 (Tex. App.—Corpus Christi–Edinburg 1975, writ ref’d n.r.e.).

In Robinson v. Risinger, 548 S.W.2d 762, 766 (Tex. App.—Tyler 1977, writ ref’d n.r.e.), the court stated:

An attorney should not withdraw without considering carefully and endeavoring to minimize the possible adverse effect on the rights of his cli­ent and the possibility of prejudice to his client as a result of his with­drawal. . . . [The attorney should give] due notice of his withdrawal, suggesting employment of other counsel, delivering to the client all papers and property to which the cli­ent is entitled, cooperating with counsel subsequently employed, and otherwise endeavoring to minimize the possibility of harm.

The Fifth Circuit has held that under former DR 9-102(B)(4) a client has a right to the return of papers on request if the attorney cannot claim an attorney’s lien. The court reasoned that, although a client’s remedy for an attorney’s vio­lation of this right would be a damage action sounding in tort, the fact that the client cast the violation in terms of breach of contract would not preclude damages if the client could prove the violation. Nolan v. Foreman, 665 F.2d 738, 742–43 (5th Cir. 1982). But see Martin v. Trev­ino, 578 S.W.2d 763, 770 (Tex. App.—Corpus Christi–Edinburg 1978, writ ref’d n.r.e.) (viola­tion of former Code of Professional Responsi­bility will not give rise to private cause of action). However, in a later decision, this same court stated that the appellee might seek recov­ery in a private cause of action against the appel­lant’s attorney whose violation of the Code of Professional Responsibility rendered a postjudg­ment settlement agreement void and unenforce­able. Quintero v. Jim Walter Homes, Inc., 709 S.W.2d 225, 233 (Tex. App.—Corpus Christi–Edinburg 1985, writ ref’d n.r.e.).

§ 1.12:4Withholding Services Until Fee Is Paid

Late payment or nonpayment of a fee does not justify withholding services from a client. If the client substantially fails to fulfill an obligation to the attorney regarding the attorney’s services, including an obligation to pay the attorney’s fee as agreed, the only recourse is to withdraw from representation. Tex. Disciplinary Rules Prof’l Conduct R. 1.15(b)(5). Before withdrawal is proper, the attorney must obtain permission from any court before which he has acted as attorney of record for that client and must take reasonable steps to avoid foreseeable prejudice to the client’s rights. These steps include giving reasonable warning that the attorney will with­draw unless the obligation is fulfilled, allowing time to employ other counsel, surrendering to the client all papers and property to which the client is entitled, and refunding any advance payments of fee not yet earned. Tex. Disci­plinary Rules Prof’l Conduct R. 1.15(b)(5), (d).

An attorney may condition acceptance of employment on advance payment but may not condition completion of legal services on pay­ment of unpaid portions of the fee. A client’s failure to pay for the attorney’s services does not relieve the attorney of the duty to perform com­pletely and on time unless the attorney with­draws from representation in a manner that does not prejudice the client’s legal rights. See Tex. Disciplinary Rules Prof’l Conduct R. 1.15.

§ 1.13Conflicts of Interest

§ 1.13:1Conflicts between Interests of Attorney and Client

Generally:      An attorney has a strong fiduciary relationship to the client that precludes any con­flict of interest. “The relation of attorney and cli­ent is one of uberrima fides. . . . The integrity of such relationship should be carefully observed and scrupulously upheld at all times.” Smith v. Dean, 240 S.W.2d 789, 791 (Tex. App.—Waco 1951, no writ).

Refusing to Accept Employment:      If the interests of the client and the attorney may con­flict, the attorney must refuse that employment. Tex. Disciplinary Rules Prof’l Conduct R. 1.06 states in part:

(a)A lawyer shall not represent opposing parties to the same lit­igation.

(b)In other situations and except to the extent permitted by para­graph (c), a lawyer shall not represent a person if the repre­sentation of that person:

(1)involves a substantially related matter in which that person’s interests are materially and directly adverse to the interests of another client of the law­yer or the lawyer’s firm; or

(2)reasonably appears to be or become adversely lim­ited by the lawyer’s or law firm’s responsibilities to another client or to a third person or by the lawyer’s or law firm’s own inter­ests.

(c)A lawyer may represent a client in the circumstances described in (b) if:

(1)the lawyer reasonably believes the representation of each client will not be materially affected; and

(2)each affected or poten­tially affected client con­sents to such represent-ation after full disclosure of the existence, nature, implications, and possible adverse consequences of the common representa­tion and the advantages involved, if any.

Tex. Disciplinary Rules Prof’l Conduct R. 1.06(a)–(c).

The attorney’s duty to withdraw because of con­flict also prevails when a court has appointed an attorney to represent an indigent client. In Haley v. Boles, 824 S.W.2d 796 (Tex. App.—Tyler 1992, no writ), a trial judge had appointed an attorney to represent a criminal defendant. The attorney filed a motion to withdraw, alleging that a conflict of interest would arise from his representation because his law partner’s wife was the district attorney. The trial court denied the motion, and the attorney filed an application for writ of mandamus. In conditionally granting the writ, the court of appeals noted that the pro­priety of attorney-spouses representing oppos­ing parties in a criminal case was a case of first impression but that, if there is impropriety in spouses representing adversaries, the disqualifi­cation extends to the partners and associates of the spouse. The court also concluded that there was at least the appearance of tension and that the appearance of independence of trial counsel is diminished in these circumstances. Although the court expressly limited its ruling to the rep­resentation of indigent defendants in criminal cases by court-appointed counsel, the relevance of the case to guardianship practice is apparent from the frequent appointment of attorneys to act as attorneys ad litem.

Former Clients:      An attorney may permissi­bly acquire an interest adverse to that of a for­mer client only on a showing that acquiring the interest did not require breaching any confi­dence, taking any unfair advantage, or using any information acquired in the attorney-client rela­tionship. Waters v. Bruner, 355 S.W.2d 230, 233 (Tex. App.—San Antonio 1962, writ ref’d n.r.e.).

In Merrell v. Fanning & Harper, 597 S.W.2d 945 (Tex. App.—Tyler 1980, no writ), the court held that a law firm had no duty to protect a for­mer client’s property that was the subject of a writ of execution issued to the firm under a judgment against the former client for unpaid attorney’s fees. Because the attorney-client rela­tionship had ended well before the litigation began, the firm had no duty to protect the prop­erty sold to satisfy the judgment.

Acquiring Interest in Litigation:      Tex. Disci­plinary Rules Prof’l Conduct R. 1.08(h) states that an attorney shall not acquire a proprietary interest in the cause of action or subject matter of litigation the attorney is conducting for a cli­ent, except that the attorney may acquire a lien granted by law to secure the attorney’s fee or expenses and contract in a civil case with a cli­ent for a contingent fee that is permissible under Tex. Disciplinary Rules Prof’l Conduct R. 1.04.

The rule is preventive, for it may be violated even without a showing that a client has suffered actual harm. The rule prohibits attorneys from acquiring proprietary interests in the subject matter of litigation in order to avoid the possibil­ity of adverse influence on the attorney and harm to the client. State v. Baker, 539 S.W.2d 367, 373 (Tex. App.—Austin 1976, writ ref’d n.r.e.), disapproved on other grounds by Cos­grove v. Grimes, 774 S.W.2d 662, 665 (Tex. 1989). In Baker, the attorney was disciplined for purchasing property on the client’s behalf at a sheriff’s sale and thereafter using title to the property to secure fees for himself without notice to and consent of the client.

Loans to Clients:      Tex. Disciplinary Rules Prof’l Conduct R. 1.08(d) provides that an attor­ney shall not provide financial assistance to a client in connection with pending or contem­plated litigation or administrative proceedings, except that an attorney may advance or guaran­tee court costs, expenses of litigation or admin­istrative proceedings, and reasonably necessary medical and living expenses, the repayment of which may be contingent on the outcome of the matter, and an attorney representing an indigent client may pay court costs and expenses of liti­gation on behalf of the client.

Business Ventures with Clients:      Tex. Disci­plinary Rules Prof’l Conduct R. 1.08(a) pro­vides that an attorney shall not enter into a business transaction with a client unless the transaction and terms on which the attorney acquires the interest are fair and reasonable to the client and are fully disclosed in a manner that can be reasonably understood by the client, the client is given a reasonable opportunity to seek the advice of independent counsel in the transaction, and the client consents in writing thereto.

Tex. Disciplinary Rules Prof’l Conduct R. 1.08(j) defines the term business transactions as excluding standard commercial transactions between the attorney and the client for products or services that the client generally markets to others. Tex. Disciplinary Rules Prof’l Conduct R. 1.08 cmt. 2 reiterates this exclusion, noting that the general prohibition does not apply to standard commercial transactions between the attorney and client for products or services that the client generally markets, such as banking or brokerage services, medical services, products manufactured or distributed by the client, and utilities services. In these transactions the attor­ney has no advantage in dealing with the client, and the restrictions in Tex. Disciplinary Rules Prof’l Conduct R. 1.08(a) are unnecessary and impracticable.

The rule departs from former DR 5-104(A), which forbade an attorney to enter into a busi­ness transaction with a client if they had differ­ing interests and if the client expected the attorney to exercise his professional judgment to protect the client, unless the client consented after disclosure. The rule does not refer to the exercise of the attorney’s professional judgment or to the client’s expectations. Business transac­tions are flatly prohibited unless the attorney strictly complies with Tex. Disciplinary Rules Prof’l Conduct R. 1.08(a), which appears to require written consent of the client regardless of his expectations.

§ 1.13:2Conflicts of Interest among Clients

Conflicts Created by Multiple Representation:      An attorney may not accept or continue employment when two or more of the attorney’s clients might have interests that are conflicting, inconsistent, diverse, or other­wise discordant. Lott v. Ayres, 611 S.W.2d 473, 476 (Tex. App.—Dallas 1980, writ ref’d n.r.e.).

Tex. Disciplinary Rules Prof’l Conduct R. 1.06 provides—

(a)A lawyer shall not represent opposing parties to the same lit­igation.

(b)In other situations and except to the extent permitted by para­graph (c), a lawyer shall not represent a person if the repre­sentation of that person:

(1)involves a substantially related matter in which that person’s interests are materially and directly adverse to the interests of another client of the law­yer or the lawyer’s firm; or

(2)reasonably appears to be or become adversely lim­ited by the lawyer’s or law firm’s responsibilities to another client or to a third person or by the lawyer’s or law firm’s own inter­ests.

(c)A lawyer may represent a client in the circumstances described in (b) if:

(1)the lawyer reasonably believes the representation of each client will not be materially affected; and

(2)each affected or poten­tially affected client con­sents to such represent-ation after full disclosure of the existence, nature, implications, and possible adverse consequences of the common representa­tion and the advantages involved, if any.

(d)A lawyer who has represented multiple parties in a matter shall not thereafter represent any of such parties in a dispute among the parties arising out of the matter, unless prior consent is obtained from all such parties to the dispute.

(e)If a lawyer has accepted repre­sentation in violation of this Rule, or if multiple representa­tion properly accepted becomes improper under this Rule, the lawyer shall promptly withdraw from one or more representa­tions to the extent necessary for any remaining representation not to be in violation of these Rules.

(f)If a lawyer would be prohibited by this Rule from engaging in particular conduct, no other lawyer while a member or asso­ciated with that lawyer’s firm may engage in that conduct.

Tex. Disciplinary Rules Prof’l Conduct R. 1.06.

An attorney may properly represent both buyer and seller in real estate transactions when all parties agree after full disclosure of the facts. One court held such representation proper under these circumstances: The purchasers were satis­fied with the attorney’s handling of the original transaction; they were aware of the attorney’s position as trustee; and they understood that as trustee he had power to sell the property in case of default. Dillard v. Broyles, 633 S.W.2d 636 (Tex. App.—Corpus Christi–Edinburg 1982, writ ref’d n.r.e.), cert. denied, 463 U.S. 1208 (1983).

Conflicts Created by Prior Representation:      Tex. Disciplinary Rules Prof’l Conduct R. 1.09 provides that, without prior consent, an attorney who personally has formerly represented a client in a matter shall not thereafter represent another person in a mat­ter adverse to the former client in which the other person questions the validity of the attor­ney’s services or work product for the former client, or if the representation in reasonable probability will involve a violation of Tex. Dis­ciplinary Rules Prof’l Conduct R. 1.05, or if it is the same or a substantially related matter.  The fact that the lawyer has no recollection of the initial consultation or the matter disclosed in the meeting is of no consequence. The former client is entitled to a conclusive presumption that he imparted confidences and secrets. In re Z.N.H., 280 S.W.3d 481, 485 (Tex. App.—Eastland 2009, no pet.).

The issue of what constitutes a “substantial rela­tion” in this regard has arisen in some cases. In Lott v. Lott, 605 S.W.2d 665, 668 (Tex. App.—Dallas 1980, writ dism’d), the court held that an attorney’s representation of a husband and wife in a personal injury action involving the wife’s injuries did not preclude his representation of the wife in a divorce action filed while the first suit was pending.

Similarly, the court did not find a sufficient rela­tion to create a conflict when an attorney repre­sented a clinic in a contract dispute against a doctor to whom he had previously given advice on the status of an out-of-state divorce decree. Braun v. Valley Ear, Nose & Throat Specialists, 611 S.W.2d 470, 472 (Tex. App.—Corpus Christi–Edinburg 1980, no writ).

§ 1.14Confidentiality

§ 1.14:1Confidences and Secrets of Clients

Tex. Disciplinary Rules Prof’l Conduct R. 1.05 imposes on attorneys the duty to maintain their clients’ confidences and secrets. The rule is couched in terms of “confidential information,” which includes both “privileged information” and “unprivileged client information.” “Privi­leged information” is information of a client protected by the attorney-client privilege of Tex. R. Evid. 503 or by the principles of attorney-cli­ent privilege governed by Fed. R. Evid. 501. “Unprivileged client information” means all information relating to a client or furnished by the client, other than privileged information, acquired by the attorney during the course of or by reason of the representation of the client.

An attorney may reveal confidential information under these circumstances:

1.When the attorney has been expressly authorized to do so in order to carry out the representation.

2.When the client consents after consul­tation.

3.To the client, the client’s representa­tives, or the members, associates, and employees of the attorney’s firm, except when otherwise instructed by the client.

4.When the attorney has reason to believe it is necessary to do so in order to comply with a court order, a Texas Disciplinary Rule of Professional Conduct, or other law.

5.To the extent reasonably necessary to enforce a claim or establish a defense on behalf of the attorney in a contro­versy between the attorney and the cli­ent.

6.To establish a defense to a criminal charge, civil claim, or disciplinary complaint against the attorney or the attorney’s associates based on conduct involving the client or the representa­tion of the client.

7.When the attorney has reason to believe it is necessary to do so in order to prevent the client from committing a criminal or fraudulent act.

8.To the extent revelation reasonably appears necessary to rectify the conse­quences of a client’s criminal or fraud­ulent act in the commission of which the attorney’s services had been used.

Tex. Disciplinary Rules Prof’l Conduct R. 1.05(c).

An attorney may reveal unprivileged client information when the attorney is impliedly authorized to do so in order to carry out the rep­resentation or when the attorney has reason to believe it is necessary to do so in order to carry out the representation effectively, to defend the attorney or the attorney’s employees or associ­ates against a claim of wrongful conduct, to respond to allegations in any proceeding con­cerning the attorney’s representation of the cli­ent, or to prove the services rendered to a client, or the reasonable value of the services, or both, in an action against another person or organiza­tion responsible for the payment of the fee for services rendered to the client. Tex. Disciplinary Rules Prof’l Conduct R. 1.05(d).

Further, an attorney shall reveal confidential information when it clearly establishes that a cli­ent is likely to commit a criminal or fraudulent act that is likely to result in death or substantial bodily harm to a person, and the revelation of the information reasonably appears necessary to prevent the client from committing the act. Tex. Disciplinary Rules Prof’l Conduct R. 1.05(e). An attorney shall also reveal confidential infor­mation when required to do so by Tex. Disci­plinary Rules Prof’l Conduct R. 3.03(a)(2), 3.03(b), or 4.01(b). See Tex. Disciplinary Rules Prof’l Conduct R. 1.05(f). Rules 3.03(a)(2) and 4.01(b) require an attorney to disclose informa­tion when necessary to avoid assisting a crimi­nal or fraudulent act. Rule 3.03(b) requires “reasonable remedial measures, including dis­closure of the true facts” if an attorney has offered material evidence and later learns of its falsity.

The rule 1.05 comments note that when death or serious bodily harm is likely to result, revelation of confidential information is required. In all other situations, the attorney’s obligation is to dissuade the client from committing the crime or fraud or to persuade the client to take corrective action. When the threatened crime or fraud is likely to have the less serious result of substan­tial injury to the financial interests or property of another, the attorney is not required to reveal preventive information, but may do so. Com­ment 14 notes:

Although preventive action is permit­ted by paragraphs (c) and (d), failure to take preventive action does not violate those paragraphs. But see paragraphs (e) and (f). Because these rules do not define standards of civil liability of lawyers for professional conduct, paragraphs (c) and (d) do not create a duty on the lawyer to make any disclosure and no civil lia­bility is intended to arise from the failure to make such disclosure.

The same statement is not made with regard to paragraphs (e) and (f).

§ 1.14:2Obtaining Confidences

Recording One’s Own Conversations:       Either of two individuals having a telephone conversation may record it without violating the Federal Communications Act, 47 U.S.C. § 605. See Rathbun v. United States, 355 U.S. 107 (1957). This general rule has been applied to conversations between spouses. See Kotrla v. Kotrla, 718 S.W.2d 853 (Tex. App.—Corpus Christi–Edinburg 1986, writ ref’d n.r.e.). How­ever, a Texas attorney has been publicly repri­manded for involving a nonattorney in the installation of a device to record telephone con­versations of her estranged husband. The attor­ney also engaged in third-party recordings of telephone conversations without the knowledge or consent of the parties engaged in the conver­sations. It is noted, however, that the telephone calls did not involve any clients. 52 Tex. B.J. 234 (1989).

The American Bar Association has previously taken the position that no attorney should record any conversation, whether by tape or other elec­tronic device, without the consent or prior knowledge of all parties. ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 337 (1974). The former Code of Professional Responsibility took a similar position. Except under extraordi­nary circumstances, former Ethical Consider­ations 1-5 and 9-6 prohibited an attorney from tape-recording a conversation with another per­son without first informing that person. Comm. on Interpretation of the Canons of Ethics, State Bar of Tex., Op. 392 (1978) (overruling Ethics Op. 84 (1953)).

But in 2001, the American Bar Association’s Standing Committee on Ethics and Professional Responsibility (the “ABA Committee”) with­drew its Formal Opinion 337 and issued Formal Opinion 01-422 (June 24, 2001). In that opinion, the ABA Committee ruled that a lawyer may record his telephone conversations without dis­closure to other parties to the calls, provided that the recording is not in violation of applicable law and is not contrary to a representation by the lawyer that the conversation is not being recorded. The ABA Committee noted that it was divided on whether to permit a lawyer to make an undisclosed recording of a telephone conver­sation with a client but indicated that such recordings were generally inadvisable. In doing so, the ABA Committee recognized that there are legitimate reasons a lawyer may electroni­cally record conversations with a client or third party, including to aid memory, keep accurate records, gather information from potential wit­nesses, and to protect the lawyer from false accusations. See ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 01-422 (2001).

In 2006, the Texas Committee on Professional Ethics issued Opinion 575, indicating it did not believe that an “undisclosed recording of a tele­phone conversation by a party to the conversa­tion can be termed to involve ‘dishonesty, fraud, deceit or misrepresentation’ within the meaning of Rule 8.04(a)(3).” The committee noted that because “an undisclosed recording of a tele­phone conversation by a party to the conversa­tion is not a crime under Texas or Federal law, there appears to be no other provision of the Texas Disciplinary Rules of Professional Con­duct that could be said to be violated by such an undisclosed recording.” Therefore, it found that a Texas attorney’s “undisclosed recording of his telephone conversation with another person should not be held to violate Rule 8.04(a)(3).” But the opinion did mandate several qualifica­tions, including (1) recordings of clients should be for the “legitimate interest” of the lawyer or client, (2) any recordings should be safeguarded to protect confidential information, (3) record­ings should not violate the other laws that may apply, such as the laws of another state, and (4) any recordings should not be contrary to a repre­sentation made by the attorney. If these condi­tions are met, an undisclosed recording of telephone conversations by a Texas attorney is no longer per se a violation of the Texas Disci­plinary Rules of Professional Conduct. See Tex. Comm. on Prof’l Ethics, Op. 575 (2006).

Recording Conversations to Which One Is Not a Party—Federal Regulations:      The Omnibus Criminal Control Act, at 18 U.S.C. § 2511(1), precludes the interception of a wire, oral, or electronic communication. “Intercept” is defined at 18 U.S.C. § 2510(4) as “the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device.”

Recording Conversations to Which One Is Not a Party—State Statutes:      The Texas Penal Code provides a second-degree felony punishment (confinement in the Texas Depart­ment of Criminal Justice for a term of two to twenty years and a fine of not more than $10,000) for one who “intentionally intercepts, endeavors to intercept, or procures another per­son to intercept or endeavor to intercept a wire, oral, or electronic communication.” Tex. Penal Code § 16.02(b)(1), (f). The terms intercept, oral communication, and wire communication have the meanings given them in article 18A.001 of the Texas Code of Criminal Proce­dure. Tex. Penal Code § 16.02(a). The article 18A.001 definitions are virtually the same as those in the federal act (without the references to interstate commerce or communications). Tex. Code Crim. Proc. art. 18.20, § 1(1)–(3).

The Civil Practice and Remedies Code autho­rizes civil action by a party to a communication against a person who intercepts, tries to inter­cept, or employs or obtains another to intercept or try to intercept the communication or who uses or divulges information he knows or rea­sonably should know was obtained by intercep­tion of the communication. Tex. Civ. Prac. & Rem. Code § 123.002(a)(1), (2). “Communica­tion” means speech uttered by a person or infor­mation including speech that is transmitted in whole or in part with the aid of a wire or cable. Tex. Civ. Prac. & Rem. Code § 123.001(1). “Interception” means the aural acquisition of the contents of a communication through the use of an electronic, mechanical, or other device that is made without the consent of a party to the com­munication. Tex. Civ. Prac. & Rem. Code § 123.001(2).

§ 1.15Commingling Funds

§ 1.15:1Keeping Clients’ Funds in Separate Account

An attorney must hold funds and other property belonging in whole or in part to clients or third persons that are in the attorney’s possession in connection with a representation separate from the attorney’s own property. These funds must be kept in a separate account, designated as a “trust” or “escrow” account, maintained in the state in which the attorney’s office is situated or elsewhere with the consent of the client or third person. Other client property must be identified as such and appropriately safeguarded. The attorney must keep complete records of account funds and other property and preserve them for five years after termination of the representa­tion. Tex. Disciplinary Rules Prof’l Conduct R. 1.14(a).

On receiving funds or other property in which a client or third person has an interest, an attorney must promptly notify the client or third person. Except as stated in Tex. Disciplinary Rules Prof’l Conduct R. 1.14 or otherwise permitted by law or by agreement with the client, an attor­ney must promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, on request by the client or third person, promptly render a full account regarding the property. Tex. Disciplinary Rules Prof’l Conduct R. 1.14(b).

When in the course of representation an attorney is in possession of funds or other property in which both the attorney and another person claim interests, the attorney must keep the prop­erty separate until there is an account and sever­ance of their interest. All funds in a trust or escrow account may be disbursed only to those persons entitled to receive them by virtue of the representation or by law. If a dispute arises con­cerning their respective interests, the attorney must keep the portion in dispute separate until the dispute is resolved, and the undisputed por­tion must be distributed appropriately. Tex. Dis­ciplinary Rules Prof’l Conduct R. 1.14(c).

In Archer v. State, 548 S.W.2d 71 (Tex. App.—El Paso 1977, writ ref’d n.r.e.), the court upheld a two-year suspension of an attorney’s license as a proper sanction for commingling funds. The jury found that the attorney had deposited a cli­ent’s funds in a general business account. The court held that a fraudulent, willful, or culpable intent was not necessary to invoke the suspen­sion and that the client’s consent did not absolve the attorney from liability. The purpose of for­mer DR 9-102, said the court, was to guard against loss of a client’s funds that may occur even with “good intentions.” Archer, 548 S.W.2d at 74.

§ 1.15:2Retainer Fees

Attorneys must distinguish between true retainer fees (payments to compensate an attorney for his commitment to provide certain services and to forgo other employment opportunities) and advance payment retainer fees (advance pay­ments for services to be performed). True retainer fees are earned when received and may be deposited in the attorney’s account. Former DR 2-110 required the attorney to promptly refund an equitable portion of the true retainer fee if he was discharged or withdrew before los­ing other employment opportunities. Tex. Disci­plinary Rules Prof’l Conduct R. 1.15(d) merely requires an attorney to refund any advance pay­ment of a fee that has not been earned. Retainer fees are not mentioned in Tex. Disciplinary Rules Prof’l Conduct R. 1.14, but clearly they should be used with caution. Nonrefundable retainers, though not inherently unethical, pose many potential problems and must be used with caution. Tex. Comm. on Prof’l Ethics, Op. 431 (1986). Guardianship fees, including the pay­ment of retainers, are subject to the approval of the probate court.

§ 1.16Advertising

§ 1.16:1Background

In Bates v. State Bar of Arizona, 433 U.S. 350 (1977), the Supreme Court held that it was unconstitutional to prohibit attorneys from advertising prices charged for uncontested divorces, simple adoptions, uncontested per­sonal bankruptcies, changes of name, and rou­tine services, as long as the advertising is not false, deceptive, or misleading.

However, in Florida Bar v. Went for It, Inc., 515 U.S. 618 (1995), the Supreme Court ruled that certain restrictions on targeted direct-mail solici-tation imposed by the Florida Bar did not violate the First Amendment free-speech guarantees as applied to commercial speech. This case further refines the “intermediate scrutiny” framework applied to regulation of commercial speech and upholds the right of state bar associations to restrict certain forms of advertising by attorneys.

§ 1.16:2Texas Advertising Guidelines

The following practice notes briefly summarize salient parts of the rules adopted by the Supreme Court of Texas relating to advertising, but attor­neys planning any form of advertising or solici­tation, including on websites, should examine the advertising rules closely and direct any inquiries to the State Bar of Texas Advertising Review Department. A packet of information containing the Lawyer Advertising Rules, an application form, and other informative materi­als may be obtained from the department, and attorneys may seek guidance about interpreta­tions of the rules from department staff. The telephone number for the Advertising Review Department is 1-800-566-4616.

Firm Names and Letterhead:      Tex. Disci­plinary Rules Prof’l Conduct R. 7.01(a) prohib­its the practice of law under a trade name or a name that is misleading as to the identity of the attorneys practicing under the name or under a firm name that includes names other than one or more of the attorneys in the firm. This rule allows use of words such as professional corpo­ration, limited liability partnership, or similar designations and allows use of abbreviations for the entity. Tex. Disciplinary Rules Prof’l Con­duct R. 7.01(e) prohibits advertising using a trade name unless it is in the form authorized above and actually used in the firm’s letterhead and contracts. However, use of the name of a deceased or retired partner or predecessor firm is not considered misleading. Tex. Disciplinary Rules Prof’l Conduct R. 7.01(a) & cmt. 1. If a law firm has a multistate practice, letterhead of the firm for a Texas office must indicate which attorneys listed are not licensed to practice in Texas. Tex. Disciplinary Rules Prof’l Conduct R. 7.01(b). If an attorney has taken a position with the government, the firm may not include his name during any substantial period in which the attorney is not regularly and actively practic­ing with the firm. Tex. Disciplinary Rules Prof’l Conduct R. 7.01(c).

Communications about Services:      The rules specifically prohibit making or sponsoring false or misleading communications about attorneys’ services or qualifications. See Tex. Disciplinary Rules Prof’l Conduct R. 7.02. The following seven categories of communications are consid­ered false and misleading:

1.Communications containing material misrepresentations of fact or law or omitting a fact necessary to prevent the statement as a whole from being materially misleading. Tex. Disci­plinary Rules Prof’l Conduct R. 7.02(a)(1).

2.Communications that contain any ref­erence in a public media advertise­ment to past successes or results obtained unless (a) the attorney served as lead counsel in the matter or was primarily responsible for the settle­ment or verdict, (b) the client actually received the amount involved, (c) the reference is accompanied by adequate information about the nature of the case or matter and the damages or injuries the client sustained, and (d) if the gross amount received is stated, the attorney’s fees and litigation expenses withheld are also stated. Tex. Disciplinary Rules Prof’l Conduct R. 7.02(a)(2).

3.Communications that are likely to cre­ate an unjustified expectation about the results the attorney can achieve or that state or imply that the attorney can achieve results by means that vio­late the law or the disciplinary rules. Tex. Disciplinary Rules Prof’l Con­duct R. 7.02(a)(3).

4.Communications comparing the attor­ney’s services with other attorneys’ services unless the comparison can be substantiated with objective, verifiable data. Tex. Disciplinary Rules Prof’l Conduct R. 7.02(a)(4).

5.Communications stating or implying that the attorney is able to influence any tribunal or official improperly or on irrelevant grounds. Tex. Disci­plinary Rules Prof’l Conduct R. 7.02(a)(5).

6.Communications in an advertisement in the public media or in a solicitation communication that designate one or more areas of practice unless the attor­ney is competent to practice in those areas. Tex. Disciplinary Rules Prof’l Conduct R. 7.02(a)(6). (Although an attorney is not required to be board certified to advertise a specialty, certi­fication is conclusive of an attorney’s competence as required by Tex. Disci­plinary Rules Prof’l Conduct R. 7.02(a)(6). Tex. Disciplinary Rules Prof’l Conduct R. 7.02(b).)

7.Communications that use an actor or model to portray a client of the attor­ney. Tex. Disciplinary Rules Prof’l Conduct R. 7.02(a)(7).

Prohibited Solicitations and Payments:      An attorney may not contact, in person or by regu­lated telephone or other electronic means (not including the attorney’s website) that will result in live, interactive communication, someone (other than a family member) who was not pre­viously a client regarding a particular event or series of events when the attorney’s objective is pecuniary gain. Tex. Disciplinary Rules Prof’l Conduct R. 7.03(a), (f). However, an attorney employed by a nonprofit organization may con­tact members of the organization for limited pur­poses. Tex. Disciplinary Rules Prof’l Conduct R. 7.03(a). Attorneys may not pay referral fees to nonattorneys, although they may pay for advertising and for the expenses of an attorney referral service. Tex. Disciplinary Rules Prof’l Conduct R. 7.03(b). Attorneys may not advance or offer to advance anything of value to a pro­spective client or other person, except for amounts allowed under Tex. Disciplinary Rules Prof’l Conduct R. 1.08(d) and legitimate referral fees. Tex. Disciplinary Rules Prof’l Conduct R. 7.03(c). An attorney shall not enter into an agreement to collect fees in violation of the above rules, nor may he accept referrals from an attorney referral service unless the service meets the requirements of chapter 952 of the Texas Occupations Code. Tex. Disciplinary Rules Prof’l Conduct R. 7.03(d), (e).

Advertisements in Public Media:      Tex. Dis­ciplinary Rules Prof’l Conduct R. 7.04 governs communications made through the public media. Attorneys may list specialties in legal directories and legal newspapers, as long as the information is not false or misleading. Tex. Dis­ciplinary Rules Prof’l Conduct R. 7.04(a). An attorney who advertises in the public media must publish or broadcast the name of at least one attorney who is responsible for the content of the advertisement. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(b)(1). Attorneys may also advertise that they are, for example, “Board Certified, Family Law—Texas Board of Legal Specialization” if in fact they are so recognized by the Texas Board of Legal Specialization. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(b)(2)(i). Attorneys may include statements that they are members of an organization the name of which implies that its members possess special competence only if the organization has been accredited by the Texas Board of Legal Specialization as a bona fide organization that admits to membership or grants certification only on the basis of objective, exacting, publicly available standards that are reasonably relevant to the special training or special competence that is implied and that are in excess of the level of training and competence generally required for admission to the bar. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(b)(2)(ii). An infomercial or comparable presentation must state that it is an advertisement both verbally and in writing at both the beginning and the end and in writing during any portion that explains how to contact an attorney or firm. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(b)(3). The statements required by Tex. Disciplinary Rules Prof’l Con­duct R. 7.04(b) must be displayed conspicuously and in easily understood language. Tex. Disci­plinary Rules Prof’l Conduct R. 7.04(c).

Attorneys may advertise their services in the public media either directly or through a public relations firm. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(d). A particular attorney must be responsible for the content of each advertise­ment, so all advertisements must be reviewed and approved in writing by the advertising attor­ney or an attorney in the advertised firm. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(e), cmt. 10. Copies of advertisements and a record of where they were used must be retained for four years after their last use. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(f).

In advertisements in the public media, a person who portrays an attorney whose services are being advertised or narrates the advertisement as if he were such an attorney must in fact be an attorney whose services are being advertised. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(g).

If contingent fees are advertised, the advertise­ment must state whether the client will be required to pay court costs and whether the cli­ent will be responsible for other expenses. If specific percentages are disclosed, the advertise­ment must state whether the percentage is calcu­lated before or after the expenses are deducted from the recovery. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(h).

If a fee or range of fees is advertised, the attor­ney is expected to honor those prices for the period during which the advertisement is expected to be in circulation or to be effective or for the time stated in the advertisement. How­ever, quoted prices are not expected to be hon­ored for longer than one year. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(i).

Tex. Disciplinary Rules Prof’l Conduct R. 7.04(m) prohibits use of false or misleading slo­gans or jingles in the public media.

The geographic location of the attorney’s princi­pal office must be disclosed. No other office may be advertised unless that other office is staffed by an attorney at least three days a week or the advertisement states the days and times an attorney will be at the office or that meetings with attorneys will be by appointment only. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(j).

If the rules require that specific items of infor­mation accompany communications about an attorney’s services, the required items must be presented in the same manner as the communi­cation and with equal prominence. Tex. Disci­plinary Rules Prof’l Conduct R. 7.04(q).

Advertisements on the Internet must display the statements and disclosures required by rule 7.04. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(r).

Additional rules apply to cooperative advertis­ing by attorneys from different firms, referral services, and payments for advertising made by another attorney. Tex. Disciplinary Rules Prof’l Conduct R. 7.04(k), (l), (n)–(p).

Advertising Regarding Medications or Medi­cal Devices:      Texas Government Code section 81.151, enacted by the Eighty-sixth Legislature in 2019, creates restrictions on television adver­tising for legal services relating to medications and medical devices. The statute provides guide­lines on restricted language and mandates the use of certain warnings and disclosures. A viola­tion of the provision is actionable under chapter 17, subchapter E, of the Texas Business and Commerce Code. See Tex. Gov’t Code § 81.151.

Prohibited Written, Electronic, or Digital Solicitations:      Tex. Disciplinary Rules Prof’l Conduct R. 7.05 pertains to certain written, audio, audio-visual, digital media, recorded tele­phone message, or other electronic communica­tions to prospective clients for the purpose of obtaining professional employment. This rule prohibits an attorney from sending communica­tions that involve coercion, duress, fraud, over­reaching, intimidation, undue influence, or harassment; that contain information forbidden by Tex. Disciplinary Rules Prof’l Conduct R. 7.02; that fail to satisfy the requirements of Tex. Disciplinary Rules Prof’l Conduct R. 7.04 that would apply if the communication were an advertisement in the public media; or that con­tain a false, fraudulent, misleading, deceptive, or unfair statement or claim. Tex. Disciplinary Rules Prof’l Conduct R. 7.05(a). The format of a written, electronic, or digital solicitation com­munication is governed by Tex. Disciplinary Rules Prof’l Conduct R. 7.05(b), and require­ments for audio, audio-visual, digital media, recorded telephone message, and other elec­tronic communications are governed by Tex. Disciplinary Rules Prof’l Conduct R. 7.05(c).

All written, audio, audio-visual, digital media, recorded telephone message, or other electronic communications must be reviewed by the attor­ney and signed or approved by the attorney or by an attorney in the firm. Tex. Disciplinary Rules Prof’l Conduct R. 7.05(d). A copy of each such communication and the dates and places it was sent must be retained for four years. Tex. Disciplinary Rules Prof’l Conduct R. 7.05(e).

Communications to family members or to pre­existing clients, communications made at the request of the prospective client, communica­tions made without concern for a specific past occurrence or event or series of past occurrences or events and not concerned with a specific legal problem of which the attorney is aware, and communications not motivated by the desire for employment or the possibility of pecuniary gain are exempt from the provisions of Tex. Disci­plinary Rules Prof’l Conduct R. 7.05. Tex. Dis­ciplinary Rules Prof’l Conduct R. 7.05(f).

Prohibited Employment:      Tex. Disciplinary Rules Prof’l Conduct R. 7.06 generally prohibits an attorney from accepting or continuing employment if the employment was procured by conduct prohibited by the advertising rules, cer­tain criminal conduct, or barratry.

Filing Requirements:      Tex. Disciplinary Rules Prof’l Conduct R. 7.07 establishes a pro­cedure for preapproval of advertising by the Advertising Review Committee. A copy of the written, audio, audio-visual, digital, or other electronic communications, including a repre­sentative sample of the envelope or other pack­aging to be used, together with an application form and a filing fee, must be submitted no later than the sending of the communication. Tex. Disciplinary Rules Prof’l Conduct R. 7.07(a). A copy of an advertisement in the public media in the form in which it will appear (for example, video, print copy, audiotape), production script and other information, time and locations of dis­semination or proposed dissemination, a com­pleted application form, and a filing fee must be submitted. Tex. Disciplinary Rules Prof’l Con­duct R. 7.07(b). Requirements for filing with regard to a Web site are prescribed in Tex. Dis­ciplinary Rules Prof’l Conduct R. 7.07(c).

An attorney may seek an advance advisory opin­ion about compliance of a proposed solicitation not less than thirty days before its dissemination. An opinion of noncompliance is not binding in a disciplinary proceeding, but a finding of compli­ance is binding as to all materials submitted for preapproval if the information received in con­nection with the solicitation is true and not mis­leading. The finding of compliance is admissible evidence if offered by a party. Tex. Disciplinary Rules Prof’l Conduct R. 7.07(d).

Certain types of communications are exempt from the approval process. These advertise­ments, if they contain no false or misleading information, include those providing basic infor­mation such as the name, address, electronic address, phone numbers, office and telephone service hours, and fax numbers of the attorney or attorneys in a firm, with a designation such as “lawyer” or “law firm”; fields of specialization and concentration or practice limitation; dates of admission; foreign language ability; acceptance of credit cards; identification with group prepaid legal plans; and any fee for initial consultation or fee schedule. See Tex. Disciplinary Rules Prof’l Conduct R. 7.07(e).

Jurisdiction:      Tex. Disciplinary Rules Prof’l Conduct R. 8.05 designates who will be subject to discipline by the State Bar of Texas for viola­tion of the Texas advertising guidelines. Under rule 8.05, in certain cases, an attorney admitted in Texas may be disciplined for advertisements made in other jurisdictions.

§ 1.17Attorney as Witness

An attorney who finds it necessary to testify as a witness should first consult rule 3.08, which provides:

(a)A lawyer shall not accept or continue employment as an advocate before a tribunal in a contemplated or pending adju­dicatory proceeding if the law­yer knows or believes that the lawyer is or may be a witness necessary to establish an essen­tial fact on behalf of the law­yer’s client, unless:

(1)the testimony relates to an uncontested issue;

(2)the testimony will relate solely to a matter of for­mality and there is no rea­son to believe that substantial evidence will be offered in opposition to the testimony;

(3)the testimony relates to the nature and value of legal services rendered in the case;

(4)the lawyer is a party to the action and is appearing pro se; or

(5)the lawyer has promptly notified opposing counsel that the lawyer expects to testify in the matter and disqualification of the lawyer would work sub­stantial hardship on the client.

(b)A lawyer shall not continue as an advocate in a pending adju­dicatory proceeding if the law­yer believes that the lawyer will be compelled to furnish testi­mony that will be substantially adverse to the lawyer’s client, unless the client consents after full disclosure.

(c)Without the client’s informed consent, a lawyer may not act as advocate in an adjudicatory proceeding in which another lawyer in the lawyer’s firm is prohibited by paragraphs (a) or (b) from serving as advocate. If the lawyer to be called as a wit­ness could not also serve as an advocate under this Rule, that lawyer shall not take an active role before the tribunal in the presentation of the matter.

Tex. Disciplinary Rules Prof’l Conduct R. 3.08.

However, disqualification is a severe remedy. In re Sanders, 153 S.W.3d 54, 57 (Tex. 2004). “Mere allegations of unethical conduct or evi­dence showing a remote possibility of a viola­tion of the disciplinary rules will not suffice” to merit disqualification. Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex. 1990). The party requesting disqualification must demon­strate that the opposing lawyer’s dual role as attorney and witness will cause the party actual prejudice. Ayres v. Canales, 790 S.W.2d 554, 558 (Tex. 1990); see also In re Frost, No. 12-08-00154-CV, 2008 WL 2122597 (Tex. App.— Tyler May 21, 2008) (mem. op.). Finally, a law­yer should not seek to disqualify an opposing lawyer by unnecessarily calling that lawyer as a witness. Tex. Disciplinary Rules Prof’l Conduct R. 3.08 cmt. 10.

§ 1.18Technological Competence

The Supreme Court has amended the comment to rule 1.01, which addresses competent and diligent legal representation, to address technological competency. The revised comment indicates that each lawyer “should strive to become and remain proficient and competent in the practice of law, including the benefits and risks associated with relevant technology.” Tex. Disciplinary Rules Prof’l Conduct R. 1.01 & cmt. 8 (emphasis added). The comment is similar to a change made in the American Bar Association’s model rule in 2012. See www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_1_competence/comment_on_rule_1_1/.

§ 1.19Duty to Report Ethical Violation; Peer Assistance Program Alternative

The Texas Lawyer’s Creed states that a lawyer must “abide by the Texas Disciplinary Rules of Professional Conduct” and “professionalism requires more than merely avoiding the viola­tion of laws and rules.” The Texas Lawyer’s Creed—A Mandate for Professionalism, reprinted in Texas Rules of Court—State 735 (West 2018).

Rule 8.03 of the Texas Disciplinary Rules of Professional Conduct requires attorneys to make a report when a substantial question arises about another lawyer’s “honesty, trustworthiness or fitness”:

8.03      Reporting Professional Mis­conduct

(a)Except as permitted in para­graphs (c) or (d), a lawyer hav­ing knowledge that another lawyer has committed a viola­tion of applicable rules of pro­fessional conduct that raises a substantial question as to that lawyer’s honesty, trustworthi­ness or fitness as a lawyer in other respects, shall inform the appropriate disciplinary author­ity.

(b)Except as permitted in para­graphs (c) or (d), a lawyer hav­ing knowledge that a judge has committed a violation of appli­cable rules of judicial conduct that raises a substantial question as to the judge’s fitness for office shall inform the appropri­ate authority.

(c)A lawyer having knowledge or suspecting that another lawyer or judge whose conduct the lawyer is required to report pur­suant to paragraphs (a) or (b) of this Rule is impaired by chemi­cal dependency on alcohol or drugs or by mental illness may report that person to an approved peer assistance pro­gram rather than to an appro­priate disciplinary authority. If a lawyer elects that option, the lawyer’s report to the approved peer assistance program shall disclose any disciplinary viola­tions that the reporting lawyer would otherwise have to dis­close to the authorities referred to in paragraphs (a) and (b).

(d)This rule does not require dis­closure of knowledge or infor­mation otherwise protected as confidential information:

(1)by Rule 1.05 or

(2)by any statutory or regula­tory provisions applicable to the counseling activities of the approved peer assis­tance program.

Tex. Disciplinary Rules Prof’l Conduct R. 8.03 (emphasis added). The rule and the alternative method of reporting under rule 8.03(c) reflect the values of the Texas Lawyer’s Creed; rule 8.03(c) allows attorneys to help each other with­out involving the disciplinary process.

§ 1.20Texas Lawyers’ Assistance Program

The only approved peer assistance program to which lawyers may make reports under rule 8.03(c) is the Texas Lawyers’ Assistance Pro­gram (TLAP). See Tex. Health & Safety Code § 467.001(1)(A); Board of Directors Meeting Minutes, Jan. 20–21, 1989, State Bar of Texas. TLAP is available to lawyers, judges, and law students twenty-four hours a day, seven days a week, at 1-800-343-TLAP (8527). Information about attorney wellness and other related infor­mation is also available on TLAP’s website, www.tlaphelps.org. If a lawyer is required to report under rule 8.03(a), that is, if he has knowledge “or suspects” another lawyer is “impaired by chemical dependency on alcohol or drugs or by mental illness,” the report may instead be made to TLAP and discharges the reporting lawyer’s duty to report. See Tex. Health & Safety Code § 467.005(b); Tex. Disci­plinary Rules Prof’l Conduct R. 8.03(c). “Men­tal illness” encompasses Alzheimer’s disease, dementia, and other cognitive disorders. Ameri­can Psychiatric Association, Diagnostic & Sta­tistical Manual of Mental Disorders 591 (5th ed. 2013).

Calling TLAP about a fellow lawyer in need is a way to help an attorney with a problem without getting that attorney into disciplinary trouble. The confidentiality of TLAP participants’ infor­mation is ensured under Tex. Health & Safety Code § 467.007 and by TLAP policy. All com­munications by any person with the program (including staff, committee members, and vol­unteers) and all records received or maintained by the program are strictly protected from dis­closure. TLAP does not report lawyers to disci­plinary authorities. While the majority of calls to TLAP are self-referrals, referrals may also come from partners, associates, office staff, judges, court personnel, clients, family members, and friends. TLAP is respectful and discreet in its efforts to help impaired lawyers who are referred, and TLAP never discloses the identity of a caller trying to get help for another attorney. Furthermore, the Health and Safety Code pro­vides that any person who “in good faith reports information or takes action in connection with a peer assistance program is immune from civil liability for reporting the information or taking the action.” Tex. Health & Safety Code § 467.008.

Approximately half of all assistance provided by TLAP is given to attorneys suffering from anxi­ety, depression, or burnout. Additionally, TLAP helps lawyers, law students, and judges suffer­ing problems such as prescription and other drug use, eating disorders, gambling addictions, cog­nitive impairment, codependency, and many other serious issues.

Once a lawyer, law student, or judge is con­nected to TLAP, the resources that can be pro­vided directly to that person include—

1.direct peer support from TLAP staff attorneys;

2.self-help information;

3.connection to a trained peer support attorney who has overcome the partic­ular problem at hand and who has signed a confidentiality agreement;

4.information about attorney-only sup­port groups such as Lawyers Con­cerned for Lawyers (weekly meetings for alcohol, drug, depression, and other issues) and monthly wellness groups (professional speakers on vari­ous wellness topics in a lecture for­mat), which take place in major cities across the state;

5.referrals to lawyer-friendly and expe­rienced therapists, medical profession­als, and treatment centers; and

6.assistance with financial resources needed to get help, such as the Sheeran-Crowley Memorial Trust, which is available to help attorneys in financial need with the costs of men­tal-health or substance abuse care.

IV.  Professional Malpractice

§ 1.21Nature of Legal Malpractice Action

Legal malpractice is typically based on negli­gence because such claims arise from an attor­ney’s alleged failure to exercise ordinary care. See Cosgrove v. Grimes, 774 S.W.2d 662, 665 (Tex. 1989); see also Goffney v. Rabson, 56 S.W.3d 186, 190 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (regardless of labeling, claim based on attorney’s failure to exercise degree of care, skill, and diligence equal to that an attorney would commonly possess and exer­cise is legal malpractice claim based on negli­gence). The weight of authority in Texas holds that a legal malpractice action is a common-law tort arising from an attorney’s negligence that breaches a duty to represent a client competently and that proximately causes damages to the cli­ent. See Woodburn v. Turley, 625 F.2d 589 (5th Cir. 1980); Oldham v. Sparks, 28 Tex. 425 (1866); Gabel v. Sandoval, 648 S.W.2d 398 (Tex. App.—San Antonio 1983, writ dism’d).

There is some Texas authority for breach-of-contract malpractice actions based on an attor­ney’s breach of agreement to perform legal ser­vices. See Bolton v. Foreman, 263 S.W.2d 618 (Tex. App.—Galveston 1953, writ ref’d n.r.e.); Kruegel v. Porter, 136 S.W. 801 (Tex. App. 1911), aff’d, 155 S.W. 174 (Tex. 1913). With the advent of advertising and specialization by attorneys in Texas, the historical basis for the courts’ reluctance to hold attorneys liable on an implied or express warranty theory may slowly erode.

The issue of whether the claims are claims for legal malpractice or something else is a question of law for the court to determine. Murphy v. Gruber, 241 S.W.3d 689, 692 (Tex. App.—Dallas 2007, pet. denied). For a discussion of the differentiation between legal malpractice and breach of fiduciary duty, see Gallagher v. Wilson, No. 2-09-376-CV, 2010 WL 3377787 (Tex. App.—Fort Worth Aug. 26, 2010, no pet.).

§ 1.22Elements of Legal Malpractice

§ 1.22:1Attorney-Client Relationship and Duty

In order to recover for legal malpractice, a plain­tiff must prove four elements, which are—

1.the attorney owed a duty of care to the plaintiff (generally, this is shown by the presence of an attorney-client rela­tionship between the plaintiff and the attorney);

2.the attorney violated that duty;

3.the attorney’s negligence was the proximate cause of injury to the plain­tiff; and

4.damages.

See Cosgrove v. Grimes, 774 S.W.2d 662, 665 (Tex. 1989) (citing McKinley v. Stripling, 763 S.W.2d 407 (Tex. 1989)); see also Alexander v. Turtur & Associates, Inc., 146 S.W.3d 113 (Tex. 2004); Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 508 (Tex. App.—Houston [1st Dist.] 2003, no pet.).

Tex. Disciplinary Rules Prof’l Conduct R. 1.01 states that an attorney shall not accept or con­tinue employment in a legal matter that he knows or should know is beyond his compe­tence unless another attorney competent to han­dle the matter is associated (with the client’s prior informed consent) or the advice or assis­tance of the attorney is required in an emergency and the attorney limits the advice and assistance to that which is reasonably necessary under the circumstances. The rule further provides that an attorney shall not neglect a legal matter entrusted to him or “frequently” fail to carry out completely the obligations that the attorney owes his clients. “Neglect” is defined as inatten­tiveness involving conscious disregard for the responsibilities owed a client.

In Cook v. Irion, 409 S.W.2d 475, 477 (Tex. App.—San Antonio 1966, no writ), disapproved on other grounds by Cosgrove, 774 S.W.2d at 665, the court set out the general duties of an attorney in representing a client:

Ordinarily when an attorney engages in the practice of the law and con­tracts to prosecute an action in behalf of his client, he impliedly represents that (1) he possesses the requisite degree of learning, skill, and ability necessary to the practice of his pro­fession and which others similarly situated ordinarily possess; (2) he will exert his best judgment in the prosecution of the litigation entrusted to him; and (3) he will exercise rea­sonable and ordinary care and dili­gence in the use of his skill and in the application of his knowledge to his client’s cause.

§ 1.22:2Negligent Breach of Duty

Neglect Is Not Negligence:      Neglect of a legal matter involves indifference and consistent fail­ure to carry out the obligation that the attorney has assumed to the client or conscious disregard for responsibilities owed the client. Neglect is usually evidenced by more than a single act or omission. 61 A.B.A. J. 986 (1975) (A.B.A. Informal Op. 1273).

Good-Faith Errors in Judgment:      The “error-in-judgment” rule was substantially rewritten in Cosgrove v. Grimes, 774 S.W.2d 662 (Tex. 1989). Cosgrove initially retained an attorney (Bass) to sue for a personal injury claim arising from an automobile accident. Bass left town and, according to Cosgrove, told Cosgrove he had turned the case over to attorney Grimes. However, Grimes testified that he first heard of the case when Cosgrove came to his office a mere five days before the statute of limitations was to have run. Cosgrove gave Grimes the information about the accident, including its location and the person to sue (one Timothy Pur-nell). Grimes testified that he found Cos­grove to be an intelligent man on whom he could rely for the basic facts. Suit was filed on the basis of the information. It later was discov­ered that Purnell was the passenger, not the driver, and that the petition stated the wrong location of the accident. Both the decision of the court of appeals (Cosgrove v. Grimes, 757 S.W.2d 508 (Tex. App.—Houston [1st Dist.] 1988)) and that of the supreme court detail the application of the error-in-judgment rule.

The rule, commonly known as the good-faith defense, has historically excused an attorney for any error in judgment if he acted in good faith and in an honest belief that the act or advice was well founded and in the best interests of the cli­ent. See Cook v. Irion, 409 S.W.2d 475 (Tex. App.—San Antonio 1966, no writ), disapproved by Cosgrove, 774 S.W.2d at 665, in which the plaintiffs’ attorneys in a personal injury action sued only one of three potential defendants. An instructed verdict was granted against the plain­tiffs after the two-year statute of limitations expired. In an appeal from the legal malpractice action, the court concluded that the good-faith defense applied and that the appellants had failed to establish the attorneys’ negligence.

The good-faith exception has been applied to an attorney’s failure to dispose of a client’s non­vested military retirement benefits in a divorce action and to warn him of a possible later parti­tion action based on the unclear law at the time. Medrano v. Miller, 608 S.W.2d 781 (Tex. App.—San Antonio 1980, writ ref’d n.r.e.), dis­approved by Cosgrove, 774 S.W.2d at 665. It has been held inapplicable in the following disci­plinary proceedings: violating a disciplinary rule prohibiting receiving compensation from any­one other than one’s client (State v. Baker, 539 S.W.2d 367 (Tex. App.—Austin 1976, writ ref’d n.r.e.), disapproved by Cosgrove, 774 S.W.2d at 665); violating disciplinary rules against commingling (Archer v. State, 548 S.W.2d 71 (Tex. App.—El Paso 1977, writ ref’d n.r.e.)); and making false statements that suit had been filed and failing to file suit before the running of the statute of limitations (Hicks v. State, 422 S.W.2d 539 (Tex. App.—Houston [14th Dist.] 1967, writ ref’d n.r.e.), disapproved by Cosgrove, 774 S.W.2d at 665).

A review of the early cases involving the rule indicates quite clearly that it has been held to be a subjective test. However, Cosgrove mandates that the proper standard is the objective exercise of professional judgment:

There is no subjective good faith excuse for attorney negligence. A lawyer in Texas is held to the stan­dard of care which would be exer­cised by a reasonably prudent attorney. The jury must evaluate his conduct based on the information the attorney has at the time of the alleged act of negligence. In some instances an attorney is required to make tacti­cal or strategic decisions. Ostensibly, the good faith exception was created to protect this unique attorney work product. However, allowing the attor­ney to assert his subjective good faith, when the acts he pursues are unreasonable as measured by the rea­sonably competent practitioner stan­dard, creates too great a burden for wronged clients to overcome. The instruction to the jury should clearly set out the standard for negligence in terms which encompass the attor­ney’s reasonableness in choosing one course of action over another.

If an attorney makes a decision which a reasonably prudent attorney could make in the same or similar circum­stance, it is not an act of negligence even if the result is undesirable. Attorneys cannot be held strictly lia­ble for all of their clients’ unfulfilled expectations. An attorney who makes a reasonable decision in the handling of a case may not be held liable if the decision later proves to be imperfect. The standard is an objective exercise of professional judgment, not the subjective belief that his acts are in good faith.

Cosgrove, 774 S.W.2d at 664–65. The court then specifically disapproved all cases to the con­trary, including Cook, 409 S.W.2d 475; Medrano, 608 S.W.2d 781; Baker, 539 S.W.2d 367; and Hicks, 422 S.W.2d 539. Cosgrove, 774 S.W.2d at 665.

No Ensuring Desired Result:      The duty to use reasonable care, diligence, and skill does not include ensuring or guaranteeing the desired result. Cosgrove, 774 S.W.2d at 665; Great American Indemnity Co. v. Dabney, 128 S.W.2d 496, 501 (Tex. App.—Amarillo 1939, writ dism’d judgm’t cor.).

§ 1.22:3Proximate Cause

To constitute malpractice, the attorney’s negli­gent breach of duty must proximately cause the client’s damages. See Patterson & Wallace v. Frazer, 79 S.W. 1077 (El Paso 1904, no writ). The two components of proximate cause are cause-in-fact and foreseeability. Berly v. D&L Security Services & Investigations, Inc., 876 S.W.2d 179, 182 (Tex. App.—Dallas 1994, writ denied). Cause-in-fact means that the attor­ney’s acts or omissions were a substantial factor in bringing about the injury that would not oth­erwise have occurred. See Two Thirty Nine Joint Venture v. Joe, 60 S.W.3d 896, 909 (Tex. App.—Dallas 2001), rev’d on other grounds, 145 S.W.3d 150 (Tex. 2004). Foreseeability of harm means that the attorney could anticipate that his actions could injure another. Two Thirty Nine Joint Venture, 60 S.W.3d at 909. Foresee­ability does not require that the attorney antici­pate the particular injury that eventually occurs. Brown v. Edwards Transfer Co., 764 S.W.2d 220, 223 (Tex. 1988).  

When the client claims that some failure by the attorney caused an adverse result in prior litiga­tion, the client must produce evidence from which a jury may reasonably infer that the attor­ney’s conduct caused the damages alleged. Haynes & Boone v. Bowser Bouldin, Ltd., 896 S.W.2d 179, 181 (Tex. 1995), abrogated by Ford Motor Co. v. Ledesma, 242 S.W.3d 32 (Tex. 2007). Thus, the client must prove that the initial suit would have been successful but for the attorney’s negligence and must show the amount that could have been collected on a suc­cessful judgment. Jackson v. Urban, Coolidge, Pennington & Scott, 516 S.W.2d 948, 949 (Tex. App.—Houston [1st Dist.] 1974, writ ref’d n.r.e.). Mere conjecture, guess, or speculation is not sufficient to establish that the attorney’s actions proximately caused the client’s injury. For example, in the 2007 decision of Baker Botts v. Cailloux, 224 S.W.3d 723 (Tex. App.—San Antonio 2007, pet. denied), the appellate court reversed a trial court judgment in favor of the client-plaintiff, finding that causation was not proven at trial.

In Baker Botts, the client was incapacitated and her attorney-in-fact sued the law firm and others claiming that, but for its actions, the client would not have signed a disclaimer. None of the trial witnesses had any knowledge of the client’s “true wishes or intentions.” See Baker Botts, 224 S.W.3d at 734. The court held that, at best, any assumption of what the client would have done is based on nothing more than conjecture. See Baker Botts, 224 S.W.3d at 734. Likewise, in Longaker v. Evans, 32 S.W.3d 725 (Tex. App.—San Antonio 2000, pet. withdrawn by agr.), the appellate court rejected as mere speculation any assumption as to the deceased client’s motives or intent when she terminated a trust whose pro­ceeds would have benefited her son but instead went to the brother “advising” her to terminate the trust. In Longaker, the court noted that “while there is much speculation that the trust termination was not the result of [the dece­dent’s] free act, there is no competent evidence that [the beneficiary] wrongfully influenced or otherwise induced [the decedent] to do anything she did not otherwise intend to do.” Longaker, 32 S.W.3d at 734. Instead, “all indications are it was what [the decedent] wanted and there is no evidence of a contrary intent.” Longaker, 32 S.W.3d at 735. In the absence of competent evi­dence demonstrating the deceased client never intended to divest her son of the trust assets, the court determined that it was improper to make that assumption. Longaker, 32 S.W.3d at 734–35. The court therefore held there was no evi­dence of causation or damages. Longaker, 32 S.W.3d at 734–35.

Some courts have held that as a general rule, expert testimony is needed to prove causation in a legal malpractice case. See Turtur & Associ­ates, Inc. v. Alexander, 86 S.W.3d 646, 652 (Tex. App.—Houston [1st Dist.] 2001), rev’d on other grounds, 146 S.W.3d 113 (Tex. 2004); Onwuteaka v. Gill, 908 S.W.2d 276, 281 (Tex. App.—Houston [1st Dist.] 1995, no writ). When a layperson would ordinarily be competent to make a determination on causation, however, expert testimony is not required. See Turtur, 86 S.W.3d at 652 (expert testimony not required if causal connection is obvious); Arce v. Burrow, 958 S.W.2d 239, 252 (Tex. App.—Houston [14th Dist.] 1997), rev’d on other grounds, 997 S.W.2d 229 (Tex. 1999) (citing Delp v. Douglas, 948 S.W.2d 483, 495 (Tex. App.—Fort Worth 1997), rev’d on other grounds, 987 S.W.2d 879 (Tex. 1999)) (adopting rule previously applied in medical malpractice cases that expert testi­mony not required in cases where layperson competent to determine causation).

Note, however, that the determination of proxi­mate cause differs in cases of malpractice involving the negligent handling of an appeal. Although the issue of proximate cause is usually a question of fact, the supreme court has deter­mined that in a case of appellate legal malprac­tice it is a question of law. Millhouse v. Wiesenthal, 775 S.W.2d 626, 628 (Tex. 1989).

§ 1.22:4Client Must Be Damaged

Amount of Damages:      Another essential ele­ment of a malpractice action is that the client must sustain damage as a result of the attorney’s negligence. Fireman’s Fund American Insur­ance Co. v. Patterson & Lamberty, Inc., 528 S.W.2d 67, 69–70 (Tex. App.—Tyler 1975, writ ref’d n.r.e.).

On proof that the attorney’s negligence proxi­mately caused the client’s damage, proper recovery is the amount the client would have recovered from the original defendant. See Schlosser v. Tropoli, 609 S.W.2d 255 (Tex. App.—Houston [14th Dist.] 1980, writ ref’d n.r.e.) (upholding $100,000 judgment against attorney who allowed case to be dismissed for want of prosecution). The plaintiff in a legal malpractice case must also demonstrate that the alleged damages, including attorney’s fees, were proximately caused by the breach of a duty by the defendant. See Judwin Properties, Inc. v. Griggs & Harrison, 911 S.W.2d 498, 507 (Tex. App.—Houston [1st Dist.] 1995, writ denied).

In a malpractice action by a husband for the attorney’s failure to raise the issue of retirement benefits and secure the benefits for the husband at the time of the divorce, the court found that the plaintiff had suffered no damage. The hus­band was in no worse position because of the subsequent partition of the benefits than he would have been if the benefits had been prop­erly divided in the divorce suit eight years before. Medrano v. Miller, 608 S.W.2d 781, 784 (Tex. App.—San Antonio 1980, writ ref’d n.r.e.), disapproved on other grounds by Cos­grove v. Grimes, 774 S.W.2d 662, 665 (Tex. 1989).

If the attorney is found liable, any payment col­lected from the original defendant is credited against damages assessed against the attorney. See Fireman’s Fund, 528 S.W.2d at 70.

If a judgment is entered against a client because of the attorney’s negligence, the client may recover the amount of the judgment from the attorney even if the client has not yet paid the judgment. Montfort v. Jeter, 567 S.W.2d 498, 499–500 (Tex. 1978).

Recovery in a malpractice action is not limited to actual damages but may also include damages for mental anguish and exemplary damages. See Montfort, 567 S.W.2d at 499–500.

Requirement of Actual Damages:      The client must suffer actual damage in order to recover from a negligent attorney. In Philips v. Giles, 620 S.W.2d 750 (Tex. App.—Dallas 1981, no writ), the court upheld an attorney’s plea in abatement in a malpractice suit on the grounds that the client-plaintiff’s suit was premature. In the client’s divorce, the attorney had negotiated a settlement in which the husband agreed to pay the wife $500,000 in monthly installments over five years, and the attorney allegedly told the wife she would owe no taxes on the settlement. After the wife’s accountant told her that the monthly payments were taxable, she began pay­ing taxes and sought reimbursement from the attorney. The appellate court held the malprac­tice action premature since no actual tax liability had been established. See also Cosgrove, 774 S.W.2d at 665–66 (damages based on amount of damages that could have been recovered from defendant in underlying suit but for attorney’s inadequate representation); Ballesteros v. Jones, 985 S.W.2d 485 (Tex. App.—San Antonio 1998, pet. denied) (damages based on difference between settlement received and best settlement possible, but for attorney’s inadequate represen­tation).  

Deciding when an action is premature, however, is not always straightforward. In Bailey v. Tra­vis, 622 S.W.2d 143 (Tex. App.—Eastland 1981, writ ref’d n.r.e.), the court upheld a sum­mary judgment for the attorney in a malpractice action. Travis had represented Bailey in a case, but Bailey hired a different attorney to appeal that case. While appeal was pending, Travis suc­cessfully sued Bailey for attorney’s fees from the first case. Bailey later sued Travis for mal­practice in the first trial, but Travis successfully moved for summary judgment on the basis that, under Tex. R. Civ. P. 97, the malpractice action should have been filed as a compulsory counter­claim when Travis sued Bailey for attorney’s fees. In upholding the summary judgment, the appeals court held that Bailey had been dam­aged as a result of the alleged malpractice at the time he filed his answer in Travis’s suit for fees. Accordingly, said the court, “Bailey’s claim . . . had ripened into an enforceable cause of action, even though the full extent of his damages might not have been known.” Bailey, 622 S.W.2d at 144. See section 1.24:1 below for a discussion of when a cause of action accrues.

§ 1.22:5Additional Meritorious Action

In addition to establishing the defendant-attorney’s primary negligence, the plaintiff-client must often prove an additional meritori­ous lawsuit in a legal malpractice action to establish that he would have prevailed in the suit that is the subject of the malpractice action. The plaintiff-client must establish that the underlying cause of action was meritorious, that it would have resulted in a favorable judgment but for the attorney’s negligence, and that the judgment could have been collected. See Lynch v. Munson, 61 S.W. 140 (Galveston 1901, no writ).

§ 1.22:6Breach-of-Contract Action

Most Texas courts have not allowed the plaintiff to divide or fracture claims arising out of an attorney’s alleged bad legal advice or improper representation into separate claims for negli­gence, breach of contract, or fraud. See Murphy v. Gruber, 241 S.W.3d 689, 692–97 (Tex. App.—Dallas 2007, pet. denied) (discussion of Texas law precluding fracturing legal malprac­tice claims into multiple causes of action); Aiken v. Hancock, 115 S.W.3d 26, 28–29 (Tex. App.—San Antonio 2006, pet. denied) (affirming sum­mary judgment on plaintiff’s claims of DTPA violations and breach of fiduciary duty and con­cluding that claims should not have been divided and were “thinly veiled” claims of legal malpractice); Goffney v. Rabson, 56 S.W.3d 186, 190–94 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (discussion and application of Texas law precluding “dividing legal malprac­tice claims” into claims of breach of contract, DTPA violations, and breach of fiduciary duty).

Rather, the courts have held that the “real issue remains one of whether the professional exer­cised that degree of care, skill, and diligence that professionals of ordinary skill and knowledge commonly possess and exercise.” Averitt  v. PriceWaterhouseCoopers L.L.P., 89 S.W.3d 330, 333 (Tex. App.—Fort Worth 2002, no pet.); see also Kimleco Petroleum, Inc. v. Morri­son & Shelton, 91 S.W.3d 921, 924 (Tex. App.—Fort Worth 2002, pet. denied) (“Gener­ally, courts do not allow a case arising out of an attorney’s alleged bad legal advice or improper representation to be split out into separate claims for negligence, breach of contract, or fraud, because the real issue remains one of whether the professional exercised that degree of care, skill, and diligence that professionals of ordinary skill and knowledge commonly possess and exercise. . . . Regardless of the theory a plaintiff pleads, as long as the crux of the com­plaint is that the plaintiff’s attorney did not pro­vide adequate legal representation, the claim is one for legal malpractice”) (internal citation omitted); Ersek v. Davis & Davis, P.C., 69 S.W.3d 268, 274–75 (Tex. App.—Austin 2002, pet. denied) (policy reasons behind rule preclud­ing the fracturing of legal malpractice claims); Goffney, 56 S.W.3d at 190–94; Sledge v. Alsup, 759 S.W.2d 1, 2 (Tex. App.—El Paso 1988, no writ).

Therefore, when the complaint is essentially that the attorney did not provide adequate legal rep­resentation, the claim is one for legal malprac­tice. See Greathouse v. McConnell, 982 S.W.2d 165, 172 (Tex. App.—Houston [1st Dist.] 1998, pet. denied); see also Averitt, 89 S.W.3d at 334 (cause of action based on attorney’s alleged fail­ure to perform professional service is tort rather than breach of contract, regardless of whether written contract providing for professional ser­vices existed between attorney and client).  

§ 1.23Who Can Sue for Legal Malpractice

§ 1.23:1No Private Actions under Texas Disciplinary Rules of Professional Conduct

The Texas Disciplinary Rules of Professional Conduct exist solely as professional sanctions and do not create a private cause of action for malpractice. Comment 15 in the preamble states:

These rules do not undertake to define standards of civil liability of lawyers for professional conduct. Violation of a rule does not give rise to a private cause of action nor does it create any presumption that a legal duty to a client has been breached.

In Martin v. Trevino, 578 S.W.2d 763 (Tex. App.—Corpus Christi–Edinburg 1978, writ ref’d n.r.e.), the physician in a medical malprac­tice action filed a counterclaim against the attor­ney representing the plaintiff and alleged that the attorney knew the plaintiff’s claim was friv­olous, in violation of former DR 7-102(A). The court dismissed the counterclaim for failure to state a cause of action, for the remedy provided in the Texas Code of Professional Responsibil­ity is a public, not a private, one; it entitles the physician to file a grievance complaint but not a malpractice action. But see Quintero v. Jim Wal­ter Homes, Inc., 709 S.W.2d 225, 233 (Tex. App.—Corpus Christi–Edinburg 1985, writ ref’d n.r.e.) (appellant should seek recovery in private cause of action against appellee’s attor­ney whose violation of Texas Code of Profes­sional Responsibility rendered postjudgment settlement agreement unenforceable). (Effec­tive January 1, 1990, the Texas Code of Profes­sional Responsibility was repealed and replaced with the Texas Disciplinary Rules of Profes­sional Conduct.)

§ 1.23:2Privity Generally Required

Texas law does not extend an attorney’s liability for negligence beyond the client to third per­sons. Bryan & Amidei v. Law, 435 S.W.2d 587, 593 (Tex. App.—Fort Worth 1968, no writ).   In the United States, the requirement of privity in the legal malpractice context originated in National Savings Bank v. Ward, 100 U.S. 195 (1879), decided by the U.S. Supreme Court in 1879. In Ward, the defendant-attorney issued a certificate to his client stating that the client had good title to a tract of real property. The client was able to obtain a loan from the plaintiff, Sav­ings Bank, based on the erroneous certificate. The client, however, “was insolvent and had no title whatever to the premises.” Ward, 100 U.S. at 196. When the client defaulted on the loan, Savings Bank sued the attorney for malpractice. The trial court held that privity of contract, “arising from an actual employment of the defendant by the plaintiffs, is necessary to enable the latter to maintain the action.” Ward, 100 U.S. at 196.  

In Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780 (Tex. 2006), the Texas Supreme Court held a personal representative of a deceased client has the requisite privity to maintain an estate-planning malpractice claim against a decedent’s estate-planning attorney for negligence relating to the estate plan. In decid­ing whether the malpractice claim survives the client’s death, the Texas Supreme Court rea­soned that an estate planner’s negligence results in the improper depletion of a client’s estate. Therefore, this type of claim involves injury to the decedent’s property. See Tex. Est. Code § 22.028 (defining the “personal property” of an estate to include interests in goods, money, and choses in action); see also Cleveland v. United States, No. 00-C-424, 2000 WL 1889640, at *3 (N.D. Ill. Dec. 28, 2000) (tort claim for financial loss resulting from estate-planning malpractice deemed action for damage to personal property); Williams v. Adams, 193 S.W. 404, 405 (Tex. App.—Texarkana 1917, writ ref’d) (tort claim alleging fraud, which resulted in financial loss to plaintiff, survived death of defendant because it involved wrongful acquisition of property). When an attorney’s malpractice results in finan­cial loss, the aggrieved client is fully compen­sated by recovery of that loss and the client may not recover damages for mental anguish or other personal injuries. See Douglas v. Delp, 987 S.W.2d 879, 885 (Tex. 1999). Thus, estate-planning malpractice claims seeking recovery for pure economic loss are limited to recovery for property damage. See also O’Donnell v. Smith, 197 S.W.3d 394 (Tex. 2006).   

But in Chapman Children’s Trust v. Porter & Hedges, L.L.P., 32 S.W.3d 429, 441–42 (Tex. App.—Houston [14th Dist.] 2000, pet. denied), an appellate court held that neither a trust nor an estate is a legal entity and, therefore, neither should be considered the client (because trusts were not clients, trusts have “no right of recov­ery, under any cause of action,” as a matter of law, for conduct in connection with its represen­tation of trustee).  

In McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787 (Tex. 1999), the court held that, although persons not in priv­ity with an attorney cannot sue the attorney for legal malpractice, a nonclient may sue an attor­ney for negligent misrepresentation without regard to the nonclient’s lack of privity with the attorney.

§ 1.24Defenses to Legal Malpractice

§ 1.24:1Statute of Limitations

In Texas, malpractice claims are tort actions governed by the two-year statute of limitations, Tex. Civ. Prac. & Rem. Code § 16.003. If the suit is brought on a legitimate breach-of-contract theory based on a contractual relation­ship, it is governed by the four-year statute of limitations, Tex. Civ. Prac. & Rem. Code § 16.051. However, malpractice actions have been barred by the two-year statute even though the pleadings were couched in breach-of-contract language and filed within four years of the alleged malpractice. See Woodburn v. Tur­ley, 625 F.2d 589 (5th Cir. 1980); Gabel v. San­doval, 648 S.W.2d 398 (Tex. App.—San Antonio 1983, writ dism’d); Citizens State Bank v. Shapiro, 575 S.W.2d 375 (Tex. App.—Tyler 1978, writ ref’d n.r.e.).

Beginning of Period:      As a general rule, the statute of limitations begins to run in legal mal­practice actions when the tort occurs. This rule has been interpreted variously as the time the negligence occurs, Crawford v. Davis, 148 S.W.2d 905 (Tex. App.—Eastland 1941, no writ), and as the time the plaintiff’s damages are sustained as a result of the negligence, Atkins v. Crosland, 417 S.W.2d 150 (Tex. 1967). The cur­rent rule is the one stated in Atkins, that the period begins when “the force wrongfully put in motion produces the injury, the invasion of per­sonal or property rights accruing at that time.” Atkins, 417 S.W.2d at 153.

In a malpractice action for failing to secure an express lien in a deed and thus subordinating the client’s lien, the court determined that the lim­itations period began when the faulty deed was filed, not when the plaintiff later suffered dam­age as a result of the negligence. Cox v. Rosser, 579 S.W.2d 73 (Tex. App.—Eastland 1979, writ ref’d n.r.e.).

When an attorney negligently advised a client to execute a release that inadvertently surrendered the client’s entire cause of action, the limitations period began when the client detrimentally relied on the attorney’s advice and signed the release. The times when the advice was given and when the damage occurred were not con­trolling. Pack v. Taylor, 584 S.W.2d 484 (Tex. App.—Fort Worth 1979, writ ref’d n.r.e.); see also Zidell v. Bird, 692 S.W.2d 550 (Tex. App.—Austin 1985, no writ) (discussing rule for determining when negligence cause of action accrues).

“Discovery Rule”:      Before 1988, courts had declined to extend the “discovery rule” to legal malpractice actions. In 1988, the supreme court imposed the discovery rule in legal malpractice actions. See Willis v. Maverick, 760 S.W.2d 642 (Tex. 1988). Used most frequently in medical malpractice actions, the rule begins the limita­tions period when the plaintiff discovers an injury if the plaintiff could not know of the injury at the time it occurred.

Statute Tolled While Underlying Lawsuit Appealed:      When an attorney allegedly com­mits malpractice while providing legal services in the prosecution or defense of a claim that results in litigation, the statute of limitations on the malpractice claim against the attorney is tolled until all appeals on the underlying claim are exhausted or the litigation is otherwise finally concluded. Apex Towing Co. v. Tolin, 41 S.W.3d 118, 119 (Tex. 2001). Limitations are tolled for the second cause of action because the viability of the second cause of action depends on the outcome of the first. Hughes v. Mahaney & Higgins, 821 S.W.2d 154 (Tex. 1991).

Fraudulent Concealment:      In Anderson v. Sneed, 615 S.W.2d 898 (Tex. App.—El Paso 1981, no writ), the court considered the effect of fraudulent concealment by the attorney on the running of the period of limitations. In a per­sonal injury case, the client’s cause of action against the attorney arose two years after the date of the client’s accident, for on that date the client’s personal injury suit was barred by lim­itations. The client did not file the legal malprac­tice action within two years from the time his cause of action actually accrued against the attorney, but the appeals court remanded the case to the trial court to determine whether the attorney had fraudulently concealed his negli­gence from the plaintiff. The running of the stat­ute is tolled when the attorney fraudulently conceals the negligence from the client. McClung v. Johnson, 620 S.W.2d 644 (Tex. App.—Dallas 1981, writ ref’d n.r.e.); see also Crean v. Chozick, 714 S.W.2d 61 (Tex. App.—San Antonio 1986, writ ref’d n.r.e.) (client’s allegations that attorney failed to disclose legal effect of signed requests for admissions raised material fact issue on concealment, thus tolling statute of limitations).

§ 1.24:2Good-Faith Defense

The good-faith defense is the equivalent of the error-in-judgment rule. See section 1.22:2 above.

§ 1.25Potential Areas for Legal Malpractice

§ 1.25:1Attorney’s Fees

“[A]t least 20 percent and perhaps in excess of 30 percent of all malpractice claims and coun­terclaims arise directly or indirectly from dis­putes over fees.” Jeffrey M. Smith, The Pitfalls of Suing Clients for Fees, 69 A.B.A. J. 776, 778 (1983). “Our experience indicates that from ten to fifteen percent of all legal malpractice claims are direct or indirect results of fee disputes. Many times the attorney who sues for fees spends more nonbillable hours in defense of a negligence counterclaim than the original suit for fees was worth.” Texas Lawyer’s Insurance Exchange advertisement, 46 Tex. B.J. 215 (1983).

§ 1.25:2Failure to Convey Settlement Offer to Client

Under Tex. Disciplinary Rules Prof’l Conduct R. 1.02(a), an attorney must inform clients of offers of settlement made by the opposing party. See also Tex. Disciplinary Rules Prof’l Conduct R. 1.02 cmts. 2, 3.

In Smiley v. Manchester Insurance & Indemnity Co., 375 N.E.2d 118, 122–23 (Ill. 1978), an attorney’s failure to convey a settlement agree­ment to his client was found to be negligence as a matter of law.

§ 1.25:3Failure to Timely Pursue Client’s Claim

An attorney who negligently lets the statute of limitations run on a client’s cause of action becomes liable for any amount the client could have collected from the original defendant. Pat­terson & Wallace v. Frazer, 79 S.W. 1077 (Tex. App. 1904, no writ); Fox v. Jones, 14 S.W. 1007 (Tex. Ct. App. 1889).

§ 1.26Procedures to Help Avoid Malpractice Actions

The procedures described below can help to reduce the chances of facing a malpractice claim.

§ 1.26:1Calendaring System

To avoid missing important deadlines, every firm should have an effective calendaring sys­tem that includes all cases the firm handles, not just those in the litigation section. Deadlines are crucial to all types of law practice. For example, one attorney postponed drafting a will for so long that the testator died, and the expected ben­eficiary sued for malpractice. See Estate of Arlitt v. Paterson, 995 S.W.2d 713 (Tex. App.—San Antonio 1999, pet. denied). When a tickler sys­tem is set up so that every file comes up for reg­ular review, problems like this can be avoided. Files coming up for review may need no action other than being “re-tickled,” but the review provides the attorney a good occasion to write the client that things are proceeding as expected or to explain why no immediate action is neces­sary. The system also provides incentive to make progress on files that are not urgent and that would otherwise remain idle for too long.

§ 1.26:2Engagement and Nonengagement Letters

As with any representation, a well drafted engagement letter and fee agreement can both provide protection to the attorney and be benefi­cial to the client. The agreement should set out the scope of the engagement as well as the method of calculating and collecting fees. If entering into a joint representation of, for exam­ple, co-applicants for guardianship, the agree­ment should also discuss potential conflicts of interest and the expected course of action in the event of an actual future conflict. The agreement may also contain dispute resolution provisions. A sample engagement letter and fee agreement is attached as form 1-1.

Attorneys should always write nonengagement letters when they decline or withdraw from employment and should keep a permanent file of these letters. This practice can eliminate many potential malpractice actions based on claims that an attorney failed to pursue a claim for a client.

§ 1.26:3File Retention

As a conservative estimate, files should be kept intact for four years after a matter is completed, because most malpractice claims are filed within two to four years of that time. Some files should be kept for even longer, however, such as those involving a minor and those in which the client was particularly troublesome. Also, files con­cerning clients who refused legal advice should be retained and should contain a copy of the let­ter to the client detailing the advice given, rea­sons for the advice, and confirmation that the client declined to accept the advice. Records of clients’ trust accounts must be maintained for at least five years after final disposition of the underlying matter. Tex. Rules Disciplinary P. R. 15.10; see also Tex. Disciplinary Rules Prof’l Conduct R. 1.14(a).

§ 1.26:4Supervision of Support Staff and New Associates

Attorneys need to supervise their support staff and new associates closely; if, for example, a law clerk arrives at the wrong answer to an important question, the attorney is the one who will take the wrong action and then face a possi­ble malpractice suit. Clerks should be told to document their research so that its accuracy can be verified, and new secretaries should be responsible for filing petitions only if the attor­ney is certain that they know where and by when to file them. In short, all personnel must know both substantively and procedurally what their jobs require. Careful screening and interviewing of applicants can help, of course, as can hiring only professional secretaries and paralegals.

§ 1.26:5Avoiding Overload

Many malpractice suits result from mistakes made during periods of personal stress, and some attorneys let themselves become overex­tended or burdened with too many cases and other responsibilities so that they lose both per­spective and effectiveness. For their clients’ sake as well as their own, many attorneys would be wise to slow down the pace and offer each other support when signs of stress, such as abuse of alcohol or other drugs, become evident. The Texas Lawyers’ Assistance Program, which may be contacted at 1-800-343-8527, is an excellent resource for obtaining immediate peer support for attorneys whose lives or practices are suffering because of physical or mental ill­ness, including substance abuse or emotional distress.

§ 1.27Standard of Care for Specialists

All Texas attorneys, whether specialized or not, appear now to be under the same standard of care. However, attorneys who have been board certified as specialists in Texas and who hold themselves out to the public as specialists may eventually be held to a higher standard, perhaps the same standard of care as that applied to simi­lar specialists.

Texas courts have held in medical malpractice cases that specialists must exercise the same degree of skill as similar specialists, rather than the skill of a general practitioner. King v. Flamm, 442 S.W.2d 679 (Tex. 1969).

At least one other jurisdiction has held legal spe­cialists to a higher standard of care than the ordi­nary practitioner. In Wright v. Williams, 47 Cal. App. 3d 802, 810, 121 Cal. Rptr. 194, 199 (1975), the California court of appeals held:

One who holds himself out as a legal specialist performs in similar circum­stances to other specialists but not to general practitioners of the law. We thus conclude that a lawyer holding himself out to the public and the pro­fession as specializing in an area of the law must exercise a skill, pru­dence, and diligence exercised by other specialists of ordinary skill and capacity specializing in the same field.

The case involved a maritime law specialist.

§ 1.28Standard of Care for Guardian Ad Litem

The court of appeals held in Byrd v. Woodruff, 891 S.W.2d 689 (Tex. App.—Dallas 1994, writ dism’d by agr.), that a guardian ad litem appointed under Tex. R. Civ. P. 173 (amended in 2005) has, in some cases, fiduciary duties to the minor and can be held liable for a breach of those duties. Although recognizing that the rela­tionship of the guardian ad litem to the contro­versy is only that of an appointee of the court and not that of a participant, the Dallas court held that a person acting as guardian ad litem may be held liable for negligence in performing his duty. The court noted that a guardian is charged with the duty to properly and prudently manage and control the ward and the ward’s estate, citing former section 110(g) of the Texas Probate Code, and that a personal representative has a fiduciary duty to maintain and preserve the estate’s assets. Further, the guardian ad litem has a duty to evaluate the damages suffered by the minor, the adequacy of the settlement, the pro­posed apportionment of settlement proceeds among the interested parties, the proposed man­ner of disbursement of the settlement proceeds, and the amounts of attorney’s fees charged by the minor’s attorney. Byrd, 891 S.W.2d at 707.

The Byrd court rejected the theory that the guardian ad litem is an officer of the court and therefore under the protection of judicial immu­nity from civil liability. Rather, the guardian ad litem is the personal representative of the minor’s interests whose actions and decisions are not under the direction of the court. The court reasons that if the guardian ad litem were granted complete judicial immunity, the minor would be denied any protection against acts of incompetence or bad faith committed by his guardian ad litem.

As a result, a guardian ad litem who has replaced a minor’s next friend can be liable in a civil action for damages resulting from a breach of his duties as a personal representative of the minor. Byrd, 891 S.W.2d at 710.

Note that since the facts under Byrd arose, Tex. Prob. Code § 681 (now Tex. Est. Code §§ 1104.351–.358) was enacted and section 110 was repealed. In addition to Tex. R. Civ. P. 173.1–.7, Texas Estates Code chapter 1054, sub­chapter B, now authorizes the appointment of guardians ad litem. This section specifically states that a guardian ad litem is an officer of the court. Tex. Est. Code § 1054.054(a). See section 1.31 below for a discussion of the claim against the attorney for the next friend in the same case.

Further, the court in Delcourt v. Silverman, 919 S.W.2d 777 (Tex. App.—Houston [14th Dist.] 1996, writ denied), held that a guardian ad litem appointed under Family Code section 11.10 (now section 107.002) is absolutely immune from liability for actions taken pursuant to and within the scope of employment, provided that the appointment contemplates the ad litem’s act­ing as an extension of the court. However, under Family Code section 107.009, a guardian ad litem may be liable for civil damages arising from an action taken, a recommendation made, or an opinion given with conscious indifference, with reckless disregard to the safety of another, in bad faith, or with malice or that is grossly negligent or willfully wrongful. Tex. Fam. Code § 107.009.

The Texas legislature has enacted protection for guardians ad litem serving under Estates Code section 1054.051, 1102.001, or 1202.054. The statute provides that a guardian ad litem who is appointed to represent the interests of an inca­pacitated person in a guardianship proceeding involving the creation, modification, or termina­tion of a guardianship is not liable for civil dam­ages arising from a recommendation made or an opinion given in the capacity of guardian ad litem unless such recommendation or opinion is willfully wrongful, given with conscience indif­ference or reckless disregard to the safety of another, given in bad faith or with malice, or grossly negligent. Tex. Est. Code § 1054.056.

§ 1.29Standard of Care for Attorney Ad Litem

The Texas Disciplinary Rules of Professional Conduct address the dilemma an attorney faces if a client is suffering from a mental disability. If an attorney believes his client lacks legal com­petence and action is required to protect the cli­ent, the attorney is mandated to take reasonable action to secure the appointment of a guardian or seek other protective orders. Tex. Disci­plinary Rules Prof’l Conduct R. 1.02(g). An attorney is permitted to reveal confidential information in order to comply with a court order, a disciplinary rule, or other law. Tex. Dis­ciplinary Rules Prof’l Conduct R. 1.05(c)(4). The attorney may reveal unprivileged client information if it is necessary to represent the cli­ent effectively. Tex. Disciplinary Rules Prof’l Conduct R. 1.05(d)(2)(i). These rules do not, however, prohibit an attorney ad litem from defending the client in a guardianship proceed­ing, since the disability already has been brought to the court’s attention.

Furthermore, to the extent that a guardian or other becomes aware of any specific acts of abuse, neglect, or exploitation, he is required to report it to the Texas Health and Human Ser­vices Commission and Department of Family and Protective Services. See Tex. Hum. Res. Code § 48.051. Section 48.051(c) provides that the duty imposed to report the abuse, neglect, or exploitation includes a person “whose knowl­edge concerning possible abuse, neglect, or exploitation is obtained during the scope of the person’s employment or whose professional communications are generally confidential, including an attorney, clergy member, medical practitioner, social worker, employee or member of a board that licenses or certifies a profes­sional, and mental health professional.” See Tex. Hum. Res. Code § 48.051. Therefore, not only is a guardian required to report such abuse, neglect, or exploitation, but an attorney ad litem, guardian ad litem, and employee of the ward’s trust are as well. The required report may be made orally or in writing but must include the following—

1.the name, age, and address of the elderly or disabled person;

2.the name and address of any person responsible for the elderly or disabled person’s care;

3.the nature and extent of the elderly or disabled person’s condition;

4.the basis of the reporter’s knowledge; and

5.any other relevant information.

See Tex. Hum. Res. Code § 48.051(d).

A guardian or other person is subject to criminal charges if he fails to report the abuse, neglect, or exploitation as required by Human Resources Code section 48.051. See Tex. Hum. Res. Code § 48.052(a). If discovered, he may be charged with a class A misdemeanor or, in some instances, a state jail felony. See Tex. Hum. Res. Code § 48.052(a).

If the victim was a resident of a nursing home, the guardian or other person should also contact the Texas Department of Health and Human Services at 1-800-458-9858.

Although Tex. Est. Code § 1001.001 recognizes that a guardianship should be designed to encourage the development or maintenance of maximum self-reliance and independence in the incapacitated person, an attorney ad litem repre­senting a disabled client in a guardianship must still counsel the client to the extent possible, advise him of his legal rights, and determine if a preference exists as to the selection of a guard­ian. In general, the attorney ad litem is required to discuss with the client to the greatest extent possible the law and facts of the case, the ward’s legal options regarding disposition of the case, the grounds on which the guardianship is sought, and whether alternatives to guardianship would meet the ward’s needs and avoid the need for the appointment of a guardian. Tex. Est. Code § 1054.004(a).

§ 1.30Ex Parte Contacts

An attorney or a guardian ad litem who is an attorney is subject to the Texas Disciplinary Rules of Professional Conduct. According to the rules, a communication is considered ex parte if the contact is made for the purpose of influenc­ing the court concerning the matter other than—

1.in the course of official proceedings in the case;

2.in writing if the attorney or guardian ad litem promptly delivers a copy of the writing to opposing counsel or to the adverse party if that party is not represented by an attorney; or

3.orally on adequate notice to opposing counsel or to the adverse party if that party is not represented by an attorney.

Tex. Disciplinary Rules Prof’l Conduct R. 3.05(b).

Similarly, the Texas Code of Judicial Conduct prohibits a judge from ex parte communications with attorneys or parties involved in a case. Tex. Code Jud. Conduct, Canon 3B(8), reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G, app. B.

§ 1.31Responsibility of Guardian’s Attorney to Ward

Overview:      The age-old question of who is the client has become increasingly complicated in recent years. Generally, the attorney-client rela­tionship is a contractual relationship whereby the attorney agrees to render professional ser­vices for the client. Parker v. Carnahan, 772 S.W.2d 151, 156 (Tex. App.—Texarkana 1989, writ denied). The resulting contract may be either expressed or implied from the actions of the parties. Once established, the attorney-client relationship imposes numerous duties on the attorney. These include the duties to use the utmost good faith in dealings with the client, to maintain the confidences of the client, and to use reasonable care in rendering professional ser­vices to the client. Perez v. Kirk & Carrigan, 822 S.W.2d 261, 265 (Tex. App.—Corpus Christi–Edinburg 1991, writ denied); see also Yaklin v. Glusing, Sharpe & Krueger, 875 S.W.2d 380, 383 (Tex. App.—Corpus Christi–Edinburg 1994, no writ).

Possible Existence of Attorney-Client Relationship:      An issue has arisen in the last few years concerning whether an attorney repre­senting a guardian also represents the ward. At least one Texas court has recognized that a guardian’s retention of an attorney for a ward establishes an attorney-client relationship as between the attorney and the ward. See Daves v. Commission for Lawyer Discipline, 952 S.W.2d 573 (Tex. App.—Amarillo 1997, writ denied). In Daves, the parents of a minor retained an attorney to file an application to be appointed the minor’s legal guardians. The parents then also sought permission from the guardianship court to allow the attorney to represent the minor ward in pursuing a cause of action for personal injuries. After the settlement of a fee and other disputes with the parents’ prior attor­ney, the attorney was charged with violating the Texas Disciplinary Rules of Professional Con­duct and subsequently suspended from the prac­tice of law. The violations included conflicts of interest in the representation of both the parents and the minor ward.

The attorney first alleged that he had no attor­ney-client relationship with the minor ward as a matter of law because he was not “court-appointed.” Daves, 952 S.W.2d at 576. The appellate court, however, held that comment 12 to rule 1.02 of the Texas Disciplinary Rules of Professional Conduct does not provide that an attorney must be court-appointed to represent a person under a disability. Daves, 952 S.W.2d at 577 (comments to rule 1.02 apply only to that particular rule and not to the other rules, includ­ing those regarding conflicts of interest). The court further held, regardless of rule 1.02, that the actions of the attorney and the parents clearly demonstrated that the attorney was rep­resenting the minor ward. The court held that “[t]he attorney-client relationship may be implied if the parties by their conduct manifest an intent to create such a relationship.” Daves, 952 S.W.2d at 577. Finally, the court held that even if rule 1.02 did apply, the parents, as coguardians, had a duty to the minor ward to protect the child’s legal interests, and they retained the attorney to assist them in pursuing the minor ward’s claims. Therefore, even though retained by the parents, the attorney “had a duty not only to the Parents as co-guardians, but also to the Child whose claims he was asserting, and the attorney-client relationship was established between the Child and [the attorney] under comment 12 to Rule 1.02.” Daves, 952 S.W.2d at 577.

Furthermore, the Texas Disciplinary Rules of Professional Conduct appear to recognize that a person under a disability, whether created by a guardianship or otherwise, can be the client. Comment 13 to rule 1.02 provides that “[i]f a legal representative has already been appointed for the client, the lawyer should ordinarily look to the representative for decisions on behalf of the client.” Tex. Disciplinary Rules Prof’l Con­duct R. 1.02 cmt. 13 (emphasis added).

The possible existence of an attorney-client rela­tionship between the guardian’s attorney and the ward could also be argued based on decisions in Texas that have found an attorney-client rela­tionship existed between a minor child and the attorney retained by the child’s next friend. In Byrd v. Woodruff, 891 S.W.2d 689 (Tex. App.—Dallas 1994, writ dism’d by agr.), a minor’s par­ents, as next friend, retained an attorney to pur­sue a cause of action relating to personal injuries incurred by the minor child. The court also appointed a guardian ad litem to represent the minor’s best interests. A settlement was ulti­mately reached, and the minor’s settlement pro­ceeds were to be placed in a trust for the benefit of the minor. The court approved the proposed settlement. On reaching majority, the emanci­pated minor sued the attorney for negligence, legal malpractice, and breach of fiduciary duty. Byrd, 891 S.W.2d at 697. The trial court granted the attorney’s motion for summary judgment, resulting in the dismissal of the emancipated minor’s claims. Reversing the trial court, the court of appeals held that the attorney acted as the minor’s attorney, and an attorney-client rela­tionship existed between the attorney and the minor. As such, the attorney “had a duty to pro­tect [the minor’s] interests.” Byrd, 891 S.W.2d at 701. This duty included seeing that the minor’s assets were properly managed and protected for her benefit. The appellate court further held that the attorney could be liable for a third party’s negligence or wrongful conduct when the con­duct is foreseeable. Byrd, 891 S.W.2d at 701; see also Broughton v. Humble Oil & Refining Co., 105 S.W.2d 480, 485 (Tex. App.—El Paso 1937, writ ref’d) (attorney retained by agent deemed to be attorney of principal’s selection). See sec­tion 1.28 above for a discussion of the claim against the guardian ad litem in Byrd.

Although a Texas case directly on point has yet to be decided as of the publication date of this manual, Texas could follow the lead of other states that have recognized the existence of an attorney-client relationship between the attorney and both the guardian and the ward. Schwartz v. Cortelloni, 685 N.E.2d 871 (Ill. 1997) (holding that attorney represented ward by representing guardian in sale of ward’s property interest); see Fickett v. Superior Court, 558 P.2d 988, 990 (Ariz. Ct. App. [Div. 2] 1976) (rejecting attor­ney’s claim of no privity, court found that attor­ney who undertakes to represent guardian of incompetent person assumes relationship not only with guardian but also with ward). Like Texas, those states follow the general rule that an attorney owes a duty only to the person who is his client. However, those states have recog­nized that an exception must exist when an attorney is hired by a client specifically for the purpose of benefiting a third party. See Schwartz, 685 N.E.2d at 875. In determining whether a duty is owed to a third party, the key factor to be considered is whether the attorney acted at the direction or on behalf of the client for the benefit of a third party. Schwartz, 685 N.E.2d at 876; Pelham v. Griesheimer, 440 N.E.2d 96, 99 (Ill. 1982).

Possible Duties Regardless of Privity:      Texas law has long held that if an attorney acting for his client participates in fraudulent activities, his actions are “foreign to the duties of an attorney.” But, for years, the issue was either fraud was excluded from the attorney immunity defense or an exception to it. Some courts of appeals have broadly held that attorney immunity defense does not extend to an attorney’s knowing partic­ipation in fraudulent activities on his client’s behalf. E.g., Toles v. Toles, 113 S.W.3d 899, 911 (Tex. App.—Dallas 2003, no pet.); Querner v. Rindfuss, 966 S.W.2d 661, 666 (Tex. App.—San Antonio 1988, pet. denied) (“An attorney . . . is liable if he knowingly commits a fraudulent act or knowingly enters into a conspiracy to defraud a third person”). But other courts provided a limited exception when the claims involve situa­tions where the attorney’s “knowing commis­sion of a fraudulent act” is “outside the scope of his legal representation of the client.” See Can­tey Hanger, LLP v. Byrd, 467 S.W.3d 477, 483 (2015). In Cantey Hanger, LLP, the Texas Supreme Court finally adopted the more limited recognition and held that fraud is not an excep­tion to attorney immunity. Rather, the defense does not extend to fraudulent conduct that is outside the scope of an attorney’s legal repre­sentation of his client. Thus, an attorney who pleads the affirmative defense of attorney immu­nity has the burden to demonstrate that his alleged wrongful conduct, regardless of whether it is labeled fraudulent, is part of the discharge of his duties to his client. E.g., Cantey Hanger, LLP at 483 (citing Dixon Financial Services, Ltd. v. Greenberg, Peden, Siegmyer & Oshman, P.C., No. 01-06-00696-CV, 2008 WL 746548, at *9 (Tex. App.—Houston [1st Dist.] Mar. 20, 2008, pet. denied); see also Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 408 (Tex. App.— Houston [1st Dist.] Sept. 2005) (holding that claim against an attorney for con­spiracy to defraud was not actionable if “the complained-of actions involve the filing of law­suits and pleadings, the providing of legal advice upon which the client acted, and aware­ness of settlement negotiations—in sum, acts taken and communications made to facilitate the rendition of legal services to [the client]”).

Therefore, depending on the facts of the case, an attorney could be held liable for fraud, conver­sion, conspiracy, unjust enrichment, breach of fiduciary duty, and constructive fraud. Querner, 966 S.W.2d at 670. But a claim of fraud will require a showing of the attorney’s knowing participation. See Cantey Hanger, LLP, 467 S.W.3d at 483. Each claim must, however, be considered in light of the actions shown to have been taken by the attorney to determine whether he can be held liable for such actions. If the facts show that the attorney actively engaged in fraudulent conduct in furtherance of some con­spiracy or otherwise, the attorney can be held liable. Querner, 966 S.W.2d at 666.

Similarly, the attorney may also be held liable if the facts show that an informal fiduciary or con­fidential relationship exists. Querner, 966 S.W.2d at 667. The Supreme Court of Texas has recognized the difficulty of formulating a defini­tion of the term fiduciary that is sufficient to cover all cases. Crim Truck & Tractor Co. v. Navistar International Transportation Corp., 823 S.W.2d 591, 593 n.3 (Tex. 1992). In Texas, certain informal relations may give rise to a fiduciary duty. These informal fiduciary rela­tionships have been called “confidential rela­tionships” and may arise “where one person trusts in and relies upon another, whether the relation is a moral, social, domestic or merely personal one.” Confidential relationships exist in those cases “in which influence has been acquired and abused, in which confidence has been reposed and betrayed.” The existence of confidential relationships is usually a question of fact. Crim Truck & Tractor Co., 823 S.W.2d at 594.

The unique relationship between the attorney representing the guardian and the ward raises issues concerning whether the guardian could be held liable to the ward in the absence of an attor­ney-client relationship. Consider the following hypothetical situation: A wife has been serving as guardian for her husband for years. The wife asks the attorney representing her as guardian to seek authority for her to withdraw all the com­munity property from the estate of the husband ward under chapter 1353 of the Estates Code, which allows for management of the community estate outside of court supervision and control. See Tex. Est. Code ch. 1353. The attorney knows that the wife is considering divorcing her husband, and the attorney believes that the wife will attempt to dispose of all community assets before divorce.

In this situation, the attorney has sufficient knowledge to be aware that the wife is seeking to manage and dispose of the ward’s assets out­side the guardianship. If the attorney is success­ful in helping the wife gain unsupervised control of the community estate, does the attorney expose himself to claims of fraudulent conduct, conversion of the ward’s assets, and conspiracy, as well as allegations that an informal fiduciary or confidential relationship existed between the attorney and the ward? If so, does the attorney breach his fiduciary duty to the ward?

Consider another increasingly common situation in which the guardian is about to convert or has converted the ward’s assets. Does the attorney have a duty to advise the court of the theft? Rule 1.05(c)(7) and (8) of the Texas Disciplinary Rules of Professional Conduct authorizes the disclosure, because conversion is a criminal or fraudulent act. See Tex. Disciplinary Rules Prof’l Conduct R. 1.05. The rules do not, how­ever, mandate disclosure. This raises the ques­tion of whether the special relationship between the attorney and the guardian imposes such a duty in light of the attorney’s ability to advise the court presiding over the guardianship and thus avoid or mitigate any damages.

Until this issue is decided by the supreme court, practitioners should be aware that certain actions could increase the potential exposure to such claims. For example, if the attorney signed the pleadings as attorney for the guardianship, it could be argued that he intended to represent the guardianship rather than the individual serving as guardian. See Querner, 966 S.W.2d 661. In Querner, the appellate court noted the fact that the attorney, even though retained by an execu­tor, characterized his representation as “the attorney for the estate,” which raised a fact ques­tion of whether there was privity or a fiduciary relationship between the attorney and the bene­ficiaries of the estate. Querner, 966 S.W.2d at 667.

 

 

 

 

 

 

 

 

 

[Sections 1.32 through 1.40 are reserved for expansion.]

V.  Texas Deceptive Trade Practices–Consumer Protection Act (DTPA) Lia­bility

§ 1.41Application of Act to Legal Services

In 1993 the legislature added a professional ser­vices exemption to the Deceptive Trade Practices–Consumer Protection Act, thus revers­ing a case-law trend toward holding that profes­sional services are subject to liability under the DTPA. See DeBakey v. Staggs, 612 S.W.2d 924 (Tex. 1981) (attorney’s unconscionable conduct actionable under DTPA); Melody Home Manu­facturing Co. v. Barnes, 741 S.W.2d 349 (Tex. 1987) (breach of implied warranty to repair in good and workmanlike manner actionable under DTPA); but see Dennis v. Allison, 698 S.W.2d 94 (Tex. 1985) (implied warranties do not include professional conduct). Tex. Bus. & Com. Code § 17.49(c) provides:

Nothing in this subchapter shall apply to a claim for damages based on the rendering of a professional service, the essence of which is the providing of advice, judgment, opin­ion, or similar professional skill.

However, the section also provides exceptions to the exemption. The following acts would bring professional services back into the DTPA: an express misrepresentation of a material fact that cannot be characterized as advice, judg­ment, or opinion; a failure to disclose informa­tion in violation of Tex. Bus. & Com. Code § 17.46(b)(24); an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion; a breach of an express warranty that cannot be characterized as advice, judgment, or opinion; or a violation of section 17.46(b)(26). Tex. Bus. & Com. Code § 17.49(c). These exceptions apply to an action against both a professional rendering services and any entity that could be held vicariously lia­ble for the professional’s conduct. Tex. Bus. & Com. Code § 17.49(d).

§ 1.42Statute of Limitations

All DTPA actions must be brought within two years of the date on which the act or practice occurred or within two years after the consumer discovered or reasonably should have discov­ered the act or practice. This period may be extended for 180 days if the plaintiff proves that failure to timely commence the action was caused by the defendant’s knowingly engaging in conduct calculated to induce the plaintiff to refrain from or postpone commencing the action. Tex. Bus. & Com. Code § 17.565.

 

 

 

 

 

 

 

 

 

[Sections 1.43 through 1.50 are reserved for expansion.]

VI.  Grievances

§ 1.51Grievance Procedure

A grievance may be filed with the State Bar by any person who believes that a rule of profes­sional conduct has been violated by an attorney. In most cases, grievances must be filed within four years from the time of the alleged act of misconduct. See Tex. Rules Disciplinary P. R. 15.06.

When a complainant signs the grievance form, the attorney-client privilege is waived in order for the chief disciplinary counsel to investigate the complaint. See Tex. R. Evid. 503(d)(3); Tex. Disciplinary Rules Prof’l Conduct R. 1.05.

When the chief disciplinary counsel’s office receives a grievance, an initial review is made to determine whether the grievance alleges facts which, if true, would constitute a violation of the Texas Disciplinary Rules of Professional Con­duct. If the grievance does not allege such facts, it is dismissed as an inquiry, and the attorney will receive notification from the chief disci­plinary counsel’s office. There is no action required on the attorney’s part when this occurs. If the grievance alleges facts which constitute professional misconduct, the attorney will be notified of the complaint and given thirty days to respond to the allegations. The chief disci­plinary counsel’s office will review the response and investigate the facts in order to determine whether there is just cause to proceed into litiga­tion. If just cause is not found, the case is set before a summary disposition panel for dis­missal. If the panel does not agree the case should be dismissed, it will move forward. If just cause is found, the attorney will then be notified of the rule violations and given twenty days to notify the chief disciplinary counsel’s office whether he elects to have the complaint heard in a district court of proper venue, with or without a jury, or by an evidentiary panel of a grievance committee. It is very important that the attorney respond timely. Failure to timely file an election is conclusively deemed as an affirmative election to proceed to an evidentiary panel hearing. An attorney should consider retaining counsel to advise him as these new processes must be strictly adhered to.

The respondent or the commission may appeal the judgment of the evidentiary panel to the Board of Disciplinary Appeals. Tex. Rules Dis­ciplinary P. R. 2.24. An appeal from the decision of the Board of Disciplinary Appeals on an evi­dentiary proceeding is to the Supreme Court of Texas in accordance with Tex. Rules Disci­plinary P. R. 7.11. Tex. Rules Disciplinary P. R. 2.28. If the complaint is heard in a district court, the judgment may be appealed as in civil cases generally. Tex. Rules Disciplinary P. R. 3.16.

 

 

 

 

 

 

 

 

 

[Sections 1.52 through 1.60 are reserved for expansion.]

VII.  Language Considerations in Guardianship Matters

§ 1.61Person First Respectful Language

Recent legislative measures have been passed with the intent to guide legislators in their use of language when drafting statutes regarding per­sons with disabilities. The legislation directs the legislature and the legislative council to avoid the use of certain language and to instead focus on “person first” language. See Tex. Gov’t Code ch. 392.

The Person First Respectful Language Initiative notes that “language used in reference to per­sons with disabilities shapes and reflects soci­ety’s attitudes toward persons with disabilities. Certain terms and phrases are demeaning and create an invisible barrier to inclusion as equal community members.” Tex. Gov’t Code § 392.001. The initiative suggests preferred terms and phrases for new and revised laws by requiring the use of language that places the per­son before the disability. Similarly, practitioners should consider the use of language as directed by the statute, which suggests eliminating the use of the following terms: disabled, develop­mentally disabled, mentally disabled, mentally ill, mentally retarded, handicapped, cripple, and crippled. Such language should be replaced as appropriate with the following terms: persons with disabilities, persons with developmental disabilities, persons with mental illness, and persons with intellectual disabilities. See Tex. Gov’t Code § 392.002. While the new language is preferred, any statutes and resolutions that fail to use the preferred terms are not rendered invalid.