Can two members of a law firm also run a separate oil partnership out of the same offices, when the oil firm does not feed legal work to the law firm?

Plain-English summary

A, B, and C practiced as a law firm; B practiced little but took a third of the profits. A and B were also in a separate oil partnership with X, a layman geologist, and B devoted most of his time to the oil partnership while contributing some legal services to it. Occasionally B asked the law firm to do title work for the oil firm, sometimes paid and sometimes not. The two firms had different names but the same mailing address; the phone was listed under the law firm; the oil firm operated from the law firm's offices, contributed to expenses, and displayed no sign on the office door or building. The inquiry asked whether the arrangement violated any Texas Canon.

The Committee answered that it did not. Canon 30 was not violated because the partnership of A, B, and X was not a partnership for the practice of law, even though B performed legal services for it. Canons 24 and 25 were not violated either. The Committee explained that a lawyer may engage in any legitimate outside business so long as it does not solicit or feed law practice to him as a lawyer, and that the bar's prohibitions on partnerships with other professionals and on running businesses like estate-planning services or collection agencies from a law office aim to prevent a feeder relationship, citing A.B.A. opinions 57 and 272. The oil business was not inherently calculated to feed law business, and here the lawyers apparently did not advertise themselves as lawyers in connection with the oil firm, used no connecting office sign, did not use the oil firm as a feeder, and did not mention on the oil firm letterhead that A and B were lawyers. Comparing Texas opinions 142 and 196, the Committee found no improper advertising and no improper feeder relationship, so the arrangement did not in itself violate any Texas Canon. The Committee ruled 9-0.

Currency note

This opinion was issued in 1963, under the former Texas Canons of Ethics, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. It also predates Bates v. State Bar of Arizona, 433 U.S. 350 (1977), which loosened categorical advertising restrictions, though prohibitions on solicitation were not eliminated. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can lawyers run a separate non-law business from their law office?

A: Under this opinion, a lawyer may engage in any legitimate outside business so long as it does not solicit or feed law practice to him as a lawyer; the Committee found the shared oil partnership did not, on these facts, violate any canon.

Q: What made the shared-office oil partnership acceptable here?

A: The Committee pointed to the lawyers not advertising themselves as lawyers in connection with the oil firm, using no connecting office sign, not using the oil firm as a feeder, and not stating on the oil firm letterhead that they were lawyers.

Q: Was the partnership with a non-lawyer geologist a problem under Canon 30?

A: No. The Committee held the oil partnership was not a partnership for the practice of law, so Canon 30 was not violated even though one lawyer performed legal services for it.

Background and rules framework

The opinion interprets former Texas Canons 24, 25, and 30, on advertising, solicitation, and partnerships with non-lawyers, as applied to a lawyer's outside business sharing the law office. The modern analogs are ABA Model Rule 7.1, on communications concerning a lawyer's services, and Model Rule 7.3, on solicitation, which carry forward the concern with feeder relationships.

Citations and references

Rules of Professional Conduct:

• MR 7.1 (communications concerning a lawyer's services), as the modern analog
• MR 7.3 (solicitation of clients), as the modern analog
• Texas Canons 24, 25, and 30 (former canons)

Other opinions cited:

• A.B.A. Opinions 57 and 272: preventing a feeder relationship from a lawyer's outside business
• Texas Opinions 142 and 196: improper advertising and feeder relationships

See also

• TX Ethics Op. 290: Lawyer Title-Insurance Agent Distributing Branded Contract Forms
• TX Ethics Op. 277: Lawyer Listings in a Business Guide and City Directory
• TX Ethics Op. 285: "General Practice" on a Lawyer's Office Door Sign

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-275/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_275.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

QUESTION PRESENTED

A, B and C are partners under the firm name of A, B, and C. B practices little but receives 1/3 of the profits. A and B are in another partnership with X, a layman and geologist. B devotes most of his time to the oil partnership, and contributes some legal services to the oil partnership. Occasionally B asks the law firm to perform title work for the oil firm, and the law firm may or may not be paid for the legal services.

While the names of the law firm and the oil partnership are different, the mailing addresses are the same. The phone is listed in the name of the law firm, but the oil firm's business is conducted from the law firm's offices, and the oil firm contributes to expenses. The oil firm does not have any type of sign on the law office door or on the building.

Does this arrangement violate any Texas Canons?

18 Baylor L. Rev. 347 (1966)

SOLICITATION - OUTSIDE BUSINESS - JOINT OCCUPANCY OF OFFICES
Two members of a law firm ethically may be members of another partnership engaged in the oil business and conducting its business from the same offices, where the oil firm does not feed law practice to the law firm, provided the arrangement is such that the lawyers are not advertised as lawyers in connection with the oil firm.

Canons 24, 25, 30.

No. Canon 30 is not violated. The partnership of A, B and X is not a partnership for the practice of law. Although B performs legal services for the oil partnership, the oil partnership is not engaged in the practice of law.

Canons 24 and 25 are not violated.

A lawyer may engage in any legitimate business outside his law practice so long as it does not result in the solicitation of law practice for (or the feeding of law practice to) him as a lawyer. One purpose of prohibiting a lawyer from entering into partnerships with men of other professions, such as accountants, and the purpose of prohibiting a lawyer from conducting businesses such as an estate planning service or a collection agency from the lawyer's office is to preclude the development of a feeder-type relationship. See A.B.A. opinions 57 and 272. The oil firm's business is not of a nature inherently calculated to solicit law business for or feed law practice to the law firm. Where, as here A and B apparently do not advertise themselves as lawyers in connection with the oil firm, do not use an office sign which might connect the oil firm with the law firm, apparently do not use the oil firm as a feeder of law business, and apparently do not mention on the oil firm letterhead that A and B are lawyers, there is no evidence of improper advertising by the lawyers and no evidence of an improper feeder-type relationship. Compare Texas opinions 142 and 196. The arrangement does not in itself violate any Texas Canon.(9-0)

Tex. Comm. On Professional Ethics, Op. 275 (1963)