Can a law firm represent both a savings and loan association and the title insurance company that issues title policies to it, where firm members are the S&L's president and closing attorney?

Plain-English summary

The Committee was asked whether the Canons of Ethics are violated when a law firm represents both a savings and loan association and a title insurance company that issues title binders and policies to that association, in circumstances where one firm member is president of the savings and loan association, another firm member is the closing attorney for it, and the firm charges the association for drafting notes, deeds of trust, and other customer loan papers, with those charges passed on to the borrower by the association as loan costs. The question assumed that both the savings and loan association and the title insurance company were fully advised of the firm's representation of both clients and that both clients agreed.

The Committee concluded that there is no violation of the Canons of Ethics of the State Bar of Texas on the stated facts, because full disclosure was made and the clients agreed. It cited Texas Canon 6.

Currency note

This opinion was issued in 1971, under the former Texas Canons of Ethics, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. Concurrent representation of multiple clients with adverse or potentially adverse interests is now governed by Texas Rule 1.06 and ABA Model Rule 1.7, which set out specific consent and reasonable-belief requirements not detailed in former Canon 6. 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 Treat this page as historical context, not current guidance.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: May a firm represent both a savings and loan and its title insurer?

A: On the stated facts, yes. The Committee concluded there was no violation of the Canons because full disclosure was made and both clients agreed, citing Texas Canon 6.

Q: Did it matter that a firm member was the S&L's president and another was its closing attorney?

A: The Committee did not find those facts disqualifying on the stated facts; its conclusion turned on full disclosure to both clients and their agreement.

Q: What was the basis for the conclusion?

A: The Committee rested on Texas Canon 6, finding no violation because the dual representation was fully disclosed and consented to.

Background and rules framework

The opinion rests on former Texas Canon 6, addressing a lawyer's representation of conflicting interests with the consent of the clients after full disclosure. The modern analog is Texas Rule 1.06 and ABA Model Rule 1.7 (concurrent conflicts of interest).

Citations and references

Rules of Professional Conduct:

• MR 1.7 (concurrent conflicts of interest), as the modern analog
• Texas Canon 6 (former Texas Canons of Ethics)

See also

• TX Ethics Op. 448: Representing Both Seller and Buyer in a Real Estate Transaction
• TX Ethics Op. 525: Lender's Attorney Preparing a Deed for the Seller
• TX Ethics Op. 408: Fee as a Percentage of the Title Insurance Premium

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-359/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_359.pdf

Original opinion text

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

QUESTION PRESENTED

Is there a violation of the Canons of Ethics for a law firm to represent a savings and loan association and also a title insurance company issuing title binders and title insurance policies to the savings and loan association where one of the members of the law firm is President of the savings and loan association; another of the members of the law firm is closing attorney for the savings and loan association and the law firm charges the savings and loan association for drafting notes, deeds of trust, and other customer loan papers which charges are passed on to the borrower by the savings and loan association as loan costs, and the savings and loan association and title insurance company are fully advised of the representation by the law firm of both clients and both clients agree thereto?

Tex. Comm. On Professional Ethics, Op. 359, V. 35 Tex. B.J. 106 (1972)
Canon 6

There is no violation of the Canons of Ethics of the State Bar of Texas under the facts above stated since full disclosure is made and the clients have agreed thereto. See Texas Canon No. 6.

A law firm may represent a savings and loan association and also a title insurance company which issues title insurance to the savings and loan association when full disclosure is made to both the savings and loan association and the title insurance company.

Tex. Comm. On Professional Ethics, Op. 359 (1971)