Can a Texas lawyer hold a financial interest in a bail bond business that someone else operates?

Plain-English summary

A general-practice attorney proposed transferring real property to his secretary's father, who would use it to run a bail bond business, paying the attorney a fair percentage return on the property's value. The father would operate the business alone at a separate location, would be told to refer no business to the attorney, and would orally agree to transfer the land back on demand or at death, subject to any outstanding bond liabilities. The Committee was asked whether this arrangement was improper for the attorney.

The Committee held it was not improper, provided the attorney did not participate in the operation of the business and would not accept employment from a person whose bail bond the business had written. It reviewed prior Texas Opinions 46, 140, 141, 248, 251, and 347, and described Opinion 141's blanket holding (that an attorney may not in any way be connected with a bail bond company) as too broad. It observed that those earlier opinions rested on "indirect solicitation" and "feeder" rationales that were omitted from the Code of Professional Responsibility, which instead governs outside businesses through specific disciplinary rules, particularly DR 1-201 through DR 2-105.

The Committee noted that no disciplinary rule forbids a lawyer from engaging in another business; DR 2-102(E) expressly recognizes the right to practice law and carry on another business, while barring the lawyer from indicating the dual role on letterhead, office signs, or professional cards, or identifying himself as a lawyer in connection with the other business. Because the bail bond business is so law-related, the Committee added that any participation in it would necessarily involve the practice of law, so a lawyer who engaged in it would have to comply not only with DR 2-102(E) but with all other provisions of the Code.

Currency note

This opinion was issued in 1974, under the former Texas Code of Professional Responsibility, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. A lawyer's involvement in a separate, law-related business is now addressed by Texas Rule 1.06 and related conflict rules and by ABA Model Rule 5.7 (responsibilities regarding law-related services). 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 Treat this page as historical context, not current guidance.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 lawyer have a financial stake in a bail bond business?

A: The Committee concluded it is not improper, provided the lawyer does not participate in operating the business and does not accept employment from anyone whose bond the business wrote, and complies with DR 2-102(E).

Q: Did this overrule the older Texas opinions on bail bonds?

A: The Committee described Opinion 141's blanket ban as too broad, explaining that the "indirect solicitation" and "feeder" rationales behind the earlier opinions were left out of the Code of Professional Responsibility.

Q: What does DR 2-102(E) require of a lawyer in a second business?

A: It recognizes the lawyer's right to engage in both, but bars indicating the dual role on letterhead, office signs, or professional cards, and bars identifying oneself as a lawyer in any publication connected with the other business.

Q: Did the Committee treat the bail bond business as separate from law practice?

A: Not entirely. It said the bail bond business is so law-related that any participation would necessarily involve the practice of law, so the lawyer would have to comply with all provisions of the Code, not just DR 2-102(E).

Background and rules framework

The opinion interprets DR 2-102(E) (a lawyer engaged in both law and another business) and the broader DR 1-201 through DR 2-105 group of the former Texas Code of Professional Responsibility, which replaced the earlier "indirect solicitation" and "feeder" rationales of prior bail bond opinions. The modern analog for a lawyer's separate, law-related business is ABA Model Rule 5.7.

Citations and references

Rules of Professional Conduct:

• MR 5.7 (responsibilities regarding law-related services), as the modern analog
• DR 2-102(E); DR 1-201 through DR 2-105 (former Texas Code of Professional Responsibility)

Other opinions cited:

• Texas Ethics Opinions 46, 140, 141, 248, 251, 347 (prior treatment of lawyers connected with the bail bond business; Opinion 141's blanket ban characterized as too broad)

See also

• TX Ethics Op. 388: Lawyer Going Off a Bail Bond Posted for a Client
• TX Ethics Op. 599: Lawyer-Bondsman No-Contest-Plea Bond Clause
• TX Ethics Op. 667: Prosecutor Whose Spouse Is a Bail Bondsman

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-366/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_366.pdf

Original opinion text

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

QUESTION PRESENTED

An attorney engaged in the general practice desires to transfer certain real property to his secretary's father who will use the property in the bail bond business. In return, the father would pay the attorney a sum equal to a fair percentage rate of return on the value of the property. The father would solely operate the business and there would be only an oral agreement that the land would be transferred back to the attorney upon demand or in case of death and subject to any liabilities for outstanding bonds. The business would be operated as a location entirely different from the attorney=s office and the father would be instructed to refer no business to the attorney. Is such a business arrangement improper upon the part of the attorney?

FINANCIAL INTEREST IN BAIL BOND BUSINESS

It is not improper for a practicing attorney to have a financial interest in a bail bond business if he does not otherwise participate in the operation of the business and will not accept employment from a person whose bail bond has been written by the business.

Code of Professional Responsibility: DR 1-201 Through DR 2-105

Texas Opinions 46, 140, 141, 248, 251 and 347 all deal with the question, in one form or another, of the propriety of a practicing attorney engaging in the business of making bail bonds. Opinion No. 141 holds that it is unethical for an attorney to be in any way connected with, or have an interest in, any company which is engaged in the business of making bail or other bonds in criminal cases. Such holding is, in the opinion of the Committee, too broad.

The primary basis for the above opinions has been that the operation of the bail bond business constituted "indirect solicitation" and served as a "feeder" to the law practice. These phrases have been entirely omitted from the Code of Professional Responsibility indicating an intent not to rely on such vague phrases as standards by which to judge the outside activities or occupations of attorneys. Such activities are now governed by several comprehensive but specific disciplinary rules, particularly DR 1-201 through DR 2-105.

No disciplinary rule forbids an attorney to engage in another business or profession. To the contrary, DR 2-102 (E) expressly recognizes the right of an attorney to engage in both the practice of law and another profession or business and sets forth certain prohibitions while the attorney is carrying on the second business or profession:
"A lawyer who is engaged both in the practice of law and another profession or business shall not so indicate on his letterhead, office sign or professional card, nor shall he identify himself as a lawyer in any publication in connections with his other profession or business."
In the question presented though the attorney has a financial interest in the bail bond business he does not participate in the operation of the business. Additionally, if the attorney will not accept employment of any person whose bail bond has been written by the business, then under such circumstances there would be no impropriety so long as the requirements of DR 2-102 (E) are met.

The bail bond business is so law-related that if the attorney engages in such business to any extent it will necessarily involve the practice of law, and, therefore, the attorney would be considered to be engaged in the practice of law while engaging in the business. Accordingly, under these circumstances, he must comply not merely with DR 2-102 (E) but with all other provisions of the Code of Professional Responsibility.

Tex. Comm. On Professional Ethics, Op. 366 (1974)