If my client's lawyer prepared a defective QDRO and won't fix it after I flag it, do I have to report them to the bar?
Texas Ethics Opinion 534: Correcting a Defective QDRO and the Duty to Report
Short answer: The Committee concluded that a divorce lawyer must prepare a QDRO competently and correct material defects once another lawyer flags them (Rule 1.01), and that the employer's reviewing lawyer must report the failure under Rule 8.03(a) only if it raises a substantial question about the divorce lawyer's honesty, trustworthiness, or fitness, and then without disclosing the employer's confidential information.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the Texas Disciplinary Rules of Professional Conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. The opinion text is reproduced at the bottom; the official source (linked) controls.
Plain-English summary
In a divorce, the non-employee spouse's lawyer (Attorney A) prepared a Qualified Domestic Relations Order (QDRO) needed to give the spouse rights in the employee's ERISA retirement plan. The employer's lawyer (Attorney B), reviewing the proposed QDRO before submission, found it materially defective and told Attorney A, who did not correct it; the defects could later prove significantly detrimental to the spouse. The Committee addressed Attorney A's competence obligations and Attorney B's possible duty to report.
On Attorney A, the Committee applied Rule 1.01: a lawyer must not take or continue a matter beyond the lawyer's competence, and must represent the client competently and without neglect (conscious disregard of responsibilities owed). The Committee concluded that once the defects were called to Attorney A's attention at a time when correction was possible, Attorney A had to act to correct them, which might require additional work or associating a competent lawyer; whether the corrective work's cost could be billed to the spouse depended on the circumstances and the fee agreement under Rule 1.04.
On Attorney B, the Committee applied Rule 8.03(a): if Attorney B's knowledge of Attorney A's failure to represent the spouse competently raised a substantial question about Attorney A's honesty, trustworthiness, or fitness, Attorney B was required to report it to the disciplinary authority. The Committee noted, per Comment 4 to Rule 8.03, that "substantial" refers to the seriousness of the violation, not the quantum of evidence; that any report was limited by Rule 8.03(d)(1) so as not to reveal confidential information about Attorney B's client (the employer) in violation of Rule 1.05; and that, per Opinion 520, Attorney B could choose to report even where the Rule 8.03(a) standard was not met.
Currency note
This opinion was issued in 2000, under the Texas Disciplinary Rules of Professional Conduct that took effect January 1, 1990. Texas did not adopt the ABA's Ethics 2000 revisions; its rules have been amended only piecemeal since (including the March 1, 2005 amendment to the fee rule, Rule 1.04, and the comprehensive 2021 revisions adopted by Texas Supreme Court order). 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: Must a lawyer fix a defective QDRO after another lawyer points out the defects?
A: Yes. The Committee concluded that under Rule 1.01 the divorce lawyer must correct material defects once they are called to the lawyer's attention at a time when correction is possible, which may require additional work or associating a competent lawyer.
Q: Can the lawyer bill the client for the corrective work?
A: The Committee concluded it depends on the circumstances, including the prior fee agreement; under Rule 1.04 the lawyer may or may not be permitted to charge the client for the additional corrective work.
Q: Does the reviewing lawyer have to report the other lawyer to the bar?
A: Only in some circumstances. The Committee concluded the employer's lawyer is required to report under Rule 8.03(a) if the failure raises a substantial question about the divorce lawyer's honesty, trustworthiness, or fitness; "substantial" refers to the seriousness of the violation, not how much evidence the reporting lawyer has.
Q: Does the duty to report override the reviewing lawyer's confidentiality duty to the employer?
A: No. The Committee noted that under Rule 8.03(d)(1) the report need not, and may not, disclose confidential information about the employer in violation of Rule 1.05.
Background and rules framework
The opinion interprets Texas Disciplinary Rule 1.01 (competent and diligent representation, ABA Model Rule 1.1), Rule 1.04 (fees), Rule 8.03 (reporting professional misconduct, ABA Model Rule 8.3), and Rule 1.05 (confidentiality). The analysis turned on the duty to correct material defects once they are known and correctable, and on the threshold and confidentiality limits that govern a lawyer's mandatory reporting of another lawyer's violation.
Citations and references
Rules of Professional Conduct:
- MR 1.1 (competence)
- MR 8.3 (reporting professional misconduct)
- Texas Disciplinary Rules 1.01, 1.04, 1.05, 8.03
Statutes referenced (factual background):
- Employee Retirement Income Security Act of 1974 (ERISA)
Other opinions cited:
- Tex. Ethics Op. 520 (May 1997): a lawyer may report another lawyer's violation even where the Rule 8.03(a) standard is not met
See also
- TX Ethics Op. 632: Reporting Another Lawyer's Prohibited Trade Name
- TX Ethics Op. 680: Using Cloud-Based Storage and Software for Client Data
Source
- Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-534/
- Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_534.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
QUESTION PRESENTED
Does an attorney who represents a non-employee spouse in a divorce proceeding violate the Texas Disciplinary Rules of Professional Conduct (the Rules) if the attorney prepares a materially defective Qualified Domestic Relations Order (QDRO) and does not correct the defects after being informed of the defects by an attorney reviewing the proposed QDRO for the employer concerned? If such conduct by the divorce attorney constitutes a violation of the Rules, is the employer's attorney who notifies the divorce attorney of the defects in the proposed QDRO required to report such a violation to the appropriate disciplinary authority?
STATEMENT OF FACTS
An employer (the Employer) maintains a retirement plan (the Plan) that is qualified under the Employee Retirement Income Security Act of 1974 as amended (ERISA). An employee (the Employee) and his or her spouse (the Spouse) are divorcing. It is assumed that under ERISA and other applicable law, a QDRO is required in order for the Spouse to have certain rights after the divorce with respect to the Employee's interest in the Plan. Although a QDRO is a court order signed by the judge in the divorce proceedings, it is assumed that the QDRO is normally prepared by the attorney for one of the parties, reviewed and approved by attorneys for the other party and the employer, and then signed by the judge in the divorce proceedings based on the approvals for the parties and the employer.
In this case, a proposed QDRO is prepared by the Spouse's attorney (Attorney A), who is representing the Spouse without the assistance of another attorney. The proposed QDRO is reviewed by the Employer's attorney (Attorney B) prior to submission of the proposed QDRO to the court. In Attorney B's judgment, the proposed QDRO is materially defective. Attorney B calls Attorney A's attention to the defects but Attorney A does not correct them. It is assumed that the consequences of the material defects in the QDRO could manifest themselves at some time after the divorce is final and could be significantly detrimental to the Spouse.
The specific questions considered by the Committee are the following:
What are Attorney A's obligations under the Rules with respect to the preparation of the proposed QDRO?
What are Attorney B's obligations under the Rules if Attorney B receives from Attorney A proposed QDRO that is materially defective and Attorney A fails to correct the draft QDRO after the inadequacy is called to the attention of Attorney A?
DISCUSSION
Rules Applicable to Attorney A Under Rule 1.01(a),1 Attorney A may not accept or continue employment by the Spouse in the divorce action if the lawyer knows or should know that the matter, including the preparation of the QDRO, is beyond Attorney A's competence (and the competence of any other lawyer assisting Attorney A in the matter). The term competence is defined in the Terminology for the Rules as denoting possession or the ability to timely acquire the legal knowledge, skill, and training reasonably necessary for the representation of the client. In determining what legal knowledge, skill, and training are reasonably necessary for the representation of the Spouse, all the circumstances relating to the matter, including the Spouse's need for an effective QDRO, must be considered.
Under Rule 1.01, Attorney A must represent the Spouse in the divorce, including preparation of the QDRO, with competence (Rule 1.01(a)) and must not neglect this representation (Rule 1.01(b)(1)). Rule 1.01(c) defines neglect for purposes of Rule 1.01(b)(1) as signifying inattentiveness involving a conscious disregard for the responsibilities owed to a client or clients. These standards require that an attorney must correct material defects in work for a client if the attorney's attention is called to the defects at a time when correction is possible. In this case, when Attorney A is informed by Attorney B that the draft QDRO prepared for the Spouse is materially defective, Attorney A must take such actions as are required to correct the problem. Such actions may involve additional work by Attorney A, or the association of another lawyer with competence in this area of the law to complete the preparation of the QDRO. Depending on the specific circumstances, including Attorney A's prior agreement with the Spouse, Attorney A may or may not be permitted under the standards of Rule 1.04 on legal fees to include the additional costs of this corrective work in legal fees charged to the Spouse.
Rules Applicable to Attorney B If Attorney B has called Attorney A's attention to material defects in the proposed QDRO and Attorney B knows Attorney A is taking no action to correct these defects, Attorney B may, depending on the circumstances, be required by the Rules to inform the appropriate disciplinary authority as to Attorney A's violation of the Rules. The obligation for Attorney B to inform the appropriate disciplinary authority would arise under Rule 8.03(a) if Attorney B's knowledge of the failure by Attorney A to represent the spouse competently and diligently under Rule 1.01 raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects. As noted in Comment 4 to Rule 8.03, whether or not the question raised as to Attorney A is substantial under Rule 8.03(a) refers to the seriousness of the violation by Attorney A and not the quantum of evidence of which Attorney B is aware concerning the violation.
The term fitness is defined in the Terminology for the Rules as denoting those qualities of physical, mental and psychological health that enable a person to discharge a lawyer's responsibilities to clients in conformity with the [Rules]. If Attorney B determines that the circumstances described in Rule 8.03(a) are present, Attorney B is required by that Rule to report Attorney A's violation to the appropriate disciplinary authority, subject to the limitation of Rule 8.03(d)(1) that such report is not required to include disclosure of confidential information relating to Attorney B's client (the Employer) in violation of Rule 1.05. As noted in Comment 4 to Rule 8.03 and in Professional Ethics Committee Opinion 520, Texas Bar Journal, May 1997, Attorney B may, but is not required to, report Attorney A's violation of the Rules to the disciplinary authority even if, in Attorney B's judgment, the standards of Rule 8.03(a) are not met with respect to Attorney A's conduct.
CONCLUSION
Under the Texas Disciplinary Rules of Professional Conduct, an attorney representing a spouse in a divorce action and having responsibility for the preparation of a Qualified Domestic Relations Order in that action is required to act with competence in the preparation of the QDRO and is required to correct material defects in the QDRO if such defects are called to the attorney's attention by another attorney reviewing the proposed QDRO. An attorney for the employer affected by the QDRO, who learns that the attorney for a divorcing spouse has prepared and will not correct a materially defective proposed QDRO that may substantially compromise the interests of such attorney' client, would in some circumstances be required under the Rules (subject to the obligations of the employer's attorney to protect client confidences) to report this violation to the appropriate disciplinary authority; the circumstances requiring such a report would exist if the employer's attorney concluded that the divorce attorney's failure as to the QDRO raised a substantial question with respect to the divorce attorney's honesty, trustworthiness, or physical, mental, and psychological health necessary to discharge the lawyer's obligations to clients.
- Unless otherwise indicated, all citations are to provisions of the Texas Disciplinary Rules of Professional Conduct as currently in effect.
Tex. Comm. On Professional Ethics, Op. 534 (2000)