May a Texas lawyer practicing in Texas join a D.C. law firm partnership that includes a nonlawyer partner permitted under D.C. Rule 5.4(b)?
Texas Ethics Opinion 704: Texas Lawyer Practicing in Texas Joining D.C. Firm With a Nonlawyer Partner
Short answer: Per the Committee, a Texas-licensed lawyer who practices in Texas may not join a law firm partnership that includes a nonlawyer partner or owner, even if the firm is based in the District of Columbia, which expressly allows nonlawyer ownership under D.C. Rule 5.4(b). Texas Rules 5.04(b) and 5.04(d) reach the conduct in Texas regardless of the firm's home jurisdiction.
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
The opinion addresses a Texas lawyer who proposes to join a D.C.-based law firm as a partner. The firm would include the Texas lawyer, one or more D.C.-licensed lawyers, and at least one nonlawyer partner permitted by D.C. Rule 5.4(b). The Texas lawyer would office in Texas and serve Texas clients, with revenue shared among all partners including the nonlawyer.
The Committee concludes Texas Disciplinary Rule 5.04(b) (no partnership with nonlawyer if any partnership activities consist of the practice of law) and Rule 5.04(d) (no professional corporation or association in which a nonlawyer holds any interest, is an officer, or has the right to direct or control a lawyer's professional judgment) prohibit the Texas lawyer's participation in the proposed structure. The Committee aligns its reasoning with ABA Formal Opinion 91-360 (July 1991), which addressed the converse dual-licensure scenario, and NYSBA Op. 1038 (Dec. 2014), which reached the same conclusion for a New York lawyer. The Committee declines to allow the lawyer to escape Texas's rule by formal corporate structuring (such as a wholly-owned Texas subsidiary).
The Committee expressly does not address fee division between separate firms under Rule 1.04(f) and (g): a Texas firm splitting a fee with an outside lawyer whose firm is lawfully nonlawyer-owned is a separate question the opinion does not reach.
In practice
Under this opinion, conduct consisting of a Texas-licensed lawyer practicing in Texas joining a multi-jurisdictional firm that includes any nonlawyer partner, owner, officer, or person with the right to direct or control a lawyer's professional judgment is prohibited by Rule 5.04(b) and 5.04(d). Per the opinion, the prohibition reaches the structure regardless of whether the firm's home jurisdiction permits nonlawyer ownership.
Common questions
Q: Does it matter that D.C. expressly permits nonlawyer partners?
A: No. The Committee concludes Texas's rules apply to the Texas lawyer's conduct in Texas, regardless of the firm's home jurisdiction. The Committee aligns with ABA Formal Op. 91-360 (1991), which reasoned that bar regulation is "an essential function of the judiciary of each state."
Q: Can the Texas lawyer set up a wholly-owned Texas subsidiary of the D.C. firm to sidestep this?
A: Per the opinion, no. The Committee follows NYSBA Op. 1038 (2014), which rejected the same workaround in the parallel New York scenario.
Q: Does Opinion 704 address fee sharing between separate firms?
A: No. The Committee says the question of fee division between lawyers who are not in the same firm is governed by Rule 1.04(f) and 1.04(g), and the opinion expressly does not address whether a Texas lawyer may divide fees with a separate firm that is lawfully nonlawyer-owned.
Background and rules framework
The opinion interprets Texas Disciplinary Rules 5.04(b) (partnership with nonlawyer in any practice-of-law activity) and 5.04(d) (nonlawyer interest, officership, or control in a professional corporation or association). Rule 5.04 corresponds to ABA Model Rule 5.4. The Committee notes the comparative posture of D.C. Rule 5.4(b), which expressly permits nonlawyer ownership in entities providing legal services, subject to restrictions.
Citations and references
Rules of Professional Conduct:
- Texas Disciplinary Rule 5.04(b) (partnership with nonlawyer)
- Texas Disciplinary Rule 5.04(d) (nonlawyer interest in professional corporation)
- D.C. Rule of Professional Conduct 5.4(b)
Other opinions cited:
- ABA Formal Op. 91-360 (July 1991) - extrajurisdictional effect of nonlawyer-partnership prohibitions
- NYSBA Ethics Op. 1038 (Dec. 2014) - New York lawyer joining D.C. firm with nonlawyer members
See also
- TX Ethics Op. 706: Vendor Revenue Share and Lawyer Equity - related Rule 5.04 analysis
- TX Ethics Op. 707: In-House Counsel for Company Customers at Cost - Rule 5.05(a)(2) UPL companion
Source
- Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-704/
- Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_704.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
QUESTION PRESENTED
May a Texas lawyer practicing in Texas join a District of Columbia law firm partnership that lawfully includes a nonlawyer partner?
STATEMENT OF FACTS
A Texas lawyer intends to become a partner in a law firm based in the District of Columbia. The partnership would include the Texas lawyer, one or more lawyers licensed in the District of Columbia, and at least one nonlawyer. It is assumed that the proposed partnership composition complies with the District of Columbia Rules of Professional Conduct. The proposed firm would have offices in the District of Columbia and Texas. The Texas lawyer would office in Texas and provide legal services to clients in Texas. Revenue generated by the Texas lawyer would be shared with the law firm's partners.
DISCUSSION
District of Columbia Rule of Professional Conduct 5.4(b) allows a lawyer licensed in that jurisdiction to "practice law in a partnership or other form of organization in which a financial interest is held or managerial authority is exercised by an individual nonlawyer who performs professional services which assist the organization in providing legal services to clients," subject to certain restrictions.
In contrast, Texas Disciplinary Rule of Professional Conduct Rule 5.04(b) provides that "[a] lawyer shall not form a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law." Rule 5.04(d) extends the prohibition against nonlawyer law firm ownership to professional corporations or associations. The principal reasons for the prohibition against nonlawyer law firm ownership are to prevent solicitation of clients by nonlawyers, to avoid encouraging or assisting nonlawyers in the practice of law, and to protect a lawyer's professional independence. See comments 1 and 6 to Rule 5.04.
The question in this case is whether Texas's prohibition against nonlawyer-owned law firms applies to a Texas lawyer who seeks to join a law firm based in a jurisdiction that expressly allows nonlawyer ownership. The Committee concludes that it does.
In reaching this conclusion, the Committee considered ABA Comm. on Ethics & Prof'l Responsibility, Formal Op. 91-360 (July 1991) ("Prohibition of Partnerships with Nonlawyers: Extrajurisdictional Effect"). Opinion 91-360 considered the dilemma of a lawyer licensed to practice law in two jurisdictions, one of which allowed nonlawyer law firm ownership (D.C.) and one of which did not (State X). The ABA Committee considered which rules should apply if the dual-licensed lawyer joined a D.C. law firm that lawfully had a nonlawyer partner.
The ABA Committee examined the different policies underlying each jurisdiction's rule, recognizing that the regulation of the bar is "an essential function of the judiciary of each state . . . involving weighty governmental interests." After considering the interests of each jurisdiction, the ABA Committee concluded that the disciplinary rules of State X would prohibit the lawyer from practicing law in State X as a member of a D.C. law firm with a nonlawyer partner. On the other hand, the ABA Committee opined that joining a D.C. law firm with a nonlawyer partner should not subject the dual-licensed lawyer to discipline in State X if the lawyer only practiced in D.C.
The New York State Bar Association Committee on Professional Ethics reached a similar conclusion in NYSBA Ethics Op. 1038 (Dec. 2014). That opinion concluded that a New York lawyer who practiced primarily in New York could not join a D.C. firm with nonlawyer members and could not avoid New York's prohibition of nonlawyer firm ownership by "forming a 'wholly-owned subsidiary law firm' in New York to be 'independently managed/operated' by the New York lawyer."
This Committee reaches the same conclusion. A Texas-licensed lawyer who practices law in Texas violates Rule 5.04(b) or 5.04(d) by joining a law firm with a nonlawyer partner or owner, even if the law firm is based in a jurisdiction that allows expressly nonlawyer law firm ownership.
This Opinion does not address whether a Texas lawyer may divide fees with a lawyer in a different law firm that is lawfully owned by nonlawyers. The topic of fee division between lawyers who are not in the same firm is governed by Rule 1.04(f) and 1.04(g) and does not necessarily implicate the same issues and concerns as Rule 5.04(b) and 5.04(d).
CONCLUSION
A Texas-licensed lawyer who practices law in Texas may not join a law firm that includes a nonlawyer partner or owner, even if the law firm is based in a jurisdiction that expressly allows nonlawyer law firm ownership.
Tex. Comm. On Professional Ethics, Op. 704 (2025)