Can a lawyer help organize a collection agency, and can he call on prospective clients with a card touting his collection work?

Plain-English summary

The inquiry had two parts: whether a lawyer could participate in organizing a collection agency, and whether a lawyer could call on a prospective client, present his card, and state that he was engaged in and giving special attention to collections.

On the first question, the Committee unanimously concluded that the Canons do not prohibit a lawyer from organizing a collection agency, and that a lawyer may participate in any legitimate business enterprise so long as he does not advertise himself as a lawyer in connection with it (10-0). On the second question, the Committee unanimously concluded that the described conduct would violate Canon 24, which prohibits solicitation of professional employment (10-0).

Currency note

This opinion was issued in 1953, under the former Texas Canons of Ethics, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. The advertising and solicitation restrictions the opinion applies predate Bates v. State Bar of Arizona, 433 U.S. 350 (1977), which held that categorical bans on lawyer advertising violate the First Amendment, so the Canon 24 framework used here has since been substantially narrowed. Treat this page as historical context, not current guidance.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: Could a lawyer help organize a collection agency under this opinion?

A: Yes. The Committee held that the Canons do not prohibit a lawyer from organizing a collection agency or any legitimate business, provided he does not advertise himself as a lawyer in it (10-0).

Q: Could the lawyer call on prospective clients with a card touting his collection work?

A: No. The Committee held that calling on a prospective client to present such a card would violate Canon 24's prohibition on solicitation (10-0).

Q: What was the dividing line the opinion drew?

A: Participating in a legitimate side business was permitted; using it to advertise himself as a lawyer or to solicit professional employment was not.

Background and rules framework

The opinion interprets former Texas Canon 24 (solicitation of professional employment), applied to a lawyer's participation in a collection-agency business and to in-person outreach to prospective clients. The modern analogs are ABA Model Rule 7.1 (communications concerning a lawyer's services) and Model Rule 7.3 (solicitation of clients).

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)
• Texas Canon 24 (advertising and solicitation)

See also

• TX Ethics Op. 119: Lawyer Status on a Side-Business Letterhead
• TX Ethics Op. 91: Advertising a Legitimate Side Business
• TX Ethics Op. 110: Contributor Credit Noting "Attorney"

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-92/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_92.pdf

Original opinion text

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

QUESTION PRESENTED

Would it be a violation of the Canons of Ethics for an attorney to participate in the organization of a collection agency?
Would it be a violation of the Canons of Ethics for an attorney to call on a prospective client, present his card and advise that he is engaged in and giving special attention to collections?

18 Baylor L. Rev. 233 (1966)

BUSINESS - PARTICIPATION - ADVERTISING
An attorney may participate in the organization of a collection agency, or in any legitimate business, provided he does not advertise himself as an attorney in connection therewith.

SOLICITATION
An attorney may not call on a prospective client, present his card, and advise that he is engaged in and giving special attention to collections.

Canon 24.

As to Question No. 1, the members of the committee are unanimously of the opinion that the Canons do not prohibit the organization of a collection agency by an attorney. These members hold the view that an attorney may ethically participate in any legitimate business enterprise so long as he does not advertise himself as an attorney in connection therewith. (10-0)

As to Question No. 2, the members of the committee are unanimously of the opinion that the conduct described in the question would violate Canon 24, which prohibits the solicitation of professional employment. (10-0)

Tex. Comm. On Professional Ethics, Op. 92 (1953)