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Law Firms in San Antonio to Face Clarified Restrictions on Internal Structure and Designation of Sta

The Texas bar’s ethics committee just released an opinion that has the potential to affect law firms in San Antonio and all across Texas. It may just be semantics, but semantics are apparently exceptionally important when considering the staffing structure of firms in the Lone Star state, and according to this notice in the American Bar Association Journal, firms are now prohibited from using certain titles and designations for their non-lawyer senior staff.

Titles such as “chief executive officer,” and “chief technology officer” are out for managers who don’t hold a law degree. The ethics opinion specifies that such words as “officer” indicates “the person has the power to control either the entire firm or significant areas of the firm’s operations,” which is unethical in an organization that calls itself a law firm in San Antonio. Oh, and “principal” is out, too, for much the same reason: the word implies that the employee “has an interest in the firm involving control or ownership.”

Lawyers are special. Or, at least, the rules that govern their organization and formation into groups practicing together most certainly are. And allowing non-lawyers the title “officer” or “principal” are apparently misleading, since non-lawyers are not allowed “to direct or control the professional judgment of a lawyer” in Texas. So for law firms in San Antonio and Dallas, at least, no one can be a lawyer’s boss. (Unless they, too, have that J.D.).

The opinion has received some criticism across the industry, including within the ABA Journal article, which points out that “the ethics opinion is at odds with the way many large law firms operate,” which hire non-lawyers with excellent business education and experience and allow them titles within the firm reflecting their roles. So what’s in a name? An age-old question pondered by intellectuals and artists for centuries, the Texas bar association has finally figured it out. Or, at least, in so far as law firms in San Antonio and across Texas are concerned, unless being disbarred is on the agenda.

The second part of the ethics committee’s decision doesn’t bode well for top businessmen and women working at law firms in San Antonio and in Houston, etc., either: Texas law firms can’t pay bonuses to non-lawyer employees based on the firm’s ability to meet a revenue or target profit, either. That would be sharing legal fees with a non-lawyer.

Sometimes you have to draw a hard line in the sand, something Texas is pretty good at. At other times, such as in this case, it may be worth considering what the potential cost could be? Will Texas law firms still be able to recruit individuals with business backgrounds to come and work for them, if they can neither give them the title nor pay that they deserve? How will this affect the reputation of Texas law firms in the long term? Attorneys and law firms across the U.S. are acutely aware how the industry is changing, moving away from Big Law to innovative and smaller-scale solutions; now the Texas bar association may just be helping that process along, even if in an antagonistic way.

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