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Scales of Justice

Trade Names May Survive Next Phase of Texas Lawyer Ad Rules Changes

Texas lawyers may be able to vote on the long-anticipated rules for legal advertising as early as next year. But there appears to be more work to do, particularly regarding the controversy over allowing lawyers and law firms to use trade names.

The possibility of Texas lawyers and firms using trade names appeared to be dead in its tracks the last time I visited the Ad Rules saga. However, despite the flood of negative comments about trade names, it appears that current and potential related lawsuits may end up making them the new normal in Texas.

The latest proposed revisions to the Texas Disciplinary Rules of Professional Conduct recently were published in the Texas Register and the Texas Bar Journal. The State Bar Committee on Disciplinary Rules and Referenda (CDRR) also announced that it will accept public comments on the planned changes through April 10, including those from a public hearing scheduled for 10:30 a.m. on April 7 at the Texas Law Center in Austin. Comments can be submitted online here.

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How Trade Names Came Back

In January, the State Bar of Texas Board of Directors voted to return the proposed rules revisions to the CDRR for further consideration, particularly on the issues surrounding trade names.

During the CDRR’s deliberations, Chairman Lewis Kinard told fellow committee members about a First Amendment lawsuit filed in January by the Utah-based law firm LawHQ, LLC, against Seana Willing, the Chief Disciplinary Counsel of the Texas Office of Chief Disciplinary Counsel.

Filed in the U.S. District Court for the Western District of Texas, LawHQ’s lawsuit is one of nine the firm has filed in states where lawyers’ use of trade names is prohibited, including Texas, Georgia, Indiana, Nebraska, New Jersey, New York, Ohio and Rhode Island.

Following the update from Mr. Kinard, the CDRR decided at its regular meeting earlier this month to eliminate the trade name restriction altogether and leave in place the general prohibitions on false and misleading statements included in proposed Rule 7.01(a), which reads:

“A lawyer shall not make or sponsor a false or misleading communication about the qualifications or services of a lawyer or law firm. Information about legal services must be truthful and nondeceptive. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading. A statement is misleading if there is a substantial likelihood that it will lead a reasonable person to formulate a specific conclusion about the lawyer or the lawyer’s services for which there is no reasonable factual foundation, or if the statement is substantially likely to create unjustified expectations about the results the lawyer can achieve.”

It will be interesting how Texas attorneys decide this hotly debated issue if it ever comes to a vote. But, for now, it appears the prospect of additional litigation could well make trade names a reality in the Lone Star State.

Other Updates to Texas Legal Advertising Rules

In addition to eliminating Rule 7.07 and proposing revisions to Rule 7.01, the CDRR also is considering updated versions of Rule 7.02 through Rule 7.06.

Another controversial proposal in an earlier version of Rule 7.04(b) would have ended the current ban on Texas attorneys being allowed to claim special competence or “specialization” in a particular area unless they are Board Certified by the Texas Board of Legal Specialization (TBLS).

Now, that language has been removed from Rule 7.04(b) and the latest version of Rule 7.02 has been updated to continue the ban on specialization claims from anyone who is not blessed by the TBLS.

My earlier disaster prediction about a proposed revision that would allow Texas attorneys to provide non-lawyers with referral payments is one step closer to being tested. That language remains in the current version and would allow “nominal gifts given as an expression of appreciation that neither intended nor reasonably expected to be a form of compensation for recommending a lawyer’s services.”

If Texas lawyers approve this revision, experience tells me to expect one or more of their colleagues to push the definition of a “nominal gift” for as long and as far as they can get away with it.

Next Steps for Texas Lawyer Advertising Rules

Once the public comment period concludes on April 10, the CDRR will have a June 9 deadline to vote on whether to send the proposed rules to the State Bar Board of Directors for review. The Bar will have 120 days from the time it receives the proposed rules to decide to whether to vote on each rule or return a proposed rule to the committee for additional consideration.

If a majority of the board of directors approves a proposed rule, the Bar will petition the Supreme Court of Texas to order a referendum that would be subject to a vote by every member of the State Bar. Mr. Kinard told the CDRR that he believes the Bar is looking at 2021 before such a vote will be held.

I will continue to monitor the ongoing developments in the Ad Rules debate so please check back in our blog for the latest updates.

 

Bruce Vincent is a writer and editor who was the only reporter to provide gavel-to-gavel coverage of the federal trial that resulted in the lawyer advertising rules for members of the State Bar of Texas. If you or your firm are having trouble deciphering what the rules allow, contact Bruce at bruce.vincent@muselegalpr.com for more information about how he can help.

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