Tuesday, May 20, 2014

New Ethics Opinion (Texas is Not to Be Messed With)

The Legal Ethics Forum flagged a recent ethics opinion (Opinion 642) from the Texas State Bar, which is sure to be of interest to our CIO, CTO, CRO and COO readers (in that great state at least) -- "Texas Ethics Opinion: Law Firms Can't Have Nonlawyer Chief Technology Officers" --
  • "According to the Committee, a law firm can't hire a nonlawyer to serve as Chief Technology Officer, Chief Operating Officer, or an "officer" or "principal" of any other kind.  The reason?  Apparently, even if these nonlawyers have no control over the delivery of legal services and do not share in the firm's legal fees, the job titles are so misleading that they are unethical.  Here's the Committee's logic:
    • "If the non-lawyer employees will not, in fact, control operations of the law firm nor own an interest in the firm, then designating these employees as "officers" or "principals" would be misleading and thus violate Rule 7.02(a), which states: 'A lawyer shall not make or sponsor a false or misleading communication about the qualifications or the services of any lawyer or firm.'"
    • "Identifying a person as an “officer” of or a “principal” in a law firm when the person does not, in fact, have a controlling or ownership interest in the firm would be a false or misleading communication about the firm." 
    • "Furthermore, using the title "officer" or "principal" for a non-lawyer employee who does not act as an "officer" or "principal" of the firm would violate Rule 8.04(a)(3), which prohibits a lawyer from engaging in “conduct involving dishonesty, fraud, deceit or misrepresentation[.]"
The expert minds and commenters at the Forum waste no time in attacking the opinion, led by law professor Andrew Perlman, who delivers a bit of a double-edged dismissal of the its merit:
  • "I am loathe to be too critical of state bar ethics opinions, but this one seems particularly troubling. In my view, this opinion is yet another unfortunate example of bar associations having a knee jerk negative reaction to the notion that nonlawyers have something important to contribute to the delivery of legal services. With opinions like this, it is no wonder that law firms are losing top nonlawyer talent to -- and having their lunches eaten by -- innovative legal service providers."

(Important Note: The opinion does not limit the scope of "officer" titles affected, so there's every reason to believe that Chief Financial Officers, Chief Knowledge Officers, Chief HR Officers, Chief Risk Officers, and Chief Marketing Officers at Texas firms, who haven't already, best be heading to law school... Or at least might want to consider updating their LinkedIn profiles... I'm partial to the title Khal/Khaleesi, or Admiral -- but, inspired by rules that are taking such interesting and creative turns, I bet our readers can do even better...)

1 comment:

CL1945 said...

The title "Admiral" is actually a rank designation for an "officer" so you're out of luck on that one in Texas unless you are also a lawyer.

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