As we’ve predicted before, the increasing globalization of high-level legal practice continues to create questions about forms of legal practice – in particular, vereins, a structure aimed at letting firms based in different countries operate under a unified brand. Mega-firms Fulbright & Jaworski (subs. req.) and Dentons have faced motions to disqualify centered on such structural issues, and now a Texas ethics opinion issued last month questions whether lawyers in the Lone Star state can use a verein name on pleadings. (Hat tip to Dan Bressler and the Law Firm Risk Management blog for alerting us to the opinion.)

Five AmLaw 100 firms affected

In Opinion 663, the Texas Professional Ethics Committee concluded that under the state’s Disciplinary Rules of Professional Conduct, Texas lawyers in an organization such as a verein “may not use the name of the organization as their law firm’s name on pleadings or other public communications” unless all the names are those of current or former lawyers in the Texas firm or a predecessor firm.

According to an article in Texas Lawyer, five firms on the AmLaw 100, which lists the highest-grossing U.S. law firms, are Swiss vereins that include Texas lawyers, including DLA Piper, Baker & McKenzie, Hogan Lovells, Norton Rose Fulbright and Squire Patton Boggs.

The Committee based its opinion, which is advisory, on Texas’s Rule 7.01(a), which unlike the analogous Model Rule on firm names, expressly bars lawyers from practicing under a “a firm name containing names other than those of one or more of the lawyers in the firm,” (except for deceased/retired lawyers’ names or names of predecessor firms).

The Committee’s analysis used a hypothetical Texas firm formerly named “Smith Johnson,” that has joined an “international verein” and become known as “Brown Jones Smith.” The Texas lawyers in the verein would be violating Rule 7.01(a), said the Committee, because “there has never been a lawyer in the Texas law firm or any predecessor firm named Brown or Jones.”

In addition, like the analogous Model Rule, Texas Rule 7.02 prohibits “misleading” firm names, and the Texas Committee concluded that the use of the “Brown Jones Smith” name would also be misleading, by creating “the appearance that all lawyers in all the law firms that are in the verein are members of a single law firm when in fact they are not.” The firm’s statements about its composition in advertising disclaimers don’t diminish the misleading nature of the communication, the Committee said.

Be careful what you ask for?

According to Texas Lawyer, the Texas Committee issued Opinion 663 in response to an inquiry from Robert Newman, who is of counsel with Norton Rose Fulbright (a verein with Texas lawyers), and a former chair of the Committee. Asking for an advisory ethics opinion, and then getting an adverse one, is always a possibility, although even an adverse opinion at least tells you where you stand, ethically speaking. But the reactions of the current Committee chair and the mega-firms contacted by Texas Lawyer are interesting, and indicate that it will basically be business as usual for the firms, notwithstanding the (advisory) opinion. The Committee chair said that “Literally nothing is going to happen” unless someone files a grievance against a lawyer for using a verein name, which he said would be a “rare” occurrence.

For their part, two firms contacted by Texas Lawyer — Norton Rose Fulbright and Baker & McKenzie — said they do not plan to make any changes as a result of the ethics opinion. The magazine quotes the managing partner of Baker’s Dallas office, who said “We’ve been practicing in Texas as Baker & McKenzie since 1986 and plan to continue to do so.”

Whether this ethics opinion will resonate with bar regulators in other jurisdictions, and whether it will generate some disciplinary cases remains to be seen. Also interesting is the Texas committee’s view that the law firms in the verein are not members of the “same firm,” which might have a potential impact on analyzing future conflict of interest issues, among other things. Stay tuned for further developments.