In October 2024, the Texas Supreme Court adopted significant changes to Texas Disciplinary Rule of Professional Conduct 1.08(a), which sets out the requirements a lawyer must follow if they enter into a business transaction with a client. The rule now explicitly includes the situation when a lawyer knowingly acquires an ownership, possessory, security or other pecuniary interest adverse to a client. It also now explicitly requires that the lawyer make certain disclosures to the client in writing and obtain the client’s informed consent in writing. We previously wrote about these changes in our September 26, 2024 Top Tip.  If you are handling these transactions in the same manner as you were pre-October 2024, you are at risk for violating TDRPC 1.08. 

The TDRPC 1.08(a) requirements are not DICTA. Rather, the following are essential for compliance with 1.08(a):