Today’s Top Tip continues our series discussing the new and amended Texas Disciplinary Rules of Professional Conduct. Rule 1.08 received a substantial rewrite while retaining its primary mission–to provide guidelines for when and how a lawyer can enter into a business relationship with a client. This rule recognizes the position of influence a lawyer has, and the risk of overreaching, and seeks to ensure that the lawyer obtains informed consent in writing from the client as to the terms of a business transaction with the client or when the lawyer is acquiring an interest adverse to a client. 

Revised Rule 1.08 establishes three mandatory requirements before an attorney can enter into a transaction with, or knowingly acquire an interest adverse to, a client. The lawyer must, in writing:

Fully disclose the terms of the transaction or acquisition in a way that the client can understand; Advise the client to seek independent counsel…