In general, with respect to client funds, a lawyer’s primary duty is to the client and the lawyer is required to deliver client funds to the client in accordance with Texas Disciplinary Rule of Professional Conduct 1.15.* The exceptions to this duty are discussed in Opinion 681 (September 2018) from the Texas Professional Ethics Committee, which set out to clarify a lawyer’s obligations under the disciplinary rules when a lawyer is aware that a third-party claimant has an interest in settlement proceeds or other client property held by the lawyer. 

The existence of a duty turns on whether the third party has a “matured legal or equitable interest” in the funds. Specifically, a lawyer has a duty to disburse funds to a third party when the lawyer is aware that a third party has a matured legal or equitable interest in those…