Houston Daily

Texans for Lawsuit Reform recently announced on the social media platform X that some lawyers specializing in billboard advertising are leveraging Arizona's permissive regulations to expand their firms.

Under existing Texas law, non-lawyers are barred from owning law firms or being partners in entities engaged in legal practice. According to the Texas Disciplinary Rule of Professional Conduct Rule 5.04(b) and (d), a lawyer cannot form a partnership with a non-lawyer if any activities of the partnership involve practicing law. Non-lawyers are also prohibited from owning shares or having managerial authority in such entities. The Texas Bar’s Professional Ethics Committee reaffirmed this stance in Opinion 704 (2025), stating that even if a firm is based outside Texas where non-lawyer ownership is allowed, a Texas-barred attorney would violate Rule 5.04 by joining such a firm if they practice law within Texas.

According to legal ethics commentary, while Texas has not adopted Alternative Business Structures (ABS) or permitted non-lawyer ownership of law firms, some plaintiff law firms use extensive advertising methods like billboards, radio, and TV to increase case volume. Although specific statistics on cases driven by billboard advertising in Texas are unavailable, there is concern that advertiser-funded lead generation may prioritize volume over quality in litigation. Commentary also warns that firms heavily reliant on mass marketing might pursue riskier cases or push settlements for profit maximization rather than achieving optimal client outcomes.

In terms of liability, Texas law allows for vicarious liability through doctrines like respondeat superior, which can hold businesses accountable for wrongful acts committed by employees within their employment scope. Businesses often use this doctrine defensively by either proving the employee was not acting within employment scope during the wrongful act or demonstrating strong supervision and policies to mitigate claims exposure. Practitioners note this serves as a check against litigant abuse; when suing under vicarious liability theory, plaintiffs must partly prove the wrongful act was foreseeable.

Texans for Lawsuit Reform is an advocacy organization based in Texas focused on promoting changes in civil justice laws to curb what it perceives as "lawsuit abuse." The group engages in policy research, public education, lobbying, and legislative advocacy aimed at reforming rules related to liability, court access, plaintiff law firm advertising, damages, and procedural matters.