City of San Antonio, Texas

Ethics Advisory Opinion No. 8

October 23, 2001

Issued By: The Ethics Review Board

Whether a lawyer who is a former City official, may represent for compensation any person, group, or entity, other than himself or his spouse or minor children, before the City Council; before a board, commission, or other city entity; or before a city official within two (2) years after termination of his official duties.

FACTS AND APPLICABLE LAW

A lawyer was employed as an assistant City attorney until September 7, 2000, at which time the lawyer began employment with a private law firm. It is the understanding of the Board that the lawyer frequently attends meetings and initiates contact with City officials and employees regarding matters involving clients of the law firm that employs the lawyer.

Due to the lawyer’s former employment with this office, the City Attorney’s office forwarded the matter to the Ethics Review Board for its consideration pursuant to Part H of the Ethics Code of the City of San Antonio (Code). Section 10(a)(2) of this Part authorizes the Board to "issue a written advisory opinion with respect to the interpretation of the ethics laws as they apply to persons other than city employees if a majority of the Board determines that an opinion would be in the public interest or in the interest of such person or persons subject to the provisions of the ethics laws." The Board, at its meeting on October 2, 2001, voted to appoint a panel to draft for the Board an opinion determining whether the actions of the lawyer in representing clients by initiating contacts with City officials and employees is a violation of the Code.

There are two issues that the Board must determine. First, the Board must determine whether the lawyer’s actions are regulated by the Code, and if so, in what respect. Second, if the Board determines that one or more of the provisions of the Code are applicable to the lawyer’s actions, whether the Texas Disciplinary Rules of Professional Conduct (Rules), particularly Rules 1.10 and 5.06, bar the application of the Code to the lawyer.

The Code’s definition of a "former city employee," is found in Part A, 2. The lawyer is a person who, prior to termination of employee status, was listed on the City of San Antonio payroll as an employee, and whose City duties terminated after the effective date of the Code, January 1, 1999.

Part C of the Code lists the standards of conduct to which a former city official or employee must abide. There are four (4) standards of conduct that apply to former city officials or employees in the provisions of Part C. Those standards of conduct concern: (1) continuing confidentiality; (2) subsequent representation; (3) prior participation in negotiating or awarding contracts; and (4) discretionary contracts.

Section 1 Continuing Confidentiality

A former city official or employee shall not use or disclose confidential government information acquired during service as a city official or employee. This rule does not prohibit:

(a) any disclosure that is no longer confidential by law; or

(b) the confidential reporting of illegal or unethical conduct to authorities designated by law.

Section 2 Subsequent Representation

(a) Representation by a Former Board Member. A person who was a member of a board or other city body shall not represent any person, group, or entity for a period of two (2) years after the termination of his or her official duties:

(1) before that board or body;

(2) before city staff having responsibility for making recommendations to, or taking any action on behalf of, that board or body, unless the board or body is only advisory in nature; or

(3) before a board or other city body which has appellate jurisdiction over the board or body of which the former city official or employee was a member, if any issue relates to his or her former duties.

(b) Representation Before the City.

(1) A former city official or employee shall not represent for compensation any person, group, or entity, other than himself or herself, or his or her spouse or minor children, before the city for a period of two (2) years after termination of his or her official duties. This subsection does not apply to a person who was classified as a city official only because he or she was an appointed member of a board or other city body. For purposes of this subsection, the term compensation means money or any other thing of value that is received, or is to be received, in return for or in connection with such representation.

(2) In connection with the representation of private interests before the city, a former city official or employee shall not state or imply that he or she is able to influence city action on any basis other than the merits.

(c) Representation in Litigation Adverse to the City. A former city official or employee shall not, absent consent from the city, represent any person, group, or entity, other than himself or herself, or his or her spouse or minor children, in any litigation to which the city is a party, if the interests of that person, group, or entity are adverse to the interests of the city and the matter is one in which the former city official or employee personally and substantially participated prior to termination of his or her official duties.

Section 3 Prior Participation in Negotiating or Awarding of Contracts

A former city official or employee may not, within two (2) years of the termination of official duties, perform work on a compensated basis relating to a discretionary contract, if he or she personally and substantially participated in the negotiation or awarding of the contract. A former city official or employee, within two (2) years of termination of official duties, must disclose to the City Clerk immediately upon knowing that he or she will perform work on a compensated basis relating to a discretionary contract for which he or she did not personally and substantially participate in its negotiation or award.

Section 4 Discretionary Contracts

(a) Impermissible Interest in Discretionary Contract or Sale. This Subsection applies only to contracts or sales made on a discretionary basis, and does not apply to contracts or sales made on a competitive bid basis. Within one (1) year of the termination of official duties, a former city officer or employee shall neither have a financial interest, direct or indirect, in any discretionary contract with the City, nor have a financial interest, direct or indirect, in the sale to the City of any land, materials, supplies, or service. Any violation of this Section, with the knowledge, expressed or implied, of the individual or business entity contracting with the Council shall render the contract involved voidable by the City Manager or the Council. A former city officer or employee has a prohibited "financial interest" in a discretionary contract with the city, or in the sale to the city of land, materials, supplies, or service, if any of the following individuals or entities is a party to the contract or sale:

(1) the former officer or employee;

(2) his or her parent, child, or spouse;

(3) a business entity in which the former officer or employee, or his or her parent, child or spouse, directly or indirectly owns:

(A) ten (10) percent or more of the voting stock or shares of the business entity, or

(B) ten (10) percent or more of the fair market value of the business entity; or

(4) a business entity of which any individual or entity listed in Subsection (1), (2) or (3) is:

(A) a subcontractor on a city contract;

(B) a partner; or

    1. a parent or subsidiary business entity.

Exception: Prior Employment or Status. Notwithstanding subsection (a) of this Section 4 (Discretionary Contracts) and Section 3 (Prior Participation in Negotiation or Awarding of Contracts), a former city official or employee may upon leaving official duties return to employment or other status enjoyed immediately prior to commencing official city duties.

The Texas Disciplinary Rules of Professional Conduct (Rules) were adopted by the Supreme Court and made effective on January 1, 1990. Two Rules may be applicable to the lawyer whose actions are at issue in this case.

RULE 5.06 of the Texas State Bar Rules "RESTRICTIONS ON RIGHT TO PRACTICE" states:

A lawyer shall not participate in offering or making:

(a) a partnership or employment agreement that restricts the rights of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement; or

(b) an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a suit or controversy, except that as part of the settlement of a disciplinary proceedings against a lawyer an agreement may be made placing restrictions on the right of that lawyer to practice.

RULE 1.10 of the Texas State Bar Rules "SUCCESSIVE GOVERNMENT AND PRIVATE EMPLOYMENT" states:

(a) Except as law may otherwise expressly permit, a lawyer shall not represent a private client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency consents after consultation.

(b) No lawyer in a firm with which a lawyer subject to paragraph (a) is associated may knowingly undertake or continue representation in such a matter unless:

(1) The lawyer subject to paragraph (a) is screened from any participation in the matter and is apportioned no part of the fee therefrom; and

(2) written notice is given with reasonable promptness to the appropriate government agency.

(c) Except as law may otherwise expressly permit, a lawyer having information that the lawyer knows or should know is confidential government information about a person or other legal entity acquired when the lawyer was a public officer or employee may not represent a private client whose interests are adverse to that person or legal entity.

(d) After learning that a lawyer in the firm is subject to paragraph (c) with respect to a particular matter, a firm may undertake or continue representation in that matter only if that disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom.

(e) Except as law may otherwise expressly permit, a lawyer serving as a public officer or employee shall not:

(1) Participate in a matter involving a private client when the lawyer had represented that client in the same matter while in private practice or nongovernmental employment, unless under applicable law no one is, or by lawful delegation may be, authorized to act in the lawyer's stead in the matter; or

(2) Negotiate for private employment with any person who is involved as a party or as attorney for a party in a matter in which the lawyer is participating personally and substantially.

(f) As used in this rule, the term "matter" does not include regulation-making or rule-making proceedings or assignments, but includes:

(1) Any adjudicatory proceeding, application, request for a ruling or other determination, contract, claim, controversy, investigation, charge accusation, arrest or other similar, particular transaction involving specific party or parties; and

(2) any other action or transaction covered by the conflict of interest rules of the appropriate government agency.

(g) As used in this Rule, the term "confidential government information" means information which has been obtained under governmental authority and which, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose, and which is not otherwise available to the public.

(h) As used in this Rule, "Private Client" includes not only a private party but also a governmental agency if the lawyer is not a public officer or employee that agency.

(i) A lawyer who serves as a public officer or employee of one body politic after having served as a public officer of another body politic shall comply with paragraphs (a) and (c) as if the second body politic were a private client and with paragraph (e) as if the first body politic were a private client.

 

OPINION

The Board is of the opinion that the lawyer is a former City official or employee as defined by the Code. The lawyer was an employee of the City as of January 1, 1999, when the Code became effective. As a result, the lawyer must comply with standards of conduct for former city officials and employees found in Part C of the Code. Therefore, the lawyer is "[a] former city official or employee," and the lawyer is prohibited from representing "for compensation any person, group, or entity, other than himself or herself, or his or her spouse or minor children, before the city for a period of two (2) years after termination of his or her official duties." Additionally, the lawyer must comply with the requirement for continued confidentiality of information received by the lawyer in the course of the lawyer’s employment with the City.

The above conclusion requires the Board to consider the second issue: whether Rules 1.10 and/or 5.06 of the Texas Disciplinary Rules of Professional Conduct bar the application of the Code to the lawyer.

The practice of law in Texas is limited to attorneys licensed to practice law in the state, who are required to be members of the State Bar of Texas. Those persons attempting to practice law in Texas who do not have a license to do so are engaged in the unauthorized practice of law. Section 81.101 of the Texas Government Code defines the practice of law as

the preparation of a pleading or other document incident to an action or special proceeding or the management of the action or proceeding on behalf of a client before a judge in court as well as a service rendered out of court, including the giving of advice or the rendering of any service requiring the use of legal skill or knowledge, such as preparing a will, contract, or other instrument, the legal effect of which under the facts and conclusions involved must be carefully determined.

Subsection (b) of Government Code 81.101 permits the judicial branch to determine whether other acts and services may constitute the practice of law, and subsection (c) excludes from the definition of the practice of law the writing and publication of materials that "conspicuously state that the products are not a substitute for the advice of an attorney."

The regulation of attorneys in the State of Texas is vested in the Supreme Court of Texas. One of the forms of attorney regulation is the Texas Disciplinary Rules of Professional Conduct. The Preamble to those Rules provides that the purpose of the Rules is to "define the proper conduct for purposes of professional discipline." Thus, a lawyer who violates one or more provisions of the Rules is subject to professional discipline. A lawyer may engage in misconduct by actions that are both within and without the practice of law as defined above. For example, a lawyer violates the Rules by engaging in dishonest conduct, see Rule 8.04(a)(3), or by "stat[ing] or imply[ing] an ability to influence improperly a government agency or official." Rule 8.04(a)(5). These examples of impermissible conduct are not restricted to lawyers, or even to the practice of law. But, because lawyers are granted a license to practice law that is unavailable to others, lawyers are subject to regulation of their behavior that extends beyond what is defined as the practice of law.

The City of San Antonio Ethics Code does not attempt to regulate the practice of law in Texas. It does not delineate the standards of conduct for lawyers. It does not attempt to discuss the limits imposed upon lawyers in representing persons after leaving government service, and it does not mete out discipline for the failure of a lawyer to abide by the Disciplinary Rules of Professional Conduct. A lawyer who is a former city employee may engage in conduct that violates the Rules, but that has no logical connection to the former city employee’s duties under the Code. For example, a lawyer who is a former city employee may engage in dishonest action toward a private client. That lawyer’s dishonesty is not within the jurisdiction of the Code, for the lawyer who is a former city employee is required only to abide by the four (4) standards of conduct listed above. Conversely, a lawyer who is a former city employee may violate a provision of the Code (e.g., having an impermissible interest in a discretionary contract), but that has no necessary implication regarding the lawyer’s responsibilities under the Rules. These regulatory provisions are intended for disparate groups for different reasons. That a person is both a lawyer and a former city employee of the City of San Antonio means the person may be subject to the regulatory provisions of both the Code and the Rules. It does not follow that the Code is attempting in any manner to regulate the practice of law. Therefore, the Board concludes that the Code does not attempt to regulate the practice of law, and therefore, the provisions of the Code are applicable to the lawyer, and are not displaced by the Rules or other law of the State of Texas.

It is also the opinion of the Board that Rule 5.06 does not apply to the limitations on representation required by the Code. The beginning language of Rule 5.06 states, "A lawyer shall not participate in offering or making...." The explicit language of Rule 5.06 makes it clear that the rule applies solely to the conduct of a lawyer. The City of San Antonio, is, of course, not a lawyer. Even assuming that Rule 5.06 somehow is directed to the conduct of the City of San Antonio, the substantive provisions of the rule are inapplicable in this case. The City of San Antonio does not by employment agreement or by the Code bar any lawyer from practicing law in the City of San Antonio. The lawyer who is a former city employee is not barred from using his/her legal expertise on behalf of clients in matters that concern the practice of law. As stated clearly in Government Code 81.101, the practice of law is defined to include the preparation of pleadings in actions before a judge in court, and "the giving of advice or the rendering of any service requiring the use of legal skill or knowledge." (emphasis added) Any service that does not require the use of legal skill or knowledge is not the practice of law. Meeting with city officials does not require the use of legal skill, and so is not limited to lawyers. Many non-lawyers meet with city officials, often to discuss issues of both law and public policy. Those actions by non-lawyers do not require the use of legal skill, so those persons are not engaged in the practice of law. Those actions may be subject to the Code, however, through Part E (Lobbyists).

Rule 1.10 states the restrictions concerning conflicts of interests when former government lawyers enter private practice. A lawyer who violates Rule 1.10 is subject to professional discipline. The Code does not attempt to extend the disciplinary scope of Rule 1.10. It does not claim to regulate the practice of law. It merely impresses upon its former city employees and officials, some of whom may be lawyers, that those persons have certain duties that follow the end of the employer-employee relationship. The opinion of the Board is that Rule 1.10 does not affect the Code’s jurisdiction in any manner.

 

___________________________________

(signed) _______________________________

ROSS RODRIGUEZ, District 1 Appointee

ARTHUR DOWNEY, District 9 Appointee

 

(signed)_____________________________

Michael Ariens, Mayor Appointee