EXHIBIT 5.1


                   McGUIRE, CRADDOCK, STROTHER & HALE, P.C.
                           ATTORNEYS AND COUNSELORS
                              3550 LINCOLN PLAZA
                                 500 N. AKARD
                             DALLAS, TEXAS 75201

                                                   TELEPHONE (214) 954-6800
                                                   TELECOPIER (214) 954-6868

                                July 12, 2000

 Hallmark Financial Services, Inc.
 14651 Dallas Parkway
 Suite 900
 Dallas, Texas  75240

      RE:  Registration Statement on Form S-8

 Dear Gentlemen:

      We have  acted as  counsel for  Hallmark  Financial Services,  Inc.,  a
 Nevada corporation (the "Company"), in  connection with the preparation  and
 filing of a Registration Statement on  Form S-8 under the Securities Act  of
 1933 relating to  an aggregate  of 3,375,000  shares (the  "Shares") of  the
 Company's common  stock,  $0.03 par  value  per share,  issuable  under  the
 Hallmark Financial Services, Inc. 1991 Key  Employee Stock Option Plan,  the
 Hallmark Financial Services, Inc. 1994 Key Employee Long Term Incentive Plan
 and the Hallmark Financial Services,  Inc. 1994 Non-Employee Director  Stock
 Option Plan (collectively, the "Plans").

      In connection with the foregoing, we have examined originals or copies,
 certified or otherwise  identified to our  satisfaction, of such  documents,
 corporate records, certificates of public officials and other instruments as
 we have deemed necessary or advisable for the purposes hereof.  Based on the
 foregoing, we are of  the opinion that, when  issued in accordance with  the
 Plans, the Shares will be duly authorized and validly issued.

      This opinion is  solely for the  benefit of the  Company in  connection
 with the Registration  Statement and  may not be  relied upon  by any  other
 person, furnished  to any  other person,  quoted,  filed or  otherwise  used
 without the express written consent of this firm.  We hereby consent to  the
 filing of this opinion as an exhibit to the Registration Statement.

                                    Very truly yours,

                                    MCGUIRE, CRADDOCK, STROTHER & HALE, P.C.



                               By:
                                    Steven D. Davidson, Director