EXHIBIT 5.1

                      MCGUIRE, CRADDOCK & STROTHER, P.C.
                           ATTORNEYS AND COUNSELORS
                              3550 LINCOLN PLAZA
                                 500 N. AKARD
                             DALLAS, TEXAS 75201
                           TELEPHONE (214) 954-6800
                          TELECOPIER (214) 954-6868


                               April 10, 2005


 Securities and Exchange Commission
 Judiciary Plaza
 450 Fifth Street, N.W.
 Washington, D.C. 20549


      Re:  Hallmark Financial Services, Inc.


 Gentlemen:

      We have  acted as  counsel to  Hallmark   Financial Services,  Inc.,  a
 Nevada corporation (the "Company"),  in connection with the filing this date
 of its registration  statement  on  Form S-3 (File  No. ______________) (the
 "Registration Statement"), relating to shares  (the "Shares") of its  common
 stock,  par value  $.03 per share  (the "Common Stock"),  issuable upon  the
 exercise  of  outstanding  subscription  rights  (the  "Rights"),  as   more
 particularly described in the Registration Statement.

      In connection  with  this  opinion,  we  have  examined  the  Company's
 Certificate  of  Incorporation  and  By-Laws, each as  amended to date,  the
 Registration Statement  and  such  other documents  as  we  have  considered
 appropriate for purposes of this opinion.

      We have also reviewed such other matters of law and examined and relied
 upon such  other  documents, records  and  certificates as  we  have  deemed
 relevant hereto.  In all such  examinations we have assumed conformity  with
 the original documents  of all  documents submitted  to us  as conformed  or
 photostatic copies, the  authenticity of all  documents submitted  to us  as
 originals and the genuineness of all  signatures  on all documents submitted
 to us.

      On the basis of the foregoing, we are of the opinion that the  issuance
 and sale of the Shares upon exercise of the Rights have been duly authorized
 and  when  (i)  the  Registration  Statement  becomes  effective  under  the
 Securities Act of  1933, as  amended,  (ii) the  holders of  the Rights have
 complied with  the terms  of  the Rights  in  connection with  the  exercise
 thereof,  (iii) certificates  representing  the Shares  have  been  manually
 signed by an authorized officer of the transfer agent and registrar for  the
 Common Stock and registered by such  transfer agent and registrar, and  (iv)
 the Shares have been delivered to and paid for as contemplated by the Rights
 and the Registration  Statement, the Shares  will be  validly issued,  fully
 paid and non-assessable.

      We hereby consent to the  filing of this opinion  as an exhibit  to the
 Registration Statement  and  to the reference  made  to  our firm  under the
 caption   "Legal  Matters"  in  the  prospectus  constituting  part  of  the
 Registration Statement.

                               Very truly yours,

                               /s/  MCGUIRE, CRADDOCK & STROTHER, P.C.

                               MCGUIRE, CRADDOCK & STROTHER, P.C.