Michigan Supreme Court to review ethics rules on Sept 28th

Cap on attorney referral fees, pro bono requirements among proposed changes

LANSING, MI--A proposed rule aimed at capping attorney referral fees in contingent fee cases is on the agenda of the Michigan Supreme Court's September 28 public hearing.

The rule would apply to cases where the attorney's compensation is an agreed-upon share of the case award or settlement. Under the proposed amendment of Michigan Rule of Professional Conduct 1.5 (ADM File No. 2010-07), an attorney who refers a contingent fee case to another attorney could receive a referral fee, but the fee would be capped at "25 percent of the amount recovered." The rule change is aimed at discouraging attorneys from operating as brokering services and directing clients to lawyers who pay the highest referral fees. A referring attorney who also contributes a "substantial input of time or cost, or assumption of risk" could receive a larger fee if the other attorney agrees and if the court approves.

Other proposed attorney ethics rule changes (ADM File No. 2011-05) would amend MRPC 1.1 ("Competence"), 1.2 ("Scope of Representation"), 1.3 ("Diligence"), 1.4 ("Communication"), 1.5 ("Fees"), 1.6 ("Confidentiality of Information"), 1.7 ("Conflict of Interest: General Rule"), 1.9 ("Conflict of Interest: Former Client"), 1.13 ("Organization as Client"), 1.14 ("Client Under a Disability"), 1.15 ("Safekeeping Property"), 1.16 ("Declining or Terminating Representation"), 1.17 ("Sale of a Law Practice"), 3.2 ("Expediting Litigation"), 4.1 ("Truthfulness in Statements to Others"), 4.3 ("Dealing with An Unrepresented Person"), 5.2 ("Responsibilities of a Subordinate Lawyer"), and 8.4 ("Misconduct"). For example, MRPC 1.15 would be amended to add that "A lawyer shall not delay remittance of funds received from third persons as a way to coerce a client to accept a lawyer's statement of payable fees and expenses."

The Court will also discuss whether to adopt one of two alternative proposals regarding an attorney's ethical obligation to provide pro bono services (ADM File No. 2010-18; proposed amendments to of MRPC 6.1). Alternative A would clarify that attorneys are not subject to disciplinary proceedings to enforce the pro bono rule. Alternative B would require Michigan attorneys to donate 30 hours of professional time or handle three pro bono cases per year, and/or contribute $300 or $500 per year to programs that provide legal services to the poor.

The Michigan Supreme Court periodically holds administrative hearings to allow interested persons to comment on proposed court rule changes and other administrative matters on the Court's agenda. Speakers will be allotted three minutes each to present their views, after which they may be questioned by the Justices. To reserve a place on the agenda, please contact the Office of the Clerk of the Court in writing at P.O. Box 30052, Lansing, Michigan 48909, or by e-mail at MSC_clerk@ courts.mi.gov, no later than Monday, September 26, 2011. Requests to speak should include the ADM file numbers for the agenda items the speaker wishes to discuss.

The September 28 hearing will be held in the Supreme Court courtroom on the sixth floor of the Michigan Hall of Justice, 925 W. Ottawa Street, Lansing, Michigan 48915, starting at 9:30 a.m.

More information, including comments about these proposals, is online at http://www. courts. michigan.gov/supremecourt/Resources/Administrative/index.htm#proposed.

Published: Thu, Sep 15, 2011


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