State Bar wants client solicitation rule revamped

The Michigan Supreme Court is seeking comments on a proposed amendment of Michigan Rule of Professional Conduct 7.3, ADM File No. 2010-22.

The proposal, sponsored by the State Bar of Michigan, would place limitations regarding attorney solicitation of potential family law clients.

The proposal would added the following language to MRPC 7.3a

[I]n any matter that involves a family law case in a Michigan trial court, a lawyer shall not initiate contact or solicit a party to establish a client-lawyer relationship until the initiating documents have been served upon that party or 14 days have passed since the date the document was filed, whichever action occurs first.

This limitation does not apply if the party and lawyer have a pre-existing family or client-lawyer relationship.

For purposes of this rules, “family law case” includes the following case-type code designations from MCR 8.117: DC, DM, DO, DP, DS, DZ, NA, PJ, PH, PP, or VP.

According to the staff comment accompanying the proposal, the state bar “argues that allowing attorneys to notify defendants before service leads to greater risk of domestic violence against the filing party or other illegal actions (such as absconding with children or removing assets from a joint bank or other financial account) that may occur before service can be completed.”

Accompanying the proposal is a request from Michigan Supreme Court Justice Diane N. Hathaway that persons submitting comments “address whether the proposed amendment to the rule is consistent with Shapero v Kentucky Bar Ass’n, 486 US 466; 108 S ct 1916; 100 LEd 2d 475 (1988), or raises any other constitutional concerns.”

The comment period for the proposal closes March 1, 2012. Send comments in writing or by email to: Supreme Court Clerk, P.O. Box 30052, Lansing, MI 48909, or MSC_clerk@courts.mi.gov. Reference ADM File No. 2010-22.

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MSC hearing on referral fee, pro bono rules

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.

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.

– Information provided by the Michigan Supreme Court.

Another swing at revamping client solicitation rules

There was considerable uproar in May when the Michigan Supreme Court amended MRPC 7.3 and published for comment further revisions of when, how and under what circumstances attorneys could solicit potential clients.

See Michigan Lawyers Weekly, “Does new advertising rule give big firms, insurance companies a head start?” (May 30, 2011).

When the proposal was first floated in July 2010, it was almost universally panned by those submitting comments on the Court’s web site. Follow the link and search “2002-24” when you get there.

Yesterday, the Court backtracked:

On order of the Court, and in light of concern expressed regarding the amendments adopted in this file [ADM File No. 2002-24] by order of the Court dated May 19, 2011, the order that entered on that date is rescinded, effective immediately … .

In yesterday’s order, the Court published for comment its latest proposal for regulating client solicitation. As explained by the staff comment accompanying the proposal:

Under the proposed amendments, MRPC 7.3 would be reformatted and would describe the general prohibition regarding a lawyer’s solicitation, and also would describe the types of communication that are allowed, including a lawyer’s general advertising, and a lawyer’s targeted communications to potential clients who are facing legal problems (as protected by Shapero v Kentucky Bar Ass’n, 486 US 466 [1988]).

The proposed amendments of MRPC 7.3 would require that inclusion of the designation “Advertising Material” on general advertising and targeted communications applies only to written materials, including e-mailed communications, but not to television or radio advertisements.

The amendment also requires a 30-day period to pass before an attorney may contact a potential client after a death, injury, or accident.

Comments are welcome, says the Court:

Comments on the proposal may be sent to the Supreme Court Clerk in writing or electronically by November 1, 2011, at P.O. Box 30052, Lansing, MI 48909, or MSC_clerk@courts.mi.gov.

When filing a comment, please refer to ADM File No. 2002-24. Your comments and the comments of others will be posted at http://www.courts.mi.gov/supremecourt/resources/administrative/index.htm.

We’ll keep you posted.

MSC amends lawyer advertising rule

The Michigan Supreme Court has amended Michigan Rule of Professional Conduct 7.3 — Direct Contact With Prospective Clients — to require lawyers who engage in certain types of client solicitation to include the words “Advertising Material” as part of the pitch.

According to the staff comment accompanying today’s amendment:

MRPC 7.3 has been reformatted and describes the general prohibition regarding a lawyer’s solicitation, and also describes the types of communication that are allowed, including a lawyer’s general advertising, and a lawyer’s targeted communications to possible clients who are facing legal problems (as protected by Shapero v Kentucky Bar Ass’n, 486 US 466 [1988]). The amendment of MRPC 7.3 requires that inclusion of the term “Advertising Material” applies only to written materials, including e-mailed communications, but not to television or radio advertisements. The amendment also requires a 30-day period to pass before an attorney may contact a potential client after a death, injury, or accident.

The staff comment is not an authoritative construction by the Court.

The amendment takes effect Sept. 1, 2011.

The Court adopted the amendment on a 4-3 vote. Justice Diane Marie Hathaway dissented, stating that she would “decline to adopt.”

Justice Marilyn Kelly dissented, opting instead for ABA Model Rule of Professional Conduct 7.3.

Justice Stephen J. Markman dissented as well. Markman said he didn’t think the amended rule significantly addresses the problems of lawyer advertising. He also stated that the the amended rule places small firms at a distinct economic disadvantage:

Essentially, as in other states, the floodgates have been opened in Michigan concerning lawyer advertising, with fortunes now spent in this regard on television, radio, billboards, and 1-800-LAWSUIT telephone numbers.

In the face of this transformation of the advertising environment, this Court now issues a new rule focused upon which of the four corners of a postcard soliciting clients the words “advertising material” must appear.

The upshot is that those lawyers, and law firms, which engage in client solicitation by the hundreds of thousands will continue to engage in business as usual, while those lawyers, and law firms, which engage in client solicitation one person at a time will become more heavily regulated.

Further, the latter group will be prohibited during a 30-day period from soliciting business from certain categories of potential clients, while the former group will be allowed to continue soliciting such business during the same period.

For better or for worse, the United States Supreme Court has redefined the rules of the game for lawyer advertising, and I would not indulge in the illusion that by the measure this Court adopts today, we are doing anything of consequence to improve upon these rules.

Instead, all that we are doing is placing the small law firm at an increasing economic disadvantage to the large law firm in terms of client solicitation. I see little point to the new rule, and would not adopt it.

MSC proposes referral fee, juror challenge changes; names chief judge in Barry County

Referral fees would be limited to 25 percent under a proposed amendment of Rule 1.5 of the Michigan Rules of Professional Conduct.

The Michigan Supreme Court’s proposed 25 percent cap would be lifted

if the referring attorney participates in the case to an extent that a greater percentage of the amount recovered should be allowed as a reflection of the referring attorney’s substantial input of time or cost, or assumption of risk, the referring attorney’s share of fees may exceed the maximum referral fee as agreed by the receiving attorney and as approved by the court in which the proceeding takes place.

The proposal would also require that contigent-fee agreements disclose “the amount or percentage of fees to be divided or shared among or between lawyers who are not in the same firm.”

Under the proposed amendment, clients would have to approve “the amount or percentage of fees to be divided or shared among or between lawyers who are not in the same firm.” ADM File No. 2010-07.

Under a proposed amendment of MCR 2.511, courts would be required to excuse to discharge a juror upon learning that the juror is unqualified, rather than waiting for a party to challenge the juror for cause. The staff comment to the proposal explains that

[b]ecause MCL 600.1337 requires a court to discharge an unqualified juror regardless whether a party challenges the juror for cause, the proposed amendment of MCR 2.511 would eliminate the provision from the list of challenges that may be made for cause, and instead would clarify that the discharge must be made when the court learns that the juror is not qualified to serve.

This clarification would foreclose the possibility that an unqualified juror could be allowed to sit because no one challenged his or her qualification.

ADM File No. 2011-10.

The Michigan Supreme Court issued the proposed amendments in orders released yesterday. The comment period for both proposals is open until Sept. 1, 2011.

In another order released yesterday, the MSC appointed Judge William M. Doherty as chief judge of the Barry County Trial Court for a term ending Dec. 31, 2011.

MSC issues rules orders, board appointments

The Michigan Supreme Court issued the following orders on March 22, 2011:

  • ADM File No. 2011-01. Appointments to the Court Reporting and Recording Board of Review: Probate Judge Shana Lambourn, and Felicia Jordan, Sylvia Stratton and Rebecca Russo.
  • ADM File No. 2011-01. Appointments to the Committee on Model Civil Jury Instructions: Mark T. Boonstra, Thomas Van Dusen.
  • ADM File No. 2004-19. Rescission of LCR 4.202 of the 36th District Court: The rescinded rule provided “Rule: 4.202 Summary Proceedings; Land Contract Forfeiture (I) Joinder; Removal. (2) In the Thirty-Sixth District Court a money claim or counterclaim must be tried separately from a claim for possession unless joinder is allowed by leave of the court pursuant to MCR 4.202(I)(3).”
  • ADM File No. 2008-29, 2008-43. Amendments of MCR 3.807, 3.921, and 5.402: Technical amendments to clarify former language and to correct cross references.
  • ADM File No. 2011-04. Proposed Amendments of MCR 3.911 and 3.915: The proposed amendment of MCR 3.911 would eliminate the 14-day time frame during which a demand for jury must be made. The proposed revision of MCR 3.915 would clarify that counsel should be appointed for a parent even at the preliminary hearing of a child protective proceeding.
  • ADM File No. 2011-05. Proposed Amendments of the Michigan Rules of Professional Conduct: The proposed amendments of MRPC 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, 1.9, 1.13, 1.14, 1.15, 1.16, 1.17, 3.2, 4.1, 4.3, 5.2, and 8.4 would incorporate language from the comments of these rules into the rule itself.