Rule governing bar admission by motion amended

Lawyers seeking admission to the State Bar of Michigan without taking the Michigan bar examination will no longer be required to state a good-faith intention to maintain an office in the state under a rule change approved by the Michigan Supreme Court.

The Michigan Supreme Court, with one partial dissent, has amended Rule 5 of the Rules for the Board of Law Examiners to eliminate the requirement effective Jan. 1, 2013.

However, there’s a possible snag. The rule amendment is at odds with MCL 600.946, which has not been amended to mirror the newly amended rule.

That’s why Janet Welch, the state bar’s executive director, had asked the MSC to adopted the Jan. 1, 2013, effective date, “to allow the Legislature to act on a corresponding statutory change consistent with the proposed amendment.” Welch submitted the request on behalf of the bar’s Executive Committee.

Chief Justice Robert Young Jr. complained that the MSC majority acted too quickly.

I concur with amending Rule 5 of the Rules for the Board of Law Examiners to eliminate the requirement that an application for admission without examination assert the intent to maintain an office in Michigan for the practice of law.

However, I dissent from giving this change effect prior to the amendment of MCL 600.946, which provides the identical requirement. Therefore, until MCL 600.946 is amended, the adopted rule change will not solve the problem it is designed to cure and amounts to no more than a gesture by this Court.

Young didn’t identify the “problem” to which he referred.

But Welch, in her comments to the MSC, noted that at least one other jurisdiction has found an in-state office requirement unconstitutional, and that the U.S. Supreme Court has spoken on the matter.

We believe that proposed change is supported by federal case law, In Fraizer v. Heebe,  a 1987 U.S. Supreme Court case, [the Court] struck down a U.S, District Court local rule requiring either residency in the state where the court sat or the maintenance of an office in the state without reaching any of the constitutional questions, by concluding that the residency requirement was “unnecessary and arbitrarily discriminates against out-of-state lawyers” and that the in-state office requirement is “unnecessary and irrational.”

In September 2011, New York’s in-state office requirement was ruled unconstitutional in Schoenefeld v. New York. The opinion held that the rule was a violation of the privileges and immunities clause.

So, the MSC has amended a rule governing admission to the bar, presumably to eliminate a provision of questionable legality. Young has gone out of his way to opine that the MSC’s action doesn’t mean a thing until the Legislature brings the statute into line.

In the meantime, the Legislature is preparing for its summer break, so if anything is going to happen, it won’t be until later in the year.

Lest you think this is an academic point, the Michigan Board of Law Examiners gets more than 100 applications a year for admission under Rule 5.

If the Legislature doesn’t act until after Jan. 1, or decides to simply ignore the matter, the bar examiners will have an interesting choice to make when processing Rule 5 applications in 2013 and beyond.

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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.

Eastern District Bankruptcy Court: Hear it soon

In April 2011, the United States Bankruptcy Court for the Eastern District of Michigan will begin to make digital audio files of court proceedings available to the public over the internet through the PACER system.

Counsel of record who receive a notice of electronic filing will have one free review, just as they do with other electronically filed documents.

The PACER fee to access the digital audio is $2.40 per session.

The implementation schedule, which is subject to change if unforeseen technical issues arise, is as follows:

  • beginning April 11, 2011: audio files from all matters held before Judge Thomas Tucker will be uploaded to court dockets in CM/ECF, within 24 hours of the proceeding.
  • beginning April 18, 2011: audio files from all matters held before Chief Judge Phillip Shefferly and Judge Steven Rhodes will be uploaded to court dockets in CM/ECF, within 24 hours of the proceeding.
  • beginning April 25, 2011: audio files from all matters held before Judge Marci McIvor and Judge Walter Shapero will be uploaded to court dockets in CM/ECF, within 24 hours of the proceeding.
  • beginning May 2, 2011: audio files from all matters held before Judge Daniel Opperman will be uploaded to court dockets in CM/ECF, within 24 hours of the proceeding.

The court’s order includes instructions for downloading the MP3-format audio files.

Source: United States Bankruptcy Court for the Eastern District of Michigan.

Big firms expect to raise rates slightly, but …

An interesting report was recently released by the Altman Weil consulting firm. It surveyed nearly 300 U.S. law firms and found that those firms intend to raise their 2010 rates by an average of more than 3 percent.

“Although these results may seem to contradict some expectations for rate freezes in 2010, this is a relatively conservative rate increase by law firms that are struggling to balance their own business perspective with the needs of their clients.” said Altman Weil principal Tom Clay.  “Most firms are making careful, considered increases – often client by client or lawyer by lawyer – unlike prior years when across the board increases were typical. … Law firms know that this is a buyers market.” 

However, when the managing partners of some of Michigan’s largest law firms were asked about what measures they would be taking in 2010 in terms of raising rates,  none would respond on record.

It’s understandable why they kept mum. No one wants to alert the competition as to what course of action is being taken financially by a firm of 100 or more attorneys. It could lead to something akin to the Wal-Mart v. Amazon price wars of last holiday season — only on a more crucial scale.

Foley & Mansfield PLLP takes top honors at MiLW’s 21st Century Innovator event

At Michigan Lawyers Weekly’s second 21st Century Innovators event, 21 Michigan firms were saluted for their new and different ways of achieving success — from going fully paperless to hosting free seminars on pressing legal matters, to finding new uses for software to composing a company code of core values.

But it was one firm’s idea that stood out as thinking beyond convention.

Foley & Mansfield PLLP took top honors at the 21st Century Innovator for its Detroit FM Employment Connection program, which offers employers an affordable way to discuss and solve potential labor law problems with an attorney.

C. John Holmquist Jr. and Gregory M. Meihn, who came up with the program earlier this year, said it was to help employers understand and get a handle on new legal changes that the Obama administration – and a dour economy – were bringing to the labor landscape.

At $150 per quarter for unlimited labor law-related advice, “Some would call this way of thinking the equivalence of a loss-leader,” said Lawyers Weekly publisher Alan Turner at the ceremony, which took place Sept. 10 at the Detroit Marriott in Troy. “We, however, call it innovation.”

For more on how Foley & Mansfield’s program came into being, and where it’s headed from here, check out the Sept. 21 edition of Michigan Lawyers Weekly.

Bankruptcy filings soar, conference will cover client issues

From the American Bankruptcy Institute comes word that October consumer bankruptcy filings were the most ever since the Bankruptcy Code was revised two years ago.

Filings increased to 75,975, up 10 percent from the previous month. Chapter 13 filings accounted for almost 40 percent of the total and could go higher if Congress passes legislation that would let consumers use bankruptcy to write down their mortgages to avoid foreclosure, says the ABI.

It’s a good time to bone up on the new code, and the ABI and the Detroit Consumer Bankruptcy Association have just the thing: a Nov. 12 conference at the Detroit Marriott Troy designed especially for Michigan-area bankruptcy practitioners.

Program sessions will include: Means Test Calculating; Litigating the Presumption of Abuse under Section 707; Secured Claims in Chapter 7 and 13; Mock Appellate Argument: “Projected” Disposable Income Issue; New Options When Facing Foreclosure; Consumer Case Management for Debtors’ and Creditors’ Attorneys and a Judges Panel.

Click here for more information and a link to register.