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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


Michigan Legal Ethics

V. LAW FIRMS AND ASSOCIATIONS

5.1   Rule 5.1 Responsibilities of a Partner and Supervisory Lawyer

5.1:100   Comparative Analysis of MI Rule

¥ Primary Michigan References: MI Rule 5.1
¥ Background References: ABA Model Rule 5.1, Other Jurisdictions
¥ Commentary:

5.1:101      Model Rule Comparison

Michigan adopted MR 5.1 exactly.

5.1:102      Model Code Comparison

[The discussion of this topic has not yet been written.]

5.1:200   Duty of Partners to Monitor Compliance with Professional Rules

¥ Primary Michigan References: MI Rule 5.1(a)
¥ Background References: ABA Model Rule 5.1(a), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:201, ALI-LGL ¤ 12, Wolfram ¤ 16.2
¥ MI Commentary: Dubin and Schwartz MRPC 5.1

Formal Ethics Opinion R-5 provides that law firms and lawyers must develop record retention policies or plans to protect client confidences and secrets. In Informal Ethics Opinion RI-149, the committee held that a supervising lawyer had a responsibility to notify the Attorney Grievance Commission on discovering that a subordinate lawyer had neglected professional obligations.

This duty extends to supervision over temporary ÒleasedÓ lawyers as well. RI-310.

5.1:300   Monitoring Duty of Supervising Lawyer

¥ Primary Michigan References: MI Rule 5.1(b)
¥ Background References: ABA Model Rule 5.1(b), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:201, ALI-LGL ¤ 12, Wolfram ¤ 16.2
¥ MI Commentary: Dubin and Schwartz MRPC 5.1

See discussion under 5.1:200 above.

5.1:400   Failing to Rectify the Misconduct of a Subordinate Lawyer

¥ Primary Michigan References: MI Rule 5.1(c)
¥ Background References: ABA Model Rule 5.1(c), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:201, ALI-LGL ¤ 5, Wolfram ¤ 16.2
¥ MI Commentary: Dubin and Schwartz MRPC 5.1

See discussion under 5.1:200 above.

5.1:500   Vicarious Liability of Partners

¥ Primary Michigan References: MI Rule 5.1
¥ Background References: ABA Model Rule 5.1, Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:201, ALI-LGL ¤58
¥ MI Commentary: Dubin and Schwartz MRPC 5.1

See discussion under 1.1:600 above.

5.2   Rule 5.2 Responsibilities of a Subordinate Lawyer

5.2:100   Comparative Analysis of MI Rule

¥ Primary Michigan References: MI Rule 5.2
¥ Background References: ABA Model Rule 5.2, Other Jurisdictions
¥ Commentary:

5.2:101      Model Rule Comparison

Michigan adopted MR 5.2 exactly.

5.2:102      Model Code Comparison

[The discussion of this topic has not yet been written.]

5.2:200   Independent Responsibility of a Subordinate Lawyer

¥ Primary Michigan References: MI Rule 5.2(a)
¥ Background References: ABA Model Rule 5.2(a), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:201, ALI-LGL ¤ 5, Wolfram ¤ 16.2
¥ MI Commentary: Dubin and Schwartz MRPC 5.2

The official Comment to Rule 5.2 states:

ÒWhen lawyers in a supervisor-subordinate relationship encounter a matter involving professional judgment as to ethical duty, the supervisor may assume responsibility for making the judgment. Otherwise a consistent course of action or position could not be taken. If the question can reasonably be answered only one way, the duty of both lawyers is clear and they are equally responsible for fulfilling it.Ó

In RI-92, the Ethics Committee determined that an employee of a legal aid organization was equally responsible for violating MRPC 1.15 and should refuse to continue the violation.

5.2:300   Reliance on a Supervisor's Resolution of Arguable Ethical Issues

¥ Primary Michigan References: MI Rule 5.2(b)
¥ Background References: ABA Model Rule 5.2(b), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:201, ALI-LGL ¤ 5, Wolfram ¤ 16.2
¥ MI Commentary: Dubin and Schwartz MRPC 5.2

See discussion under 5.2:200 above.

5.3   Rule 5.3 Responsibilities Regarding Nonlawyer Assistants

5.3:100   Comparative Analysis of MI Rule

¥ Primary Michigan References: MI Rule 5.3
¥ Background References: ABA Model Rule 5.3, Other Jurisdictions
¥ Commentary:

5.3:101      Model Rule Comparison

Michigan adopted MR 5.3 exactly.

5.3:102      Model Code Comparison

[The discussion of this topic has not yet been written.]

5.3:200   Duty to Establish Safeguards

¥ Primary Michigan References: MI Rule 5.3(a)
¥ Background References: ABA Model Rule 5.3(a), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:201, ALI-LGL ¤¤ 4, 5, Wolfram ¤ 16.3
¥ MI Commentary: Dubin and Schwartz MRPC 5.3

The official Comment to Rule 5.3 provides that a lawyer should give employee assistants appropriate instruction and supervision concerning the ethical aspects of their employment, particularly regarding the obligation not to disclose information relating to representation of the client, and should be responsible for their work product. The measures employed in supervising nonlawyers should take account of the fact that they do not have legal training and are not subject to professional discipline.

In RI-210, the Ethics Committee held that a lawyer who participates in a legal assistance program may be assisted by nonlawyers in the representation of a client, but the lawyer must supervise the non-lawyers to insure compliance with professional obligations. In RI-128, the Committee decided that a lawyer may not delegate responsibility for client contact to a legal assistant where the lawyer has never met the client or discussed the representation directly with the client. In RI-191, the Ethics Opinion holds that a lawyer may not delegate the responsibility for commencing a lawyer-client relationship to a nonlawyer agent and must properly supervise the activities of a nonlawyer employee.

5.3:300   Duty to Control Nonlawyer Assistants

¥ Primary Michigan References: MI Rule 5.3(b)
¥ Background References: ABA Model Rule 5.3(b), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 21:8601, ALI-LGL ¤¤ 4, 5, Wolfram ¤ 16.3
¥ MI Commentary: Dubin and Schwartz MRPC 5.3

See discussion under 5.3:200 above.

5.3:400   Responsibility for Misconduct of Nonlawyer Assistants

¥ Primary Michigan References: MI Rule 5.3(c)
¥ Background References: ABA Model Rule 5.3(c), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:201, ALI-LGL ¤¤ 4, 5, Wolfram ¤ 16.3
¥ MI Commentary: Dubin and Schwartz MRPC 5.3

See discussion under 5.3:200 above. See also RI-29 where it was held that a lawyer had an obligation to disclose that a law student who worked for the same company had been involved in an automobile accident and had failed to report it. Since the failure to disclose this information about the law student would constitute the lawyerÕs ratification, the duty to report arose.

In Upjohn Co v Aetna Casualty & Surety Company, 768 F Supp 1186 (WD Mich 1990), the court held that evidence obtained by a private investigator who violated the Michigan Rules of Professional Conduct would be inadmissible at trial even if the violations were unintentional or committed without the knowledge of the lawyer who employed the investigator.

5.4   Rule 5.4 Professional Independence of a Lawyer [Restrictions on Form of Practice]

5.4:100   Comparative Analysis of MI Rule

¥ Primary Michigan References: MI Rule 5.4
¥ Background References: ABA Model Rule 5.4, Other Jurisdictions
¥ Commentary:

5.4:101      Model Rule Comparison

Michigan adopted MR 5.4 exactly.

5.4:102      Model Code Comparison

[The discussion of this topic has not yet been written.]

5.4:200   Sharing Fees with a Nonlawyer

¥ Primary Michigan References: MI Rule 5.4(a)
¥ Background References: ABA Model Rule 5.4(a), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 41:801, ALI-LGL ¤ 60, Wolfram ¤¤ 16.4, 16.5
¥ MI Commentary: Dubin and Schwartz MRPC 5.4

The provisions of this rule express traditional limitations on sharing fees. According to the official Comment, these limitations are to protect the lawyerÕs professional independence of judgment.

A lawyer who has had his license suspended, for example, may not share in legal fees for services performed by another lawyer to whom he had referred a case during the period of disqualification. RI-19. A suspended lawyer can be compensated on a quantum meruit basis for legal services rendered before the date of suspension. RI-30. However, it is unethical for a lawyer to pay a for profit lawyer referral service for the right to receive potential clients. R-8. And a lawyer cannot provide legal services at a seminar sponsored by a non-legal organization where the lawyer and the organization shared the fees for attendance. RI-141. A lawyer may base part of a legal assistantÕs compensation on the percentage of the net profit from the specific area of practice in which the employee will be involved. RI-143.

5.4:300   Forming a Partnership with Nonlawyers

¥ Primary Michigan References: MI Rule 5.4(b)
¥ Background References: ABA Model Rule 5.4(b), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:401, ALI-LGL ¤ 60, Wolfram ¤¤ 16.4, 16.5
¥ MI Commentary: Dubin and Schwartz MRPC 5.4

Although the rule clearly prohibits a lawyer from forming a partnership with a nonlawyer if any of the activities of the partnership consists of the practice of law, the sharing of office space with a nonlawyer does not necessarily violate the rule so long as other provisions of the rules such as confidentiality, independence of the lawyer and proper contact with clients are not violated. See RI-118 and RI-206.

5.4:400   Third Party Interference with a Lawyer's Professional Judgment

¥ Primary Michigan References: MI Rule 5.4(c)
¥ Background References: ABA Model Rule 5.4(c), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:901, ALI-LGL ¤ 60, Wolfram ¤ 8.8
¥ MI Commentary: Dubin and Schwartz MRPC 5.4

In RI-7, the Ethics Committee found that a lawyerÕs participation in a legal services plan offered by a financial organization was improper. The lawyer would be paid by the organization but the client would be the member of the plan. However, if a dispute arose between the lawyer and the client, the president of the financial organization would handle the conflict, and the Committee found that this possible interference would compromise the lawyerÕs independent judgment.

In RI-15, the Committee found that a lawyerÕs arrangement with an intermediary collection agency gave the agency too much control over the lawyerÕs representation of the client. And in RI-141, the Committee opined that a lawyer could not give legal advice to sign certain forms provided by an organization that sponsored a seminar for older persons because the lawyer was not providing independent professional judgment.

5.4:500   Nonlawyer Ownership in or Control of Profit-Making Legal Service Organizations

¥ Primary Michigan References: MI Rule 5.4(d)
¥ Background References: ABA Model Rule 5.4(d), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 91:401, ALI-LGL ¤ 60, Wolfram ¤ 16.4, 16.5
¥ MI Commentary: Dubin and Schwartz MRPC 5.4

RI-223 sets forth the following requirements that a lawyer must meet to participate in a for profit legal service plan:

1.   The plan is not a lawyer referral plan.

2.   The plan allows the lawyer to exercise independent professional judgment on behalf of the client, to maintain client confidences, to avoid conflicts of interest, and to practice competently.

3.   The operation of the plan does not involve improper advertising or solicitation or improper fee sharing.

4.   The plan is in compliance with other applicable law.

A Michigan lawyer who is also licensed in the District of Columbia wanted to acquire a financial interest in a law firm there in which a nonlawyer held a financial interest, which was permitted by the District of Columbia ethics rules. Because DC ethics rules permitted the arrangement, the Michigan lawyer could acquire the interest, but the law firm could not handle any Michigan legal matters nor must a nonlawyer owner of that firm have any ownership or control over the lawyerÕs legal matters in Michigan. RI-225.

5.4:510      Group Legal Services

See discussion under 5.4:500 above.

5.4:520      Nonprofit Organizations Delivering Legal Services

See discussion under 5.4:500 above.

5.5   Rule 5.5 Unauthorized Practice of Law

5.5:100   Comparative Analysis of MI Rule

¥ Primary Michigan References: MI Rule 5.5
¥ Background References: ABA Model Rule 5.5, Other Jurisdictions
¥ Commentary:

5.5:101      Model Rule Comparison

Michigan adopted MR 5.5 exactly.

5.5:102      Model Code Comparison

[The discussion of this topic has not yet been written.]

5.5:200   Engaging in Unauthorized Practice

¥ Primary Michigan References: MI Rule 5.5(a)
¥ Background References: ABA Model Rule 5.5(a), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 21:8001, ALI-LGL ¤¤ 3, 4, Wolfram ¤ 15.1
¥ MI Commentary: Dubin and Schwartz MRPC 5.5

5.5:210      Practice of Law by Nonlawyers

There is no exact definition of the phrase Òpractice of lawÓ as used in the Rules. In State Bar of Michigan v Galloway, 422 Mich 188; 369 NW2d 839 (1985), the Michigan Supreme Court interpreted MCL 421.31, which permits an employer to be represented in any proceeding before the Employment Security Commission by counsel or another duly authorized agent, to include non- attorneys since the legislative intent was to include non-attorneys within the purview of duly authorized agent. In Grand Rapids Bar AssÕn v Denkema, 290 Mich 56; 287 NW 377 (1939), the court held that preparing documents is the practice of law. However, a suspended attorney who works as an agent, clerk or employee of a licensed attorney is not engaged in the unauthorized practice of law. Grievance AdmÕr v Chappell, 418 Mich 1202; 344 NW2d 1 (1984).

The Michigan Court of Appeals ruled in Dressel v Ameribank, 2001 Mich App Lexis 163 (August 3, 2001) that a bank which charged a $400 fee for Òdocument production,Ó to cover the cost of preparing mortgage papers in connection with a loan, was engaged in the unauthorized practice of law by a corporation.

According to Informal Opinion RI-144, a lawyer is prohibited from forming a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law. In RI-191, the State Bar opined that a lawyerÕs oversight obligation includes prevention of the unauthorized practice of law by legal assistants. If a lawyer works in an organization other than a law firm, legal services may not be offered or rendered. RI-198.

The State Bar of Michigan is authorized to investigate matters pertaining to the unauthorized practice of law and, with the authority of its Board of Commissioners, to file and prosecute actions and proceedings with regard to such matters (Rule 16 of the Rules Concerning the State Bar of Michigan).

5.5:220      Admission and Residency Requirements for Out-of-State Lawyers

Admission of out-of-state lawyer to the State Bar of Michigan without the necessity of examination is governed by Rule 5 of the Rules for the Board of Law Examiners. An applicant for admission without examination must meet the good moral character and educational requirements required of all applicants (Rule 1) and have obtained a law degree from a reputable and qualified law school (Rule 2(B)).

The applicant must also demonstrate that he or she intends, in good faith, to maintain an office in Michigan for the practice of law, to practice law in Michigan or to be a full-time instructor in a reputable and qualified Michigan law school. The applicant must also fulfill the requirement that after having been licensed in another jurisdiction and for three of the five years preceding the application, he has either actively practiced law as a principal business or occupation, or been employed as a full-time instructor in a reputable and qualified law school or been on active duty in the United States Armed Forces as a judge advocate, legal specialist or legal officer (Rule 5(A)(6)).

5.5:230      Pro Hac Vice Admission [see also 8.1:240]

Rule 15 of the Rules Concerning the State Bar provides that any person who is duly licensed to practice law in another state or territory or in the District of Columbia or in any foreign country may be permitted to engage in the trial of a specific case in a court or before an administrative tribunal in Michigan when that person is associated with and on motion of an active member of the State Bar of Michigan who appears of record in the case. The temporary permission to engage in the trial may be revoked by the court summarily at any time for misconduct.

5.5:240      Performing Legal Services in Another Jurisdiction

MRPC 5.5(a) prohibits a Michigan lawyer from practicing law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction.

5.5:300   Assisting in the Unauthorized Practice of Law

¥ Primary Michigan References: MI Rule 5.5(b)
¥ Background References: ABA Model Rule 5.5(b), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 21:8201, ALI-LGL ¤ 4, Wolfram ¤ 15.1
¥ MI Commentary: Dubin and Schwartz MRPC 5.5

MRPC 5.5(b) does not prohibit a lawyer from employing the services of paraprofessionals and delegating functions to them, so long as the lawyer supervises the delegated work and retains responsibility for their work. See MRPC 5.3 and the Comment to MRPC 5.5. A lawyer may also counsel nonlawyers who wish to proceed pro se.

Informal Opinion RI-144 of the State Bar holds that a lawyer is prohibited from forming a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.

5.6   Rule 5.6 Restrictions on Right to Practice

5.6:100   Comparative Analysis of MI Rule

¥ Primary Michigan References: MI Rule 5.6
¥ Background References: ABA Model Rule 5.6, Other Jurisdictions
¥ Commentary:

5.6:101      Model Rule Comparison

Michigan adopted MR 5.6 exactly.

5.6:102      Model Code Comparison

[The discussion of this topic has not yet been written.]

5.6:200   Restrictions on Lawyers Leaving a Firm

¥ Primary Michigan References: MI Rule 5.6(a)
¥ Background References: ABA Model Rule 5.6(a), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:1201 ALI-LGL ¤ 10
¥ MI Commentary: Dubin and Schwartz MRPC 5.6

The rationale for this rule is contained in the official Comment:

Agreements restricting the right of a lawyer to practice after leaving a firm not only limits the lawyerÕs professional autonomy but also limits the freedom of clients to choose a lawyer.

In the case of McCroskey, Feldman, Cochrane & Brock, PC v Waters, 197 Mich App 282; 494 NW2d 826 (1992), the Michigan Court of Appeals held that an agreement between a law firm partner and his firm requiring the payment by the partner of certain funds if he left the firm to be enforceable. Under the agreement, the departing partner was obligated to pay the firm for all costs expended on cases pending for trial and a certain percentage of attorneysÕ fees based on the size of the case. The agreement also covered cases on appeal. The departing lawyer objected to the agreement on the basis that it violated the rule because it restricted his right to practice law. The court found that the agreement was merely an attempt to assign fees proportionally based on the stage of litigation.

However, in RI-245, the Ethics Committee determined that a provision in an employment agreement between lawyers and their professional corporation constituted an undue burden on the right of employees to practice law after termination of the employment relationship. It required any lawyer who left the firm and later represented a firm client to pay the firm one-third of all fees bills for four years.

5.6:300   Settlements Restricting a Lawyer's Future Practice

¥ Primary Michigan References: MI Rule 5.6(b)
¥ Background References: ABA Model Rule 5.6(b), Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 51:1201, ALI-LGL ¤ 10, Wolfram ¤ 16.2.3
¥ MI Commentary: Dubin and Schwartz MRPC 5.6

There appear to be no Michigan cases or State Bar of Michigan ethics opinions interpreting this topic.

5.7   Rule 5.7 Responsibilities Regarding Law-Related Services

5.7:100   Comparative Analysis of MI Rule

¥ Primary Michigan References:
¥ Background References: ABA Model Rule 5.7, Other Jurisdictions
¥ Commentary:

5.7:101      Model Rule Comparison

Michigan has no rule equivalent to MR 5.7.

5.7:102      Model Code Comparison

[The discussion of this topic has not yet been written.]

5.7:200   Applicability of Ethics Rules to Ancillary Business Activities

¥ Primary Michigan References:
¥ Background References: ABA Model Rule 5.7, Other Jurisdictions
¥ Commentary: ABA/BNA ¤ 101:2101, ALI-LGL ¤, Wolfram ¤

[The discussion of this topic has not yet been written.]