SUPREME COURT OF WISCONSIN
In the
Matter of the Amendment of
Supreme
Court Rules: SCR 20:5.4 --
Professional
Independence of a Lawyer;
ORDER
SCR
20:5.7 -- Limited Liability No. 96-02
Legal Practice
The court held a
public hearing March 27, 1996 on the petition of the State Bar of Wisconsin
seeking the creation of a rule authorizing lawyers to engage in practice as a
limited liability organization, subject to annual registration and proof of
financial responsibility. The petition also sought the amendment of SCR 20:5.4
to specify limited liability organizations in the rule prohibiting the practice
of law in the form of an organization in which a nonlawyer owns an interest, is
a corporate director or officer, or has the right to direct or control the
professional judgment of a lawyer. Following the public hearing, the State Bar
filed a revised petition addressing some of the issues raised at the hearing.
Thereafter, at the court’s request, the State Bar submitted additional proposed
liability limits of professional liability insurance to be required according
to law firm size.
The court has
considered the petition and revised petition of the State Bar, the
presentations at the public hearing, and the material filed with the court in
the matter and has adopted the State Bar’s submission on liability limits.
IT IS ORDERED
that, effective July 1, 1997, the Supreme Court Rules are amended as follows:
1. SCR
20:5.4(d)(intro.) of the Supreme Court Rules is amended to read:
20:5.4(d)(intro.)
A lawyer shall not practice with or in the form of a professional corporation or,
association or limited liability organization authorized to practice law
for a profit, if:
2. SCR 20:5.7 of
the Supreme Court Rules is created to read:
20:5.7 Limited
liability legal practice
(a) (1) A lawyer
may be a member of a law firm that is organized as a limited liability
organization solely to render professional legal services under the laws of
this state, including chs. 178 and 183 and subch. XIX of ch. 180. The lawyer
may practice in or as a limited liability organization if the lawyer is
otherwise licensed to practice law in this state and the organization is
registered under sub. (b).
(2) Nothing in
this rule or the laws under which a lawyer or law firm is organized shall
relieve a lawyer from personal liability for any acts, errors or omissions of
the lawyer arising out of the performance of professional services.
(b) A lawyer or
law firm that is organized as a limited liability organization shall file an
annual registration with the state bar of Wisconsin in a form and with a filing
fee that shall be determined by the state bar. The annual registration shall be
signed by a lawyer who is licensed to practice law in this state and who holds
an ownership interest in the organization seeking to register under this rule.
The annual registration shall include all of the following:
(1) The name and
address of the organization.
(2) The names,
residence addresses, states or jurisdictions where licensed to practice law,
and attorney registration numbers of the lawyers in the organization and their
ownership interest in the organization.
(3) A
representation that at the time of the filing each lawyer in the organization
is in good standing in this state or, if licensed to practice law elsewhere, in
the states or jurisdictions in which he or she is licensed.
(4) A
certificate of insurance issued by an insurance carrier certifying that it has
issued to the organization a professional liability policy to the organization
as provided in sub. (bm).
(5) Such other
information as may be required from time to time by the state bar of Wisconsin.
(bm) The
professional liability policy under sub. (b)(4) shall identify the name of the
professional liability carrier, the policy number, the expiration date and the
limits and deductible. Such professional liability insurance shall provide not
less than the following limits of liability:
(1) For a firm
composed of 1 to 3 lawyers, $100,000 of combined indemnity and defense cost
coverage per claim, with a $300,000 aggregate combined indemnity and defense
cost coverage amount per policy period.
(2) For a firm
composed of 4 to 6 lawyers, $250,000 of combined indemnity and defense cost
coverage per claim, with $750,000 aggregate combined indemnity and defense cost
coverage amount per policy period.
(3) For a firm
composed of 7 to 14 lawyers, $500,000 of combined indemnity and defense cost
coverage per claim, with $1,000,000 aggregate combined indemnity and defense
cost coverage amount per policy period.
(4) For a firm
composed of 15 to 30 lawyers, $1,000,000 of combined indemnity and defense cost
coverage per claim, with $2,000,000 aggregate combined indemnity and defense
cost coverage amount per policy period.
(5) For a firm
composed of 31 to 50 lawyers, $4,000,000 of combined indemnity and defense cost
coverage per claim, with $4,000,000 aggregate combined indemnity and defense
cost coverage amount per policy period.
(6) For a firm
composed of 51 or more lawyers, $10,000,000 of combined indemnity and defense
cost coverage per claim, with $10,000,000 aggregate combined indemnity and
defense cost coverage amount per policy period.
(c) Nothing in
this rule or the laws under which a lawyer or law firm is organized shall
diminish a lawyer’s or law firm’s obligations or responsibilities under any
provisions of this chapter.
(d) A law firm
that is organized as a limited liability organization under the laws of any
other state or jurisdiction or of the United States solely for the purpose of
rendering professional legal services that is authorized to do business in
Wisconsin and that has at least one lawyer licensed to practice law in
Wisconsin may register under this rule by complying with the provisions of sub.
(b).
(e) A lawyer or
law firm that is organized as a limited liability organization shall do all of
the following:
(1) Include a
written designation of the limited liability structure as part of its name.
(2) Provide to
clients and potential clients in writing a plain-English summary of the
features of the limited liability law under which it is organized and of the
applicable provisions of this chapter.
IT IS FURTHER
ORDERED that notice of these amendments of the Supreme Court Rules shall be
given by a single publication of a copy of this order in the official state
newspaper and in an official publication of the State Bar of Wisconsin.
Dated at
Madison, Wisconsin, this 18th day of March, 1997.
BY
THE COURT:
__________________________
Marilyn L. Graves, Clerk