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    Wisconsin LawyerWisconsin Lawyer
    Vol. 79, No. 12, December 2006

    Supreme Court Orders

    The Wisconsin Supreme Court will hold a public hearing Jan. 17 regarding amendments to trust account rules, and has amended the Rules of Appellate Procedure regarding briefs of parties designated as respondents.

    Rules of Appellate Procedure

    In the matter of the Petition to Amend Wis. Stat. § (Rule) 809.19(3)

    Order 06-02

    On March 8, 2006, the Department of Workforce Development filed a petition asking this Court to amend Wis. Stat. § (Rule) 809.19 (3) to clarify that when a respondent is not affected by any of the issues raised in the appellant's brief, that respondent need not file a brief, but may file a statement advising the court that no brief will be filed. On May 17, 2006, the Wisconsin Court of Appeals filed a letter proposing some alternate language intended to accomplish the same objective. The court of appeals indicates that the proposed amendment "improves the Rules of Appellate Procedure" by formalizing a process which is not currently contemplated by the Rules of Appellate Procedure. The Appellate Practice Section of the State Bar of Wisconsin and the State Bar Board of Governors support the petition, recommending a minor modification to the language proposed by the court of appeals.

    A public hearing on the petition was conducted on Oct. 24, 2006. At the ensuing open administrative conference, the court voted unanimously to adopt the petition, using the language proposed by the court of appeals, as modified by the Appellate Practice Section of the State Bar of Wisconsin.

    Accordingly, effective Jan. 1, 2007, Wis. Stat. ss. 809.19(3) of the Rules of Appellate Procedure is to read:

    Section 1. 809.19(3)(a)3. of the statutes is created to read:

    809.19(3)(a)3. Within the time limits for filing a respondent's brief, a party who has been designated as a respondent may file a statement with the court that it will not be filing a brief because its interests are not affected by the issues raised in the appellant's brief or because its interests are adequately represented in another respondent's brief.

    IT IS ORDERED that notice of this creation of 809.19(3)(a)3. 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, Wis., this 25th day of October, 2006.

    By the court:

    Cornelia G. Clark,
    Clerk of Supreme Court

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    Trust Account Rules

    In the matter of the Amendments of SCR 20:1.15 Safekeeping Property; SCR 20:1.0 Definitions; SCR 21.16 Discipline; and SCR 12.04 Wisconsin Lawyers' Fund for Client Protection

    Order 06-04

    On May 22, 2006, the Office of Lawyer Regulation and the State Bar of Wisconsin filed a joint petition proposing certain modifications to SCR 20:1.15, the "trust account" rule.

    IT IS ORDERED that a public hearing on the petition shall be held in the Supreme Court Room in the State Capitol, Madison, Wis., on Jan. 17, 2007, at 9:30 a.m.

    IT IS FURTHER ORDERED that the court's conference in the matter shall be held promptly following the public hearing.

    IT IS FURTHER ORDERED that notice of the hearing be given by a single publication of a copy of this order and of the petition in the official state newspaper and in an official publication of the State Bar of Wisconsin not more than 60 days nor less than 30 days before the date of the hearing.

    IT IS FURTHER ORDERED that the appendices filed with the petition, namely Appendix A (proposed changes to SCR 20:1.15), Appendix B (proposed changes to SCR 20:1.0), Appendix C (proposed changes to SCR 21.16), Appendix D (proposed changes to SCR 12.04), Appendix E (list of proposed changes to above referenced rules), Appendix F (list of proposed substantive changes to above referenced rules), and Appendix G (list of proposed non-substantive changes to SCR 20:1.15) shall be made available on the Web site of the Wisconsin Supreme Court, http://wicourts.gov.

    Dated at Madison, Wis., this 31st day of October, 2006.

    By the court:

    Cornelia G. Clark, Clerk of Supreme Court

    Petition

    In October, 2004, Michelle A. Behnke, Past President of the State Bar of Wisconsin, appointed a committee (the Trust Account Rule Working Group) to study SCR 20:1.15 and propose modifications to the trust account rule.

    The members of the Trust Account Rule Working Group ("Working Group") included: Attorney Michael Olds, Chairperson; Attorney Barry Cohen; Cathleen Dettman, State Bar Public Policy and Media Assistant; Attorney Diane Diel; Attorney Dean Dietrich; Mary Hoeft Smith, OLR Trust Account Program Administrator; Attorney Gerald Mowris; Attorney Timothy Pierce, State Bar Ethics Counsel; Attorney Sheila Romell; Attorney Keith Sellen, OLR Director; and Attorney Daniel Shneidman.

    The Working Group also received input and guidance from the following individuals and organizations: Attorney Kristine Cleven, Director, Legal Department of Wisconsin Bankers Association; Attorney Gerald Connolly; De Ette Tomlinson, Executive Director of WisTAF; Attorney George Dionosopoulos; Attorney Len Leverson; Attorney Jon Lhost; and Attorney Rose Oswald Poels, Wisconsin Bankers Association.

    This Petition is filed jointly by Attorney Keith L. Sellen, Director, Office of Lawyer Regulation, and Attorney D. Michael Guerin, President, State Bar of Wisconsin.

    GENERAL COMMENTS: The attached proposal, concerning amendments to SCR 20:1.15, SCR 20:1.0, SCR 21.16, and SCR 12.04, presents the current rules in a red-line format that highlights all proposed changes (i.e. amendments to current rules, proposed new rules, and proposed deletions from current rules). (Appendices A - D).

    Also attached are three lists which provide synopses of the rules to which changes are proposed. The first list contains all of the changes to the above-referenced rules. (Appendix E). The second list is limited to the substantive changes. (Appendix F). The final list is limited to the non-substantive, "housekeeping" changes to SCR 20:1.15. (Appendix G).

    KEY PROPOSALS: The Petitioners recognize that certain proposals involve significant changes that should be specially brought to the court's attention. The following proposals fall in that category:

    SCR 20:1.15 Safekeeping property; trust accounts and fiduciary accounts.

    SCR 20:1.15(b)(4m) Alternative protection for advanced fees. This proposal is a new provision that will allow a lawyer to deposit unearned, advanced fees into his/her business account, rather than a trust account, subject to certain conditions. Those conditions include providing clients with written notice of the lawyer's obligation to refund any unearned fee and to submit any disputed fee to binding arbitration. A lawyer is further required to notify the client that the client may submit a claim to the Fund for Client Protection in the event the lawyer fails to refund an unearned fee. The proposal also specifies the steps that a lawyer must take to protect the client at the termination of a representation, the steps that must be taken if the client disputes the lawyer's fee, and the steps that must be taken following a determination that a refund is owed.

    SCR 20:1.15(e)(4)h. Fee advances by credit card, debit card and other electronic deposit. This proposal is a new provision that will allow lawyers to accept credit and debit card payments as well as other forms of electronic deposit in payment of fee advances, provided that a separate trust account is established for this purpose.

    SCR 20:1.15(g) Withdrawal of non-contingent fees from trust account. This proposal amends the existing rule to allow fees paid pursuant to a court order to be withdrawn without the five day waiting period prior to withdrawal. It also includes a new provision that allows lawyers to withdraw funds on the date that the invoice is mailed to the client, provided that the client has previously been advised in writing that the fee will be withdrawn at that time. Finally, the proposal repeals the existing rule regarding what the lawyer is required to do when a client objects to the fee and creates a new rule that more clearly defines when a disputed fee must be returned to the trust account.

    SCR 20:1.15(k)(4) Exceptions to SCR 20:1.15. This proposal adds an exception to the trust account rule for lawyers whose employer is not engaged in the practice of law, provided that the employment is not ancillary to the lawyer's law practice.

    SCR 21.16 Discipline.

    SCR 21.16(5m) Restitution. This proposal is a final component of the alternative protection for advanced fees. In order to assure that the Fund for Client Protection is protected to the extent authorized by law, this rule requires that, whenever the court orders restitution to the Fund, the court shall issue a judgment in favor of the Fund, which judgment has the same force and effect as judgments docketed pursuant to Wis. Stat. Secs. 809.25 and 806.16.

    SCR 12.04 Wisconsin lawyers' fund for Client Protection: creation and purpose; definitions.

    SCR 12.04(2)(e) "Dishonest Conduct." This proposal is a key component of the alternative protection for advanced fees, which is proposed in SCR 20:1.15(b)(4m). In order to assure that the Fund for Client Protection will reimburse a client if the client's lawyer fails to refund an unearned fee, the definition of "dishonest conduct" must be expanded to include the failure to refund an unearned fee.

    SCR 12.04(2)(g)(iii)4. "Reimbursable Loss." This proposal, like the prior one, is a key component of the alternative protection for advanced fees. In order to assure that the Fund for Client Protection will reimburse a client if the client's lawyer fails to refund an unearned fee, the definition of "reimbursable loss" must be expanded to include a lawyer's failure to refund an unearned fee.

    CONCLUSION: Attached to this Petition are the Proposed Amendments to Supreme Court Rules 20:1.15, 20:1.0, 21.16 and 12.04.

    Respectfully submitted by:

    Keith L. Sellen, Director, Office of Lawyer Regulation
    D. Michael Guerin, President, State Bar of Wisconsin

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