Effective September 1, 2023, the Michigan Supreme Court introduced a significant update to the State Bar of Michigan (SBM) practice regulations. This amendment mandates the appointment of an Interim Administrator (IA) for all private practice members. These individuals have two options: either select another SBM member to act as their IA for their private practice or enroll in the SBM's IA program for an annual fee of $60. Each IA is obligated to procure and maintain professional liability insurance covering their IA responsibilities.
Anytime an attorney becomes incapacitated, this leaves their clients and the courts in a difficult position due to the absence of someone responsible for handling their practice's affairs. The strategic addition of an IA seeks to strengthen the legal practice landscape in the state and address this common issue faced by private practice attorneys.
For many years, professional liability insurance carriers for lawyers (LPL) have required insured solo practitioners to designate a backup attorney (BA). This BA would step in, like an IA, should unexpected circumstances prevent the solo practitioner from fulfilling their client duties. Unfortunately, there have been instances where the designated backup attorney lacked the necessary expertise to take over the practice's caseload. Such situations have resulted in malpractice claims, placing additional burdens on LPL carriers.
When designating an IA or BA, solo practitioners should exercise careful consideration. They should assess whether the same attorney can fulfill both roles and if it's more beneficial to have separate individuals for each responsibility. Think of the BA as an overall practice manager and the IA as a specific pinch-hitter. While they can be the same person in many cases, having separate attorneys fulfilling distinct roles could prove advantageous.
Regardless of the chosen appointee, it's crucial to inform your staff of this person's identity in case of an emergency. Additionally, maintaining a well-documented office procedures manual that covers topics such as calendaring, conflict resolution, active and closed files, and accounting systems is essential. Comprehensive file documentation is also invaluable, as it should be assumed that whoever takes over the files may have limited knowledge of the matters at hand.
In summary, the Michigan Supreme Court’s recent update to the State Bar of Michigan practice rules, requiring the appointment of an Interim Administrator for private practice attorneys, represents a proactive step towards ensuring the integrity and continuity of legal services within the state. As members of the bar navigate these new rules, it is crucial to consider all the pieces of your practice and what another attorney would need to take over individual files along with the entire practice in your absence. Doing so is not just fulfilling your obligations under the IA rules, but also making sure your clients are not in a worse situation than you found them.