Michigan Supreme Court accepting comment on license fee recommendation

Michigan Supreme Court accepting comment on license fee recommendation

Related: A special message from State Bar of Michigan President Dana Warnez

The Supreme Court is now accepting comment on a license fee increase to fund the State Bar of Michigan’s operations, the first proposed fee change in 18 years.

After careful examination of the Bar's operations and efficiencies, and taking into account the effects of inflation, the Representative Assembly in April 2021 overwhelmingly supported a proposal to increase license fees $80, which is less than the rate of inflation since 2003-04 when license fees for SBM operations were last adjusted.

The Supreme Court is now accepting public comment on a proposed order that would raise by $50 the portion of the license fees that funds State Bar of Michigan operations. See the State Bar of Michigan's response to the proposed order here

The RA-recommended $80 increase would fully fund the State Bar so that it could continue offering important programming such as support for legal aid, including advocacy for programs and their funding; the Ethics Helpline; the Lawyers and Judges Assistance program, which provides mental health services for SBM members; the E-Journal, which provides summaries of court opinions five days a week; and public policy initiatives that drive improvements to court operations and the availability of legal serves.

Michigan attorneys pay far less in regulatory expenses than attorneys in many other states. Although SBM collects license fees, only $180 of the $315 annual fee funds SBM operations. The Attorney Discipline System collects $120 of the fee and another $15 goes to the Client Protection Fund.

Frequently Asked Questions

Like all states, Michigan requires attorneys who practice in the state to pay an annual license fee. The fee consists of three separate amounts set by the Michigan Supreme Court to fund the Attorney Discipline System, the Client Protection Fund, and State Bar of Michigan operations.

The Michigan Supreme Court determines the annual license fee. The State Bar of Michigan Representative Assembly has exclusive authority on behalf of the State Bar to recommend a change in the SBM portion of the licensing fee. Taking into account the economies adopted by the State Bar to keep Michigan’s regulatory burden for attorneys among the lowest in the nation and the effects of inflation on the 2003-04 fee amount, the RA overwhelmingly recommended an $80 fee increase during its April 2021 meeting.

Why now? It’s been a difficult year for everyone.
The license fee has not increased (even to account for inflation) since 2003, when today’s 1Ls were in kindergarten. At that time, nearly two decades ago, the increase was expected to sustain the State Bar for several years, but through frugal budgeting it has sustained SBM for far longer than any other fee cycle in SBM’s modern history. Now, however, the current fee cycle has reached its natural conclusion. Recognizing the extreme stress that COVID-19 has placed on many attorneys, the proposed license fee increase would not take effect until the 2022-2023 bar year.

Why can’t the increase be gradual?
A gradual increase would require an overall larger increase over the same time span.

What will this money be used for?
The money from the license fees funds basic State Bar of Michigan operations, including issuing licenses, and operating the programs designed to carry out its governmental duties to serve the public and Michigan attorneys. These include assisting in the regulation of the legal profession, improving the quality of legal services available statewide, and fulfilling goals outlined in the State Bar’s Strategic Plan, derived from court rule and statute. While SBM collects the entire license fee on behalf of the Court, only a portion of it remains with the State Bar. The rest is used to fund the Attorney Discipline System and the Client Protection Fund.

How does Michigan’s attorney license fee compare to other states?
Michigan’s $315 cost of licensure falls below the $362 national average. Even with an increase, Michigan would remain in the middle tier or lower nationally.

What has SBM done to save money?
The State Bar of Michigan has automated manual transaction processes and member interactions such as license renewal, pro hac vice applications, and new member applications. Paper, printing, and mailing costs have been reduced by using electronic communication to issue license fee statements, provide access to the alphabetical member directory, and provide attorneys with the option of an electronic Michigan Bar Journal. The downsizing and restructuring of the SBM Annual Meeting have produced further and substantial savings. Staffing levels and benefits have been carefully controlled.

What would happen if there’s not an increase?
Without an increase, SBM will not be able to sustain its current level of service to the public and members. The $80 increase recommended by the Representative Assembly would fully fund the State Bar of Michigan. For more on this, read a special message from SBM President Dana Warnez.