February 12, 2003

N O T I C E

Admission and Discipline Rule 27(1), Professional Corporations, Limited Liability Companies and Limited Liability Partnerships states that: “The maximum amount of any insurance deductible under this Rule shall be as prescribed from time to time by the Board of Law Examiners.”

At its meeting on February 8, 2003, the State Board of Law Examiners amended the insurance deductible requirement, now allowing a deductible in the maximum amount of $10,000 per owner in the firm.

The previous requirement, set forth in a notice dated August 10, 1998, mandated a $10,000 maximum deductible for law firms with 1-10 shareholder/partners, a $25,000 maximum deductible for firms with 11-15 shareholders/partners and a $50,000 maximum deductible for firms with 26 or more shareholders/partners. This breakdown no longer applies. The maximum deductible is now simply $10,000 per owner. For example, if the firm has 6 owners, the maximum deductible is $60,000.

Admission and Discipline Rule 27(g)(h) requires all professional corporations, limited liability companies, and limited liability partnerships to have “adequate professional liability insurance” or “other form of adequate financial responsibility.”

At its meeting on June 5, 1998, the Board determined that Admission and Discipline Rule 27(g)(1)(ii) should be used to figure segregated amounts for firms wishing to use “Other form of adequate financial responsibility” rather than professional liability insurance.

Admission and Discipline Rule 27(g)(1)(ii) states “in an amount of one hundred thousand dollars ($100,000) in excess of any insurance deductible or deductibles for all claims during the policy year, multiplied by the number of lawyers practicing with the professional corporation, limited liability company, or limited liability partnership.”