An Important Message To Our Clients
And Prospective Clients

We are taking this opportunity to tell you about a recent development that affects our law firm as well as all of our clients and prospective clients.

You may have noticed the "S.C." in our firm name. It means "Service Corporation," and it indicates that we are a corporation organized under a special part of Wisconsin's corporation laws for use only by professionals, such as doctors, dentists, accountants, lawyers, and others who provide professional services. A service corporation, like most other corporations, is a "limited liability" entity because its shareholders normally are not personally responsible for the debts and obligations of the corporation. The corporation is responsible for its debts and obligations, but the shareholders are not--they have "limited liability." But there are two exceptions to this general rule of limited liability that are unique to service corporations. A shareholder in a service corporation may be held personally responsible for his or her own errors in providing professional services and for the errors of other professionals under his or her direct supervision.

Until recently, shareholders in service corporations could be held personally responsible for all other shareholders, even those who were not under their direct supervision. This was known as "vicarious liability." A recent change in the law has eliminated vicarious liability for shareholders of service corporations. A service corporation is still legally responsible for the errors of its employees, as are shareholders who make errors or directly supervise others who make errors. That part of the law has not changed. Only the vicarious liability was eliminated.

The Supreme Court of Wisconsin, which makes the rules that regulate all lawyers in this state, recently made a rule requiring all law firms that are service corporations (and some other kinds of law firms, too) to let you know about the change in the law we just described to you. The new rule also requires law firms that are service corporations (and some other kinds of law firms, too) to register annually with the State Bar of Wisconsin (which we have done), to have certain minimum levels of insurance to protect clients in case of errors in performing legal services, and to be sure the firm name reflects that it is a "limited liability" entity. We are pleased to let you know that we have long maintained much more than the minimum insurance levels required by the new rule, so we have had to make no change to comply. And because we already have "S.C." in our firm name, we won't have to change that, either.

At Loeb & Herman, S.C., we are committed to providing you with high quality, professional service. The recent change in the law, and the new Supreme Court Rule, will not change our commitment to that goal or the way we serve your needs. For us, our high quality service remains unchanged.

Please feel at liberty to ask any of the lawyers in the firm you regularly deal with if there is anything in this notice you do not understand.