State bar cash cow? Not if CLE is Free.

I once asked, “Who’s making money from MCLE?” but, of course, I already knew the answer — mostly, it’s your friendly state bar. For many state bars, including Arizona’s, continuing legal education (CLE) is a cash cow.

For instance, according to its most recent Annual Report, the Arizona Bar grossed $2,151,368 in revenue from continuing legal education, which after cost-allocating its miscellaneous staff, meals and facilities’ expenses, amounted to $733,208 buckaroo bucks of CLE revenue.

Any wonder, then, that when the AZ Bar does serve up a free webinar — like the upcoming February 12, 2013, “It Just Makes Cents: Ethical Fee Agreements,” — there’s no CLE credit given?

Mucho dinero.

Or take the “Show-Me” folks at the Missouri State Bar. According to the Missouri Bar Annual Report 2011/2012, of the total $3,797,902 in non-enrollment fee receipts, CLE contributed a robust 75% or $2,848,426 of the total.* [But see the asked-for clarification below from the folks at the Missouri Bar]. And in Washington State, WSBA-CLE’s fund balance as of September 30, 2011 was a cool $1,351,465.

Indeed, so lucrative is the CLE revenue stream that some bars go out of their way to protect their turfs and to disincentivize lawyer attendance at non-bar sponsored programs.

In Arizona, for example, irrespective of the writing, editing and research hours that may actually be expended, the bar arbitrarily limits CLE to only 2 credit hours “for each 3,000 words of original material written.”

And in Arkansas and Oklahoma, audio-only live webcasts are not approved for credit. Meanwhile, Indiana imposes a 6 credit limit per year on distance education courses while the Alabama State Bar not only limits lawyers to 6 hours of online participatory CLE but also charges its lawyers a $25 processing fee just to apply for CLE course credit.

But live is better.

Other state bars also limit the number of online courses that can be taken for credit, “claiming live CLE is better.”

In November 2011, the Virginia Bar began requiring “a minimum hourly requirement for courses which provide simultaneous, live interactivity,”  or said another way, active Virginia lawyers are now required “to attend a minimum of four (4.0) credit hours of live interactive programming.”

Blogging about the Virginia Bar’s new requirement at Civilian’s Guide to Lawyers (the Blog), lawyer John Toothman posted, “If it weren’t for mandatory CLE, most bars would be broke.  So the Virginia Bar has hatched some excuses to leverage its control over lawyers and CLE in a vain attempt to save its live conference cash cow.”

Not milked dry.

Virginia notwithstanding, the good news is that most lawyers can still get CLE credit for online programs. Better yet, they can still get CLE credit for FREE — instead of getting milked dry by expensive live, video or webcast programs of inconsistent quality. And the reason any of this matters is that when lawyers — especially new ones, are so hard pressed to pay back exorbitant student loans they’re the last ones to afford hundreds of dollars a year in CLE fees on top of hundreds of dollars in annual bar dues.

Below is the latest round-up of FREE ONLINE CLE. The usual caveats about content quality, continued availability and jurisdictional approval apply.

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Practising Law Institute

PLI: Seminars – Update on CA Penal Code 1170.9 for Veterans ..

February 12, 2013

Item# 46519

Format:  Webcast

Free
Pre-Register

(1) Hour CLE Credit

“Learn about the restorative relief now available to veterans under subdivision (h) of the California Penal Code 1170.9, effective as of January 1, 2013!”

Representing the Pro Bono Client: Effective Written Advocacy

March 7, 2013

Item# 43292

Format:  Webcast

Free
Pre-Register

(1) Hour CLE Credit

“This program will teach new attorneys and seasoned professionals effective writing techniques to assist pro bono clients with a variety of legal issues.  Learn the tools to draft concise complaints, declarations and briefs to help your pro bono clients assert their legal rights and win their cases!”

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Clifford Law Offices

2013 Webinar: “Ethics of Witness Preparation for Deposition and Trial” – February 21, 2013

(2) hours CLE Professional Responsibility Credit

Illinois Commission on Professionalism

CLICK HERE TO REGISTER

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X1 Discovery

RECORDED WEBINAR

Social Media Ethics: Attorneys’ Affirmative Duty to Address Social Media Evidence (60 min) 1 hour CLE webinar.

http://www.x1discovery.com/video_webinar_duty_to_address_request.html

X1 Social Discovery Webinar with LexisNexis

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Steptoe & Johnson LLP

Food Labeling: What You Can Say, What You Must Say, and How to Defend It

(A Steptoe-Sponsored Event)
Complimentary webinar on food labeling, February 21, 2013

CLE credit pending: AZ, CA, IL, NY, and VA.

Click here to register

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Lexis Nexis

Whistleblower Update 2013

Complimentary accredited CLE webinar: February 13, 2013

Whistleblower webinar | HB Litigation Conferences

Register Now!

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* Missouri Bar Media Relations Director Farrah Fite has asked I add the following clarification about the Missouri Bar’s CLE receipts cited in this post, which I am happy to oblige here: “While the gross receipts information in our annual report is correct, your post does not account for the department’s expenditures which are outlined in the neighboring graph (http://www.mobar.org/uploadedFiles/Home/Publications/Annual_Report/2011-2012/full.pdf). I would appreciate it if you would update your blog post to reflect the full budget picture which demonstrates the Missouri Bar’s CLE programs are not a “cash cow.” In fact, in 2011 the expenditures outweighed receipts by $219,773.75.”

There’s an old joke that lawyers go to law school because they’re not good at math. But before I was a lawyer, I was a business manager. So here are some facts and my opinionated inferences from the Missouri Bar’s graph data.

According to the Internal Revenue Service (IRS), the definition of gross receipts is “the total revenue a company or organization receives during its annual accounting period before subtracting any costs or expenses.”

Per the graph of “Missouri Bar Total Disbursements,” i.e., money paid out (expenses) — the Missouri Bar allocated 33% of its total disbursements of $9,250,976 to “Continuing Legal Education” plus an additional 3% of the total disbursements or $277,526 to something else called “Minimum Continuing Legal Education.” But all along, $2,848,426 simply stated gross receipts.

As for expenses, 36% of $9,250,976 comes to $3,330,215 — a whopping expense number which when subtracted from CLE gross receipts of $2,848,426 does indeed suggest the Bar is ‘in the red.’

But as the saying goes, the devil’s in the details — which there’s a paucity of here, particularly when the Missouri Bar shows a scant 9% allocation to “Administration,” most likely, employee overhead.

Moreover, the Missouri Bar scatters disbursements across 17 expense categories. But none even comes close to the 36% allocated to CLE.

However, all I can infer from my own business experience and from virtually every employer cost data point concerning employee compensation, the cost of payroll is the single largest line item on a P & L. Employee compensation can average from an extremely well-run business low of 20% to well over 40%.

With respect to non-profits, one survey summarized by The NonProfit Times, similarly shows that “38 percent of nonprofits’ operating budgets were spent on total cash compensation costs . . . and for most nonprofits, compensation costs comprised at least a third of their operating budget.”

But at the Missouri Bar where 2011 bar enrollment and non-enrollment receipts and fees total $8,511,670 — counterintuitively, CLE and not employee compensation accounts for over a third of total disbursements. And when disbursements of $9,250,876 exceed fees and receipts by $739,206, CLE’s got a lot of water to carry.

Photo Credits:”Toe Tag,” by Dep. Garcia at Wikipedia Commons under the Creative Commons Attribution-ShareAlike 3.0 License; “Neanderthal,” by Hamed Saber, at Flickr via Creative Content-license requiring attribution.