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https://cdn.morguefile.com/imageData/public/files/a/almogaver/preview/fldr_2008_11_07/file000136151699.jpgYesterday, Arizona took one more step toward reforming the way lawyers are regulated in the state. By a vote of 31-29, the Arizona House passed HB2295. This bill splits the State Bar of Arizona into two subsets. One preserves the mandatory membership character in order to function as an independent regulatory quasi-agency that makes paramount the protection of the public from unethical lawyers. The other subset becomes a voluntary organization that engages solely in the kinds of non-regulatory activities more traditionally associated with professional trade associations. It’s worth watching the HB2295 floor debate here starting at the 3:34 minute mark.

A conflicted identity.

Politicians 81Like mandatory bars elsewhere, the Arizona Bar suffers from what former Wisconsin State Bar President Steven Levine once described as “a schizophrenic identity.”

In a just published post at The Legal Watchdog, Wisconsin lawyer, blogger, author and scholar Michael Cicchini mentions the article, State Bar’s limits on financial transparency create budgetary blind spots (subscription required) where author James Briggs writes that “The State Bar straddles a line between being a state agency, under the jurisdiction of the Supreme Court, and a private corporation, which is not compelled to share financial information even with the people elected to govern it.” The author then quotes Levine on the Wisconsin Bar.

FunHouse 119But Levine could just as easily be referring to Arizona’s Bar while talking about Wisconsin, “When it comes to the advantages of being a state entity . . . they claim to be a state agency.  But when they want to act in private or in secret and avoid all public requirements state agencies are required to follow, they say they’re just a private organization.”1

Case in point when I filed a public records request last July with the State Bar of Arizona asking for lobbying expenditure disclosures concerning its opposition to bar reform legislation, the Bar’s response included the following lawyer doublespeak: “However, without waiving our right to assert any future objections applicable to a nonprofit organization either by rule or statute, this organization believes in transparency and will provide answers when possible.”

arizona_bar_frank2

Can’t serve two masters or walk around with two heads.

Two hats for two heads.2

By deunifying the regulator/trade association functions, HB2295 solves the longtime problem the State Bar of Arizona has been burdened with, which is trying to serve two masters by wearing two hats for two heads. The result has been an irreconcilable conflict of interest. Why? Because the interests of the public and the interests of lawyers are not the same. More often than not, they are in conflict.

Consequently, the State Bar should not simultaneously serve the interests of the public and the interests of the legal profession. If it truly means to protect the public, then the interests of the public have to be foremost. Because HB2295 separates the State Bar’s regulatory and disciplinary functions from the State Bar’s trade association services and activities, it improves the protection of the public from lawyers who violate the canons of professional ethics.

Moreover, by dividing the regulatory and disciplinary functions from its lawyer trade association activities and transferring all regulation to the Arizona Supreme Court, HB2295 helps to bring lawyer regulation more fully compliant with the 2015 U.S. Supreme Court decision in North Carolina State Board of Dental Examiners v. FTC.

In Dental Examiners, the nation’s high court ruled that state regulatory bodies controlled by “active market participants” – such as practicing lawyers -­ are not immune from federal antitrust laws. The solution then, as provided under paragraph B of HB2295 is “active supervision” by the state Supreme Court or by an independent body under the Court — not controlled by practicing lawyers. Despite the recent work of a Court State Bar task force, the State Bar of Arizona continues to operate under a lawyer-dominant governing board elected by lawyers.

HB2295 now moves to the Arizona Senate where the State Bar of Arizona hopes its lobbyists and well-paid executives can sustain a firewall sufficient to stop the spread of reform.

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1 Some 14 years ago, in a First Amendment suit against the State Bar of Arizona brought by former bar member Edmund Kahn, the U.S. District Court for Arizona in an unpublished opinion discussed whether a state bar was entitled to Eleventh Amendment immunity. The Arizona Bar, which usually asserts it’s a private association not a state agency, tried in this instance to hide behind the Eleventh Amendment by claiming a “level of integration between the State Bar and the Arizona Supreme Court.” The Court distinguished the cases the State Bar invoked, which were Bates v. State Bar of Arizona involving lawyer discipline; Hoover v. Ronwin concerning bar exams and another discipline case in O’Connor v. State of Nevada. The District Court stated that when it comes to cases that generally challenge either the state bar’s disciplinary function or its function administering bar exams and admitting new lawyers, “the state bar clearly acts as an arm of the Arizona Supreme Court in regulating the practice of law.” But the District Court next made a most critical distinction, “In this case, Plaintiff challenges the way in which the state bar spends mandatory dues on non-regulatory functions and the bar’s procedures for addressing objections to its spending. Because this suit challenges the bar’s spending on non-regulatory programs, the link between the state bar and the Arizona Supreme Court is more tenuous.” The Court then went on to declare that the State Bar, a “non-profit corporation” did not qualify as a state agency for Eleventh Amendment purposes because among other factors, it also maintained “its own treasury and any award of damages would come from the state bar’s funds rather than the state treasury.”

2 Cartoon inspired by a bar executive’s email reference to a lawmaker last session counterintuitively overlooking the Bar’s own 800 lb Chimera in its parlor when describing a bifurcated state bar as “a two-headed Frankenstein.”

 

 

https://cdn.morguefile.com/imageData/public/files/g/GromovatayaIrina/03/l/1458732114nc9vo.jpgIf the American Bar Association (ABA) is underwriting something — America’s lawyers be wary. This is the organization led a few years ago by an oblivious President with the stones to blame students for opting for law school in a declining economy — this while the selfsame was roundly criticized for its own considerable regulatory failings.

And despite having done more than its share to create the lawyer glut, the ABA stands around even now, in the words of one critic, “limp-wristed” while law schools race to the bottom repeatedly lowering LSAT admission scores trawling for matriculants as enrollments decline. Any wonder another commentator declares, “The ABA can’t be trusted”?

More recently, politically correct ABA do-gooders have recommended bar associations adopt a “speech code” for lawyers — the violation of which means discipline.

And just days ago, the ABA House of Delegates adopted a new model rule concerning continuing legal education, recommending in part that state bars uniformly impose a 15-hour minimum continuing legal education requirement per jurisdictional reporting period. As usual, the ABA trots out the self-serving claptrap offered without a scintilla of empirical proof that “MCLE continues to play a crucial role in maintaining public confidence in the legal profession and the rule of law and promoting the fair administration of justice.” Pretentious pretextual poppycock notwithstanding, left out as usual is the truth that MCLE mostly serves to line bar association coffers nationwide. Ka-ching!

Such was the context for the announcement of a pro bono survey project launched by the ABA last year. It was just rolled out in Arizona.

On its website, the ABA explains it offered “its pro bono survey instrument, free of charge, to states interested in studying various aspects of the profession’s pro bono culture.” One can only guess what that means although after welcoming survey-takers, the questionnaire reveals its intentions:

“You have been asked to participate in this survey so that we may gain a better understanding of legal services provided to low and moderate income people in your state. This is a nationwide effort to quantify and recognize the pro bono work provided by attorneys, as well as to understand the factors that encourage or discourage pro bono service. We are interested in the perspectives of attorneys who have provided such services as well as attorneys who have not.”

What the “better understanding” leads to, however, is another question. Otherwise, to the frequently asked question, “What are the states expected to do with the results?” — it answers:

The ABA encourages the state leadership teams to review the findings and collaborate to generate state program and policy recommendations. In the summer and fall of 2017, the ABA will facilitate conference calls with each of the participating states to review the findings and discuss recommendations.”

https://cdn.morguefile.com/imageData/public/files/j/Jamierodriguez37/03/l/1426633399eunhs.jpg Carrots turned cudgels.

Since I ignored the first email solicitation from the Arizona Bar CEO to take the survey, last week I received a reminder to “take a few minutes” to participate in “this worthy effort” along with “an incentive to complete the survey.” No further reminders necessary for this resolute non-participant.

Based on the time it took Nebraska lawyer survey participants to complete the survey, it’s anticipated it will take lawyers more than “a few minutes” since Nebraska participants took an average of 32 minutes to finish it. And ostensibly an anonymous survey, that anonymity flies out the window if Arizona Bar members elect the Bar’s incentive to “be included in a drawing for a $150.00 gift card.”

In 2014, the State Bar of Arizona dangled a $250 Visa gift card as the sole prize for contestants vying to create a 15-second Instagram video with the mandatory phrase, “Finish the ballot. Vote for the judges!” To the best of my knowledge, the Bar never disclosed the winner or the wining video most likely because of embarrassing sparse participation. More recently, the Bar offered another gift card incentive to induce participation in its triennial lawyer compensation survey.

Compulsory lawyer servitude.

Ever the jaundiced one, I suspect these surveys will be used to advance program and policy goals of those clamoring for mandatory pro bono. Their salivary glands have never stopped drooling ever since New York became the first state to mandate pro bono work.

In New York, the forced pro bono rule was inflicted on law school graduates as a condition for bar admission. New York bar applicants must perform 50 hours of pro bono work before they can be admitted and some day hope to earn a living as lawyers.

Unlike other professionals, lawyers inexplicably remain the sole special snowflakes compelled to belong to their trade associations as conditions to earn a living. And soon enough lawyers may be the solitary profession whose services should also be compulsorily given away.

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Credits: Morguefile.com, no attribution; Making Faces, at Flickr by a2gemma via Creative Commons-attribution license.

Mike Padden Image

State Sen. Mike Padden

Kudos to State of Washington lawyers. They’re fighting the latest kick to their billfolds and keisters arising from a 141% licensing fee increase approved by the Washington State Bar Association’s (WSBA) Board of Governors. Last September, the WSBA’s governors voted to raise licensing fees from $325 to a whopping $458 by 2020.

By subsequent Order, the Washington Supreme Court sacramentally blessed the proposed fee increase deeming it “reasonable.” The justices also refused to tie any future increases to a cost of living index as proposed by a member referendum petition.

Ubi Jus Ibi Remedium

https://cdn.morguefile.com/imageData/public/files/h/hotblack/preview/fldr_2008_11_02/file0001565651674.jpgThere’s an ancient legal maxim that for every wrong, the law provides a remedy. But in the real world, even this most aspirational of principles is soon enough found wanting. Therefore, left without apparent remedy, Washington lawyers turned to their state legislature. On February 6, 2017, WSBA member and state senator Mike Padden introduced Senate Bill 5721. The Bill would require the WSBA “to obtain an affirmative vote prior to increasing bar dues for membership.”

SB 5721 is in reaction to the Washington Supreme Court’s Jan. 5, 2017 order — that on its own motion without formal prompting from another party — overruled a December 20, 2016 citizen petition filed by 2,180 Washington Bar members calling for a member referendum to reject the licensing fee increase.

As explained by an email forwarded to me by a Washington lawyer, “The Supreme Court’s order, issued without briefing or discussion, has raised an important constitutional challenge to the Legislature’s power over taxes and government regulation; the Court’s challenge is entirely unnecessary. SB 5721 can resolve that conflict quickly and easily, while protecting the interests of the public and the profession. SB 5721 does not create new law; it does not direct an outcome on the member referendum. SB 5721 simply returns the law to what it was before the Supreme Court changed it.”

The email goes on to pose the following series of questions to Washington lawmakers. “Can the Supreme Court now set taxes and establish public policy through a regulatory body that it indirectly controls? Can it do so without briefing or explanation? Can it do so when those closest to the effects and burdens of such public policy — those who pay for it directly — are denied the use of established procedures to petition the government for redress of grievances, without even a hearing or any other form of due process? Who is to guard the rights of Washingtonians when the Supreme Court itself is the offender?”

In reply, the answer and the anticipated remedy is: “It must be the Legislature, a co-equal branch and author of the State Bar Act.”

Mother’s milk.

cowabungaThe WSBA last tried raising fees in 2012. A member referendum rejected that proposed increase.

But if there’s one more thing that’s certain — besides death and taxes — it’s that money is also the mother’s milk of bureaucrats.1 And all the better when it’s OPM (other people’s money).

It’s no surprise, then, that bar bureaucrats would be: (1) back for more money and (2) looking for an end-around what must be for them irritating member referenda. In their minds, if you’re forced to belong as a precondition to practicing law in the state, you might as well meekly turn over all four cheeks along with your mandatory fees without complaint. It’s your privilege and their right.

The upshot of it all is a state constitutional challenge — not to mention what lawyers like to do best — litigation. A complaint was filed January 15, 2017 that also challenges the Washington Supreme Court’s power to set WSBA licensing fees.

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1Apologies to the late Jesse Unruh for paraphrasing his famous quote about money and politics.

 

 

man_in_fireFact-checking the Arizona Bar Mission & Governance Task Force in 2015, I provided a chart to refute the alternative fact in the draft report that “States that have voluntary bar associations by and large do not have lower overall bar dues.”

The Arizona Bar was wrong then. 16 months later having updated the chart — they’re still wrong. Indeed, because compulsory membership dues have gone up for Arizona’s lawyers since 2015, the claim is even more inaccurate.

Coincidentally, for the procrastinatory or penurious, yesterday was the last day Arizona lawyers could pay annual mandatory dues without incurring a $100 late penalty.  And for those still cash-strapped or dilatory after March 2nd, add another punitive $100 to the grief quotient — not to mention the risk of summary suspension for non-payment.

While it’s true fees have gone up in some voluntary states since 2015, even at that lawyers in those 18 voluntary bar states are still better off than lawyers in mandatory bar states like Arizona and the 11 other chart-topping most expensive mandatory bars. Annual dues in those not-cheaper-by-the-dozen jurisdictions run from $430 to $660.

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Arizona lawyers will be thrilled to read the current Arizona Attorney magazine item on how the Bar Board of Governors’ 2015-2019 strategic plan is “committed to maintaining member fees as approved by the Arizona Supreme Court, without additional increases to members, consistent with the Bar’s duty to serve and protect the public.”  Talk about chutzpah. They haven’t even finished rolling out the last dues increase. As it is, Arizona is already the 2nd highest total cost to practice among mandatory bars.

Paying less.

https://cdn.morguefile.com/imageData/public/files/m/mensatic/preview/fldr_2005_02_05/file000777960788.jpgOn average, lawyers in the voluntary states pay less for lawyer regulation. This makes sense since lawyers aren’t forced to pay for both regulation and what should be optional trade association functions.  The average cost of lawyer regulation in the 18 voluntary jurisdictions is just over $200. Not so in Arizona where lawyers pay for compulsory membership, which includes an undisclosed amount for lawyer regulation.

And even where lawyers choose to join their voluntary bar associations, the average is $477 — still lower than the $505 Arizona lawyers currently pay and which goes up to $520 on January 1,2019. Using the comparably sized 22,000+ member voluntary Ohio State Bar Association as an example, Ohio lawyers pay $175 per year in court-mandated lawyer regulatory registration fees ($350 biennually) and $305 to belong to the voluntary Ohio State Bar. The total annualized cost for both is $480. In my opinion, the Ohio State Bar Association’s membership benefits are even better than those offered by the State Bar of Arizona.

The data on the following chart on voluntary state bar association membership dues is updated from 2015. It was obtained from readily available public online information from voluntary state bar jurisdictions and in some instances, by direct communications with voluntary bar lawyers and association representatives. Attorney registration fee information comes from state court websites.

voluntary-bar-jurisdictions-cost-comparison-chart

 

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https://upload.wikimedia.org/wikipedia/commons/thumb/f/f6/UserpageCOI.svg/262px-UserpageCOI.svg.pngThe movement begun in Nebraska in 2013 to deunify the regulatory and trade association functions of mandatory bar associations continues. On January 13, 2017,  Representative Anthony Kern introduced HB 2295 and HB 2300  to improve public protection by eliminating the Arizona Bar’s regulator and trade association conflict of interest. Yesterday, both bills were assigned to House Committees for their respective hearings.

https://i1.wp.com/azleg.gov/alisImages/MemberPhotos/52leg/House/KERN.gif

Rep. Anthony Kern

According to Kern, “The bills resolve the conflict of interest that exists when a quasi-public organization that licenses lawyers and is supposed to regulate their conduct also remains beholden to lawyer interests. Neither the public or lawyers are going to be well served by such a conflict. The two missions – protecting the public and serving lawyers – do not work well together.”

In accord with its prerogatives as a co-equal branch of government and its duty to uphold the Arizona Constitution, HB2295 represents a determination by the Arizona Legislature that the protection of the public is the highest priority. And that in the licensing, regulating, and disciplining of attorneys in the state, the protection of the public is paramount over other interests sought to be promoted. This bill goes to the heart of the conflict outlined by Kern.

Trade Association and Regulator.

https://upload.wikimedia.org/wikipedia/commons/thumb/b/b3/Berckheyde%2C_Jan_-_A_Notary_in_His_Office_-_1672.jpg/378px-Berckheyde%2C_Jan_-_A_Notary_in_His_Office_-_1672.jpgThe State Bar of Arizona tries to be all things to all people — but it can’t. Through the years it has employed various semantical machinations to reframe its trade association functions as enhancements to the legal profession. At the same time, it has also articulated a competing mission to serve the public. Indeed, under an updated rule iteration, it now says its mission is “to serve and protect the public with respect to the provision of legal services and access to justice.”

Semantical gyrations notwithstanding, the regulator/trade association conflict of interest remains intractable and irreconcilable.

In addition to doing away with those conflicted interests, HB2295 also reinforces First Amendment free speech and associational freedoms. Proponents also contend it would help lower the high cost to practice law in the state. HB2295 is similar to last session’s HB2221, which fell 5 votes shy of reaching the governor’s desk for signing.

A Voluntary Bar.

Consistent with the Arizona Legislature’s prerogatives as a co-equal branch of government and its duty to uphold the Arizona Constitution, HB2300 provides that to the extent provided by the state constitution, all lawyer regulatory and public protection functions are transferred exclusively to the Arizona Supreme Court.

The bill also provides that an attorney shall not be required to be a member of any organization to become or remain a licensed attorney in Arizona. By eliminating compulsory bar membership, HB2300 remedially makes the determination by the Legislature that conditioning the practice of law on bar membership violates the rights to free speech and free association guaranteed by the Arizona Constitution.

California Bar Deunification.

https://upload.wikimedia.org/wikipedia/commons/4/4b/Map_of_USA_highlighting_California.pngThe Arizona Legislature is not alone in its quest to reform the way lawyers are regulated. According to a report in the ABA Journal, during its last legislative session, the California Assembly “unanimously approved a bill that would have mandated a nonlawyer majority on the bar’s board of trustees to address the antitrust problem, and created a commission to study splitting the bar into a state agency that regulates lawyers and a separate private, voluntary trade group.”

The California Bill failed to pass after the Bar rallied opposition in the Senate. But the fight is far from over. It resumes this session. And the pressure for reform mounts. For example, because of policy changes to the governance of the California Bar that adversely impacted California Bar Section operations, including the Bar’s focus on its core regulatory functions, the Sections are currently considering separating from the Bar. The environment created in the past year, combined with the very high overhead and ever-increasing assessment the Sections are unilaterally mandated to pay, the environment has become too difficult for them to reasonably survive or thrive.

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Credit: UserpageCOI.svg, public domain, Wikimedia Commons; Berckheyde, Jan – A Notary in His Office – 1672.jpg, public domain, Wikimedia Commons; Map of USA highlighting California.png, Creative Commons Attribution-Share Alike License, Wikimedia Commons.

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Day 196 - Kicking Ass | by lintmachineIn 2012, a member referendum cut Washington State Bar Association (WSBA) dues from $480 to $325. Members were thrilled. Lawyers elsewhere were envious. From WSBA leaders, teeth-gnashing and underwear-twisting ensued. But truth be told, the panty-twisting began well ahead of the referendum. The sky was gonna fall. The Seattle Starks said “Winter is coming.”

The Big Payback.

Four years later on September 29, 2016, it was payback time. On that day, the WSBA Board of Governors and its executive director got their ‘gimme back.’ The Board approved substantial lawyer licensing fee increases starting next year and running through 2020. The first jump of 138% raises dues from $325 to $449 in 2018. Fees then bump up to $452 in 2019 before riding the Up escalator again in 2020 to $458. The hikes amount to a 141% increase over current fees.

Back on top.

As soon as 2018, the first increase to $449 puts Washington back in the top ten of highest mandatory bar dues states topping Idaho, Utah, Louisiana and California. Of the total 32 mandatory bar states, only Alaska, Oregon, New Hampshire, Hawaii, Wisconsin, Nevada and of course, Arizona are higher.

Although the WSBA Board approved the increases last September, it wasn’t until this past January 5, 2017 that the score was truly evened. On that date the Washington Supreme Court approved the dues increases declaring them without explanation “reasonable” and in the alternative, ruled in the same Order again without explanation that the fees proposed through a new member license fee rollback petition “would not be reasonable.”

40+118 POW!! | by barkLicense fee rollback petition.

Following the WSBA Board’s dues vote last September, members took immediate steps under WSBA Bylaws that provide that within 90 days of a final decision of the Board of Governors, any active member may file a referendum to reverse or modify that decision. Consequently, a license fee rollback petition was timely filed to reject the 2018-2020 fees approved by the Board and to alternatively require that the fee amount for a given year not be increased by a greater percentage than the consumer price index (CPI) increased during the calendar year ending 12 months previous to the effective date of the increase.

Only 1,604 or 5% of the active membership were needed to qualify the petition. A total 2,180 WSBA members signed the petition. The Court gave no explanation other than the conclusory statement: “That the lawyer license fees proposed by the license fee rollback petition, if the petition were to pass, would not be reasonable both as to the level of fees that it proposes and as to the requirement that future license fee increases be tied to the consumer price index.”

Giving my bro a "good old kick up the arse" (AKA a "Bishop Brennan") outside Parochial House, County Kerry,Ireland. | by 2thin2swim

Later this month, the WSBA’s Board of Governors meets to decide whether or not to hold the referendum vote given the Court’s order rejecting the petition.

I’m not a Washington lawyer but they should still hold the vote — because even while the Board applauds the Court’s action while sitting on their hands, WSBA members will still want to kick some ass of their own.

 

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Credits: Day 196 – Kicking Ass, by lintmachine at Flickr via Attribution-NonCommercial-ShareAlike 2.0 Generic license; 40 + 118 POW!!, by bark at Flickr Creative Common Attribution license; Giving my bro “a good old kick up the arse,” by 2thin2swim at Flickr Creative Common Attribution license.