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Archive for the ‘Your friendly state bar.’ Category

On Sunday, the local paper ran a front page story about how $4.6M in charitable contributions was spent. It was only news because of the way some of that money was distributed to the beneficiaries.

In the aftermath of the sixth-largest loss of life for firefighters in U.S. history, millions of dollars in donations came pouring in from around the country. The donations, big and small, were meant for the surviving families of the 19 Granite Mountain Hotshots, an elite group of firefighters who died in a wildfire near Yarnell, Arizona in 2013.

WTF | by ulricaloebAccording to the investigative report by the Arizona Republic’s Robert Anglen, “One of the key organizations responsible for managing those donations now questions how some of the money was used, with hundreds of thousands of dollars spent on sightseeing trips, high-end restaurants and hotels for hotshots’ families.”

My point in mentioning this head-shaking story is not to pick on the surviving families who as Anglen points out, “did nothing wrong in accepting the donations.” Or is it to unnecessarily dwell upon what amounts to a pretty embarrassing and disastrous public relations snafu for the charities and their management. The paper’s investigative story does all of that and then some.

It’s merely to highlight once again one of life’s most sacred and unhappy truths. The easiest money to spend is always somebody else’s.

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Milton Friedman

I’ve known this all my life. And it’s one of the principal reasons that organizational, business and government transparency and the lack thereof aggravates and animates me so much. As a matter of fact, it is one of the two key drivers of my quest to reform mandatory bar associations. You don’t get any more high-handed and cavalier in spending somebody else’s compulsory dues money than the tin-eared bureaucrats running our nation’s mandatory bar associations.

The other energizer is of course, reclaiming and protecting the First Amendment freedoms of lawyers, which like the Constitutional rights of all Americans are being eroded everyday.

As for transparency and “on whom money is spent,” Nobel prize-winning economist, the late Milton Friedman said it best some 36-years ago in Free to Choose co-authored with his wife, Rose.

 

Friedman knew that if it’s someone else’s money — there’s no accountability and no real consequences as to how that money is spent.

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Credits: money, at Morguefile, no attribution; “WTF,” by ulricaloeb at Flickr Creative Commons attribution license; Portrait of Milton Friedman by Robert Hannah 89, The Friedman Foundation for Educational Choice via Wikipedia, public domain; chart via Youtube video.

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I recently attended a seminar where a lawyer-lobbyist opined that non-lawyers should not be lobbyists. Influence peddling, it seems, should be the sole province of lawyers. Not that much explanation was given. Perhaps none was needed. After all, most in attendance were lawyers. Somewhere in the lawyer DNA is genetically grafted an exaggerated belief that “Anything you can do I can do better; I can do anything better than you.” 

Not that it’s true — especially in lobbying where cunning, connections, comprehension and experience count as much if not more than a legal education. Nevertheless, those advocating the supposed advantages of lawyer-lobbyists over nonlawyer-lobbyists also sniff that “Nonlawyer lobbyists lack a system of obligatory ethics norms akin to the Rules of Professional Conduct.” Apparently it matters little that such self-serving smugness is undercut by the likes of former lawyer-lobbyist Jack Abramoff.

File:Theodoor Rombouts - Christ Driving the Money-changers from the Temple.jpg

Bottom line, for lawyers fiercely wedded to the medieval guild’s monopoly-has-its-privileges — free market competition sucks. Or to Ben Franklin’s “nothing can be said to be certain, except death and taxes” — add with certitude the protectionist instincts of lawyers.

The ABA takes the lead.

Under the sheltering cover of “ponderous, backward looking, and self-preserving” bar associations, licensure was the sine qua non to supposedly protect “the uninformed public against incompetence or dishonesty.” Or at least that’s what Professor Walter Gelhorn said in “The Abuse of Occupational Licensing”  where more significantly, he also pointed out how such pretextual public protection always has “the consequence that members of the licensed group become protected against competition from newcomers.”

Ah, the joys of monopoly or as Professor Gerard Clark explains in “Monopoly Power in Defense of the Status Quo: A Critique of the ABA’s Role in the Regulation of the American Legal Profession,”

“Since its founding in 1878, the American Bar Association (ABA) has served the legal profession in two principal ways: by limiting membership in the profession, and by protecting its prerogatives. It has done so by: advocating a system of licensing backed by unauthorized practice rules; supporting and then regulating law schools and thereby diminishing the apprenticeship-clerkship route to admission; regulating the delivery of professional services through detailed professional codes; by lobbying the state and federal legislatures for favorable legislation; providing a continuous public relations campaign to put the bar in a favorable light; and supporting the growth of state bar associations that press for these prerogatives at the state and local level. The result is an outsized and comfortable profession that is costly, and inefficient. By seizing the initiative in the creation of a trade association, which simply declared itself the official voice of the bar over all aspects of the profession (although less than one-third of the 1.2 million lawyers in the United States are ABA members), and then convincing state bar authorities to accept its judgments, the ABA accomplished its goal of self-regulation through the use of monopoly power.”

Just-us.

Lawyer regulation to protect the public sounds good. But by regulating who can practice law, lawyers also maintain a monopoly on who provides legal services. The legal establishment accomplishes this by regulating the unauthorized practice of law (UPL) either by statute or court rule. But the rub is that bar association regulators have an inherent conflict of interest. On the one hand, they’re supposed to protect and serve the public by regulating lawyers. But at the same time, they function like trade associations promoting the legal profession’s common interests.

https://i1.wp.com/cdn.morguefile.com/imageData/public/files/m/meowzeroni/04/l/1397514359cws5o.jpgThese two purposes conflict because lawyers and the public often have different interests. When these interests conflict—such as when out-of-state lawyers or lower-cost legal services wish to compete with lawyers — lawyers use their regulatory powers to stop that competition.

Last year, for example, in the aftermath of the U.S. Supreme Court’s ruling against a protectionist North Carolina Dental Board, the State Bar of North Carolina settled its suit against LegalZoom. LegalZoom is now free to offer online document services and prepaid legal services plans to North Carolinians.

Here in Arizona, examples of lawyer interests trumping public interests include the Arizona State Bar’s efforts to stop realtors in the 1960s, legal document preparers in the 1990s, and out-of-state lawyers in the 2000s from offering services in Arizona.

When it comes to access to justice, those at the temple precincts mean access to just-us.

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Credits: The governors of the guild of St. Luke, Haarlem, 1675 by Jan de Bray, Wikimedia Commons, public domain; Theodoor Rombouts, Christ Driving the Money-changers from the Temple, Wikimedia Commons, public domain; other photos via Morguefile.com, no attribution required.

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In April, the Nevada State Bar’s Board of Governors blast emailed members a third-party confidential survey asking for their “opinion on the CLE and annual license fee exemptions currently offered to members older than 70.” The survey is apparently driven by proponents who want to eliminate that age exemption. Others want it left in place. Will the survey decide the matter? I rather doubt it. In any case, the results are supposed to be published online and/or in the Nevada Bar’s magazine.

Currently, there are 412 Nevada lawyers age 70 or older actively practicing. But those silver legal eagles better start worrying. Once the age exemption is eliminated, those 412 lawyers, representing less than 5% of Nevada’s 8,818 active lawyers, will each sustain about $1,000 in new higher annual costs to practice.

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Base annual dues in Nevada are presently $450. In addition, there’s a separate yearly $40 paid to the Nevada CLE Board. This amounts to $490 in total mandatory annual fees. And with the average cost of an hour’s worth of Bar CLE at about $45 multiplied by a mandated 12 annual CLE hours — tack on another $540 to the annual tariff. Wine may improve with age — but not it seems the bottom line for Nevada’s older lawyers.

As far as the Bar’s concerned, however, the news would be positive. Assuming the 412 septuagenarian lawyers satisfy their CLE requirements through the Bar, the projected fiscal impact for the Nevada Bar will to the sunny side of potentially over $400,000 in higher annual revenues based on the infusion of new dues-payers and CLE potentially totaling $1030 in fees X 412 active senior Nevada attorneys.

Right now, millenials outnumber the 75.4 million Baby Boomers in the U.S. But the bad news for those 18 to 34 year olds is that many Boomers aren’t retiring. So as Baby Boomers, including lawyers, continue working past retirement age, it’s not surprising that mandatory bars are trending toward revoking senior lawyer age exemptions. After all, the bureaucratic maw must be fed. As Oscar Wilde said, ‘the bureaucracy expands to meet the needs of the expanding bureaucracy.’

Holidays 496Some mandatory bars like the State Bar of Arizona eliminated their age exemptions years ago. As a matter of fact, in the Grand Canyon state, aging lawyers who take retirement status still pay bar dues. The only way to stop paying is to resign in good standing or to rest in peace beneath the ground. And in Texas, on April 28, 2015, the Texas Supreme Court amended its Bar Rules to eliminate its longstanding MCLE exemption for so-called emeritus attorneys, those aged 70-years and up.

Understandably, it’s a bit unseemly to ascribe money grasping reasons to these moves. So look instead for overused policy dodges dressed up in public protection apparel to justify eliminating the age exemptions. Doddering dinosaur lawyers who fail to keep abreast of the law may pose risks to consumers is how the argument goes. But unfortunately for proponents, there’s never been proof or any empirical evidence that continuing legal education makes lawyers of any age more competent, professional or ethical.

https://upload.wikimedia.org/wikipedia/commons/thumb/3/33/A_jolly_dog.png/163px-A_jolly_dog.pngIt seems “Wisdom doesn’t automatically come with old age,” according to the late Abigail Van Buren. “Nothing does – except wrinkles. It’s true, some wines improve with age. But only if the grapes were good in the first place.”

Finally, paraphrasing Francis Bacon, “Age appears to be best in four things; old wood best to burn, old wine to drink, old friends to trust,” — and for mandatory state bars, old lawyers to tax.

 

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Wyoming State Bar

Wyoming Bar Members and Guests (registration required)

Running an Efficient Law Firm (webinar)

July 27, 2016
12:00 – 1:00 p.m.
Click here for a description of the program, speaker bio and to register.

Cost: FREE

CLE Credit: 1 credit

PRE-REGISTRATION IS REQUIRED

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Wyoming Casemaker: A Complete Guide (webinar)

August 9, 2016
12:00 – 1:00 p.m.
Click here for more information and to register.

Cost: FREE

CLE Credit: 1 credit

PRE-REGISTRATION IS REQUIRED

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Laws, Rules and Practices Governing OSHA Activities (webinar)

August 25, 2016
12:00 – 1:00 p.m.
Click here for a description of the program, speaker bio and to register.

Cost: FREE

CLE Credit: 1 credit

PRE-REGISTRATION IS REQUIRED


Lawyer Fitness 101 (webinar)

August 26, 2016
12:00 – 1:00 p.m.
Click here for a description of the program, speaker bio and to register.

Cost: FREE

CLE Credit: 1 credit

PRE-REGISTRATION IS REQUIRED


Going Long on Oil and Gas: Estate Planning Tools to Maximize Mineral Interests (webinar)

October 4, 2016
12:00 – 1:00 p.m.
Click here for a description of the program, speaker bio and to register.

Cost: FREE

CLE Credit: 1 credit

PRE-REGISTRATION IS REQUIRED


Shared Custody Arrangements in Wyoming: A Challenging (and Challenged) Proposition (webinar)

Sponsored by the Children & Family Law Section

October 19, 2016
12:00 – 1:00 p.m.
Click here for a description of the program, speaker bio and to register.

Cost: FREE

CLE Credit: 1 credit

PRE-REGISTRATION IS REQUIRED


The New Era of Proportionality (webinar)

November 11, 2016
12:00 – 1:00 p.m.
Click here for a description of the program, speaker bios and to register.

Cost: FREE

CLE Credit: 1 credit

PRE-REGISTRATION IS REQUIRED

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Lexis Nexis University

Your Library is Your Portrait: Using Technology to Improve Accessibility and Effectiveness

  • Class Type: On-Demand Training
  • Product: LexisNexis® CLE and CPE
  • Run Time: 66 Minutes
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You are not Going to Believe This!: Deception, Misdescription, and Materiality in Trademark Law

  • Class Type: On-Demand Training
  • Product: LexisNexis® CLE and CPE
  • Run Time: 60 Minutes
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Credits: “Men of the Day No. 732: Caricature of Mr James Lennox Hannay. Caption read “Marlborough Street” by Spy in Vanity Fair, 22 December 1898, via Wikimedia Commons, public domain;”Am richtigen Fleck. Signiert. Öl auf Leinwand” via Wikimedia Commons, public domain; “A jolly dog,” by Currier & Ives, via Wikimedia Commons, public domain.

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Rich Life 3

  1. It fails to tell its members where their money goes. The Bar does not provide members a detailed accounting of its annual expenditures, let alone a yearly income statement and balance sheet. In addition, the Bar uses unexplained indirect cost allocations to account for overhead and administrative costs. Moreover, these partial allocations appear to be based on undocumented time estimates unrelated to measurable factors. Indeed, in the Bar’s “2015 Annual Report,” the Bar states that in 2015 it generated CLE revenues of $2,059,801 against expenses of $1,925,940. This translates into a mystifying expense-to-sales ratio of approximately 94%. Were these allocated expenses reasonably linked to a level of service or benefit received? Without transparency, it’s anybody’s guess whether the Bar’s indirect cost allocations are reasonable, equitable, real and current — or whether they even represent acceptable means for apportioning costs;

                        As clear as mud.

  1. It fails to disclose how much it spends on lawyer regulation and how much it spends on non-regulation. Of the approximate one-third of its annual budget spent on lawyer regulation and discipline, the Bar provides no expense detail, particularly about the number of discipline-related professional staff or how much they are paid;

People 1055

  1. It fails to disclose how much it spends annually on political and ideological activities, including bar relations related to promoting the interests of special interest lawyers; support services for voluntary, politically active bar associations; public relations and advocacy activities in support of merit selection; administrative and financial support of social programs having ideological content as well as political advocacy Bar leadership training; lobbying and expenses paid of the Board of Governors and other administrative expenses for carrying out the Bar’s political and ideological activities as well as all expense reimbursements and funds paid to outside contracted lobbyists. Also undisclosed are the actual work hours expended lobbying and giving lawmaking advice to the Legislature by its two executive employees who are also state-registered lobbyists: the Bar’s CEO/Executive Director and the Bar’s Chief Communications Officer;

Mirrors 84

  1. It fails to timely and completely disclose the annual compensation paid to all management, including all top executives – – not just “key employees” as defined and required under IRS Form 990 “reportable compensation” mandates;
  1. It fails to widely, and prospectively disclose periodic Supreme Court Rules Petitions it files and which often increase member disciplinary exposure or otherwise adversely affect their interests, including, for example, recent ethical rule requirements for succession planning and more recently, a Petition to Amend the Oath of Admission to the Bar & Lawyer’s Creed of Professionalism;

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  1. It fails to disclose to lawyer participants beforehand, its ‘unwritten’ voluntary Fee Arbitration Program “50% rule.” The Fee Arbitration Program is designed to resolve fee disputes between Arizona attorneys and their clients. But under the “50% rule,” if the fee arbitrator awards more than 50% of the fees returned to the client, the award is automatically referred to the Lawyer Regulation Office for lawyer disciplinary investigation. This rule is not found anywhere in the Rules of Arbitration of Fee Disputes or is it publicly divulged to members. The rule is instead invoked in practice and as an unwelcome ‘surprise’ if the parties do not settle;

Gas Station 14

  1. It fails to detail its longstanding nonperformance in committing, measuring, recruiting, training, and managing organizational workplace race, ethnicity, gender and disabilities diversity within its own employee organization, especially the historic lack of race and ethnic diversity among top management;
  1. It fails to disclose the number of outside consultants and contractors it hires; how they are hired; and how much each is paid. The Bar does not make those consulting and independent contractor agreements available for public inspection;

Babies 255

  1. It fails to adequately explain and disclose its internal process and ‘carefully tailored’ procedures to determine itself “Keller-pure,” including activities it engages in unrelated to its core functions of regulating the legal profession to improve the quality of legal services;
  1. It fails to disclose in any detail its formula for benchmarking executive compensation and organizational size, operations and service. Not long ago, Arizona was No. 1 among mandatory bars with a member-to-professional staff ratio of 158 to 1;
  1. It fails to disclose and identify the financial contributions, including gifts-in-kind, made with mandatory member assessments and which are annually disbursed to various special interest voluntary bar associations;

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  1. It fails to make open and available its member-funded channels of communication to give fair and equal time to opposing arguments and viewpoints on controversial issues and concerns like the merits of a voluntary state bar. Instead it repeatedly mischaracterizes and misrepresents the views of voluntary bar proponents.

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* Obviously, there are more than 12 including the Bar’s machinations to pass its last mandatory dues increase and its continued conflation without empirical proofs of enhanced lawyer competencies through its Bar-sponsored continuing legal education programs — but for now, these are a modest start.

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Sure I thought it was grand the California State Auditor again stepped on the State Bar of California last week. My praise, though, is restrained. The California Bar has sustained plenty of hits and fault-finding the past 30 years.1 And still it has resisted genuine reforms. Apart from that, the Cal Bar getting stomped on is such old hat that even the beaver and muskrat’s come off.

Indeed, just last June the state auditor alleged the Cal Bar may have put the public at risk by going soft on discipline by rushing settlements to reduce a festering 5,000+ lawyer disciplinary case backlog. The auditor also berated the Bar for going $50 million over-budget on a building renovation. In sum, the report declared the Cal Bar “has not consistently protected the public through its attorney discipline process and lacks accountability.”

On the heels of that, last July I criticized the Arizona Supreme Court’s on State Bar Mission and Governance for inexplicably consulting the California Bar about its governance reforms — as though the Cal Bar’s done such a good job of that. “That’s like asking Kim Kardashian about modesty or Donald Trump about hairdos,” I quipped.

Today, I still wonder, ‘What’s next?’ Consult Trump on Hispanic outreach?

State audit rips Cal Bar.

Calif State Auditor May 12 2016 Cover Letter Re. State Bar of California Audit Report

The 62-page audit report concerning the Cal Bar’s financial operations and management practices was released last Thursday. It decried the Bar’s lack of transparency, the excessive salaries paid its executives and its massive budget shortfall to repay victims of attorney misconduct. When I saw the headlines about non-transparency and inflated executive compensation, for a moment I thought the story was about the State Bar of Arizona.

https://upload.wikimedia.org/wikipedia/commons/thumb/d/df/Opie_Read_in_the_Ozarks%2C_including_many_of_the_rich%2C_rare%2C_quaint%2C_eccentric%2C_ignorant_and_superstitious_sayings_of_the_natives_of_Missouri_and_Arkansaw_%281905%29_%2814766331541%29.jpg/240px-thumbnail.jpgBut no, it was the California Bar. Also see “Audit rips California’s state bar for shady finances and bloated salaries.”

About those so-called inflated salaries, the auditor recommended that “to ensure that the compensation it provides its executives is reasonable, the State Bar should include in the comprehensive salary and benefits study it plans to complete by October 2016 the data for salaries and benefits for comparable positions in the state government’s executive branch.” 

According to Table 8 of the auditor’s report, the Bar’s Executive Director earns $267,500 per year while the Governor of California makes $182,784 annually. At 146% of what the governor makes, the value of presiding over the world’s 8th largest economy clearly pales in comparison to running the nation’s largest bar association. Meanwhile, at 18,250 active members, the State Bar of Arizona is one-tenth the size of the Cal Bar’s 186, 346 active members. And at $65M, the Cal Bar’s budget is more than 4 times the size of Arizona’s. All the same, the Arizona Bar’s Executive Director also makes more than the California Governor.

Sunshine | by nateOne

Several months ago, a local Arizona Bar apologist took exception to my comparing the Arizona Bar Executive Director’s annual compensation with that of Arizona’s Governor. He told me comparing the executive director’s salary with Arizona government employees was “meaningless.” Arizona state employees are “underpaid,” he scolded. And in any case, the governor gets a lot of non-salary perks. If you look at the table below obtained via Ballotpedia, he’s right. The Arizona Governor is indeed underpaid along with everyone else in state government — not just the executive branch.

State executive officials
Office and current official Salary
Governor of Arizona Doug Ducey $95,000
Arizona Secretary of State Michele Reagan $70,000
Attorney General of Arizona Mark Brnovich $90,000
Arizona Treasurer Jeff DeWit $70,000

A Bed | by CarbonNYC [in SF!]Just the same, the Cal auditor’s advice remains sound, to ensure reasonableness, “the data for salaries and benefits for comparable positions in the state government’s executive branch” ought to be included in any state bar salary review.

Per the federally mandated IRS Form 990 disclosures on the State Bar of Arizona’s website, the most recently available 2014 IRS Form 990 reveals the Arizona Bar’s Executive Director makes 2 times the Arizona governor’s salary. The data, though, is two years old. As a matter of fact, buried in the May 2016 issue of the bar’s monthly magazine, was a brief mention that in February the Board unanimously approved the Executive Compensation Committee’s recommendation to give the Executive Director another raise.

What it all means for transparency.

The real implications from the Cal audit report are what they mean for transparency. The legal establishment isn’t known for transparency — their disingenuous exhortations notwithstanding. That’s why I believe transparency suffers where public records access and disclosure mandates aren’t overseen by independent non-legal establishment third parties.

In Texas, for example, the Texas State Bar discloses a lot. Admittedly, that’s not necessarily because it wants to — but because it has to. The Texas Bar is subject to State Sunset Law review of its mission, continued viability, fiscal management and performance by the Texas Sunset Commission. This review by legislators and public members is required by the Texas Sunset Act.

Open Kimono Management | by standardpixelYears ago, Arizona had a Sunset Law that likewise applied to the State Bar of Arizona. But that ended in 1985 when the State Bar Act sunsetted over a dispute between the Bar and the Arizona Legislature and before the State Bar could or would open its management and financial kimono. So when the Texas Bar opens its books, it does so not as much by choice but as by statute.

The California Bar must likewise open its financial operations and management practices not by dint of munificence for open government but as required by the State Bar Act under Business and Professions Code §6145.

The lesson in Arizona, then, is that to ensure free and open governance and preserve the public’s unfettered access to financial and management information, the State Bar of Arizona needs to be treated like every other state regulator. This means being subject to Arizona Public Records Law, A.R.S. §§ 39-101 to -161 not Arizona Supreme Court Rule 123.

Gustaf Dalén 1926.jpgAlthough Arizona Courts meet the plain meaning of a “public body” supported by state monies, the high court has deemed that Arizona courts are not subject to Arizona’s public records laws. Instead, the Court says it alone under its own Rule 123 constitutionally dictates the breadth of what governs the maintenance and disclosure of its records.2

Not that the Arizona Supreme Court is alone in that thinking. In 2009, the Washington State Supreme Court expanded on that view in City of Federal Way v. Koenig. And in 2013, the Nevada Supreme Court followed in the same general direction in Civil Rights for Seniors, v. Administrative Office of the Courts.

Under Arizona public records law, most documents in a public officer’s possession are public records — except for documents that relate solely to personal matters with no relation to official duties. Rule 123(e), on the other hand, restricts access to certain administrative records including employee records, judicial case assignments, and what it alone determines is attorney and judicial work product. Ariz. R. Sup.Ct. 123(e)(1)(11)

The State Bar Mission and Governance task force has proposed the Arizona Bar not fall under Arizona Public Records Law. Rather it recommends the Bar “conduct meetings and maintain records pursuant to public access policies adopted by the Supreme Court.” How much transparency will that entail? What judicial records does the Bar create that have relation to Rule 123?

And besides, as I recently posted, the Arizona Bar already thinks “our organization has worked to be exceptionally transparent.”

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1 For more Golden State Bar dysfunction, see “California State Bar in Turmoil After Shake-up Triggers Whistleblower Claim.”

2 In Arpaio v. Davis, the Court of Appeals explained:

“Arizona’s constitution provides that “[t]he Supreme Court shall have administrative supervision over all the courts of the State.” Ariz. Const., art. 6, § 3. This administrative power “is a function of its responsibility to administer an integrated judiciary.” Scheehle v. Justices of the Ariz. Supreme Court, 211 Ariz. 282, 289, ¶ 27, 120 P.3d 1092, 1100 (2005). The Supreme Court fulfills its administrative responsibilities by promulgating rules. Id. at ¶ 23, 120 P.3d at 1099. “Such rules are valid even if they are not completely cohesive with related legislation, so long as they are an appropriate exercise of the court’s constitutional authority.” Id. at ¶ 24, 120 P.3d at 1099. Accordingly, Rule 123—not the Arizona Public Records Law—controls requests for judicial records.”

Credits: Portrait of Bartłomiej Sztosik,Creator:Henryk Grombecki, at Wikimedia Commons, public domain; Opie Read in the Ozarks, by Opie Percival, Library of Congress via Wikimedia Commons, public domain; Sunshine, by Nate Grigg at Flickr Creative Commons Attribution; A Bed, by David Goehring at Flickr Creative Commons Attribution; Two women wearing funny glasses . . . ., by Yuko Honda at Wikimedia Commons, Creative Commons Attribution-Share Alike 2.0 Generic License; Open Kimono, by Eric Gélinas at Flickr Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic license; Gustaf Dalén, Wikimedia Commons, public domain.

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Rod Serling - Twilight Zone Button | by TobyotterMay 11th is Twilight Zone Day, an unofficial holiday that celebrates The Twilight Zone, that iconic 1960’s era television anthology replete with unexpected twists, surprise endings and of course, the bizarre. What an appropriate day then to comment on a blast email from the president of the State Bar of Arizona.

It was an “update” received a few days ago following the defeat of HB 2221. This was the bill that having passed the Arizona House and legislative committees in both houses, came within 5 votes in the Arizona Senate of getting to the governor’s desk. The legislation failed to pass the Senate on May 5, 2016. Bar reformers vow to continue the fight next legislative session.

As for the bar president’s email, too bad it again mischaracterized HB 2221 as “the bill that would have created a two-tiered membership within the State Bar of Arizona.” Two-tiers? To practice law in Arizona, there’s only one tier. It’s called mandatory membership in the Arizona Bar, which would have singularly remained the requisite precondition to practice law in the state.

In truth, HB 2221 would have helped protect the constitutional rights of Arizona lawyers. And it would have increased transparency by subjecting the Bar to Arizona Public Records Lawlike all other state regulatory bodies.

The principal reason the State Bar opposed the bill was because HB 2221 would have forbidden it from using mandatory dues for anything other than lawyer regulation. Bar leadership didn’t want to lose access and control over both regulatory and non-regulatory mandatory assessments paid by Arizona’s lawyers.

laughing seinfeld evil newman laughThe other reason the Bar disliked the bill was because as the bar president’s email intimated, it didn’t see the need for greater public transparency. The Bar has long been a tone-deaf master of self-congratulation and self-delusion. Hardly a surprise then that the bar president declared, “our organization has worked to be exceptionally transparent.” This from the same organization that fails to provide detailed budget expense information to its members and that attempted to pass a stealth dues increase 12 days before Christmas 2013. It’s also the same organization that tried to disband member sections and impose a CLE precertification revenue enhancer both while it thought no one was paying attention. More recently, it’s also the organization that uses mandatory assessments to lobby against the interests of its members. And good luck getting a number on the extent and total dollar expenditure both internally in executive compensation and externally in outside lobbyist fees.

But as risibly self-delusional as that “exceptionally transparent” declaration was, the email also offered a sop to lawyers believing otherwise, i.e., that the Bar is not only non-transparent but secretive. The bar president pointed out that “a proposed Supreme Court rule would subject the Bar to open records and open meeting requirements.”

That ‘solution,’ however, leaves a lot unanswered. It may also prove less than satisfactory. Rather than submit to Arizona A.R.S. § 39-121, the Bar prefers to fall under Arizona Supreme Court Rule 123(a), which provides: “Pursuant to the administrative powers vested in the Supreme Court by Article VI, Section 3, of the Arizona Constitution, and the court’s inherent power to administer and supervise court operations, this rule [is] adopted to govern public access to the records of all courts and administrative offices of the judicial department of the State of Arizona.”

Well and good except that even though the Court falls under the statutorily defined plain meaning of “public body,” it has previously ruled for itself that “Rule 123 — not the Arizona Public Records Law — controls requests for judicial records.” See London v. Broderick and Arpaio v. Davis.

Furthermore, the bigger problem for the Arizona Bar is that contrary to its contention that HB 2221 would have created a “hybrid” State Bar, the fact is that the State Bar of Arizona is already a hybrid organization. It serves as attorney regulator and attorney “trade association.”

So as both regulator and trade association, does the Bar actually belong under Rule 123? Moreover, how will that work in actual practice? Clearly when the Bar uses lawyer mandatory assessments to perform regulatory functions such as lawyer discipline or lawyer admissions, it acts as a part of the Arizona Supreme Court. But what about when the Bar spends mandatory assessments on non-regulatory discretionary programs and services? When is the Bar required to be transparent? All the time? Or only when members police it? Or only when the Court deems it? Or only when it acts as a regulator?

And what about the real nub of the objection? How about when the State Bar uses mandatory assessments for everything else under the Arizona sun having nothing to do with regulating the legal profession to improve the quality of legal services to the public?

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Credits: “Rod Serling – Twilight Zone button,” by Tony Alter at Flickr Creative Commons Attribution.

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Right now, the State Bar of Arizona can spend attorneys’ mandatory dues on anything it wants to so long as the expenditure is related to improving the practice of law through the regulation of attorneys.  By its own interpretation, that could mean lobbying, conventions, financial contributions to special interest bar associations, office buildings, and who knows what else.  The Bar reads this permission so broadly, you can drive a dump truck through it.

Meantime, down at the Arizona Legislature, after almost 4 weeks, final votes are still pending on about 200 bills, including two measures concerning the State Bar of Arizona. All bills, though, are on hold, including the state bar bills. This is because at the beginning of April, Arizona’s governor set a legislative priority on the state budget. Governor Doug Ducey imposed a bill-signing moratorium to stop any more bills from hitting his desk until a state spending plan was finalized. The end of the month has come but budget negotiations continue.

The key state bar legislation this session is HB 2221. If it passes, the State Bar of Arizona would only be able to force lawyers to pay for attorney regulation and nothing more. Drawing this clear line is crucial to protecting attorneys’ free speech rights. But since the Arizona Bar much prefers the free-spending non-transparent status quo, it has done everything in its power to stop the historic legislation.

To underscore how important the line of demarcation is between free speech and the use of compulsory dues, look no further than the case of North Dakota attorney Arnold Fleck. With his experiences with the North Dakota Bar, Mr. Fleck has learned firsthand how easily mandatory bars can tread on attorney First Amendment rights.  In 2014, he discovered that the North Dakota Bar used nearly $50,000.00 in mandatory bar dues to oppose a shared parenting measure he supported.

Even after he filed a federal lawsuit and the North Dakota Bar consequently revised its policies, he discovered the North Dakota Bar was going to fund a “family law task force” that would propose legislative changes related to shared parenting.  He objected to the use of his dues to fund the task force and his objection went to mediation.  Mediator Karen Klein agreed that his dues could not be used to propose legislation but found his objection was premature because the task force had not yet spent money to that end. “The parameters of the activities the task force will perform are unclear,” she noted in her decision. As a result, Mr. Fleck must stay vigilant just so his dues are not used to fund causes he plainly opposes.

While stating that Mr. Fleck’s focus only on “improving the practice of law through regulation of the profession” was “too narrow,” it’s noteworthy the mediator also said, “I cannot find that all potential activities of the task force are germane under Keller.” Read the entire mediation ruling here.

As the mediator explained the holding in Keller v. State Bar of California, “The U.S. Supreme Court held that when a member of California’s integrated bar objects to his or her dues being used for particular expenditure, the bar may not charge that member dues for those expenditures unless “the challenged expenditures are necessarily or reasonably incurred  for the purpose of regulating the legal profession or improving the quality of the legal services available to the State.”

In sum, attorneys should not be have to constantly police their bar to make sure their free speech rights are not being violated. In Arizona, HB 2221 would solve that problem by forbidding the Bar from using mandatory dues for anything other than regulation. Arizona attorneys should not have to worry about what the Bar is doing with their money. And neither should North Dakota’s Arnold Fleck.

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