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Posts Tagged ‘highest cost to practice bars’

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.

https://38.media.tumblr.com/bf098594e264dd0aae08a64bd1fc5e56/tumblr_mm3ajk5tyo1qk6wc3o1_500.gif

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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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.

 

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Top Ten States by Bar Fees                                  (Click to enlarge) Not satisfied with already being near the top among highest U.S. cost-to-practice1 mandatory bar associations, on February 27, 2014 the Arizona Bar’s Board of Governors (BOG) voted 12-11 to hike annual member dues by 13% to $520 by 2019. If at first you don’t succeed . . . . Politicians 19The BOG first tried raising dues in December by 22%. But it was stymied when word got out about the stealth vote 12 days before Christmas. On being outed, the BOG regrouped and moved to postpone the vote till February. It then spun the delay as a self-congratulatory bid at notice, transparency and due process. Unfortunately with more time to deliberate, the BOG also came up with a gambit. It dropped its initial $100 increase motion in favor of one that raised dues by ‘only’ $60. But there was a ‘catch.’ The lower increase was tied to an automatic escalator based on the consumer price index — as though what a state bar does has anything to do with the nation’s basket of consumer goods and services. man face 6But fortunately, brakes were applied to the escalator. But as for the rest, “Il dado è tratto” as they still say in Italy long after Julius Caesar uttered Alea iacta est.In other words, “The die was cast.” When you’re talking fees, state bars always think it’s time to render to Caesar. The rationale. So given the Bar’s two-nostrils worth of rationale, it was never a question of “if” — but of “when” and by “how much.” Wildlife & Animals 2247First, they’d argued the last dues increase was in 2005 as though there’s a gestation period for raising fees. And second, like that proverbial bushy-tailed chicken-counter in the hen-house, an increase was necessary. Or so said a supposed cost-analyzing “Program Review Committee” made up mostly of Bar staff and management. The committee took all of 9 hours over 3 months to do its multi-million dollar operational number-crunching and qualitative analysis. https://i0.wp.com/upload.wikimedia.org/wikipedia/commons/thumb/1/1f/Langtry_cartoon.png/161px-Langtry_cartoon.pngSo to the surprise of no one, the committee pronounced there wasn’t much to cut from a bloated $14.6 million budget — not if bureaucratic stakeholders wanted to keep gilding the Bar’s ‘full-service’ lily. And as usual, the largely complaisant BOG went along. Muddled confusion. One thing the Bar’s spinmeisters also proclaimed was that Arizona’s fees are only tied for tenth highest among bar associations. But try running that declaration to ground. When it comes to decoding what and how much lawyers pay to practice in a given jurisdiction, it’s frankly difficult. To start, you need something better than a secret decoder ring from a cereal box. It’s a muddle. You have to parse, poke and ponder2 through data most of which is hidden behind expedient pay-walls. Or else you glean what you can from the Web whether the ABA or a state bar group. Cartoon Characters 57Adding to the confusion, surveys lump mandatory bars (where you have to pay-to-play) together with voluntary jurisdictions. Of course by mixing the apples with the oranges, it conveniently distorts the cost comparisons. And as long as we’re talking produce — it also helps keep the mushrooms fed and in the dark. Don’t ask why voluntary bars are bunched in with the mandatory associations. It’s one thing to discretionarily and voluntarily pay high fees and quite another to be compelled if you want to keep more than snausages on the lawyer table. Cost to Practice Rankings. People 7054Ranking comparisons are as clear as mud. The last time I looked, the prior rankings were based on 2010 ABA surveys and the had Connecticut and Tennessee at No. 1 and No. 2, respectively. Both are voluntary bar associations. Both have non-bar-related fees that hurt. But how was Georgia in third place at $536 when according to newer data compiled in 2013 by New Jersey’s Office of Attorney Ethics, Georgia’s “Maximum Mandatory Annual Fee” is $242? International Survey of Attorney Licensing Fees And take Connecticut where voluntary annual membership in the bar association costs $280. Although you’re not required to join to practice, Connecticut’s Department of Revenue Services still collects an annual attorney occupational tax of $565, which goes to the state general fund not for lawyer regulation. The state’s high court then tacks on a yearly $110 payment to the Client Security Fund. Work World 14In Tennessee, also a non-mandatory bar state, $400 of the $570 fee lawyers pay is a “Professional Privilege Tax.” And like Connecticut, that money goes to state general revenue, not specifically to any bar-related function or to the Court. And in Texas where membership is mandatory to practice, there’s a similar occupational tax that skews the cost-to-practice fees number higher. In the Lone Star State, $200 out of the $510 Texas lawyers pay to practice goes to state revenues not to fund the legal establishment. International Survey of Attorney Licensing Fees - Chart 2 Distinctions without a difference? Who cares if Caesar is the state, the court, or the bar association? It’s all money flowing out of lawyer pockets. But it matters when mandatory bars conveniently use non-decoded figures as convenient pretexts to justify high mandatory licensing fees. Children 1099So to make some semblance of the mud in the muddle, on a like-for-like dues comparison basis, Arizona is currently among the top three of the country’s 33 mandatory bars behind Alaska’s $660 and Hawaii’s $522. And going inactive in Arizona hardly saves you, either. Inactive Arizona Bar members pay $265 annually, highest among all jurisdictions and equal to or higher than what 20 other jurisdictions charge active bar members.3 Animals 2035And according to the most recent ABA Survey, among mandatory bars with more than 20,000 members, Arizona’s budget is 125 percent higher than the $11,720,787 average for comparably sized bars. And high budgets notwithstanding, by the time the latest dues increase fully implements in 2019, the Bar itself projects about a $4M surplus. An almost $15 million budget, after all, wasn’t nearly enough money. What’s more by separate motion, the BOG also got approval to impose higher fees for in-house counsel; admissions on motion; pro hac vice; and late fees for mandatory annual filings like continuing legal education. Animals 702But at least there’s potential good news for Arizona lawyers. The Bar holds elections to its board of governors in May. So when they get their online ballots and remember the incumbents who voted for even higher costs to practice, maybe members will also recall the moral in Aesop’s Fox and Stork fable.  As the stork told the fox, “One bad turn deserves another.”   _______________________________________________________ [1] See International Survey of Attorney Licensing Fees data compiled July 1, 2013 by Office of Attorney Ethics of New Jersey. [2] Oregon fees include a $30 “diversity and inclusion assessment” and $45 for the client security fund (CSF), leaving a balance of $447. Comparable cost is actually less but close to Arizona’s $460 fee, $10 of which is for the client protection fund (CPF)). But Oregon also requires members to buy high-priced co-op professional liability insurance, which runs $3,200 per year even with modest coverage limits. There’s no deductible or penalty premium for purportedly high risk practice areas. In Hawaii, $34 is allocated to the Attorney Assistance Program and $30 to CSF. The remaining $440 is actually less than but very close to Arizona’s current fee of$460. Minus $65 for Legal Aid, the comparable cost in Texas is actually $235, considerably less than Arizona’s fees. Fees in Wisconsin include $50 for Legal Aid; $11 for a Mandatory CLE Fee; and $20 for CSF. That leaves $379, a comparable cost also less than Arizona’s fees. Based on all this, Arizona is actually ranked third in cost to practice. And while Alaska is Number One, it only requires 3 hours of CLE compared to Arizona’s 15. “Active Bar members are required to earn 3 ethics credits, encouraged to earn 9 additional credits, and required to file an MCLE Report each year.” See Alaska Bar Association MCLE at https://www.alaskabar.org/servlet/content/mcle.html. This effectively makes the cost lower to practice in Alaska than in Arizona. But then I’m adding bananas here to the apples and oranges. (Hat tip to D. M. Quinterri, Esq. for her additional data research!) [3] “International Survey of Attorney Licensing Fees” data further notes Arizona has the highest fee for inactive attorneys. Op. cit. _________________________________________________________ Photo Credits: Caricature from Punch magazine of Lily Langtry. From the Punch Christmas Issue, December 1890, “Punch Among the Planets” at Wikipedia Commons, Public Domain, available from Project Gutenberghttp://www.gutenberg.org/etext/13244

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