MEETING
OF THE
BOARD OF GOVERNORS
OF THE
STATE BAR OF ARIZONA
February
20, 2004
Board Room
Arizona Bar Center
BOARD MEMBERS PRESENT: Pamela Treadwell-Rubin, President, Tucson; Charles W. Wirken, President-Elect, Phoenix; Helen Perry Grimwood, First Vice President, Phoenix; Jim D. Smith, Second Vice President, Yuma; Daniel J. McAuliffe, Secretary-Treasurer, Phoenix; Alan P. Bayham, Jr., Phoenix; Whitney Cunningham, Flagstaff; Stephen M. Dichter and Diane L. Drain, both of Phoenix; Raymond A. Hanna, Prescott; Perry L. Hicks, Bisbee; Joseph A. Kanefield, Phoenix; Phoebe Moffatt, President, Young Lawyers Division, Phoenix; Edward F. Novak, Phoenix; Richard T. Platt, Florence; Foster Robberson, Phoenix; Steven P. Sherick, Tucson; Thomas M. Thompson, Globe; Jeffrey Willis, Tucson; Public Members: Bennie R. Click, Munds Park; Public Members Fernando Gonzales and Emily R. Johnston, both of Tucson, and James B. Matthews, Phoenix; At-Large Members Paul W. Ahler and David K. Byers, both of Phoenix; and Ex-Officio Members Ernest Calderón, Immediate Past President, Phoenix and Dean Toni Massaro, Tucson.
BOARD MEMBERS WITH EXCUSED ABSENCES: At-Large Member Donald W. Carson, Tucson and Ex-Officio Member Dean Patricia White, Phoenix.
OTHERS PRESENT: Teresa Schmid, Executive Director; Robert B.Van Wyck, Chief Bar Counsel; Carrie Sherman, Director of Executive Projects; Nina Benham, Assistant to the Executive Director; Christine Thompson, Government Relations Director; Larry McVey, Chief Financial Officer; Colleen McManus, Director of Human Resources; Matthew Silverman, Director of Communications.
EXECUTIVE DIRECTOR’S REPORT
Teresa Schmid, Executive Director, reported on the Long Range Planning work with Marc Smiley which will be presented to the Board in May. The staff will be working as facilitators to accomplish submitting all departments’ input into the strategic plan template that Mr. Smiley has provided. The “goal champions” will then be meeting to define how to accomplish these goals and the final draft template deadline is April 23, 2004. Mr. Smiley is in an advisory capacity at this point and the staff will be generating the implementation plan.
Ms. Schmid advised the Board of the hiring of the new Executive Director for the Arizona Foundation for Legal Services & Education, Kevin Ruegg. Ms. Ruegg brings a great deal of experience and enthusiasm to the Foundation and will be on board full time March 15th.
COMMUNICATIONS
Matthew Silverman, Director of Communications, reported on the Phoenix Magazine’s two page pullout, a State Bar Legal Resource Guide. The publication reaches approximately 300,000 people. Mr. Silverman further reported on the new “All For You” campaign and gave the Board members a copy. A copy will be sent to each Bar member in their Arizona Attorney in March.
PROFESSIONALISM (COURSE) COMMITTEE
Dean Toni Massaro reported on the Professionalism Committee’s ongoing work. There will be periodic workshops where judges will explain the behaviors to look for in prevention of future ethical problems. The law schools are planning ways to expand their “Bridge the Gap”program
and make them more robust. Dean Massaro discussed the committee’s challenges in quantifying if the course has been successful.
MENTOR COMMITTEE
Phoebe Moffatt, Liaison to the Mentor Committee, gave an update on the work of the committee. Anyone desiring to volunteer as a mentor can complete a one-page form which is on the Web site (www.azbar.org). To qualify as a mentor, one must be a member of the Arizona State Bar in good standing and have practiced for at least three years. President Treadwell-Rubin suggested involving solo practitioners on the committee and those present discussed ways to accomplish this.
CONSUMER PROTECTION/UPL ADVISORY COMMITTEES
Alan Bayham, Liaison to the Consumer Protection/UPL Advisory Committees, recognized the Chair, Honorable Barry Schneider, for all his hard work on this committee. The committee continues to develop strategies to educate consumers about UPL. The Bar is about to file its first UPL suit in Superior Court against a person who continued to engage in UPL in violation of Arizona Supreme Court Rules. Mr. Bayham also reported that the committee is addressing the issue of the unbundling of legal services.
PRESIDENT’S REPORT
President Pamela Treadwell-Rubin presented the “Pin a Rose on You” awards for this month to Dean Toni Massaro, Phoebe Moffatt and Alan Bayham for their work on the aforementioned important committees.
Ms. Treadwell-Rubin stated that at the ABA Mid-year Meeting in San Antonio; discussions were held regarding Professionalism Task Forces. She noted that Arizona has had one in place for six months and recognized co-chairs Ed Novak and Paul Bennett, and staff members Shannon Henrie and Nedra Brown for the work that is already underway.
CHIEF FINANCIAL OFFICER'S REPORT
Larry McVey, Chief Financial Officer, reported that the auditors, Miller, Allen & Co., P.C., commenced the audit of the Arizona Foundation for Legal Services & Education (AZFLSE) on February 3, 2004 and expect to complete the field work portion of the audit by Friday, February 20, 2004. The draft of the audit report is expected by March 5, 2004 and the final report is expected to be ready for the Foundation Board of Directors meeting on March 25, 2004.
The audit of the State Bar of Arizona has begun and field work is expected to be completed by Friday March 5, 2004 and the final report is expected to be ready for the April Board of Governors meeting, if not sooner.
Mr. McVey discussed highlights of the December 2003 year-end financial statements. Year-to-date revenues are $119,000 above budget, consisting of $42,716 in member dues and $76,073 in non-dues income. Pro Hac Vice income for the year was $227,273 and $47,273 higher than budget. The $472,000 surplus is $110,000 higher than the budgeted surplus. The 2003 surplus amounts to approximately $27.75 per member. The loss in December was $46,702 and is less than the December forecasted loss of $54,860.
The net assets of the Bar are $3.335 million. The increase from the prior year is due to the $472,000 surplus in 2003. The Bar has liquid assets of $4.769 million and working capital of $2.88 million. The Bar’s net assets exceed the reserve policy of two months of operating expenses (currently $1,500,000) and exceed the reserve for sections’ carryovers of $435,000 by $1,400,000.
The January results show a surplus in excess of $44,932 versus a budgeted loss of $64,642. Since the 2004 budget has not been reviewed month by month for reasonableness and has not been loaded into Great Plains financial software, the January variances are subject to change. A rent rebate of approximately $8,000 for common area maintenance recorded in January will be accrued in 2003 and taken out of January results.
The Procurement Policy adopted in January is being implemented. All contracts subject to legal review are being reviewed by John Furlong, General Counsel. Software is being developed to monitor expenditures in excess of $5,000 per year per vendor per department and should be in use by March, 2004.
COMMITTEE ON SEXUAL ORIENTATION AND GENDER IDENTITY PROPOSED REVISED RESOLUTION
Amelia Cramer, a Tucson attorney, reported on behalf of the Committee on Sexual Orientation and Gender Identity, with regard to a proposed revised resolution to the Diversity Policy of the State Bar. Ms. Cramer provided a background on the formation of the committee. The board was provided copies of the New York State Bar Association Diversity Policy as well as Massachusetts Bar Association, Inc. Bylaws which contain diversity statements. Ms. Cramer reported on the unanimous recommendation from the SOGI Committee to modify the SBA’s diversity policy. After lengthy discussion:
Whitney Cunningham moved to table the matter, Helen Perry Grimwood seconded and the motion carried unanimously.
Further information on the proposed resolution will come before the Board in April.
AWARDS COMMITTEE REPORT
Emily Johnston, Chair of the Ad Hoc Awards Committee, reported that the members of the committee are: Ed Novak, Joseph Kanefield, Jim Smith and Alan Bayham, Jr. Ms. Johnston reminded the Board that good nominations early are very important to the committee’s work and the process. Any nominations should be directed to the Awards Committee at the State Bar address. The nomination deadline is March 22, 2004 at 5:00 p.m.
AWARD FOR HIGH SCORE ON BAR EXAM
Kiersten A. Murphy, an Arizona State University College of Law graduate, was congratulated by the board and awarded a briefcase for obtaining the highest score on the July 2003 Bar Exam. Ms. Murphy is currently clerking for the Honorable Andrew D. Hurwitz and will be going to work for Gallagher & Kennedy.
Nancy Swetnam, Administrator of the Arizona Supreme Court’s Legal Document Preparer Program which was established by the Arizona Supreme Court in January 2003 via Administrative Order 2003-14 and amendments to Rule 31, Rules of the Supreme Court, informed the Board as to the status of the Program. The Arizona Code of Judicial Administration §7-208, as adopted by the Court, governs the certification and disciplinary process for legal document preparers. Ms. Swetnam reported that the process is working well. Ms Swetnam reported that a few of the challenges of the program include: the number of applications for certification, number of denials and corresponding requests for hearings and the complexity of background investigations of some applications. The Office of the Attorney General provides legal representation to the program for complaints regarding certificate holders. In CY ’03 177 complaints were received; 60 regarding certificate holders and 117 involving non-certified individuals and entities. Processing these complaints in a timely manner is a challenge for both program and State Bar staff.
Fran Johansen, UPL attorney, reported on the background of the Consumer Protection Committee and the UPL rules that were drafted by the committee and approved by the Board of Governors and which became effective July 1, 2003. The Supreme Court Rules: a) clarify the Supreme Court’s authority to regulate anyone who engages in the practice of law or unauthorized practice of law; b) codify definitions of the “practice of law,” “unauthorized practice of law,” “paralegal,” and “mediator;” and c) establish a specific procedural system for prosecution of UPL matters and a structure of sanctions to protect the public. In addition, the Supreme Court also established a Certified Legal Document Program. Ms. Johansen reported on the number of complaints received by the State Bar during 2003. Ms. Johansen further reported that the Bar is now prepared to prosecute two cases before the Superior Court.
Attorney Keri Silvyn joined the Board meeting, with the following participating via telephone: Michele Mirto, Director of the Volunteer Lawyers Program and Task Force Co-Chairs, Jim Whitehill and Luis Ochoa. Ms. Silvyn reported on the Arizona Community Legal Assistance (ACLA) program’s request for funding and stated that historically the program was staffed by the Arizona Bar Foundation. In January of 2000, the Foundation asked the Volunteer Lawyers Program (VLP) to assume the responsibility for the program. During the first year, a nominal sum was received from the Foundation to support the program, but the program has not received any funds since that time. This program serves nine (9) counties in southern Arizona. Ms. Silvyn reported that during a Town Hall held in November of 2003 the State Bar Non-Profit Assistance Task Force was able to gather information about local non-profits and other community-based organizations resulting in the confirmation that there is in fact a need for additional legal services for such organizations. The State Bar Task Force believes that in order to expand the services currently provided by ACLA, the program must acquire a part-time staff person to process applications and coordinate the efforts of ACLA. Based on its current employment contract, the VLP believes that it can hire a part-time staff person to help coordinate the ACLA program for $10,000 per year and the Task Force respectfully requested the Board of Governors to consider funding the position at the $10,000 level for the first year. The Task Force plans to make every effort to solicit future funding from State Bar Sections and community organizations. After considerable discussion:
Diane Drain moved to fund the ACLA program with the caveat it is for the first year only.
Dan McAuliffe, Finance Committee Chair, reported on the recommendation of the committee to support the ACLA request and to commit to $5,000 now and to encourage the participants to seek outside funding for the balance. Should a shortfall occur, the Finance Committee would revisit the issue at that time.
Dan McAuliffe moved and Diane Drain seconded, and the motion carried unanimously to fund the Arizona Community Legal Assistance (ACLA) program in the amount of $5,000.
LIMITED ADMISSION ON MOTION – LEGAL SERVICES COMMITTEE
Hugh Hegyi, Chair of the Legal Services Committee, reported on the Board’s request to “analyze whether a form of limited admission on motion would increase the ranks of lawyers willing to serve in legal services and pro bono assignments; if so, what are the mechanics/requirements of such admission, and what specific strategies can be followed to ensure the admission is truly limited?” Mr. Hegyi reported that the committee’s conclusion was that a form of limited admission on motion would increase the ranks of lawyers willing to serve in legal services and pro bono assignments. Revisions of Supreme Court Rules 33, 39 and 40 would be the best way to reach these goals. This recommendation will be reviewed by the Consumer Protection/UPL Advisory Committees, the Discipline Oversight Committee and the Access to Justice Task Force for their input and comment.
NINTH CIRCUIT STUDY COMMITTEE
Jeff Willis, Chair of the Ninth Circuit Study Committee, reviewed the present configuration and possible considerations in the re-configuring of the 9th and 10th circuits. The committee will return to the Board in April or May with a report on its study.
CONSENT AGENDA
Dan McAuliffe moved, Diane Drain seconded and the motion carried to approve the Consent Agenda excluding item number 18 (MCLE suspensions): January Board Minutes and Resignations of Members in Good Standing.
Diane Drain moved, Alan Bayham, Jr. seconded and the motion carried to approve the MCLE Suspensions List for non-compliance with Rule 45, Ariz.R.S.Ct. Foster Robberson recused himself.
BOARD COMMITTEE REPORTS
Amicus – Dan McAuliffe, Amicus Committee Chair, reported that Mr. Gallo has three weeks to file a petition for a writ of certiorari. The Brown matter has been argued but no decision has been made.
Building – Charles Wirken, Building Committee Chair, reported that a buyer’s broker has been selected and a sub-committee will be meeting with the representative to initiate further investigation of possible options for the Bar.
Discipline – Chas Wirken, Discipline Oversight Committee Chair, reported that a discipline sub-committee is working on a proposal to include attorneys’ discipline on the Web site and are studying the California model. Dan McAuliffe volunteered to assist as ad hoc member of the sub-committee. The Board discussed this complicated issue and a request was made that a substantive concept be presented to the Board.
Finance and Investment – Dan McAuliffe, Finance and Investment Committee Chair, reported on the committee meeting with the auditors and Chris Littlefield, Treasurer of the Arizona Foundation for Legal Services & Education. Mr. McAuliffe reported that the Finance Committee had authorized the signing of an engagement letter with the auditors, Miller Allen.
Additional topics: The committee reviewed the status of the Mothershead conservatorship. The Tucson office lease is up for renewal in March and there has been an offer to extend the lease for an additional two years with a $50 a month increase. John Furlong, General Counsel, was given permission to negotiate on behalf of the State Bar from the Finance and Investment Committee under the Procurement Policy. The Finance Committee reviewed and approved the distribution of the (3%) salary pool for staff which included a salary increase for those employees employed before 1/1/03 and that were below the mid-point salary range of market scale; a bonus of 3% to people employed before 1/1/03 whose salary is at mid-point or above market; and a bonus of their pro-rata share of 3% for those employees hired after 1/1/03. An additional sum is being retained for reclassifications.
Human Resources/Personnel – Jim Matthews, Human Resources/Personnel Committee Chair, reported that the committee will have a summary of changes in March to the Policy Manual and look to April for adoption by the Board. Mr. Matthews summarized some of the important changes to the manual. Mr. Matthews reported that the new method for Evaluation of the Executive Director’s Performance, a 360 evaluation, will be coming to the board. The committee is hopeful to have this available electronically. They plan on having a 6 month review and in December an annual review.
Salary Plan – The committee reported that the Hay Group is doing an audit on salaries. The committee is committed to reducing current employee turnover. Mr. Matthews reported that historically cost of living raises were given. The plan for the future is to pay for performance. The interim step will be raises given this year as described earlier by the Finance Committee. Currently performance evaluation tools are not in place but they plan to have them next year
Member Services – Diane Drain, Chair of the Member Services Committee, reported on the committee’s work regarding analyzing benefits to members and the economic benefits to the Bar. The committee plans to work more closely with Discipline. The committee will be developing training programs for the board and one aspect will be to link incumbent board members with the newly elected members in a mentoring program.
RULES REVIEW COMMITTEE
Helen Grimwood, Chair of the Rules Review Committee, reported that the committee recommends the adoption of the proposal of the Civil Practice and Procedure Committee’s petition to change Civil Rule 45, with a technical amendment to the draft rule as provided by Christine Thompson, Director, Government Relations.
Jeff Willis moved, Alan Bayham, Jr. seconded and motion the carried to adopt the proposal of the Civil Practice and Procedures Committee’s petition to change Civil Rule 45, with the amendment, and to submit the petition to the court.
Ms. Grimwood reported on the committee’s review of the Limited Admission by Motion proposal submitted by the Legal Services Committee which would modify Supreme Court Rules 33, 39 and 40.
Ms. Grimwood reported that the Criminal Jury Instructions and Civil Jury Instructions are nearing completion and will be brought to the Rules Committee in March or April.
Ms. Grimwood reported that Jeff Willis, Chair of the Sub-Committee, will be assembling the necessary materials for distribution to the Rules Committee for review of the State Bar bylaws. Mr. Willis will also be drafting a proposal to authorize electronic voting by the Scope and Operations Committee.
The next Rules Committee meeting will be on March 12th at 3:00 at the Bar Center.
Steve Sherick, Liaison to the Foundation, reported that the new Executive Director, Ms. Kevin Ruegg, was hired and encouraged Board members to introduce themselves to her.
Christine Thompson, Director of Government Relations, reported on the status of bills before the legislature. The bills supported by the State Bar of Arizona are: HB 2221, UCC; Bulk Sales; Repeal; HB 2248, Uniform Disclaimer of Property; HB 2249 Revised Uniform Arbitration Act; HB 2319, Administrative Law Judges; Confidential Information.
The bills opposed by the State Bar of Arizona are: HB 2375 Appellate Judges; Elections; HB 2386 Superior Court Judges; Election; HB 2387, Justice Courts; Colocation; HCR 2007 Judicial Retention; Party Affiliation, HCR 2039 Judicial Retention; Two-Thirds Vote; HCR 2010 Supreme Court Jurisdiction, HCR 2027 Supreme Court Jurisdiction; HCR 2018 Justic3es and Judges; Election; HCR 2024 Justices and Judges; Senate Confirmation, SCR 1023 Justices and Judges; Senate Confirmation, SCR 1035 Justices and Judges; Senate Confirmation; HCR 2025 Supreme Court; Administrative Supervision; HCR 2027 Supreme Court; Jurisdiction, HCR 2010 Supreme Court Jurisdiction; HCR 2030 Separation of Powers; Judicial Lawmaking; HCR 2040 Judicial Appointment Commission SCR 1037 Judicial Appointment Commissions; SCR 1024 Justices and Judges, Election HCR 2018 Justices and Judges; Election; SCR 1025 Judicial Conduct Commission, HCR 2034 Commission on Judicial Conduct; Appointment; SCR 1031 Arizona Citizens Protection Act.
The bills listed as No Position by the State Bar of Arizona are: HB 2001, Judges Pro Tempore; Domestic Relations; HB 2020/HB 2516 Uniform Trust Code; Restoration; Restoration of Uniform Trust Code; HB 2025 Medical Board; Omnibus; HB 2128 Small Claims Court; Mail Service; HB 2138 Supreme Court; Performance Audit; HB 2142 Arizona Medical board; Licensure; HB 2143 Courts; Technical Correction; HB 2211 Arizona Criminal Justice Commission; Members; HB 2213 Right of Attorney; Technical Correction; HB 2215 Small Claims Hearing Officers; HB 2216 Court Obligation; Enforcement Assistant Program; HB 2243 Sentencing Ranges; HB 2251/SB 1139 Death Penalty; Minors; Death Penalty Minors; HB 2253 Notaries Public; HB 2260 Court Clerks; Funds; Report; HB 2261 Commission on Technology; HB 2361 State Agencies; Outside Counsel; Procurement; HB 2377 Homeowners’ Association Penalties; Notice; Hearing; HB 2383 Public Information; Confidentiality; HB 2385 Justice Courts; Jurisdictional Limit; HCR 2017 Justice Courts; Jurisdictional Limit; SCR 1008 Justice Courts Jurisdiction; HB 2388 Tax Court Decisions; Technical Correction; HB 2389 JP’s; Jury Trials; Technical Correction; HB 2390 Pro Tem JP’s; Service Disqualifications; HB 2394 Legislative Vacancies; Appointment; HCR 2023 Legislative Vacancies; HB 2395 Presiding Justice of the Peace; SB 1049 Justice of the Peace Presiding; HB 2425 Sham Legal Processes; HB 2446 Clean Elections, Lobb7ist Contributions; HB 2454 Lobbying, Former Legislators; HB 2514 Unified Registration Statements; Charitable Organizations; SB 1066 Charitable Organizations; Registration Statements; HB 2517 Adoption; HB 2561 Criminal Procedure; Change of Judge; HB 2606 Civil Appeal Bonds; Limits; HB 2607 Public Participation In Government; Protections; HB 2609 Jury Duty; Lengthy Trial Fund; HCR 2019 Superior Court; Jurisdiction; Technical Correction; HCR 2021 Pro Tem JP’s; Qualifications; SB 1076 JP’s; Pro Tem Qualifications; SCR 1009 JP Pro Tempore; Qualifications; HCR 2038 Justices and Judges; Retirement Age; SCR 1019 Justices and Judges; Retirement Age; SB 1050 Technical Correction; Justice Courts Appeals; SB 1171 Jury Service; Court Location; SB 1196 Protection Orders; Domestic Violence; Reports; SB 1199 JP’s; Qualifications; SB 1211 Justice Court Precincts; Election; SB 1279 State Funded Lobbyists; Prohibition; SB 1311 Purchaser of Dwelling Actions; SCR 1029 Term Limits; State Officers; SCR 1034 Merit Selection; Population.
Alan Bayham, Jr. moved, Ed Novak seconded and the motion carried unanimously to “support” and “oppose” positions as recommended, but to take no position on the remaining bills and to direct staff to monitor them as the session unfolds.
Leesa Berens Morrison, ABA Delegate, summarized actions of the House of Delegates at the Mid-Year Meeting in San Antonio: Uniform State Laws – approved the 2003 Amendments to the Uniform Commercial Code (Article 2A, Leases and Article 2, Sales) and approved the revised UCC, Article 7, Documents of Title. The House passed the resolution that gay marriages should be handled at state levels. Ms. Morrison reported that Don Bivens lost to Steve Zack of Florida for chair of the House of Delegates. At the August ABA annual meeting, the Model Rule on Financial Responsibility/Consumer Protection will be a big topic.
Jim D. Smith, Chair of Appointments Committee, reported that the terms of two public members of the Board of Governor expire in June and that the are eligible for re-appointment. Pursuant to revise Supreme Court Rules, board members’ terms are now for three years.
Jim D. Smith moved, Diane Drain seconded and the motion carried unanimously to re-appoint Bennie R. Click and Fernando Gonzales as public members of the Board of Governors for a three-year term beginning June 2004.
There being no further business to come before the Board of Governors, the meeting adjourned at 2:15 p.m.
Respectfully submitted,
Daniel
J. McAuliffe
Secretary-Treasurer