MEETING
OF THE
BOARD OF GOVERNORS
OF THE
STATE BAR OF ARIZONA
September 17, 2004
Board Room
Arizona Bar Center
BOARD MEMBERS PRESENT: Charles W. Wirken, President, Phoenix; Helen Perry Grimwood, President-Elect, Phoenix; Jim D. Smith, First Vice President, Yuma; Daniel J. McAuliffe, Second Vice President, Phoenix; Edward F. Novak, Secretary-Treasurer, Phoenix; Alan P. Bayham, Jr., Phoenix; Bryan B. Chambers, Globe; Roger H. Contreras, Bisbee; Amelia Craig Cramer, Tucson; Whitney Cunningham, Flagstaff; Michael K. Dana, Young Lawyers Division, Phoenix; Stephen M. Dichter, Phoenix; Diane L. Drain, Phoenix; Raymond A. Hanna, Prescott; Joseph A. Kanefield, Phoenix; Foster Robberson, Phoenix; Steven P. Sherick, Tucson; Jeffrey Willis, Tucson; Ex Officio Members: Pamela Treadwell-Rubin, Immediate Past President, Tucson; Public Members: Bennie R. Click, Munds Park; Fernando Gonzales and Emily R. Johnston, both of Tucson; James B. Matthews, Phoenix; and At-Large Members Paul W. Ahler Phoenix; and Donald W. Carson, Tucson.
BOARD MEMBERS WITH EXCUSED ABSENCES: Helen Perry Grimwood, President-Elect Phoenix; Richard Platt, Florence; Ex-Officio Member: Dean Toni Massaro, Tucson; Dean Patricia White, Tempe, Tucson; At Large Member: David K. Byers, 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; Colleen McManus, Director of Human Resources; Matthew Silverman, Director of Communications; Larry McVey, Chief Financial Officer and Justice Andrew Hurwitz, Phoenix; Attorney Ernest Calderon, Phoenix, ABA House of Representatives Delegate; Attorney Peter Neisser, representing the Probate and Trust Law Sections and Christine Thompson, Director of Government Relations.
President Charles W. Wirken called the meeting to order at 8:30 a.m. and requested the board go into Executive Session.
Executive Session – 8:30 a.m. to 9:30 a.m. Resume regular meeting 9:35 a.m.
PRESIDENT’S REPORT
President Wirken reported that he had attended the Trial Practice Section Retreat held last Friday and Saturday. One of the main topics was their interest in taking the lead on an effort to reinstate the College of Trial Advocacy. President Wirken reminded the board that at the last meeting the board had authorized appointment of a planning committee.
EXECUTIVE DIRECTOR’S REPORT
Teresa Schmid, Executive Director, reported that Pinnacle Design had been hired to do the construction drawings and space planning on the new building. Ms. Schmid reported on the Event Committee that was formed with Cari Gerchick serving as Chair. This committee will be planning the Open House and Dedication of the new building.
Ms. Schmid reported on the Hay Group Study that was completed and the need to raise the legal secretaries range 3% to become more competitive in the market and to assist with lowering turnover.
Ms. Schmid reported that she and Helen Perry Grimwood attended the annual Governor’s Office of Highway Safety Conference for Judges on September 1st. Courts of limited jurisdiction have significant issues of judicial independence due to pressures from law enforcement agencies, appointing authorities and court rules. Ms. Schmid reported that this invitation was an opportunity for the Bar to be educated as to these issues and possibly provide a resource they could consult when problems arise.
Ms. Schmid stated that Robert Van Wyck and she met with Dave Byers and Nancy Swetnam concerning the Court’s overburdened regulatory system for licensed document preparers. Since this activity is closely related to the Bar’s regulation of the unauthorized practice of law, we are discussing how to provide the court with additional support.
Ms. Schmid reported on the coming events that she would be attending and/or speaking at during October on behalf of the Bar which include: Small and Solo Practice Section; California Bar Convention, ABA American Jury Project, a national symposium on the American jury system. In addition, Betty Flores, Director of the Resource Center will attend the ABA LRIS conference in San Diego.
“On The Horizon Issues”
Limited Legal Service: The ABA has introduced a new resource for providing information on delivery of limited legal services (“unbundling”) as a means of expanding access to justice. The new tools can be found at the following web site: http://www.abanet.org/legalservices/delivery/.
The board then discussed the date of the October meeting of the board which is scheduled for October 22nd and is in conflict with the AWLA Convention being held in Tucson. It was suggested to move the October meeting to Tucson to be held at one of the law offices at 10:00 a.m. to accommodate those that wish to attend both.
Jeff Willis moved, Steve Sherick seconded to move the October meeting of the board to Tucson, Arizona, location to be determined, with a start time of 10:00 a.m.
Ed Novak moved, and Alan Bayham seconded to amend the motion to have video conferencing for those members of the board or staff whose schedule won’t allow them to attend in Tucson. Motion carried and was accepted.
The board then voted on the original motion as amended to move the October 22nd meeting of the Board of Governors to Tucson with a 10:00 a.m. start time. The motion carried unanimously.
CHIEF FINANCIAL OFFICER’S REPORT
Larry McVey, Chief Financial Officer of the State Bar, reviewed the July 2004 financial statements. Highlights of July 2004 results are: total income in June was $14,091 (or 1.5%) higher than budgeted, total expenses were $13,278 (or 1.6%) less than budgeted, the surplus from Bar operations in June 2004 was $153,075 and exceeded the budget by $27,369.
Year to date, through July 2004, total revenues are $195,248 (or 3.15%) higher than budget, total expenses are $285,252 (or 4.8%) under budget, and the surplus is $480,500 higher than budget. Mr. McVey reminded the Board that the 4th quarter of 2004 is budgeted to show a loss (as is normal at the Bar) of $120,572.
Net assets of the Bar at July 31, 2004 were $4,090,863 and exceeded the two months operating reserve, the YTD sections carryover amount of $307,333, and the down payment on the building purchase by $810,680.
Mr. McVey again called attention to the new line items on the July 31, 2004 balance sheet appearing as a result of the building purchase on July 12, 2004. The new line items on the balance sheet are land and building, unamortized loan cost; current maturities of line of credit, accrued property taxes; revolving line of credit less current maturities, and tenant security deposits.
Of the two CDs totaling $1,500,000 that mature in August $1,010,000 will be applied to the line of credit and the remainder used in operations.
Details of building operations appear on page 7 of the financial statement package. The forecasted surplus for the year is $731,000.
The August Flash Report shows August income being $4,904 higher than budget, expenses being $76,995 less than budget, and a surplus from Bar operations of $67,213 for the month. Bottom line after sections activities and building operations the total surplus for the month was $48,047 versus a budgeted loss of $16,607.
Ed Novak, Chair, reported on behalf of the committee that they had looked at the new dues statement with the opt-out provision of $50 and made some recommended changes. This portion of the dues statement is in bright red type. The board discussed the 1% dues allocation for pro bono legal services on the dues statement and that it will be clear that these two items are independent of each other. The board discussed the dues increase or changes for the future and the committee did not have sufficient time to make any changes this year but have appointed Raymond Hanna to chair a sub-committee to review this matter.
Mr. Novak reported the committee has approved $7,000 budget for the Law School for Legislatures which will be a full day function and held off site. In the past this was a half-day event held at the capital. Board members and legislators will be invited.
Mr. Novak reported on the 2005 CLE projection for the upcoming year and the plans to gain market share.
Mr. Novak reported that the Finance Committee reviewed the 2002 audit for the Client Protection Fund. There wasn’t a report or audit for 2003. The Finance Committee will be doing an in-depth review of the Client Protection Fund and will be making recommendations. The two internal controls that were flagged were 1) independent advisor on investments; and 2) segregate accounting functions appropriately.
Robert Van Wyck, Chief Bar Counsel, reported the Lawyer Regulation Department’s case aging for formal complaints is in general staying within the Courts mandated 11 month period for disposition.
Mr. Van Wyck also reported on the Task Force on Admissions and Reinstatements, chaired by Dave Byers. The Task Force is reviewing the procedures in order to enhance the process for admission and reinstatement to the Bar after suspension or disbarment.
BREAK – 10:40 – 10:55 a.m.
Pamela Treadwell-Rubin reported that the Arizona Supreme Court’s Committee on Character and Fitness was adding two non-attorney positions for a total of four public member seats. The Court will make two appointments to fill these new positions. The Board of Governors is asked to submit three nominations per opening to the Supreme Court for its ultimate selection. The appointments committee met on August 25th and screened the 13 applications received and selected eight candidates for interviews which were held on September 7th. The committee recommends in alpha order: Mr. Alexander B. Jamison and Dr. Ronald R. Watson as the top two candidates and additional qualified candidates presented in alpha order: Ms. Vicky A. Barrett, Dr. Brenda B. Even, Dr. James W. Foltz and Ms. Norma A. Nelson.
Pamela Treadwell-Rubin moved, Jeff Willis seconded and motion carried unanimously to approve and recommend to the Arizona Supreme Court Committee on Character and Fitness the following six nominations: (in alpha order) Mr. Alexander B. Jamison and Dr. Ronald R. Watson as the top two candidates and additional qualified candidates presented in alpha order: Ms. Vicky A. Barrett, Dr. Brenda B. Even, Dr. James W. Foltz and Ms. Norma A. Nelson.
New Appointment from Appointments Committee – Dan McAuliffe reported that the City of Phoenix Judicial Selection Advisory Board had notified the Bar that Lawrence E. Palles filled the unexpired term of Judge Ginger Jarvis and after serving approximately four months was eligible for reappointment in May to a full three-year term. Mr. Bill Scheel informed the State Bar staff that Mr. Palles served on the Phoenix Board with distinction and that Mayor Gordon plans to officially reappoint him and would like the State Bar’s support.
After discussion,
Dan McAuliffe moved and Ed Novak seconded and motion carried unanimously to forward the letter as drafted and submitted to the board to Mayor Phil Gordon supporting the reappointment of Lawrence E. Palles to the City of Phoenix Judicial Selection Advisory Board for a full three-year term.
Steve Sherick, Chair of the committee deferred to Teresa Schmid, Executive Director. Ms. Schmid gave an overview of the plan and that it would be a general guide through 2007 for the organization. The document is changeable and requires feedback to the board but it will guide what the State Bar does on a day to day basis. A sub-committee will be formed to report to the board on a quarterly basis and everything goes through the budget process. Comments from the board were on underlying themes and these comments have been included in this plan. The budgetary plan would be to include the adoption of a compensation philosophy which is in the budgetary process for the Finance Committee’s approval which would include a 3% COLA (cost of living adjustment) and 4% fund to draw from for incentive pay, realignment of pay range, bonuses, etc. The board discussed including the cover memo with the plan. Ms. Schmid, on behalf of the Long Range Planning Committee recommends the adoption of the Long Rang Plan proposal and requested the board use the proposed resolution:
Diane Drain moved and Dan McAuliffe seconded and the motion carried unanimously to adopt the proposed resolution as follows:
RESOLVED, that the Board approves the Long Range Plan dated September 17, 2004 as amended, as a tool that will generally guide the State Bar of Arizona in planning specific activities for three years, beginning in September 2004 continuing through December 2007.
Steve Sherick thanked Teresa Schmid for all her hard work and effort in working on this project. Ms. Schmid thanked Dan McAuliffe, who was the chair and guiding force during the start.
Stephanie Nichols-Young, Chair, reported on the sections request to approve a bylaw amendment to allow associate members and to increase the number of at large members on the coordinating committee from three to four. The board discussed the number of sections with associate members. Nedra Brown, Director of Sections and Committees, stated that currently twelve sections have associate membership. The Animal Law Section currently has 104 members. The board discussed 4.2, 4.3 and 4.4 and asked that “voting” members (not associates) conduct the meeting.
Whitney Cunningham moved and Ray Hanna seconded to approve the bylaws amendments as submitted.
Amelia Craig Cramer moved and Steve Sherick seconded the motion to modify the definition of quorum for voting requirements.
After discussion, Diane Drain moved and Alan Bayham seconded to table this motion to deal with quorum issues.
Further discussion and Chair, Stephanie Nichols-Young, asked that the board allow associate members while other issues in the bylaws are studied further.
Ed Novak moved and Dan McAuliffe seconded the motion to provisionally permit associate members to join the Animal Law section, the associate members will have no voting rights.
President Wirken expressed his intent to form a Relocation Committee that would review and assist with tenant improvements, cable for new building and the move itself. President Wirken indicated that Dan McAuliffe act as chair to this new committee. Members would include, Larry McVey, Chief Financial Officer, Teresa Schmid, Executive Director, Synda Prindle, Manager of Office Services. In addition, there will be other staff and non-staff along with several construction contract experts included in the committee. President Wirken asked for the recommendation to authorize the creation of the Relocation Committee.
Ed Novak moved and Diane Drain seconded the motion to authorize the President to create a Relocation Committee with authority to designate the chair and committee members.
President Wirken asked for a motion to approve the consent agenda. After discussion,
Roger Contreras moved and Diane Drain seconded and motion carried unanimously to approve the consent agenda to include: Revised August 20th Board Minutes (handout) with the amendment to add Roger Contreras and Donald Carson as being present and to add under the Wills for Heroes, p 2679 motion to read “for the Board to approve, encourage and support…”
Amicus – no report
Building – Chas Wirken, Chair, reported the design firm has been engaged and will start their work.
Human Resources – James Matthews, Chair, reported that the Hay Group Study recommendations were being considered in the budgeting process by the Finance Committee. The committee is further working on the compensation philosophy.
Member Services – Whitney Cunningham, Chair, reported on the first meeting of the committee held yesterday. The Committee will be undertaking various projects arising from the Long Range Plan.
Rules Review – no report.
American Bar Association – Jeff Willis, ABA Delegate, reported that he will be attending the ABA mid-year meeting in Salt Lake City, UT. The new President, Robert Gray, is focusing on the American Jury system. Mr. Willis and Ms. Schmid will be attending the one day symposium being held at Washington Lee University in October.
Arizona Foundation for Legal Services & Education – Jeff Willis reported that at the last meeting a reception followed to honor “Friends of the Foundation”. The Foundation ‘s December fund raising event is being planned. Teresa Schmid, Executive Director of the State Bar also wanted to recognize and congratulate Dr. Kevin Ruegg, Director of the AZFLS&E, for her recent accomplishment of obtaining her Ph.D. degree.
Young Lawyers Division – Mike Dana, President, stated that YLD did a kick off event for this year’s activities at a fire station in Tucson. The 100 Club was also in attendance. The YLD is also planning a program called Service for Seniors. In Phase I of this project they are preparing a handbook to educate seniors on legal issues; Phase II – they plan to hold continuing education seminars for seniors on the handbook. In addition YLD is planning their Holiday Fest Party which is held in December for children living in group homes. Pamela Treadwell-Rubin suggested the YLD work in conjunction with the Mental Health and Elder Law Section and the Probate and Trust Section.
Ed Novak moved, Diane Drain seconded and motion carried to adjourn. (Noon).
Respectfully submitted,
Edward F. Novak
Secretary-Treasurer