MEETING
OF THE
BOARD OF GOVERNORS
OF THE
STATE BAR OF ARIZONA
December 14, 2007
Arizona Bar Center
Phoenix
BOARD MEMBERS PRESENT: Daniel J. McAuliffe, President, Phoenix; Raymond A. Hanna, First Vice President, Prescott; Alan P. Bayham, Jr., Second Vice President, Phoenix; Joseph A. Kanefield, Secretary-Treasurer, Phoenix; Bryan B. Chambers, Globe; Richard D. Coffinger, Glendale; Roger H. Contreras, Sierra Vista; Amelia Craig Cramer, Tucson; Stephen M. Dichter, Phoenix; Diane L. Drain, Phoenix; Abbe M. Goncharsky, Young Lawyers Division, Tucson; H. Leslie Hall, Phoenix; Richard T. Platt, Florence; Foster Robberson, Phoenix; Dee-Dee Samet, Tucson; Jimmie Dee Smith, President, Immediate Past President, Yuma; Public Members: Frank Barriga, Glendale; Bennie R. Click, Munds Park; and Alexander B. Jamison, Scottsdale; At-Large Member: Paul W. Ahler, Phoenix; Alternate Mike Baumstark, Phoenix; Virginia Herrera-Gonzales, Phoenix; and Ex Officio Member: Dean Dennis Shields, Phoenix.
BOARD MEMBERS ABSENT: Edward F. Novak, President-Elect, Phoenix; Whitney Cunningham, Flagstaff; Michael J. Crawford, Tucson; Ex Officio Members: Dean Patricia White, Tempe and Dean Toni Massaro, Tucson; Public Member: Fernando Gonzales, Tucson.
OTHERS PRESENT: Teresa Schmid, Executive Director; John Furlong, General Counsel; Colleen McManus, Senior Director of Human Resources; Larry McVey, Chief Financial Officer; I. Godwin Otu, Diversity Director; Nina Benham, Assistant to the Executive Director; Carrie Sherman, Director of Executive Projects; Patricia Giallanza, Director of Communications; Tom Harper, Manager of Accounting; Betty Flores, Director of the Resource Center; Ruth Khalsa, AWLA; and Michael Jeanes, Clerk of the Maricopa County Superior Court.
President Dan McAuliffe called the meeting to order at 8:45 a.m.
President Dan McAuliffe reported that he had started the Presidents’ Information Exchange, an e-mail discussion group for past, present and future presidents of the Board of Governors to provide their thoughts and ideas. President McAuliffe recognized the newest member of the Board, Dean Dennis Shields, Phoenix School of Law.
President McAuliffe congratulated Richard Platt, Pinal County Chief Criminal County Attorney, for his recognition from the National District Attorneys Association. Also Mr. Platt was inducted into the “Home Run Hitters Club” which is an honor recognizing their outstanding work in trying complicated and difficult high profile cases.
President stated that as an action item under Tab 1 was the proposed In-House Counsel Rule and due to time constraints they would come back to that subject.
President McAuliffe reported that at the request of Chief Justice McGregor, Michael Jeanes, Clerk of the Maricopa County Superior Court, was present to update the Board on the status of the e-filing system being tried by the Court. The Board received comments from the Criminal Justice Section Executive Council and the Civil Practice and Procedure Committee, both of which support mandatory e-filing in Maricopa County Superior Court and offered recommendations that they believe would help make such an initiative successful.
Diane Drain moved and Foster Robberson seconded and motion carried unanimously to support e-filing and to submit the Civil Practice and Procedure report to the Chief Justice.
EXECUTIVE DIRECTOR’S REPORT
The 2008 Baseline Budget and list of new FTEs and initiatives had been presented at the November 30, 2007 meeting as an informational item. The 2008 Baseline Budget with a surplus of $331,000 and the list of new FTEs and initiatives costing $471,000 was discussed. The net loss of adopting all of the new FTEs and initiatives is $140,000. The Bar has not budgeted a loss in recent years, if ever, so much discussion ensued. CFO Mr. McVey pointed out that the Bar has reported surpluses in excess of budget in each of the past six years and that this trend could continue in 2008 resulting in a surplus, that the budgeted loss of $140,000 is insignificant compared to the Bar’s $13.5 million revenues in the previous two years and is less than 2.3% of the Bar’s $6.3 million of net assets.
September and October 2007 financial statements of the State Bar and the Chief Financial Officer’s financial report to the Finance Committee were included in the BOG package of meeting materials.
Mr. McVey reported that the YTD surplus through October of $717,000 and is significantly above budget due to the following favorable variances from budget:
Dues income less that budget by .2% $ (10,000) Non-dues income is 3.9% higher than budget $ 199,000 Total Personnel Costs is 5.9% less than budget 375,000 Other expenses are 2.1% less than budget 102,000 Net Sections Activity less than budget (36,000) Net Favorable variance $630,000
The forecast of the annual surplus is on page 4 of the financial statements. The forecast of the 2007 annual surplus is $632,000 at this time.
The Line of Credit balance at October 31, 2007 is $1,430,000 and the current interest rate is 6.56% per annum. Net assets of the Bar at the end of October are $6,300,000 compared to $5,510,000 a year earlier. Section carryovers at October 31, 2007 are $216,000.
Mr. Bayham additionally updated the Board on the Town of Guadalupe Judicial Selection Advisory Board and the Arizona Supreme Court on Examinations and the Conflict Case Committee vacancies and deadlines.
John Furlong, General Counsel, reported on the recommendation by the Discipline Department and Oversight Committee regarding the retention/disposition of conservatorship files. The essential provisions state that: (1) all files in active cases be returned to clients; (2) for those closed files that are 5 years or less, after adequate notices and no response, destruction of the files may occur after a 2 year and 2 month waiting period; and (3) certain original documents and files that are of such importance that they should not be destroyed will be retained indefinitely. After discussion,
Jim Smith moved and Steve Dichter seconded and the motion carried unanimously to approve the recommendation by the Discipline Department and Oversight Committee regarding the retention/disposition of conservatorship files. The essential provisions of the policy state that: (1) all files in active cases be returned to clients; (2) for those closed files that are 5 years or less, after adequate notices and no response, destruction of files may occur after a 2 year and 2 month waiting period; and (3) certain original documents and files that are of such importance, they should not be destroyed, but rather will be retained indefinitely.
President McAuliffe requested that the minutes be removed at this time from the Consent Agenda. He then asked for a motion to approve the remaining items on the Consent Agenda.
President McAuliffe then asked the Board members to consider two issues raised by the draft minutes that related to the satisfaction of past MCLE requirements when a member on Inactive, Retired or Emeritus status sought to return to active membership status. President McAuliffe reminded the Board that a Petition was being drafted and that we should clarify any ambiguity at the present time so that the Petition accurately reflects the Board's intent.. The issues in question are: 1) was it the Board’s intent that the proposed amended Rule would require the person seeking such a status change to only show “up to” two years of CLE or was the Board’s intent to require a showing of a full two years of CLE when a member switched from inactive or retired to active? and (2) did the Board intend that the same requirement would apply when a member in Emeritus status wished to return to Active status?
Steve Dichter moved and Ben Click seconded and the motion carried unanimously for both sections to be listed as requiring two years CLE.
TUCSON BUILDING TASK FORCE REPORT
Amelia Craig Cramer reported on behalf of the Task Force that the Committee met yesterday and they were seeking authorization for staff to seek another 60 days for due diligence and to move the closing date. The survey for the parking lot was deemed to be sub-standard and the seller and broker agreed. Ms. Cramer reviewed the other concerns of the Task Force that require the additional time.
Amelia Cramer moved and Dee-Dee Samet seconded and motion carried unanimously to authorize staff to extend the due diligence period an additional 60 days.
IN-HOUSE COUNSEL REGISTRATION
President McAuliffe reported, on behalf of Ed Novak, who was unable to attend the Board meeting, regarding the proposed In House Counsel rule status. Both he and Mr. Novak met with AvNet, US Air and Allied Waste which are significant in size employers. They would like the State Bar to pull the proposal until they have time to comment. The concerns fell in two categories, problems with unauthorized practice in other jurisdictions which the Bar could not cure by a rule change and the second category was regarding minor particulars, fine tuning language. Both President McAuliffe and Mr. Novak feel it was unnecessary to postpone for a year and therefore decided to leave it on the agenda for today in order for the Board to decide if they want to go forward to have their group meet with SCOPE or Discipline Oversight Committee so that the proposed Petition could be filed by January 10th deadline.
Richard Coffinger moved and Jim Smith seconded the motion to authorize the Discipline Oversight Committee to meet with members of Scope and Operations to work out the issues and language on the new Rule 38(g) In House Counsel Registration and to move forward to file the petition by the January 10, 2008 deadline.
After lengthy discussion, Jim Smith called for the question.
Mr. Smith restated the Motion for the Discipline Oversight Committee to hold a special meeting to work out the language on the proposed new Rule 38(g) In-House Counsel Registration and to move forward to file the Petition in Supreme Court by the January 10, 2008 deadline, motion was unanimously approved.
Legal Services Committee
On behalf of the committee, Hon. James G. Blake requested that the Board petition the Arizona Supreme Court to amend Rule 38(a) to increase funding to Arizona’s legal services providers by (1) increasing the fees paid by pro hac vice attorneys from 85% to 100% of the dues paid by active members of the State Bar; and (2) allocating this additional 15% to Legal Services. The Board approved the recommendation.
Joseph Kanefield moved and Raymond Hanna seconded and the motion carried to adopt the recommendation of the Legal Services Committee to petition the Arizona Supreme Court to amend Rule 38(a) to increase funding to Arizona’s legal services providers by (1) increasing the fees paid by pro hac vice attorneys from 85% to 100% of the dues paid by active members of the State Bar; and (2) allocating this additional 15% to Legal Services.
LEGISLATIVE REPORT
The 2008 State Bar Legislative Agenda will include two new pieces of legislation suggested by the Probate and Trust Section: (1) a comprehensive Arizona Trust Code; and (2) changes and improvements to the statutes dealing with the appointment and administration of guardians and conservators under Section 14. The Agenda also includes a third piece of legislation to amend Section 46-456 regarding duties to incapacitated adults. The Alternative Dispute Resolution (ADR) Section will again introduce the Revised Uniform Arbitration Act (RUAA).
LIAISON REPORTS
Young Lawyers Division - Abbe Goncharsky, President of the Young Lawyers Division, reported that the YLD will host its annual holiday party for children in both Pima and Maricopa counties next week.
Arizona Women Lawyers Association (AWLA) – Ruth Khalsa reported they didn’t have any activities in December and the January meeting will plan the 2008 year. On Saturday, February 2nd they will be having a seminar “Secrets of Success of Women in Practice: Women Lawyer Retention Program.”
75th ANNIVERSARY COMMITTEE
The Board discussed the upcoming 75th Anniversary of the State Bar and a new committee was formed with Richard Coffinger, Dee-Dee Samet, Virginia Herrera-Gonzalez and H. Leslie Hall volunteering. Ms. Hall will chair the committee.
OTHER BUSINESS
Dee-Dee Samet requested that in January the Board discuss their philosophy as regards to the funds from CLE and other revenue and bottom line regulatory discussion.
ADJOURN
Jimmie Smith moved and Richard Coffinger seconded and the motion carried unanimously to adjourn.
Respectfully submitted,