Board Minutes - July 20, 2007

Grandview Room, Big Cedar Lodge

Members present:

C. Ronald Baird, President

Charlie J. Harris, Jr., President-Elect

Thomas M. Burke, Vice-President

Douglas A. Copeland, Past President

Keith A. Birkes, Secretary

William R. Bay

Erik Bergmanis

Suzanne B. Bradley

P. John Brady

Hon. Richard Bresnahan

Dana Tippin Cutler

Brian Francka

Alan B. Gallas

Mike Greenwell

H. Lynn Henry

Edward J. Hershewe

Bruce F. Hilton

Vincent F. Igoe, Jr.

John S. Johnston

Aaron D. Jones

Jennifer M. Joyce

Hon. John F. Kintz

Thomas M. Lang

William J. Lasley

Mark H. Levison

Max E. Mitchell

Matthew M. Mocherman

Douglass F. Noland

Daniel A. Raniere

John A. Ruth

Allan D. Seidel

Howard A. Shalowitz

Walter R. Simpson

Wallace Squibb

Patrick B. Starke

Lynn Ann Vogel

H. A. “Skip” Walther

James C. Wirken

Eric J. Wulff

Via conference call:
Carol Chasen Friedman

Dick Halliburton

Ed Reeves

Also present:

Alan D. Pratzel

John C. Dods

Michael P. Gunn

Brian E. Hamburg

Glenn L. Baker

C. Michelle Coleman

Linda Oligschlaeger

Dan Lehmen

Chris Janku

Jack Wax

Kent Hopper

Gary Toohey

Dee Shepherd

Lucas Boling

Steve Murrell

Catherine Barrie

Millie Aulbur

Jim Brady

1. Minutes: 

It was moved and seconded that the minutes of the meeting of the Board of Governors of May 11 be approved. The motion was approved.

2. Finance Committee Report: 

Mr. Erik Bergmanis reported that the Annual Meeting budget would need to be voted on. It showed estimated receipts of $152,000, with expenses of $243,000, which is

in accordance with expectations. A motion was made to approve the Annual Meeting budget, seconded and approved.

Mr. Bergmanis then addressed the audit report, which has provided an unqualified opinion of the bar’s operation. A management note on the audit suggested that another firm might review the audit firm’s note to the bar’s financial statement. The question is whether the bar should incur the expense of hiring another audit company for this purpose. Mr. Birkes noted that the bar’s auditors are hired by the Supreme Court and do not work for The Missouri Bar, thus providing a level of protection already in place. The Board discussed the content of the notes, which is typically insignificant, such as a mere restatement of an expense noted elsewhere. It was moved that the audit be approved and to leave the audit process as is, making no changes to how it is conducted. Seconded and passed.

Mr. Baird gave a quick update on the status of FastCase, explaining that it is working well, that a few glitches had been reported and fixed, and that he has been at local bar programs promoting it.

Mr. Bergmanis reported that the Bar has spent about 48 percent of its budget to date, which is on track for meeting this year’s budget. Mr. Bergmanis then discussed the need for a bar dues increase, noting there has been no increase for about 14 years. The Finance Committee has recommended a $47 increase. OCDC has recommended a $33 increase in their portion of the dues. Mr. Bergmanis pointed out that the new increase is a 30 percent increase over the past 14 years, which is less than the cost of inflation. This is especially noteworthy considering the bar now provides more services and programs. In comparison to other mandatory bars, the increase would change The Missouri Bar’s position from having almost the lowest dues to being near the middle, with 14 bars below and 18 with higher dues. The Finance Committee recommends this increase.

Mr. Pratzel explained that OCDC had submitted its request for a $33 increase to the Supreme Court on July 9. The expanded Advisory Committee had thoroughly evaluated the needs of OCDC and had determined that $33 would be an appropriate increase to continue operations into the future. John Dods of The Missouri Bar Advisory Committee was also available for answering any questions about the increase.

Mr. Bergmanis also suggested that the $47 increase should apply to Category 1- 3 attorneys - under and over three years of practice and out of state, but that inactive lawyers would only get a $10 increase. Mr. Birkes explained that there will be a $2.3 million reserve at the end of this year, allowing a smaller increase than if the reserve were spent to zero. A motion was made to tentatively approve the proposed increase and ask for comment from the membership. It was seconded and passed. Governor Raniere asked that his vote against the increase be recorded. Final review of the proposed increase will occur at the September Board meeting.

Additional item: Michelle Coleman. Leadership Academy Advisor, was introduced and she in turn introduced the members of the Leadership Academy who explained what their service projects were. These included updating the brochure, Stepping Out, and distributing it at courthouses and schools.

3. Legislation:  

Ms. Barrie reported that no action is required today on any proposals. Two legislative proposals were included with the Board agendas. One drafted by the Environmental and Energy Law Committee clarifies that the Administrative Hearing Commission has authority to issue summary judgments. This was submitted last year and passed the House and Senate, but failed to achieve final passage. It is, therefore, being resubmitted. The Animal Law Committee is also considering whether to resubmit a proposal.

Last year, two bar-drafted bills passed - SB 163, which reauthorized the filing fee for Legal Services for the next five years and HB 2220, making a technical revision to the trust code. Ms. Barrie pointed out that the Board packets also contain summaries of federal legislation discussed by officers with the federal delegation during a trip to Washington, D.C., in June.

4. Committee Reports: 

A. Lawyer to Lawyer Dispute Resolution Committee 

Judge Gary Lynch presented proposed changes to Supreme Court Rule 5.10, which were submitted to the Board of Governors at the May Board meeting. This change would create the lawyer-to-lawyer dispute resolution program to help with two types of disputes between lawyers: financial and personal. This will be a voluntary program. A number of other states have similar programs. In the Missouri program, any lawyer in a dispute could file a complaint requesting resolution or OCDC can refer if they receive a complaint. A motion was made to recommend the change to the Supreme Court. The motion passed unanimously.

B. Fee Dispute Resolution Committee 

Mr. James Condry reported that the committee was concerned that many complaints were made about the same lawyers who choose not to participate in the fee dispute

resolution process. The Committee asked that Rule 4-1.5 be changed in subpart (f) to read “shall conscientiously consider participating.” A motion was made to recommend the change to the Supreme Court. It passed unanimously.

C. Special Committee on Unbundled Legal Services 

Mr. Alan Gallas reviewed the recommended rule changes that would facilitate the adoption of unbundled legal services to those who would otherwise not be represented - Rule 4-1.2 and 5-5.03. He stated that the change would be good for lawyers, the administration of justice and the courts. The changes would define limited scope, require that lawyers who engage in this practice have a written agreement with clients, and clarify that a lawyer who provides limited representation to a client need only

communicate with the client unless the agreement says otherwise. Also a lawyer could represent a client at a hearing for a limited aspect of the case. The rule only applies when there is an otherwise unrepresented person. Discussion focused on whether attorneys are responsible for alerting clients to possible legal problems that may not be apparent to the client, even though they fall outside the scope of the limited representation. Mr. Gallas explained that the rule does not do away with other parts of the Code of Conduct that would require this. Other questions concerned whether clients have made complaints about lawyers who provided limited scope representation. Ms. Sara Rittman said that in discussions with Mr. Pratzel, no such complaints had been noted. Mr. Gallas noted that 23 other states have approved similar types of limited scope representation rules. A motion was made to approve the report of the Special Committee on Limited Scope Representation, to approve the amendments and to recommend that the Supreme Court adopt the rule changes. The motion was seconded and passed.

D. Special Committee on the Make-up of the Board of Governors 

Mr. Tom Lang noted that the committee had a working draft and that every six years the Board could revisit the issue. He said the YLS Council Representative to the Board is appointed, setting a precedent for this type of action for an appointed Board member. A lengthy discussion followed. The Board considered whether the position should be ex-officio, with or without the right to vote. Other issues discussed included whether the language should be changed so that “diverse elements of the public” should be changed to “diverse elements of the bar,” whether local bars would be involved in the selection process, and how long the appointed Board members should serve. A motion was made to table this issue until the September Board Meeting. It was seconded and passed, opposed by four Board members. Bill Bay asked to be recorded as opposing. Others opposed were Dana Tippin Cutler, Matt Mocherman and Tom Burke.

E. Mandatory IOLTA 

Mr. Michael Gunn, president of the IOLTA Foundation Board reported, as did Brian Hamburg, Vice President of IOLTA, and Glen Baker, Executive Director of IOLTA, and Erik Bergmanis, chair of the bar’s IOLTA Committee. Mr. Gunn explained that the Supreme Court asked him to go before the Board for review and comment. The proposed rule change at issue was whether IOLTA should be mandatory and whether it should require comparability of interest rates. Mr. Gunn explained that some banks give IOLTA accounts a very low interest rate and that if banks could give IOLTA accounts rates comparable to other accounts, IOLTA could see an increase in collected funds from the current level of $1.7 million to $4.5 million per year. 92 percent of IOLTA goes to legal aid, the other 8 percent to justice administration grants. Mr. Gunn further explained that all states have IOLTA. The IOLTA Board unanimously approved this rule and submitted it to the Supreme Court, which asked that the Bar comment on it. President Baird appointed an IOLTA Committee to consider the proposed changes. Mr. Gunn explained that when IOLTA was begun, banks gave IOLTA accounts comparable rates, but when banks developed tiered accounts, some gave IOLTA the lowest rates. The concept of comparability is that if a bank is approved by IOLTA for IOLTA accounts it would pay a rate comparable to what it pays other accounts. The responsibility for approving banks is not the lawyer’s but the IOLTA Foundation. Four percent of lawyers (about 400 law firms) eligible for participation in IOLTA in Missouri have opted out. Another 600 law firms have been exempted by IOLTA because they held such small amounts in their accounts. Lawyers who live in part of the state where no local bank will pay comparable rates would be exempt. Erik Bergmanis noted that the committee concluded that, because of the comments it received, it should give the Supreme Court a summary of pros and cons. A motion was made to submit the pros and cons with the addition of a hardship provision for attorneys who would then be exempt from participating because complying would be too burdensome. Motion passed, opposed by eight Board members, who requested that they be recorded. Board members voting against were Alan Seidel, William Lasley, Mike Greenwell, Douglass Noland, Aaron Jones, and Matthew Mocherman. Suzanne Bradley and Alan Gallas abstained from voting.

F. Special Committee on the Public Defender System 

Mr. Copeland provided a status report on funding for the Public Defender System, noting that more FTEs are needed. The focus this year will be on legislation that could fund them. The current need is for additional funds of $9-10 million to meet reasonable guidelines on the number of cases per defender, but that the legislature only authorized an increase of $1.13 million, only enough to handle conflict cases. Subsequently, the Public Defender Commission developed a per-person caseload threshold rule that it submitted to the Supreme Court. This rule would provide a systematic method for Public Defender Offices to refuse to accept additional cases. Once the Public Defender Commission determines a threshold for an office, if it is exceeded by 90 percent of the maximum caseload for 90 days, the presiding judge, district defender and prosecutor would meet to try to find a solution. If they cannot, then the public defender would no longer accept cases for the circuit. The Supreme Court modified the public defenders’ proposal, making it an operating rule. The Chief Justice appointed a committee, which includes Mr. Copeland, to evaluate the rule and provide comment by August 10. The bar had already recommended an independent evaluation of the public defender caseload to determine caseload limits. Mr. Copeland asked the Board to support the concept of obtaining an independent caseload study and a request he will make of the Bar Foundation for funds of $90,000 to pay for the study, which would probably be done by the Spangenberg Group. He stated he is concerned that when public defenders reach their limit, lawyers will be assigned cases by judges. A motion was made to support the concept of an independent caseload study and to recommend that the Bar Foundation help fund the study. Motion passed.

G. Gender and Justice Committee 

Ms. Sara Rittman reported that the Committed wants approval to distribute a survey, primarily through the Internet. Participants could fill out the survey on line or ask for a paper copy. The purpose of the survey is to compare where the bar is now versus the early 90’s, when the original Gender and Justice survey was completed. A motion was made in favor of approving distribution. The motion passed.

H. Client Security Fund Committee 

Mr. Janku presented the recommendations of the Client Security Fund Committee for payment and denial of claims adopted at the Committee’s meeting in Jefferson City on June 22. The Committee recommended payment of 16 claims for a total of $15,936.00. The Committee recommended denial of 13 claims. 15 claims recommended for payment are for $2,500.00 or less, as authorized by Article 2.10 of the Committee’s Regulations and Rules of Procedure. The Committee also requested expedited payment of one claim for $3,388.00 to enable the claimant to hire an attorney to continue needed legal representation.

Mr. Janku also advised the Board of the Committee’s interpretation of Articles 1.5, 2.2(d) and 2.2(e) of the Committee’s Regulations and Rules of Procedure. Those Articles govern eligibility of claims for consideration by the Committee, as explained in the Committee’s Report included in the Board agenda. Mr. Janku stated that the Committee’s interpretation of Articles 1.5, 2.2(d) and 2.2(e) is that, for consideration of a claim involving a “suspended” lawyer, that the lawyer must have been suspended by the discipline process due to misconduct. Also, if the alleged fraudulent act occurred during the period a lawyer was suspended for non-payment of dues or failure to comply with CLE, a claim based upon the fraudulent act would not be disqualified from consideration if the lawyer was later suspended, disbarred, deceased or adjudged mentally incapacitated as provided in Articles 2.2(d) and (e). Mr. Janku informed the Board that, if the Board agreed with the Committee’s interpretation, no further action was required by the Board. If the Board would like the Committee to provide additional information or submit to the Board of Governors an amendment to the Committee’s Regulations and Rules of Procedure, the Committee would be pleased to do so.

It was moved and seconded that the Board approve the Client Security Fund Committee’s recommendations for payment and denial, including the expedited payment, and accept the Committee’s interpretation of Articles 1.5, 2.2(d) and 2.2(e).

I. YLS Report 

Mr. Jones presented a proposed YLS Bylaw change to streamline one point and add a mission statement. A motion to approve was made, seconded and approved.

5. Appointments: 

A. Current Appointments 

(1) Alcoholism Intervention Committee 

Mr. John Greider was reappointed.

(2) Fee Dispute Resolution Committee 

Mr. Robert Bailey has resigned and Mr. Gary Stamper

was appointed in his place.

(3) ABA Minority Delegate 

This appointment was discussed and a vote was held to

choose between two candidates – Ms. Pamela Meanes

and Jim Robinson. Mr. Robinson won the vote to be

appointed ABA Minority Delegate.

B. September Appointments 

(1) Trustees of The Missouri Bar 

Dana Tippin Cutler’s second term as a Trustee of The Missouri Bar is expiring, and she is not eligible for reappointment. The Missouri Bar’s other appointees are John Ruth from Jefferson City and Countess Price from St. Louis.

6. Officers Report: 

A. Executive Director’s Report 

Mr. Birkes introduced Lucas Boling, the bar’s new CLE Programs Attorney. He also noted that today, the ballots for the Board of Governor elections are being mailed and when results are known, he will communicate them to Board members. Mr. Birkes noted that a Board orientation will be held in early September and that President Baird’s committee that is considering changes in the bar’s judicial evaluation is planning to finish its task and report at the September Board meeting. The bar’s new association management software is well underway and going as expected. He further explained that the Finance Committee discussed and agreed to recommend to the Board that, because Past-President William

Corrigan must travel to the ABA Annual Meeting as the bar’s delegate and also is an officer of the National Conference of Bar Presidents, he must go to the ABA meetings three or four days earlier than the other delegates, the bar reimburse Mr. Corrigan for costs incurred on those additional days. A motion to provide reimbursement was moved, seconded and passed.

Mr. Birkes explained that the lobbyist with whom the bar contracted services last year may be available again this year and that the budget would need to include a spot for this possibility. A motion was made to go forward and seek a contract lobbyist, and, if possible, the same one used last year. Motion seconded and passed to budget for this possibility. Opposed by Mr. William Lasley.

Mr. Birkes brought Mr. Tom Casey’s letter to the attention of the Board. The letter is about a possible program to supplement the current Lawyers’ Assistance Program. The letter will be shared with the Lawyers’ Assistance Committee. No action requested.

B. Vice-President’s Report 

Mr. Burke had nothing to report at this time.

C. President-Elect’s Report 

Mr. Harris reminded the group that they should be applying for passports now if they are planning to attend the Midyear Seminar. He noted the recent attacks on the judiciary, calling them the most organized and well-funded we have seen. He also noted that the weighted judicial caseload study was completed but not yet evaluated and that he wasn’t sure when it would be finished and released. He noted that diversity and the judicial evaluation committee will be significant issues.

D. President’s Report 

Mr. Baird also noted the attacks on the judiciary and said that it would useful to have a meeting with local and specialty bar associations before January to ensure that lawyers throughout the state understand the problem and what they can do about it. He also noted that Fastcase had been launched smoothly and that no problems were being experienced by users. He also explained that a Rule of Law Conference was to be held in a few days in Columbia, and that the officers had a successful visit to the Washington delegation of Missouri’s legislators. In discussing lawyer advertising, President Baird reviewed the history of the committee and the passing of the rule changes resulting from the committee’s work. Mr. Alan Pratzel, Chief Disciplinary Counsel, assured the Board that when his office received complaints about lawyers’ advertising they would investigate. He said that identifying violations was an area in which the Office of Chief Disciplinary Counsel needs help. Currently, the office reacts to reports but does not search for violations. Mark Levison said that a reformulated committee would evaluate how well the rule changes were working and recommend to the Board any actions considered to be in order. A motion was made to reconstitute the Lawyer Advertising Committee. It was seconded and passed.

There being no further business, the meeting was adjourned.

Respectfully submitted,

Keith A. Birkes, Secretary