Proposed LACBA Bylaw Change Spawns Major Discord

Wednesday, November 18, 2015

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Proposed LACBA Bylaw Change Spawns Major Discord

‘Council of Sections’ Is Formed to Protest Actions of Hierarchy

By a MetNews Staff Writer

Twelve sections of the Los Angeles County Bar Association have asked that action on a proposed bylaw change, relating to section financing, be deferred to the January meeting of the Board of Trustees, but the organization’s president, Paul Kiesel, yesterday declined to yank the item from tonight’s agenda.

The measure would remove any control by sections over the funds they raise through events. Kiesel contends that this merely conforms to a long-time existing policy—but critics argue that it should not be the policy, and complain that unlike a few years ago, they now have no information as to financing of the sections, or the organization as a whole.

Controversy over the proposal has spawned an “Interim Council of Sections,” comprised of leaders of 12 sections: Appellate Courts, Corporate Law Departments, Family Law, Senior Lawyers, Immigration and Nationality Law, Litigation, Real Property, Business and Corporations Law, Environmental Law, Barristers, Antitrust and Unfair Business Practices Law, and Trusts and Estates.

Carson’s E-Mail

John Carson, who was LACBA president in 1994, chairs the interim council, as well as the Senior Lawyers Section. In an e-mail to members of the Board of Trustees on Friday, Carson announced the formation of the group, and related that “so far the Senior Lawyers, Antitrust, and Corporate Sections have each voted to outright oppose the Proposal.”

He attached a statement which reads:

“This is to advise you that on 11/11/15, representatives of 12 major sections met and voted unanimously to form an interim Council of Sections.

“The prevailing sentiment at the meeting was in opposition to the adoption of the proposed amendment to Section 14 of the bylaws concerning section financing (Proposal).

“In addition, those present expressed a desire for more time within which to consult with their respective executive committees, and for those committees to be able to consider their positions on the Proposal with care. Toward that end, I am asking, on behalf of the Council, that action on the Proposal be put over to the January meeting of the Board of Trustees.

“If there is a disinclination to giant this request, I would ask that representatives of the sections be permitted to express their views at the Nov. 18 meeting.”

Sherman Oaks attorney Ronald F. Brot, who chairs the Family Law Section, yesterday told members of the Interim Council of Sections, by e-mail:

“President Kiesel has just informed me that while he sees no urgency in voting on the proposed Bylaw amendment, he will allow the matter to go to a vote on Wednesday if the Board of Trustees wishes to vote. I was unable to persuade him to agree to defer.”

Kiesel’s Response

Kiesel sent an e-mail to section officers and directors saying:

“The LACBA Board of Trustees periodically updates its organizational bylaws so that they reflect the current practices of LACBA and accord with good governance. One bylaw provision related to section finances has been out of date for years, and has not reflected, for close to a decade, the reality of LACBA’s financial practices. Those practices were changed by LACBA’s leadership following extensive conversation with Section leadership. The subject bylaw provision, however, was overlooked and was therefore not amended when the Board of Trustees overhauled LACBA’s bylaws a few years ago. The current proposed revision of that bylaw provision will have no effect on the operations of any section.

Proposed bylaw amendment

“This particular bylaw amendment, along with several others, was on the agenda for consideration and approval by the Board of Trustees at its October meeting. We did not expect this to be controversial because we were simply conforming our bylaws to existing practices and removing an artifact from a bygone era. However, when it became clear that some of you took issue with the change, I removed it from the Board agenda so we can be clear about the change.”

Kiesel asked that any comments on the proposal be sent to him by noon on Monday.

Responses From Sections

There were seven responses on Monday, some directed to Kiesel and some to the entire Board of Trustees, which includes Kiesel and the other officers.

Kristin Adrian, chair of the Corporate Law Departments section, alluded indirectly to the rumblings within some sections that setting up organizations outside of LACBA or affiliating with another existing group should be considered. She said, on behalf of her section, that the effort to amend the bylaw “seems to be a legitimization of a practice that has never been agreed to by the Sections and, as you can surmise, many Sections are considering actions that would not be productive for a cohesive Association.”

She complained of LACBA “taking all control over pricing of events and programs,” noting that this step was taken “without consulting the Sections.”

Adrian recited:

“It started with the Bar stopping financial reporting to the Sections so that the Treasurer had no function. Sections were just told by administrators that if we had an award dinner that brought in large profits, the Section could not spend any of those excess funds to keep down the cost of other programming to members. This ‘recent method’ called for each program to be budgeted on 20%+ profit basis with a minimum cost per CLE hour of credit. This ‘recent method’ of mandatory minimums and all financial control taken away from the Sections in planning their programming and events leaves many Sections wondering who they are representing and feeling that the Bar is trying to balance its budget on the back of the Sections. Sections never agreed to this ‘recent method’ and pushing through a Bylaw amendment that would formalize this practice is objectionable to our Section and many Section executive committee members.

“I urge the Trustees to engage with Section leaders to address some of the Section concerns (financial and otherwise) and not try to push through a bylaw that would just further antagonize Section leaders.”

Price Hikes

William L. Winslow, chair Trusts and Estates Section, also alluded to a sore point with sections: high prices being mandated for events the sections stage. Winslow advised Kiesel:

“The contents of your statement are largely in accord with the recollection of section leaders, myself included. However, 1 must observe, with reluctance, that it is incomplete in important respects. The change would conform the by-laws to the de facto situation which has existed for many years. Nevertheless, the proposed by-law change occurs in the context of LACBA’s apparently alarming financial situation; and it follows on a decision by the leadership of LACBA to impose large price increases on section programs without consulting the sections.

“Though I heard today from Margaret Stevens, the President-Elect, that there had been some consultation with a couple of other sections’ leaders, I think it is fair to say that concrete written proposals for changes in pricing for sections’ programs, with an opportunity to comment, were not made. 1 learned of your decision to charge $50/$65 for our Brown Bag lunches, which formerly were free, from an email sent by Terrina Scott [supervisor of event operations]. Our section had no prior notice.

“It is true that the Trusts and Estates Section, like others (as I heard at the first meeting of the Council of Sections), did acquiesce in the changes made a few years ago, though not without carping and considerable resentment about the Association taking away our ability to do some things that we wanted to do with the “profits” we made on nearly every one of our programs. The changes essentially ended the practice of sections having their own separate accounts, with control (inside reasonable limits) on how to spend the revenue from our ‘profitable’ programs. That acquiescence was founded on the implicit undertaking of LACBA to not treat the sections unfairly, dictate to them, understaff them, or impose big price hikes without consultation. That is why, with respect. I submit that your explanation about what went before somewhat misses the point. The breaking of the implicit promise by LACBA is why the proposed by-law change is a flashpoint. That is why it is not all water under the bridge; that is why we oppose the by-law change.”

Personal View

Brot said his section’s executive committee would not meet until the following night and therefore had no position, yet. He added:

“While I have not yet been granted authority to speak for the Family Law Section on this issue, we have previously discussed the sentiment from our Executive Committee, past and present, that we do not feel heard or included by the Bar’s leadership. This sentiment was raised last year and again this year by several Sections at the Section Leaders Retreat. You heard a similar sentiment raised passionately by members of [Family Law Executive Committee] when you visited our meeting last month.

“My personal observation is that the Sections are frustrated that they have less and less control of their own programs and activities, and now almost no say as to the use of the funds they raise. The two step change over the last decade in the manner in which Section activities are handled by the Association (first a choice of opting in, and then a mandatory opt in), was purportedly adopted for administrative convenience and to eliminate the need for strict accounting of the administrative commitment to section programming and other activities. This was presented to the Sections as something that would ultimately benefit them. Instead, it has come to be used to control and limit Section programs and activities, to eliminate any Section control over the use of their funds (expressly contrary to the existing Bylaws which you seek to amend), and to otherwise justify the lack of Section autonomy. In my view, the current issue goes well beyond the Bylaw amendment, although it includes that issue.

“Section leaders have long demonstrated their unwavering commitment to LACBA, to their constituencies, and to the administration of justice. Not having been heard by LACBA leadership for far too long, as a first step Section leaders have now united to form the interim Counsel of Sections. I urge you not to dismiss this as a simple ‘we/you’ confrontation. I urge you not to dismiss it at all. Legitimate issues have been raised by loyal Bar leaders. The issues merit careful and thoughtful analysis, and a collaborative resolution. Accordingly, it makes good sense to defer the Bylaw amendment until these greater issues are fully explored and resolved.”

Carson Comments

Writing to the board on behalf of the Senior Lawyers Section, Carson said:

“It seems that the history of the funds of Sections has been greatly clarified by Mr. Brot’s 11/15 email to the Trustees. It is obvious that not only has this practice, that now is sought to cast into concrete, not worked as thought, but that it also has and is causing great angst and resentment among the Sections.

“And to now reason that in view of a history of violation of a By-law, the By-law should be changed rather than the practice changed, is an interesting bit of logic . I would not take the generosity of the Sections’ to give time to see how these two step changes worked out as an unconditional consent, especially in view of the anger this has generated.

“I will not repeat the contents of Mr. Brot’s email, but I have received unanimous support for his views.

“The Sections with whom I have had discussions feel dictated to and ignored, resulting in at least a lack of enthusiasm for/distraction from their work.

“The Section members have been part of this Bar for decades, and many have held leadership roles. They have the best interests of the Bar at heart. Ignoring the situation will only make it worse. They deserve the courtesy of real input, full and complete information, and open and full discussions toward problem solution.

“After all, the members of the Bar are the owners of this institution, and the Section membership comprises about 15K out of a total Bar membership of about 19K.

“I urge you to begin a dialogue with then Sections to jointly work out solutions to the situations in which the Bar and the Sections currently find themselves.”

Speed Not Necessary

The chairs of two sections supplied a copy of its position paper, but asked that the section not be identified. One section told Kiesel:

“Until reading the LACBA statement, we understood that LACBA used the funds our section generates primarily to support our section. But even if the Proposal simply conforms the Bylaws to current practices (which it appears are not currently sanctioned by the Bylaws), maintaining a transparent process and securing section input remains important. The Proposal involves the use of funds generated by the section. The Proposal thus could have a material effect on the volunteer work of section executive committees. Further, on a practical note, if this has already been the practice for years, it is unclear why the vote cannot be postponed a short time to address our and other sections’ opposition.

“Our opposition to the amendment generally stems from a desire for greater transparency with respect to LACBA financial information and, relatedly, a desire to retain some section autonomy with respect to programming, particularly revenues and pricing. These concerns go beyond the Proposal. We understand LACBA is currently contemplating a standard price increase for section programs ($75/CLE hour). The Section is in a much better position than is LACBA to set the prices for its programs to ensure that they both generate sufficient income to cover costs and are not so expensive that they discourage attendance.”

Current Provision

Another section commented:

“We believe that the association’s failure to comply with its own bylaws is a poor reason to support the amendment. We further believe there was good reason behind the current version of section 14 that continues to be relevant today. Indeed,… section 14 is more relevant today than ever in view of the broader, recent changes taking place at the association.

“Section 14, in its current form, reflects the fact that the association is a voluntary bar association that would not exist but for its members’ pro bono contribution of their time, talent, and experience. By affording the association’s members and their respective sections a say in the use of funds they generate, section 14 motivates members to contribute and encourages the spirit of partnership—a partnership between the members and their sections, on the one hand, and the broader association on the other.”

The statement goes on to say:

“We oppose the proposed bylaw amendment to section 14 because it is yet another step in the centralization of authority in the association at the expense of the association’s sections and rank-and-file members. We support the current version of section 14 because it appropriately balances the interests of the sections with the association’s financial obligations and recognizes the central role the sections play in the success of the association.”

De Los Reyes’s View

Writing as an individual, Century City attorney Anthony De Los Reyes, secretary of the Senior Lawyers Section and a former LACBA trustee, told Kiesel:

“[T]he thought that enshrining past practices that violated the bylaws should now be made lawful is disingenuous, at best.

“The members of the Senior Lawyers Section have selflessly devoted countless hours in creating, promoting, and presenting programs of considerable general interest, all in furtherance of LACBA’s greater goals. The inability to maintain any measure of control over the finances that ultimately determine the scope of these programs creates a level of frustration that discourages our efforts.

“The present unfortunate financial position of LACBA is a matter of great concern to all of us—but the proposed Draconian solution—and the way it has been presented—is not a path that should be pursued without the full participation of the membership.

“Please reconsider your position.”