LACBA Trustees Hear of ‘Angst’ Among Section Members

Friday, November 20, 2015

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LACBA Trustees Hear of ‘Angst’ Among Section Members

Organization’s President Tells of $1 Million Revenue Shortfall, Then Backs Away From Statement

By a MetNews Staff Writer

The Los Angeles County Bar Association Board of Trustees, after hearing six leaders of association sections spiritedly express disillusionment with the organization, acceded to their request for a two-month postponement of action on a proposed bylaw change that would formalize the existing denial of any control by sections over their financing.

At the meeting Wednesday night, LACBA President Paul Kiesel, who presided, argued that the current bylaw—which, as written, assures sections a degree of financial autonomy—is an “historical artifact.” At one point, he declared that the association’s annual expenses exceed its revenues by $1 million, though he later retreated from that statement and said he does not know the actual amount of the shortfall.

Kiesel initially opposed granting an audience to the section representatives, saying:

“This is a Board of Trustees discussion. I don’t think it would be appropriate to have non-trustees speak.”

However, after some trustees expressed a desire to receive the input, Kiesel told the visitors:

“I welcome your coming up, making your comments relatively brief and non-redundant.”

The speakers included two former LACBA presidents. The remarks were generally hard-hitting.

Carson’s Comments

John Carson, who was LACBA president in 1994-95, said the question is “[w]hether the bylaw should be changed, or the practice should be changed to conform with the bylaw.” He opined that “the practice is not working.”

Drawing no dispute is that the current practice, under which all revenues brought in by a section goes into a common LACBA pot, contravenes the existing bylaw which says that each section is to have a separate account. If the existing bylaw were implemented, it would permit sections to subsidize “showcase” events which do not make a profit with funds from events which do generate income.

Under a present policy, however, it is required that all events are to make a 20 percent profit.

Carson, of the law firm of Arent Fox, is chair of the interim Council of Sections, formed Nov. 11 at a meeting attended by representatives of 12 sections. His Friday, Nov. 13 e-mail to the Board of Trustees asking, on behalf of the group, for a postponement of the vote on the proposed bylaw change to January was met by a response from Kiesel that any comments on the proposal were to be received by him by noon Monday.

“All we’re asking,” Carson told the trustees, “is that this be put over to January so that the sections have more than just a week to figure out just what they should do, to try to get more adequate information as to what the fiscal problems are.”

He added:

“In spite of the few days that we’ve been given, you have letters, e-mails, from eight sections, and you’ll probably be getting at least four or five more. Each one of these e-mails has expressed angst, to put it nicely.”

Carson, who presently chairs the Senior Lawyers Section, said that the sections “have a strong feeling that they’re being ignored, dictated to.”

Kiesel told Carson:

“This is not an ignoring of, or dictation to. Just the opposite.”

‘Not Your Employees’

“We’re not your employees,” William L. Winslow, chair of the Estate and Trusts Section, told the trustees, complaining of the attitude toward section members.

He said he received an e-mail “from a LACBA staff member that Mr. Kiesel has determined that our formerly free LACBA brown bag lunches,” held at the Superior Court, would now be priced at “$50 for section members, $65 for members of the County Bar who are not members of our section.”

He expressed irritation that this was decreed “with no consultation with us, at all.”

Winslow, of Gifford, Dearing & Abernathy, LLP, asserted that there was “an appearance of arbitrariness and high-handedness.”

Kiesel yesterday e-mailed proposed guidelines for section programs—approved for circulation by the trustees in executive session Wednesday night—to section leaders. He spelled out:

“I want to make this PERFECTLY CLEAR the standards are not mandatory but are being circulated for discussion purposes only.”

He also held a call-in video conference with section leaders in the late afternoon to discuss the guidelines. The portion of the standards relating to pricing appears below.

Michaels Speaks

While Kiesel asserted at the trustees’ meeting that the current practice has been in existence for 10 years, Charles E. Michaels, who was president of LACBA in 2006-2007, contradicted him, saying:

“That statement that this is the way that the finances have been done in the last 10 years is absolutely incorrect. It was not done when I was the president of this association.”

He declared that there is “a great deal of angst and concern” within the Corporate Law Section.

Michaels—who is vice president, general counsel and secretary of LAACO, Ltd., a real estate management company—read aloud e-mails from four past chairs of the section, including one from Erich E. Everbach, whose communiqué, sent to Kiesel, said:

“[A]fter more years than I can remember of being a member of the LACBA, I have decided not to renew my membership for 2016. The LACBA is a ‘voluntary Bar’ and, as an in-house corporate lawyer, I am no longer motivated to support and to ask my employer to reimburse my dues for membership in an organization that seeks to micro-manage the activities of the only Section in which I have any interest; the Corporate Law Departments Section, as well as the other Sections.”

Michaels remarked:

“As a corporate lawyer, I don’t like to see anything ramrodded.”

Calling for consultation with the sections before taking a vote on the proposed bylaw amendment, he counseled:

“You’re sending the wrong message to the sections when you vote ahead of time, without having that dialogue.”

He related:

“There are rumblings in my section about leaving the association.”

Sections Feel ‘Downtrodden’

Ronald F. Brot, chair of the Family Law Section, noted that he has chaired the Litigation and Commercial Law sections, as well as the LACBA delegation to the erstwhile State Bar Conference of Delegates.

“I know sections,” he said, adding:

“Never before have the sections felt so downtrodden.”

Kiesel had made reference to representatives of the sections having been invited to the meeting. Brot, of Brot & Gross, LLP, said:

“I don’t believe the sections were invited to be here tonight. I love you Paul. I take issue with that. I don’t think they were invited to be here, at all.

“I think the section leaders were given an announcement that if you have a comment, make it.”

He recounted receiving an e-mail from Kiesel Friday afternoon calling for written comments, with a short deadline, and declared:

“That’s ridiculous! Were we supposed to have an executive committee meeting over the weekend, so we could get our e-mails in to you by Monday at noon?”

Noting that the Family Law Executive Committee did meet Tuesday night and voted unanimously to oppose the proposed bylaw change, Brot commented:

“The fact that the association has chosen to ignore the bylaw…for the last 10 years, doesn’t become a justification to conform the bylaw to a practice you never should have engaged in without changing the bylaw.”

He went on to say:

“The sections feel unheard because they are unheard. The sections feel disrespected because, frankly, I think they are disrespected.

“The sections feel unappreciated because, in action, they are unappreciated.”

He said the committee looking into section financing (the Ad Hoc CLE/Events Committee) had zero section leaders on it.

“It’s insulting,” he said. “It’s bad governance.”

(In an apparent response, Kiesel’s e-mail to section leaders yesterday noted that four of the five members of the committee are past section chairs, and one is a current member of a section.)

Brot reported that a former chair of the Family Law Section earlier that day proposed that the section withdraw from the association. He said the sentiment expressed the night before at the Executive Committee meeting was:

“Why should we continue to give our heart to an association when they don’t care? All they want is for us to give.”

Brot cautioned:

“They’re ready to leave. Don’t let them leave.”

Information Needed

Bradley S. Pauley, chair of the Appellate Law Section, maintained that the sections need to know what’s going on in the organization, asserting that they should receive not only copies of the agendas, but also the attachments, as well as the financial reports.

The Senior Lawyers Section, through Carson, recently requested those reports, but was denied access.

Pauley said the section’s programs cost LACBA “virtually nothing.” He explained that the Court of Appeal provides the space for meetings and “the only LACBA connection is that a LACBA staff member shows up for about 15 minutes to process MCLE and leaves.”

He noted that he polled the members of the section, numbering in excess of 300 lawyers, as to how they felt about the upcoming boost in the cost of the programs from $15 a unit to $90, and he received “dozens of e-mails from persons saying that—.”

Kiesel interrupted him at that point, insisting that “there’s never been a thought” of a mandating an increase from $15 to $90, and that “it’s never going to happen.”

Pauley, of Horvitz & Levy, advised:

“But, Paul, that happened already.”

He said a joint program with the Estate and Trusts Section had been planned, but was cancelled after a mandate was issued by LACBA that $90 be charged.

(Under the proposed guidelines, a one-hour MCLE lecture would be priced at $70 for LACBA members, with the option of charging section members $55.)

‘Absolute Control’

LACBA “seems to want absolute control” over revenues generated by sections, Pauley remarked.

He said that in 2011, over its “strenuous objection,” the Appellate Law Committee, formed in 1970, was converted into a section. Pauley presented this view:

“Remember, only a few years ago, our little committee wasn’t generating income because we were a committee, and nobody bothered us for decades. Suddenly, we’re generating large amounts of cash and people want it, but we’re not allowed to touch it. That’s a problem.”

He urged postponement of a vote to permit a “dialogue” between “LACBA Central, for want of a better word, and the sections.”

“What does LACBA envision itself being, in two or three or four years? Are the sections really going to be the life blood of LACBA, or are we going to be a section-free CLE provider?”

Trustees also heard briefly from Brian McMahon, a past chair of the Antitrust Section, who expressed a concern that LACBA might use funds generated by sections for non-section purposes, such as pro bono programs.

It was following the remarks by the section leaders that Kiesel advised:

“We’re losing a million dollars a year.”

When he later said that figure was not precise, trustee Jeff Westerman questioned why he did not know the exact amount.

Prosposed MCLE/Events Standards

Proposed Los Angeles County Bar Association guidelines on programs staged by sections were disseminated to section leaders by e-mail yesterday. They were drafted by the CLE & Events Committee comprised of Los Angeles Superior Court Judge Richard Burdge, a past LACBA president; past presidents Patricia Daehnke and Alan Steinbrecher; LACBA Senior Vice President and Treasurer Michael Lindsey; and former Barristers president David Reinert. Below is the portion of the standards relating to pricing.

MCLE Programs

kPrograms should have a LACBA member price, a non-member price, and (if applicable) a section member price.

kThe LACBA member price should be calculated using a minimum cost per CLE credit hour as follows:

■ $70 per hour for programs less than 3 hours long

■ $60 per hour for programs 3 hours or longer but less than 5 hours

■ $50 per hour for programs 5 hours or longer

kThe section member price may be lower than the LACBA member price per program as follows:

■ up to $15 below the member price for programs less than 3 hours long

■ up to $25 below for programs 3 hours or longer but less than 5 hours

■ up to $35 below for programs 5 hours or longer

kThe non-member price should be higher than the LACBA member price per program as follows:

■ at least $50 above the member price for programs less than 3 hours long

■ at least $65 above for programs 3 hours or longer but less than 5 hours

■ at least $100 above for programs 5 hours or longer

kPrograms must be priced such that gross revenue exceeds estimated total expenses, including direct and indirect costs, by a minimum of 25%.

kNo LACBA program may offer free CLE credit unless it has received prior approval from the [CLE & Events] Committee. Free CLE credit will not be given to non-members under any circumstances.

kIf a program includes a registration category for law students, that category should be priced such that no less than basic variable costs (food & beverage, materials) are covered. If law students are being included, there should be a law student member and non-member price.

kIn order for a program to include a reduced rate (or rates) for judicial officers, non-profit attorneys, and/or government attorneys, prior approval from the Committee is required.

Non-CLE Programs and Events

kPrograms and events should have a LACBA member price, a non-member price, and (if applicable) a section member price.

kThe section member price may be up to $25 below the LACBA member program price.

kThe non-member price should be at least $45 above the LACBA member program price.

kPrograms must be priced such that gross revenue exceeds estimated total expenses, including direct and indirect costs, by a minimum of 20%.

kOccasionally, programs may be offered at no cost and/or budgeted at a loss for strategic business purposes (for example, if a section wants to do a membership drive event which prospective members attend at no cost). All such exception requests require a written explanation of the relevant business purpose, and are subject to prior approval by the Committee (with the exception of the specific exception outlined below).

If the exception request meets all of the following requirements, it is subject to prior approval by LACBA’s Director of Events:

■ It is the section’s first such request of the bar year

■ The total amount being requested is $3500 or less

■ The cost-per-head being requested is $60 or less

■ The total number of anticipated guests is 60 or less

■ Spouses/significant others pay a fee that covers basic variable costs if they attend

These standards apply to networking events, holiday parties, court receptions, kick-off events, end-of-year gatherings, retreats, and other non-CLE events.

kIn order for a program to include a reduced rate (or rates) for judicial officers, non-profit attorneys, and/or government attorneys, prior approval from the Committee is required.