Wednesday, July 12, 2017
LACBA Releases Detailed Financial Information
Openness Under New Administration Is Hailed; Organization Continues to Lose Money
By a MetNews Staff Writer
Detailed information as to the finances of the Los Angeles County Bar Association was disseminated yesterday, with leaders of a reform movement hailing an end to the organization’s secrecy of recent years as to its revenues and expenses—but the bad news being that LACBA is continuing to lose huge amounts of money.
Although summaries of finances have been made available, detailed information has not been.
What made the email rounds yesterday was a detailed report for the first quarter of the calendar year. Although it shows revenues of $3,197,709, $123,152 less than the expenses of $3,074,557, those revenues include $654,000 in a cy pres award which is in a restricted account, to be used over a five-year period for a veteran’s project of the Counsel for Justice; with that amount deducted, there is roughly a $531,000 loss.
However, the loss has been shrinking. A financial summary sent to trustees and section leaders, reflecting figures through the end of May, show a loss to that point of $374,631.
A commentary in the summary says that LACBA is “under budget by $960,000,” noting:
“There are several reasons for this surplus including shifts in personnel at all levels, an increase in sponsorship obtained by several Sections…, as well as the specific revenue and Expense items….”
LACBA has been running an annual loss of about $1 million a year. Its reserves were nearly $7 million in 2013, but down to $4.6 million as of the 3end of 2016.
The financial information was provided last week by LACBA’s chief financial officer, Bruce Berra, to John Carson, a LACBA past president and chair of the Council of Sections. The council came into existence in late 2015 to oppose policies of then-President Paul Kiesel, and provided major impetus to the reform movement.
Carson emailed the report yesterday to members of the council.
He credited the release of the detailed financials to LACBA’s interim chief executive officer, Rick Cohen “and his openness philosophy” and to Berra, “following that openness.”
In the background, Carson said, are the new officers—as of July 1—led by President Michael E. Meyer and President-Elect Brian Kabateck. He added that the other officers and “most if not all” of the current trustees are also advocates of openness.
‘Impediments Are Gone’
Carson noted—with apparent reference to the departures in recent months of CEO Sally Suchil and General Counsel Clark Brown—“that the staff impediments are gone.”
Suchil and Brown drew criticisms over allegedly fostering secrecy in the running of what became known as “LACBA Central.”
“I sense that the atmosphere within Central has changed for the better,” Carson remarked, “and that many are relieved that they can now get on with business without the control previously exercised.”
Meyer sent an email quoting Carson’s words, adding: “Correct.”
LACBA Trustee Marc Sallus, who heads a task force aiming to cement relations between LACBA’s hierarchy and its sections, said he has been working with Cohen and has been favorably impressed by his outlook, favoring openness.
“It’s a whole new era,” he commented.
Robert L. Kern, a past president of the Eastern Bar Association and a member of the council, expressed the view that “the new era of openness gives the LACBA hope for the future.”
In like vein, Kabateck said in an email to council members:
“It’s a new day.”
The financials reflect less income for the first quarter than was anticipated in the budget—which some trustees viewed as being based on overly optimistic projections as to income. Among them was William Winslow, who said in an email in March to members of the Trusts and Estates Section Executive Committee:
“In January 2017 the LACBA Board of Trustees approved a balanced budget which projects $13,563,975 of income and $13,556,790 of expenses, which means $7,186 in the black.
“The budget is optimistic about several items.”
In nearly every category, according to the March figures, revenues are lagging behind what was predicted.
LACBA, which has been steadily losing membership, raked in $30,099 less in dues than anticipated, as well as $58,640 less in lawyer referral fees, $45,517 less in arbitration fees, $38,778 less in administrative fees.
Expenses, however, have also been lower than projected. They totaled $3,074,557, while $3,388,949 had been allocated—a $314,392 savings.
A meeting of LACBA’s Board of Trustees is scheduled for tonight. On the agenda is a proposal to allow section leaders access to the email addresses of the section members.
The proposal emanates from the Council of Sections. Leaders of sections have expressed displeasure over the past refusal of staff to provide such access.
The proposal would provide a four-week period for any section member to “opt out” of inclusion on the address book provided to the section chair.
Also today, Cohen will be meeting with leaders of the Council of Sections. Although the council was openly antagonistic to Suchil and Brown, Cohen, in an email to trustees and section chairs, lauded the ad hoc group, saying it “has done great work” and “has been an inspiration.”
Copyright 2017, Metropolitan News Company