In My Opinion
LACBA’s Top Priorities Should Be Staying on Course, Serving Members
By Jo-Ann W. Grace
(The writer is co-publisher of the METNEWS. She is a candidate for president-elect of the Los Angeles County Bar Association. The following was disseminated yesterday via LACBA’s election listserv.)
Patricia Phillips was president of the Los Angeles County Bar Association in 1984-85—and was the first woman to hold that post. I would never minimize her contributions to the welfare of the association over the years or her devotion to it.
She and I have in common a love of LACBA. But we have differing views as to what the association’s focus now should be. Pat wants it to serve the public as its primary mission; I want it to serve its members as its No. One objective.
Our respective outlooks are of present significance given that Pat is in the forefront of the effort to gain the election of Ann I. Park as LACBA president-elect, in preference to me. The LACBA of the future that Pat envisions is, as I see, the LACBA of the past, the recent past. That LACBA, which had scant regard for the needs of its members, was overwhelmingly repudiated by the membership in 2016 in an election in which the reform candidates achieved a sweeping victory.
Ann clings to Pat and those of like views. I, on the other hand, am proud to be supported by those who have taken control of LACBA and are leading it back to financial stability and openness, and reestablishing it as an organization to which lawyers feel that they should (or must) belong.
Before discussing our present disagreement, let me provide some background. Mike Meyer was elected president-elect in 2016; he became president on July 1, 2017. And things changed—in my view, decidedly for the better. I want the association to continue on the course that it’s on. While I would like to see some fine-tuning and enhancements, I would not want LACBA to be diverted to side-paths.
The pre-Meyer LACBA was losing about $1 million a year yet giving away around that amount to the Counsel for Justice, subsidizing its projects. Those projects were (and are) worthy ones but the association’s financial reserves were being depleted. While a recent email on the campaign listserv denied that this occurred, the financial records show that it did.
Too, LACBA was operating in secrecy; members could not obtain its financials—not even its bylaws. And the sections were being bullied in various ways, including being inhibited from putting on programs they desired to stage, and were being required to over-charge for those programs they were allowed to present, sometimes to the point of the events becoming cost-prohibitive.
I played an integral role in the reform movement. Pat opposed it.
Ann now proclaims that she was also a participant in that movement. Well, she did attend meetings of the Council of Sections which drove the reform movement. However, I was instrumental in causing the council to be formed; Ann, while a member of it, also hobnobbed with the other side.
In an email to Ann last March 28, in response to an electronic missive she sent to members of the council, Robert Kern, a past president of the Eastern Bar Association, said:
“I do not know why, at the beginning of the formation of the Council of Sections, I was requested to participate. However, I have tried to do my part as perhaps a grouchy old man representing what I feel are the average member who wants the organization to succeed but has no real input. In that participation, I have seen Ms. Grace actively participate, but I never really noticed you. And, of course, she and Roger Grace have actively promoted and published articles in support of reform.”
The council endorses me, and Ann complained in our May 3 debate that it has “ostracized” her for more than a year (and she now proposes obliterating it as an independent watchdog group by absorbing it into LACBA).
Ann clings to Pat and others who were oblivious to the need to get LACBA back on track, rather than plunging into bankruptcy. My opponent aligns herself with three past-presidents who, by ceding power to an inept staff administrator (then-CEO Sally Suchil), caused LACBA to be placed in the perilous financial position it was in—from which the reformers have, to a large extent, extricated it. Ann is endorsed by other past presidents, some of whom have not been LACBA members for years and, I must assume, have no real understanding of the present challenges the organization faces.
I’m proud to be supported by Mike Meyer and his three successors as president: Brian Kabateck, Ron Brot, and the current president, Tamie Jensen.
On May 12, there were back-and-forth emails appearing on the LACBA election listserv relating to the what the core function of LACBA should be.
Kern (a curmudgeon I know and respect) said: “[T]o be of any use to members such as myself, we need to keep the organization focused on its members,” adding:
“I submit that my assertion that the ‘pre-revolution’ endorsers of Ms. Park represent the point of view which is opposed by the Council of Sections and the ‘post-revolution’ endorsers of Mrs. Grace. My understanding of the position of Mrs. Grace and her supporters is that they have the point of view that the needs of the members should be primary….”
Pat responded on that date:
“Lawyers need to center on that which is what lawyers are for; in my view that is service to the public, not service to ourselves.”
Disagreeing, I wrote to her:
“Pat, LACBA is a mutual benefit corporation, not a public benefit corporation. The nature of a mutual benefit corporation is to provide service for the benefit of the members.”
And Pat answered:
“Hi Jo-Ann, your email to me solidifies (to me and, I hope, to others) why we are supporting the Nominating Committee’s choice for President-elect. The Los Angeles County Bar Association is not a social organization. It is an organization formed in large part, to provide localized services and control of such services to the public as well as to the lawyers who choose to pay dues to belong. I don’t pay dues to join in social activities and, I suspect, neither do most lawyers who join the Los Angeles County Bar Association.”
(Ann was the choice of the majority of the 14-member Nominating Committee; I got on the ballot pursuant to a petition signed by 103 LACBA members including the association’s current president and immediate past president and other leaders of the reform movement, as well as a legion of other notables in the legal community, including four past LACBA presidents, two past State Bar presidents, two sitting Los Angeles Superior Court judges and four past members of that court, two administrative law judges, two former district attorneys, and various leaders of ethnic and geographical bar groups.)
Also weighing in on May 12 was James Gorton, an attorney I don’t believe I have ever met but whose comments on the listserv strike me as well stated and incisive. He remarked:
“LACBA was not organized nor has it been operated for much of its 143 year history as a public charity. It is an organization the purpose of which is to serve attorneys, both in raising the standards of practice within the profession and providing for legal education, ends which in turn serve the community and enrich it. These should not be diluted with other missions.
“Diverting attention from these goals and the attempt to make LACBA into some kind of legal services oriented charity has not worked well. LACBA is not organized as a 501c3 charity nor does it have the fundraising capabilities necessary to fund charitable operations. The attempt to go down this road resulted in member dues being bled away from core functions by staff who were increasingly deaf to the members’ core needs. Meanwhile the organization was financially mismanaged and its reserves frittered away.
“Fortunately, the slide toward bankruptcy was averted, but only narrowly.
“The charitable ends which some would like to see LACBA serve and which are worthy ends in themselves. However, support of such causes need to be organized as separate 501c3 entities which can undertake fundraising toward their ends with the clear understanding of those who pay money to them that they are making a charitable donation toward the ends of those organizations.”
“Thank you so much for your responsive e-mail, Mr. Gorton. I am happy to see that you and I agree on many topics, if not on the candidate who can accomplish them. One of our disagreements centers around the purpose of most lawyers organizations including LACBA. My view is that any organization of lawyers with the exception of purely social groups has as its primary purpose service to the public. I am sorry that is where we disagree.”
Ann has not joined in this discussion. But the major issue emerging in the election appears to be: Is LACBA’s primary purpose that of serving its members (and the legal profession in general, and the courts) or the public? I say its focus must be on the former; Pat says it must be on the latter.
I fall back on the position that the fact that LACBA is a mutual benefit corporation resolves the issue.
As recited by the Court of Appeal in People v. Honig (1996) 48 Cal.App.4th 289, at 305:
“The Corporations Code recognizes three types of nonprofit corporations: public benefit corporations, mutual benefit corporations, and religious corporations.”
LACBA on Jan. 14, 1953, was incorporated as a mutual benefit corporation, the form which bar associations commonly take.
It’s beyond debate that not only is LACBA not a religious corporation, but it could not be; devotion to any religion is plainly outside the scope of LACBA’s purpose.
I would also assert that LACBA could not be a public benefit corporation, notwithstanding a proposal by then-Interim Executive Officer Rick Cohen at a Board of Trustees meeting on July 12, 2017, that LACBA be converted into such an organization. His legal premise was faulty and this move would have legitimated LACBA’s erstwhile financially suicidal charitable spending. (Cohen resigned nine days later.)
Under Corporations Code §5111, a public benefit corporation is one formed “for any public or charitable purposes.”
The Court of Appeal pointed out in Knapp v. Palisades Charter High School (2007) 146 Cal.App.4th 708, at 715:
“Public benefit corporations are formed for a public or charitable purpose. They are not operated for the mutual benefit of their members but for some broader good.”
LACBA’s articles of incorporation, while setting forth widespread purposes—including applying “the knowledge and expertise of its members in the field of law to the promotion of the public good”—declare that the purposes include cultivating “social intercourse among it members.” That benefit to members excludes the association from being classed as a public benefit corporation.
(Also, the specified purposes, such as maintaining “the honor and dignity of the profession of the law,” while, if realized, would inure to the benefit of the public, are all concerns primarily of members of the bar and the judiciary.)
W. Cole Durham and Robert Smith point out in Religious Organizations and the Law §9:21:
“Only a mutual benefit nonprofit corporation must have members. That is because the nature of a mutual benefit corporation is to provide service for the benefit of the members. Public benefit corporations generally do not have members. They are governed by a board of directors and are administered by their own officers for the benefit of the public.”
Witkin points out that mutual benefit corporations are, according to the legislative comment of the Assembly Select Committee, “formed principally for the mutual benefit of their members (fraternal organizations, tennis clubs) or for the mutual benefit of those engaging in a particular type of business (trade associations, Chambers of Commerce) or activity (automobile clubs).”
LACBA may, and does, serve public interests, as well as interests of lawyers who are not members. But, as the Attorney General’s Guide for Charities (2020) notes:
“Mutual benefit corporations are organized most often for the benefit of their own members. They may not be formed exclusively for charitable purposes. Examples include private homeowners’ associations, private clubs, and trade and professional associations.”
By virtue of its corporate structure going back to 1953, as well as its nature from the time of its founding in 1878, the Los Angeles County Bar Association, as it has been known since 1960 (it was the “Los Angeles Bar Association” before that) has been, and is, an organization set up to serve and promote the interests of its members—that is, lawyers—not the public in general.
Aside from the controversy—now, I would hope, resolved with finality—over whether LACBA should deplete its coffers by giving way its funds to charity, I cannot think of any instance where the interests of the association have been in conflict with those of the public. (The public surely would have benefitted by the continued diversion of LACBA assets to charitable causes—at least until LACBA went into bankruptcy, as it doubtlessly would have, had the fiscal folly continued.)
LACBA has never been defensive of lawyers who victimize the public—indeed, there was a time, early in the last century, when the Los Angeles Bar Association actually prosecuted disbarments in the Los Angeles Superior Court. It has always stood for promoting integrity among lawyers and been a seeker of justice in the courts.
But I would not want to see the notion Pat articulates—that LACBA’s first allegiance is to the public—prevail, causing a shift of LACBA’s focus from matters of keen interest to the well-being of lawyers (and which also would benefit the public) to matters of primary interest to the public and secondarily to lawyers.
As an example, there are now proposals to wrest matters traditionally entrusted to lawyers, exclusively, and thrust them in the hands of paralegals—who have not attained law degrees or passed the bar exam—or even relegate them to computers that would generate wills and other documents. Lawyers would be losers, and that should be of top-priority concern to LACBA.
The public, which would receive untailored and inevitably shoddy services, would also lose. And the courts would be laden with litigation stemming from incompetent legal guidance.
But if public service is viewed as the main cause of LACBA, this particular cause would predictably be downplayed.
I’m glad that LACBA sent a letter by President Tamila Jensen to the State Bar on April 19 indicating its concern over certain proposals. I would want LACBA to do more, much more. While my opponent calls for instituting a study of the issue, I want to move on it. Should the current proposals or ones of like nature advance, I urge that LACBA become aggressive in supporting the interests of lawyers, which do correspond with those of the public.
We should continue to work with the statewide Conference of California Bar Associations (successor to the State Bar Conference of Delegates), an organization with which I have conversancy, having been involved with it for years and having recently led the LACBA delegation to it. That group has successfully pushed, through a paid lobbyist, for enactment of proposed legislation (including a reform measure as to ballot designations in judicial elections which I proposed, which the conference approved without opposition, and was enacted into law).
Beyond that, 1.) we need to work with other bar associations in our county to achieve our common objectives. Short of hiring our own lobbyist, which would be cost-prohibitive, we should 2.) gain savvy as to how to push for legislation. Two lawyers who have endorsed me are former state Senate Majority Leader Charles Calderon and former Assembly Assistant Speaker Pro Tempore Mike Gatto. I would ask them and others to guide efforts of LACBA, in conjunction with other bar groups, to gain legislative approval of measures benefitting our profession and opposing those inimical to its interests.
Pat says: “The Los Angeles County Bar Association is not a social organization.” Well, yes it is, as one of the articles of incorporation specifies. A purpose is “To cultivate social intercourse among it members.” But in pressing the point that LACBA is a mutual benefit corporation, I do not mean to suggest that socializing is its only or primary purpose, as Pat implies my position to be. A mutual benefit corporation seeks to advance the interests of its members; that’s what LACBA is set up to do, and in my view, that’s what it ought to do.
We should continue on the course we are on: revitalizing LACBA by reserving its funds for purposes that serve the association and its members and seeking to serve its members’ interests. Its members. Not the general public.
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