Tuesday, July 29, 2003
State Bar Votes to Cut 18 Staff Positions to Balance Budget
By DAVID WATSON, Staff Writer
The State Bar Board of Governors has voted 17-1 to adopt a $104 million budget for 2004.
The vote, at a Saturday meeting in Los Angeles, endorsed cuts and funds transfers, including the elimination of 18 staff positions, to wipe out a projected general fund operating deficit of $4.6 million. Instead, if the changes are implemented as planned, the general fund is expected to show a surplus of at least $7,700.
The general fund accounts for about half of the bar’s revenue and expenditures. The remainder consists of 20 restricted funds which support specialized projects and activities.
Incoming president Anthony P. Capozzi, who will take office at the State Bar’s annual meeting in September, said after the vote that he expects the actual general fund surplus to exceed the projection. Capozzi, who chairs the board’s Planning, Program Development and Budget Committee, said new restrictions on scaling of membership fees for low-income lawyers will probably generate substantially more than the $1 million estimate used in projecting only a small surplus.
Under the new scaling rules, included in this year’s dues bill, only lawyers who earn less than $30,000 from all sources will qualify for a waiver of half of the $390 annual bar dues. The qualifying income level is currently $25,000 and only income from the practice of law is considered.
Lawyers who earn less than $40,000 from the practice of law will continue to qualify for can qualify for a waiver of one-quarter of their dues, but law practice will be defined to include arbitration, mediation, referee or other dispute resolution services.
The lone dissenter in the budget vote was Los Angeles County member Matthew E. Cavanaugh of Long Beach, a self-styled outsider who criticized the bar’s organization as bureaucratic and “top-heavy.” Cavanaugh declared:
“Bureaucracy is a beast and will just keep growing as long as you feed it.”
His comments drew sharp rebukes from outgoing President James E. Herman of Santa Barbara, Capozzi, Chief Executive Officer Judy Johnson and Los Angeles County member John K. Van de Kamp.
Van de Kamp, a former California attorney general, said bureaucracy was a “loaded term” and using it was not helpful to the board in exercising its oversight responsibilities.
Los Angeles County member Steven J. Ipsen, a Los Angeles deputy district attorney who was endorsed by Cavanaugh when he ran for the board, said he agreed with Cavanaugh that it was part of the board’s function to “keep staff in check.” But neither Ipsen nor any other board member joined Cavanaugh in voting against the budget resolution.
Cavanaugh did not raise objections to—and the board did not discuss—any of the specific steps adopted to eliminate the projected general fund deficit. Those steps include:
•Transferring $1.5 million in insurance rebates from the Legal Education and Development Fund to the Lawyer Assistance Program, allowing the $10 portion of dues allocated to fund that program to be used for the General Fund.
•Eliminating 18 as yet unspecified staff positions for a savings of $1.3 million.
•The new scaling rules, expected to generate increased revenue of $1 million or more.
•Reducing other miscellaneous costs by $445,000.
Capozzi told the METNEWS his committee also looked into the possibility of raising dues for inactive lawyers, currently $50. He said plans to exploit that avenue to obtain increased revenue had to be abandoned in the face of legislative opposition.
The incoming president said he believes the inactive dues are too low and may raise the issue again during his term.
The budget resolution also seeks to reduce the bar’s Public Protection Reserve Fund, since legislative opposition to an increase in the inactive fee is seen as partly due a perception that fund’s projected $7.1 million balance is too high. Some legislators have suggested that an appropriate reserve for a public sector agency is about three to five percent of total operating expenses, while the bar’s reserve is closer to seven percent.
The resolution earmarks $500,000 from the reserve fund—in addition to $2 million previously earmarked-for seismic upgrades at the bar’s San Francisco headquarters, and transfers $2 million to the bar’s Technology Improvement Fund to use for replacing computers and printers.
In other action, the board voted 13-4, with one abstention, to forward comments formulated by its Regulation, Admission and Discipline Oversight Committee on the practice of law in California by out-of-state attorneys to the Supreme Court. The high court had requested comments on its proposed rules, which would allow in-house counsel and public interest lawyers residing in California who are not admitted to the State Bar of California to practice law in California through a registration system.
The proposed rules would also allow non-admitted lawyers who are in the state temporarily for litigation and nonlitigation matters to practice on a temporary and occasional basis under specified conditions.
The bar’s response urges that all four categories of out-of-state lawyers be required to register and to contribute to the bar’s Client Security Fund.
The committee report originally recommended that the board “reject the proposal philosophically,” but this language was dropped after it was questioned by Van de Kamp. In the ensuing discussion it emerged that the “philosophical” opposition came partly from members who thought the proposed rules were too permissive and partly from those who thought they would burden out-of-state lawyers unnecessarily.
Voting against the resolution were James O. Heiting of Riverside, Carl A. Lindstrom of San Jose, and public members Dorothy M. Tucker and Chantel L. Walker. Los Angeles County member David M. Marcus abstained.
Copyright 2003, Metropolitan News Company