Georgia Bar Journal
February 2020, Vol. 25, No. 4
Each year for nearly a decade now, the State Bar of Georgia has operated within an annual budget that left us on a trajectory to—all else unchanged—eliminate our unallocated cash within the next few years. This was by design: to subsidize license fees with this?unallocated cash.
Because we are within a few years of eliminating that unallocated cash, we need to take advantage of this opportunity of time to change our course. ?
To make it a bit more concrete, if the Bar were to continue operating within the same annual budget with only a customary $2 license fee increase, a net loss of nearly $800,000 would be incurred during fiscal year 2020-21. This is consistent with the Bar’s budgeting over the past several fiscal years. But if we continued on this trajectory, that loss would grow to approximately $8 million by the 2024-25 Bar year, because we would eliminate our unallocated cash in the process.
To reverse this trajectory, the Bar must operate within a balanced budget beginning with the 2020-21 Bar year. There are a couple different ways we could achieve this.?
The first is to make no changes to Bar programs and increase license fees by the amount necessary to balance our budget. This would require a license fee increase of $22 per member for the 2020-21 Bar year. And that amount would grow by $8 per year for at least the next five years, for a total of $54 in additional license fees per member by the 2024-25 Bar year.?
This is in addition to the $30 in mandatory assessments—a $15 professionalism fee and a $15 Clients’ Security Fund assessment—each Bar member was slated to pay beginning with the 2020-21 Bar year.?
The result under this scenario would have been each active Bar member receiving a license fee notice this spring requiring a total payment of $306 in license fees and assessments. Compare that to the $269 in license fees and assessments each active Bar member was asked to pay this past spring—a year-over-year difference of $37.?
There are Bar members for whom that difference is not significant. There are others, however, for whom it is.?
Regardless, after receiving this information, Bar leadership found it necessary to develop a process that would identify alternative means for reversing the Bar’s financial trajectory. In other words, Bar leadership found it necessary to seek other opportunities for reducing operating expenses in order to reduce or eliminate the need for an increase in Bar license fees.?
Aside from personnel costs, the majority of the Bar’s expenses are connected to the operation of our 24 programs. So, to reduce expenses, Bar leadership had to consider a reduction in the costs associated with the Bar’s programming.?
That consideration required an objective assessment of each program. The Programs Committee, chaired by Martin Valbuena and including a strong representation of Bar officers and members of the Board of Governors, was therefore tasked with conducting an independent objective assessment of each Bar program. The committee did this over the course of three meetings during July and August that totaled 12 hours.?
Using a rating system modified for the State Bar of Georgia by senior Bar staff, the Programs Committee assigned each program a letter rating to indicate that program’s relationship to the Bar’s mission:
Each program was also assigned a numerical rating to indicate how well that program’s expenditure fulfills the program’s purpose:?
Also factored into the assessment were each program’s cost, staff size and whether it is funded by mandatory membership fees/assessments, voluntary contributions or self-funding by user/participant fees.?
After assigning each Bar program a letter and numerical rating, the Programs Committee reported the results to the Executive Committee, which used the assessment to weigh which programs most closely connect with the Bar’s mission and to identify its initial recommendations for the Board of Governors to consider:
Additionally, the Executive Committee recommended to the Chief Justice’s Commission on Professionalism a reduction of the mandatory professionalism fee from $15 to $5; to pass along to members paying license fees online the convenience fee associated with their credit card payments; and to direct each Bar program to identify a plan for reducing its cost by 10 percent.?
Unwilling to pass the first five recommendations to the Board of Governors without first having the opportunity to hear further information directly from the programs proposed to be impacted, the Executive Committee received a presentation from each impacted program on Oct. 2. Following these presentations, the Executive Committee maintained its recommendations to eliminate funding of the BASICS program and iCivics.?
Instead of eliminating the Bar’s funding for the Georgia Resource Center, however, the Executive Committee recommended funding the Georgia Resource Center at its current level, subject to determining the viability of it becoming a Bar Center tenant, with a portion of rent abatement replacing the equivalent of that program’s funding.?
Meanwhile, an agreement was reached to make MLAP a subset of the Bar’s Pro Bono Project, with the Georgia Legal Services Program assuming MLAP’s cost.?
And Bar staff, completing a thoughtful analysis of Bar operations, identified $350,000 of internal cost reductions that, if approved by the Board of Governors as part of the 2020-21 budget, can likely be realized.?
The Board of Governors considered and debated these recommendations at its Fall Meeting in October, in conjunction with receiving additional reports directly from the programs. After accepting the recommendations about the Georgia Resource Center and internal cost reductions, as well as endorsing the agreement about MLAP, the Board scheduled to vote upon the recommendations to eliminate funding of BASICS and iCivics at the Midyear Board of Governors meeting.?
Just before that meeting, however, an agreement was reached to eliminate the need for any action upon the recommendation to eliminate funding of BASICS. That agreement, which the Board of Governors endorsed during the Midyear Meeting, provides that BASICS will apply for funding from the Georgia Bar Foundation, with the Bar supporting that application and allocating up to one fourth of a year of Bar funding ($37,500) for fiscal year 2020-21 to be used by BASICS only if there is a delay in funding from the Bar Foundation, or a refusal or shortfall in that funding.
That left the elimination of the Bar’s funding of the iCivics educational program as the only remaining program reduction recommendation for the Board of Governors, and it was unanimously approved on Jan. 11.
Now at its conclusion, this process permitted the Bar to achieve, through program and other reductions, the trajectory reversal we sought and to avoid nearly all of the license fees increase that would have been required to do so without these reductions. That is not to say that State Bar members should not expect to see any license fees increase this spring. But that increase will be substantially less than what it would have been otherwise.?
Indeed, even with this increase, State Bar of Georgia annual member license fees remain among the lowest in the country. And Bar leadership remains committed to scrutinizing the necessity and effectiveness of our programming to ensure we are getting our money’s worth, so that future budget challenges can similarly be managed without significant license fee increases.?
As always, I value your opinion, which I hope you will share with me at email@example.com or via the #ShapeTheBar page on the Bar’s website and social media outlets. Please share. I’m listening!?
President, State Bar of Georgia
Georgia Bar Journal
December 2019, Vol. 25, No. 3
For more than a year now, the leadership and staff of the State Bar of Georgia have been studying the issue of mandatory professional liability insurance. Specifically, we are considering a requirement—as some other state bars have—for our members who are active in private practice to carry such insurance, or at least to disclose whether they are covered.
As we continue seeking the appropriate balance between protecting both the public and the profession, we are seeking the opinions of Bar members from around the state. There are many questions that have to be asked and answered before proceeding. We are providing a number of ways to collect feedback from Bar members. Before getting to those though, an update on the options being considered.
Our Professional Liability Insurance (PLI) Committee, chaired by Chris Twyman of Rome, is taking a fresh look at the issue of mandatory insurance coverage. After taking into consideration the substantial feedback received from Bar members during the past Bar year, the committee has modified the draft rule that was presented to the Board of Governors last spring, and is also presenting three additional options for discussion.
Option One would require all lawyers in private practice to disclose on their license fee statement whether they are covered by a malpractice insurance policy. The information would be published in each member’s listing in the online Member Directory. Lawyers in private practice who fail to disclose would go out of good standing on Sept. 1 of the Bar year, which is the same date that members who do not pay their license fees cease to be in good standing. To return to good standing, the member would need to make the insurance disclosure to the Membership Department of the Bar. Lawyers who have coverage would not be required to provide information about the insurance company, policy number or policy limits.?
Bar members exempted from disclosure under Option One include inactive members, government lawyers, in-house counsel and arbitrators/mediators. The online Member Directory would also include a disclaimer about the PLI disclosure, similar to the one used by the Colorado Bar: “This information is intended to present a general overview of legal malpractice insurance and is for illustrative purposes only. It is not intended to represent the actual terms and conditions of any particular malpractice policy. Please remember that only the relevant insurance policy can provide the actual terms, coverage, amounts, conditions and exclusions. You should not hesitate to discuss the issue of malpractice coverage with your lawyer.”
Each member with professional liability insurance would be required to maintain documentation showing the name of her or his professional liability insurer, the policy number, term and coverage limits so that it could be produced at the request of the Bar. Finally, members would be required to notify the State Bar within 30 days if their insurance policy lapses, terminates or is no longer in effect for any reason.?
Option Two would include all of the provisions of Option One, with an additional provision encouraging lawyers who are not covered by a PLI policy to take a free voluntary online self‐assessment course provided by the Bar and designed to evaluate the lawyer’s practice for the risk of malpractice. The assessment would be modeled on one used in Colorado. Members could receive CLE credit upon completion of the course. The assessment results would be confidential, and members would receive information about resources to help reduce the risk of a malpractice claim.?
The risk assessment program would generate information tailored to the lawyer’s needs to reduce the risk of a malpractice claim. For example, Colorado’s voluntary risk assessment course includes 10 self-assessment tests, including developing competent practices; communicating in an effective, timely, professional manner; ensuring that confidentiality requirements are met; avoiding conflicts of interest, file management, security and retention; managing the law firm or legal entity and staff appropriately; charging appropriate fees and making appropriate disbursements; ensuring that reliable trust account practices are in use; access to justice and client development; and wellness and inclusivity.?
Option Three would include all of the provisions of Options One and Two, but with two changes: (1) the disclosure of PLI information would not be published on the Bar’s website or otherwise be shared with the Office of the General Counsel, but (2) the self‐assessment course for those lawyers not covered would be mandatory. If the lawyer failed to make the disclosure or, if not covered, failed to either complete the assessment or obtain coverage within one year of the required disclosure date, she or he would go out of good standing on July 1 of the following Bar year. Also, the Bar would be authorized to report self-assessment data publicly in the aggregate.?
Option Four is the proposal that requires lawyers in private practice to be covered by a PLI policy with limits of no less than $100,000 per occurrence and $300,000 in the aggregate. The provision that required coverage to be non‐eroding would now apply to only policies with minimal limits. This option also would require lawyers to obtain or be covered by a PLI policy and to report that to the Bar on the license fee statement. Members who do not comply would go out of good standing as of Sept. 1 of the Bar year.?
Under Option Four, whether a lawyer carries professional liability insurance would be public. Each lawyer’s insurance status would appear in the State Bar Member Director as either “yes,” “no” or “exempt.” Government lawyers, in-house counsel, arbitrators/mediators and inactive Bar members would still be exempt from the mandatory insurance requirement.?
The State Bar will not proceed with any of these options without first ensuring that all Bar members who wish to offer their opinion have been heard and all questions have been asked and answered. So that every Bar member who wishes to do this has a meaningful opportunity to do so, the PLI committee will be hosting town hall style meetings across the state. The first of these was held in October in conjunction with the Fall Board of Governors Meeting in Savannah. Bar members were encouraged to share thoughts and ask questions about the current proposal and other options. Several Bar members took the opportunity to ask questions and express their views in a healthy exchange with committee members that lasted about 1 1/2 hours.
A second town hall was held Nov. 21 in Rome; a third will take place from 3:30 to 5 p.m. on Jan. 10, 2020, at The Georgian Terrace hotel in Atlanta; and a fourth will occur in March in conjunction with the Spring Board of Governors Meeting at Chateau Elan in Braselton. Additional town halls are being scheduled for other parts of the state. Watch your email inboxes and the Bar’s social media channels for dates and times.?
In the meantime, the PLI Committee and I want to hear from you. Email me at firstname.lastname@example.org with your thoughts and opinions. Or, contact any of the PLI committee’s members: Chris Twyman, Rome; Sally Akins and Kimberly Butler, Savannah; Christy Childers, Macon; Stephanie Cooper, Birmingham, Alabama; Hamilton Garner, Moultrie; Brandon Goldberg, College Park; Warren Hinds, Roswell; Hon. Ken Hodges, Albany; Linley Jones, Toronda Silas, Gary Spencer, Shannon Sprinkle and Meredith Sutton, Atlanta; Maddox Kilgore, Marietta; David Lefkowitz, Athens; Daniel O’Connor, Vidalia; Dennis Sanders, Thomson; and David Lipscomb, Lawrenceville.?
This is your opportunity to make the Bar better by helping us solve a complicated but important issue. Seize it. We’re listening!
President, State Bar of Georgia