Board Minutes - February 21, 2014
2013-2014 BOARD OF GOVERNORS MEETING
February 21, 2014
Hotel Sorella (Country Club Plaza), Kansas City
P. John Brady, President
Reuben A. Shelton, President-Elect
Erik A. Bergmanis, Vice-President
Sebrina A. Barrett, Secretary
Bevy A. Beimdiek
Thomas V. Bender
Suzanne B. Bradley
Robert J. Buckley
Nimrod T. Chapel, Jr.
Mark W. Comley
Hon. Charles Curless
Dana Tippin Cutler
Joel R. Elmer
Michael E. Gardner
John W. Grimm
James H. Guest
John R. Gunn
Edward J. Hershewe
Hon. John F. Kintz
Mark H. Levison
Gregg F. Lombardi
Neil F. Maune, Jr.
Lauren Tucker McCubbin
Max E. Mitchell
Nancy R. Mogab
Douglass F. Noland
Joseph P. Rice, III
Brett W. Roubal
Tricia M. Scaglia
Deanna K. Scott
Walter R. Simpson
Joan M. Swartz
Zachary R. Thompson
W. Douglas Thomson
Raymond E. Williams
Eric J. Wulff
Members present by telephone:
Morry S. Cole
Genevieve M. Frank
Patrick B. Starke
Hon. Richard B. Teitelman (by telephone)
(A moment of silence was observed in remembrance of former Missouri Bar Board of Governor Wallace Squibb.)
It was moved and seconded that the minutes of the Board of Governors meeting of November 22, 2013 and the minutes of Executive Committee meetings of November 22, 2013, December 5, 2013, January 10, 2014 and January 31, 2014 be approved. The motion was approved.
A. Finance Report
Mr. Thompson provided an overview of the financial status of The Missouri Bar, which included a year end summary for 2013. He reported that approximately 98 percent of receipts were collected in 2013. At year end, the financial position of the Bar was about one million dollars ahead of the same period for the previous year. He further reported that the reserves continue to build, attributing this increase in revenue to the enrollment fees and careful budgetary spending. He further reported that additional expenses are anticipated related to the new floor constructed at the Bar Center in 2013, noting that these expenses were originally budgeted for last year, but delayed until 2014. He reported that for the current year, the majority of non-CLE related revenue is typically received early in the year and this is reflected in the 2014 revenue balance of approximately $7 million at the end of January and about $10 million as of mid-February.
B. Investment Policy
Mr. Thompson presented a new investment policy for consideration by the Board. He reported that the objectives of the policy are to increase the earned rate of return on Missouri Bar funds, minimize potential risk and exercise good stewardship of the Bar’s finances. He reported that currently all funds are held in savings accounts at Central Bank. He noted that the proposed policy establishes parameters regarding the types of investments allowed. He reported that this portion of the proposed policy is intended to provide guidance for the Finance Committee Chair, Executive Director and Director of Finance and Administration in directing the investments as needed. He noted that the proposed policy does not allow for investment in equities, but proposes authorization to invest in corporate bonds of credit worthy corporations, large bank CDs and federal agency obligations and utilizes a “laddering concept” regarding short and long-term investments to optimize the rate of return. It also includes a cash management strategy ensuring the liquidity of funds to meet the Bar’s financial obligations as needed throughout the year. In addition, Mr. Thomson reported that the Finance Committee would review investment managers annually and consider changing management on a three year cycle. Mr. Thomson reported that the Finance Committee and Executive Committee recommend approval. It was moved and seconded to approve the proposed investment policy. The motion was approved.
Mr. Thomson further noted that the new policy includes the requirement of two signatures on withdrawals. He reported that this has been the policy and practice of the Bar and that a formal policy was approved by the Board of Governors in 1958, but it had not been formally added to the Fiscal Operating Policy and Procedures. It was moved and seconded to add the two-signature requirement to the Fiscal Operating Policy and Procedures. The motion was approved.
Mr. Thomson further reported that Central Bank was selected as the investment manager. He noted that three banks were considered – UMB, Commerce and Central Bank. He reported that the anticipated rate of return and investment fees were about the same for all three banks. He noted that the established relationship that already exists with Central Bank was an important factor in the decision. He also reported that a resolution is needed to allow Sebrina Barrett and Kent Hopper to sign off on investments with Central Bank. It was moved and seconded that a resolution be approved as recommended. The resolution was approved.
Finally, Mr. Thomson reported that the Finance Committee had approved the sale of the equities currently held by The Missouri Bar.
A. February Appointments
(1) Lawyer to Lawyer Dispute Resolution Committee
Mr. Brady reported that the terms of all existing members of this committee were scheduled to expire at the same time, so action was taken to provide for staggered terms. To accomplish this, Judge Gary Lynch and Ms. Janet Thompson voluntarily
resigned from this committee to allow two new members to be appointed to four-year terms. A motion was made and seconded to appoint Judge James L. Eiffert and Ron Mitchell to fill the two vacancies. The motion was approved.
(2) Complaint Resolution Committee
Mr. Brady reported that the first four-year terms of volunteer facilitators for the Complaint Resolution Program are expiring, noting that all are eligible for reappointment. It was moved and seconded to reappoint all of the volunteer facilitators. The motion was approved.
(3) JPE Appointment
Mr. Brady requested a motion to fill a lawyer vacancy that exists on the 16th Circuit Judicial Performance Committee. It was moved and seconded to appoint Phyllis Norman to fill the vacancy. The motion was approved.
B. May Appointments
(1) Fee Dispute Resolution Committee
Mr. Brady reported that the four-year terms of Melinda Grace-Beasley and Donna Thomas will be expiring in May and both are eligible for reappointment, noting that action will be taken at the spring meeting of the Board of Governors.
A. Criminal Code Legislation
Ms. Catherine Barrie reported that SB 491, the legislation to revise Missouri’s Criminal Code, was voted out of the Senate Judiciary Committee, but the bill sponsors have delayed bringing the bill to the floor while efforts are under way to gain more support for the measure. She reported that the current plan is to bring the legislation to the floor on March 3 and debate the measure chapter by chapter over a two-week period.
Ms. Barrie went on to report that the chair of the Senate Judiciary Committee is asking supporters of the legislation to contact senators and encourage them to support the measure. She noted that prosecutors across the state are expected to write op-ed pieces in support of the measure. Mr. Brady encouraged members of the Board of Governors to contact senators to assist in an effort to garner support and to also consider writing op-ed pieces for newspapers in their local communities. Ms. Barrie circulated copies of a message map outlining key points related to the legislation along with a Missouri Senate contact list to be utilized as a resource by members of the board.
Ms. Barrie further reported that the House version of the Criminal Code legislation, House Bill 1371, had been voted out of committee and must now be approved by the Rules Committee before it can be placed on the calendar. Ms. Barrie noted that there are significant differences between the House and Senate versions of the legislation and that the Senate version was truer to the bar-drafted proposal. It was noted that the bar-drafted proposal carefully balanced provisions that would increase incarceration and those that would decrease incarceration. The Board was encouraged to urge the legislature to support the proposal as recommended by the bar’s Criminal Code Revision Subcommittee. Additional discussion focused on lobbying restrictions applicable to prosecutors and defenders.
B. Bar-Drafted Probate Legislation
Ms. Barrie reported that four bills drafted by the Probate and Trust Committee (HB 1135, HB 1427, HB 1428 and HB 1429) were heard in committee and voted out together as a substitute bill. Ms. Barrie cautioned that the inclusion of the four individual bills in a single substitute bill may prove problematic because of constitutional issues related to one of the measures that deals with mandatory arbitration related to trusts. The four bar-drafted bills include a Safe Harbor for Challenge of a “No Contest” or “in terrorem” Clause; Statutory Language Abrogating the “Fiduciary Exception” to the Attorney-Client Privilege; Enforcement Mandatory ADR Provisions in Trusts; and an Amendment to Provisions of Laws Relating to Qualified Spousal Trusts (QST).
C. Senate Bill 617 Establishing Right of Insurers to Present Reservation of Rights to Insured
Mr. Brady provided a brief overview of action taken by the Executive Committee related to SB 617, a measure that would repeal sections 379.200 and 537.065, RSMo and enact in lieu thereof five new sections relating to the regulation of insurance, which include establishing rights of an insurer to present reservations of rights to insured without breaching insurance contracts, consequences of assignment by an insured of its rights under the policy, limits on the insured’s liability due to breach of its duty to defend and rights of an insured to intervene in related lawsuits. Mr. Brady noted that the Executive Committee found the measure in scope because of its potential to have a broad and adverse impact on consumers in insurance contracts and the administration of justice. He reported that the Executive Committee now recommends drafting a more detailed, balanced letter to the sponsor, utilizing the information received in comments from the members of the Bar and clearly explaining the potential legal and public policy implications this measure could have for citizens of Missouri, if enacted into law.
It was moved and seconded that SB 617 was within the scope of The Missouri Bar. Following extensive debate with positions offered for and against finding the bill in scope, it was moved and seconded to call the question, cutting off debate. The motion to call the question was approved by two-thirds of the members Board of Governors present and voting. A subsequent motion to find SB 617 in scope was approved by two-thirds of the members of the Board of Governors present and voting.
Following a finding on scope, it was moved and seconded to withdraw the previous position taken by the Executive Committee in opposition to the measure, instead take no position on the bill citing the divisiveness of the measure within the bar, to share comments received to date and solicit additional comments to be shared with the legislature. The motion was approved by two-thirds of the members of the Board of Governors present and voting.
5. Committee Reports:
A. Relevance Committee
Mr. Reuben Shelton reported on the activities of committees established to look into The Missouri Bar’s relevance to members of the bar and to the public with the objective of improving relevance in both areas. He reported that Mr. Brady appointed Mr. Bergmanis to lead the committee addressing issues of relevance related to members, and he (Mr. Shelton) was appointed to lead the committee addressing issues of relevance to the public.
Mr. Bergmanis reported that his committee had an excellent meeting on January 30 at the Bar Center and came up with three major projects.
“How to Videos” for Lawyers, Use of Supreme Court Rules, Past CLE Programs
Mr. Bergmanis reported that Mr. Ray Williams and Ms. Deanna Scott will take the lead in developing additional brief “how to” videos focusing on different practice areas with the objective of helping lawyers shorten the learning curve related to handling cases in these areas. These videos will be available to members free of charge on the members section of The Missouri Bar website. He noted that videos will be targeted for completion in time for the Solo and Small Firm Conference in June or, at the latest, by the end of the bar year in September. He further reported that the committee is considering identifying 10 Missouri Supreme Court Rules that are used on a regular basis by lawyers and develop “how to” instructions on their use, again making this resource available free on the member section of the website. The committee is also considering the feasibility of making videos of CLE programs presented by top practitioners available in this area of the website, either free or for a fee.
Communicate Bar’s Benefits/Resources, News and Activities to Members
The committee will identify ways to better communicate what the Bar does for members in terms of benefits and resources as well as identify strategies to better communicate news and activities, so members are better informed and more likely to participate in activities and become more involved with the Bar.
Relationship Building with Large Law Firms and Corporate Counsel
Mr. Bergmanis reported that the committee will also be looking at ways to make the Bar more relevant to large firms and corporate counsel, noting that active engagement and involvement with these segments has been diminishing and raising questions about the perceived value of The Missouri Bar within these segments of the profession.
Mr. Shelton reported that the committee identified four projects to address The Missouri Bar’s relevance to the public. The projects are:
(1) Launch a new website focusing on legal topics tailored to the public.
(2) Provide civics education materials on the public website.
(3) Try to expand the very successful Mini Law School program statewide.
(4) Conduct a survey about the public resources provided by the Bar.
(5) Involve members of the public in The Missouri Bar through an advisory panel, creating citizen participation, input and involvement with lawyers.
Mr. Shelton noted that the committees will be meeting again soon to continue the development of all of these initiatives.
B. Committee on Committees
Ms. Dana Tippin Cutler reported that the Committee on Committees met as part of the strategic vision process to address issues of relevance related to the committee structure and system. She explained that the objective of the Committee on Committees includes developing a structure that will better reflect the current practice of law, so members can better and more easily identify committees that pertain to their practice and become more involved and so committee activities can better serve the needs of the members. She noted that these changes are also expected to impact the dynamics and focus of the Spring and Fall Committee Meetings as well as the Annual Meeting educational programming. She explained that in many cases the current committee structure as well as committee names and scopes are outdated and do not reflect how law is practiced today, noting the negative impact the outdated structure can have on the perception of relevance among members of the Bar.
She reported that the Committee on Committees researched and reviewed practice trends among firms both large and small within the legal profession as well as committee structures at other bar associations. She further reported that the committee identified eight current Missouri Bar committees to review – Business, Eminent Domain, Insurance, Commercial Law, Paralegals, Patent, Trademark and Copyright, Property and Transportation. She explained that members of the Committee on Committees were assigned the task of surveying the committee chairs for these eight committees, so their input could be part of the review process.
She directed members of the Board of Governors in several small group sessions giving them an opportunity to discuss and share expertise related to the objectives and goals of the Committee on Committees. Members of the Committee on Committees led individual group discussions and were tasked with synopsizing the results for use in developing an updated structure that will ultimately come before the Board for consideration at a future date.
C. Model Program for Law Firms Addressing Impairment Issues
Mr. Brady briefly described a model policy for law firms addressing impairment issues. He reported that the Executive Committee recommends that the Board adopt this model policy as a resource for law firms to consider using when dealing with impairment issues involving lawyers and other employees. Mr. Brady noted that his recent article in the Journal of The Missouri Bar dealt with this issue and cited statistics indicating that members of the legal profession suffer from impairment issues including depression, substance abuse and stress related issues at a higher rate than the general public. He noted that efforts will be made to inform the members of the bar about this model policy through The Missouri Bar’s electronic and printed publications and the policy will be posted on the website. It was moved and seconded to adopt the model policy as a resource to lawyers and law firms in Missouri. The motion was approved.
D. Client Security Fund Committee
Mr. Chris Janku reported that the Client Security Fund Committee met on January 30 to discuss deferred claims held over from 2013 and newly received claims for $2,500 or less as authorized by Article 2.10 of the Regulations and Rules of Procedure of the Client Security Fund Committee. Mr. Janku reported that the committee recommends the payment of two deferred claims held over from 2013 for a total of $6,110. He reported the Committee deferred action on the remaining claims held over from 2013 and requests authority from the Board of Governors to submit recommendations on those claims prior to the November meeting of the Board of Governors. He further reported that the committee recommends payment of three newly received claims for a total of $5,250 as well as the denial of two claims. He reported that the committee requests authorization to proceed with payment of the Picotte v. Edwin Olson claim, noting that the Board of Governors had approved payment of $29,800 on that claim in November 2013 and he explained that payment was deferred until the client exhausted other remedies as required by the Committee’s Rules and Regulations. The committee has subsequently reviewed information from the claimant’s attorney establishing that other remedies had been exhausted and reaffirmed the previous recommendation for payment. Mr. Janku reported that the committee is also requesting authorization to issue a check for the payment authorized for Williams v. David Stokely to Andre Williams’ mother who is his Attorney-in-Fact, explaining that Mr. Williams is unable to cash the check because he is incarcerated. It was moved and seconded to approve the recommendations from the committee. The motion was approved.
6. Officers’ Reports:
(1) Committee Activities, Legislative Dinners, ABA Resolution and Annual Meeting
Mr. Brady announced the appointment of a new board committee to review the contract with The Bar Plan, noting that The Missouri Bar has contracted with The Bar Plan for 20 years and it has been sometime since the contract has been reviewed. He reported that the committee will identify any changes needed in regards to terms of the contract and report back to the Executive Committee with any recommendations in May.
Mr. Brady also reported that the Executive Committee has approved establishing a committee to review the funding mechanism for the staff retirement plan, noting that the current funding vehicle has a rate of return of about 2 percent. He noted the Board approved a soft freeze for the plan last fall and reported that the Executive Committee has voted to seek a second opinion to explore options available to improve the funding of the plan. Mr. Brady reported that Mr. Brian Johnston has been selected to provide the expertise needed for this review. Mr. Brady noted that Mr. Johnston is a lawyer with the Polsinelli law firm and, as a result, he (Mr. Brady) abstained from the vote related to the selection and authorization to contract for the services of Mr. Johnston.
Mr. Brady reported that a legislative dinner is planned in St. Louis on March 6 at Al’s Restaurant. He encouraged members of the Board to attend, commenting on the success and value of efforts by members of the Board to establish relationships with members of the Missouri Legislature. He further reported that another legislative dinner is scheduled for March 27 in Springfield, noting that this dinner will be held at the Flame Restaurant. He encouraged members of the Board to also attend Legislative Day activities on April 1 and 2 in Jefferson City.
Mr. Brady reported that for the past several years, board members have funded a full scholarship for the Solo and Small Firm Conference in memory of Carol Chazen Friedman and he asked members of the Board who would like to support that scholarship this year to send contributions to Sebrina Barrett.
Mr. Brady reported that the ABA has requested that The Missouri Bar approve a resolution to be sent to Missouri’s delegation to Congress opposing a change in the tax law that would require law firms to pay taxes based on an accrual method of accounting, rather than a cash basis, citing the significant burden such a change would place on law firms and small businesses. Mr. Brady indicated that the resolution and position would be communicated to the delegation through a letter from him. He reported that the Executive Committee approved this action.
Mr. Brady reported that the Annual Meeting is scheduled for September 10 -12 in Kansas City. He noted that the Planning Committee is in place and has met to develop the CLE programming, which includes some very timely, relevant ideas for the plenary sessions and track programming. He noted that the Best of Missouri will be held at the Kauffman Center for the Performing Arts and that this event will fall on the anniversary of 9/11. He encouraged everyone to add the dates to their calendars and attend.
(2) Conflict of Interest Policies
Mr. Brady thanked the members of the committee charged with drafting a conflicts of interest policy, noting the need for such a policy. He reported that the Executive Committee approved the draft policy but he is aware of questions related to its application. He reported that action by the Board of Governors is not needed at this meeting, but could be taken at the meeting in May. Mr. J.B. Lasater and other members of the committee fielded questions related to specific applications of the policy, including how it applies to lobbying and concerns about the breadth of the policy, it goals and objectives. Mr. Lasater asked board members to thoughtfully review the policy, consider different situations and encouraged questions and comments in the interim period between now and the May meeting. Mr. Brady reported that the policy will be voted on in May.
Mr. Reuben Shelton thanked everyone for the kind expressions of sympathy and support when his mother passed away recently. He also acknowledged the recent personal losses experienced by a number of members of the Board of Governors with a moment of reflection. Mr. Shelton also reported that he had the honor of attending the funeral of former board member Wallace Squibb.
Mr. Shelton further outlined his activities on behalf of the Bar leadership. He reported that he attended a Senate Judiciary Committee dinner. He also recently attended the ABA Mid-Year Meeting. He noted that two members of The Missouri Bar received national honors at the meeting with 94-year-old Frankie Muse Freeman, a legendary civil rights attorney, receiving the ABA’s Spirit of Excellence Award and Jason Sengheiser honored by the ABA Young Lawyers Division with the National Outstanding Young Lawyer Award. He reported that The Missouri Bar held a reception in honor of the Missouri award recipients and he thanked The Missouri Bar and President Jack Brady on behalf of Ms. Freeman, who was very touched by this gesture.
Mr. Erik Bergmanis reported that he has attended meetings in Oklahoma and the ABA meeting in Chicago. He noted the value of meeting leaders from bar associations throughout the country and having the opportunity to exchange information and insights related to challenges facing the profession and bar associations. He further reported that he attended a legislative dinner in Kansas City and had an opportunity to testify at the Capitol. He noted that he will be attending the Bar Leaders Institute training in Chicago. He also encouraged members of the Board of Governors to attend the Legislative Day activities on April 1 and 2 in Jefferson City, briefly outlining the schedule and structure of the event, which begins with dinner and training presented by Woody Cozad to prepare participants who will be assigned to teams and visit legislators making important contacts and offering assistance during meetings the following day.
Executive Director’s Report
Ms. Sebrina Barrett reported on staff changes at the Bar, noting that Dan Lehman retired at the end of 2013. She noted that this presents an opportunity to assess the needs and future of the print shop. She reported that a committee has been established for this review. She acknowledged Kent Hopper for chairing the committee and Gary Toohey who has assumed the duties of managing the print shop after Mr. Lehman’s retirement. She further reported that a committee is reviewing document retention needs with the goal of establishing a document retention policy expected to utilize electronic storage for the majority of documents. She acknowledged Chris Janku for chairing this committee. Ms. Barrett reported that she, Kent Hopper and Jeff Markway are working on a major revision to the employee handbook.
She further reported on activities of the Joint Commission on Women in the Profession. She reported that she attended a program, Law Firm 101, developed by the Commission and presented at law schools throughout the state, noting that the program gives law students practical advice related to the profession and working in a law firm. She reported that the Commission has programs planned for April and August and they are launching a website, which will have resources and information content that includes content publicizing and recognizing the contributions of women lawyers who paved the way for current women leaders in the profession. Ms. Barrett acknowledged the work of Farrah Fite and Cindy Neagle for providing staff expertise to the Commission.
7. Executive Session:
The Board entered executive session to discuss litigation and personnel issues.
There being no further business, the meeting was adjourned.
Sebrina A. Barrett, Secretary