Doing More with Less: Bars and Their Members Deal with the Economy

Volume 33 Number 2

By

A funny thing started happening this year at the State Bar of Arizona as gasoline prices zoomed toward $4 a gal-lon, says Jenn Moreira, the bar’s director of web services.

“We’ve been seeing an increase in members using Webcasts, Web chats, and other (online features),” she says. “Arizona is a big state . . . and it takes a lot of effort for some of our members (to travel). A lot of our commit-tees are really getting into using the Internet because of the cost of gas.”

The Arizona bar, like many other bars, is taking advantage of technology to not only provide better services to members, but also to cut costs in leaner economic times. It is just one of many ways that bars are reacting to the often grim news that has prompted widespread mortgage foreclosures (see sidebar on page 8), higher commodity prices, and job cuts and freezes at many law firms.

While the latest economic downturn might not be as severe as those in the past, it is still enough to give bar leaders—like their counterparts at other nonprofit associations—a bit of pause and concern as they draft budgets and develop programs and initiatives for the next year and beyond. It is also prompting bars to reconsider how they deliver services and what members are looking for in hard times.

 

Economic downturn hits bars and members alike

Law publications, blogs, and surveys continue to spread news about layoffs, delayed hiring, and less law school recruiting. The trend has been in place since late 2007, when record numbers of mortgage foreclosures and an ensuing credit crunch, a stock market fall, and skyrocketing energy costs started gripping the U.S. economy. De-mand for legal services is at its lowest point since 2001, according to industry consultant Dan DiPietro.

“We know that firms are being tighter. (Firms and solos) understand that in these tight economic times, membership in extra organizations might not be of value,” says Michelle Behnke, past president of the State Bar of Wisconsin and current chair of the ABA Standing Committee on Bar Services. “You can’t ignore the signs.”

Bolstering the benefits of bar membership is prominently on the radar at the ABA, she says, as well as at state and local bars. “(As associations), we need to help lawyers succeed in their practices,” she adds.

For bars and other nonprofits, the weakened economy has not only affected membership, but it has also led to de-creased contributions of funding and volunteer time, according to Tim Delaney, a lawyer and the president and CEO of the National Council of Nonprofit Associations. The combination of less money, fewer volunteers, and increased de-mand for the services that nonprofits provide exacerbates an already bad situation.

“Everyone still expects the nonprofits to be there. We can find ways to do more with less—but there are limits,” he says. “More nonprofits are closing. It’s forcing organizations to look closely at collaborating more or merging.”

Not all nonprofits are struggling, according to John H. Graham IV, president and CEO of the American Society of Association Executives (ASAE). Those connected to strong job fields, such as health care, continue to thrive. He says the recent economic challenges, combined with changes in demographics and technological advances, have prompted greater efforts by nonprofits to improve value for members.

“It’s causing associations to look at how to package things so members have a unique experience,” he says. “People will pay for what they perceive to be valuable.”

 

Leaner and meaner?

That is the kind of discussion that is occurring in Hawaii, a state dependent on tourism that has been hit hard by the soft economy. Two airline bankruptcies and cutbacks by cruise ship operators have been especially hard on lawyers, says Lyn Flanigan, executive director of the Hawaii State Bar Association (HSBA).

“We have a large number of solo practitioners who represent a lot of these small businesses that worked with the airlines (and cruise lines),” she says. “We try to encourage pro bono through our Access to Justice program. That’s difficult, asking people to give up any billable hours they get.”

The bar has also been affected by increasing numbers of members who have left the state for the U.S. mainland over the last two decades. Many have maintained dual memberships in HSBA and their new states for years, only to relinquish their Hawaii membership in the last year or two. The bar is also facing the likelihood of implementing mandatory CLE for the first time—an increased burden for bar members as well as the staff.

“We don’t own our building. We’re in a rented area, our rent is going up, and our assessments are going up,” she says. “We’ve got a bare-bones staff. We’ve added one position for someone to try and bring in more revenue, and we’re still trying to fill that position.”

While the bar has greatly curtailed travel costs—particularly among the Hawaiian Islands—more will likely need to be done to address operational expenses, according to Flanigan. The bar is preparing its first major strategic future planning summit since the bar was unified in 1990, she adds, and the future of bar services and their related costs will likely be a big part of the discussions.

Faced with lower publication advertising revenue and higher postage and travel costs, the State Bar of New Mexico has also had to work hard to control costs, according to Christine Morganti, director of membership and communications. While no jobs have been lost at the bar, she says, two positions have been eliminated due to attrition and other positions are be-ing analyzed for possible consolidation.

The bar has also turned to credit cards as a way to lower travel costs by using rewards-based cards that award points, frequent flyer miles, or both for purchases.

“We pay registration fees, hotels, and flights by credit card for board members, YLD board members, and any staff who are attending ABA meetings, rather than reimbursing attendees by check afterwards,” in order to accu-mulate points for future use, she says. “Sections, divisions, and committees that hold social events ask us to pay the facilities and caterers of those events ahead of time by credit card.”

Even in states such as North Carolina, where the economy has been prosperous and the latest downturn not as severe as elsewhere, there is concern among bars.

“We are very cautious as we read the stories about the profession being squeezed,” says Allan Head, executive director of the 13,500-member North Carolina Bar Association. “We are particularly concerned about how the economy affects contributions (to bar causes), the volunteer time members have, our membership, and our CLE registration. CLE revenue makes up 50 percent of our budget.”

Although no positions have been lost or programs cut, he says, the bar is being conservative in preparing to budget its expenses and revenues in the months ahead. The bar is also mindful of the impact of its meetings on members and the environment, Head says, adding that a special memo is now attached to bar meeting notices that encourages members to carpool. “We’ve never done anything like that,” he says.

 

Using technology

to control costs

While bars are using a variety of ways to control costs for themselves and their members, one developing tool that

is becoming more common, leaders

say, is technology. At bars and other

organizations, some of the biggest

savings and most member interest are generated by videoconferencing, teleconferencing, and other Web-enabled

meeting technologies.

“Almost all of our association members are taking a hard look at their face-to-face meetings,” says ASAE’s Gra-ham. “The half-day and single-day meetings are going by the wayside.”

As proof, Graham points to the ASAE itself. In just the last few years, the number of online meetings at the associa-tion has jumped from about 10 percent of all meetings to 40 percent.

In Arizona, lunchtime CLE Webcasts and use of the bar’s Web site for videoconferencing are increasingly popular, Moreira

says. Software and implementation costs have also been decreasing while technology has improved, making it a cost-saving benefit for the bar and its members.

Like Arizona, New Mexico is a geographically large state that makes long-distance conferencing more appealing to many members. That’s why the bar is looking to upgrade its videoconferencing options in 2009, Morganti says. The bar is also look-ing at putting most of its regular Bar Bulletin online and generating some lost revenue by putting advertising online.

“It is a constant challenge to balance the need for advertising dollars with the professional image our state bar would like to maintain,” she says

The North Carolina bar is taking advantage of its location 10 minutes from the tech-laden Research Triangle Park to also look at implementing telepresence technology—an enhanced form of videoconferencing that gives viewers the feeling of being in the same room as the people they are interacting with.

“We’ve always encouraged face-to-face meetings, but now we’re more accepting of members looking to partici-pate in different ways,” Head says.

But it’s not just cost savings and product breakthroughs that make it a good time to invest in technology, execu-tives say. Changing demographics provide a big push toward high-tech.

“The Y Generation lawyers really love this,” Arizona’s Moreira says of her members. “They were born with BlackBerries in their hands. They go to town with this.”

More and more, adds Graham, providing the latest technology for members is not a perk, but rather a way to do business that helps members, which in turn helps the association.

“Technology is a tool that enables people to do a lot of different things,” he says. “As younger people enter their pro-fessions, associations need to recognize these changes. You really need to continue to make your technology invest-ments if you want to stay competitive.”

Even older members recognize this, Morganti adds. Over the last five years, she has converted most corre-spondence with sections, divisions and committees to e-mail. Out of 20 practice sections, only one board member refuses to use e-mail, she says.

Despite the many cost and business advantages that technology brings to bar associations, addressing economic downturns and budget shortfalls will likely continue requiring a multifaceted approach. Staffing, programming, revenue streams, and services, along with other aspects of running a bar association will continue to be looked at when trimming costs, observers and leaders say.

“Everybody is struggling for money,” Flanigan says. “Almost everything we do takes this into account.” BL

 

BARS RESPOND TO MORTGAGE FORECLOSURE CRISIS

—Robert J. Derocher

 

 

From pro bono representation to educational programs, from calls

to lenders to call-in radio shows, the legal community continues to reach out to the public. It’s happening in ways that are not only helping many people cope with a financial crisis, but also in ways that are making attorneys and bars feel good about the service they’re providing, while boosting the image of the profession.

“A home is one of the single biggest purchases a person can make, and when that purchase is in jeopardy, it’s great for the lawyers to become involved and help people,” says Allan Head, executive director of the North Caro-lina Bar Association (NCBA).

The bar’s real property and bankruptcy section leaders joined forces with the state bank commissioner and Le-gal Aid of North Carolina earlier this year in a special summit to determine the best ways for lawyers to help low-income North Carolinians facing foreclosure, Head says.

Those meetings led to special discounted CLE programs for bar members, enabling them to work with people referred by Legal Aid. In many cases, lawyers helped people make the necessary calls to lenders to renegotiate loan terms and take other steps to avoid foreclosure. Volunteer bar members have also worked to establish a sys-tem to spot and avoid future foreclosure cases.

The popularity of the program has led the bar to make plans for the North Carolina Foreclosure Protection Cen-ter, Head says. A team of volunteer bar members would get involved in public education, staff a call-in help desk, and provide pro bono legal assistance.

 

Bar associations on

the front lines

In Florida, the state with the second highest number of foreclosures in the first quarter of 2008, the Florida Bar as-sociation and foundation helped launch Florida Attorneys Saving Homes (FLASH). Started this summer, FLASH attracted more than 600 bar members as volunteers to help troubled homeowners avoid foreclosure, ac-cording to Sandra Diamond, chair of the bar’s real property probate and trust section, where most of the volunteers are members.

“A lot of the stories were heartbreaking. People lost their jobs or they had a family member get sick. Many of them were families with small children,” Diamond says. “There was a statewide crisis, and we were able to step in and help.”

The work in Florida and North Carolina highlights the many programs and services being offered through bars throughout the country. Other such efforts include:

 

The Young Lawyers Section of the Chicago Bar Association has joined with the Chicago Bar Foundation and Illi-nois Legal Aid Online to produce 5 free Web-accessed videos to help the public learn about how to avoid fore-closure and what to do if faced with the problem.

The Philadelphia Bar Association, in conjunction with several other legal organizations, is participating in the Philadelphia Foreclosure Rescue Effort (FREE), which provides pro bono assistance to low-income families fac-ing foreclosure.

In New Mexico, more than a dozen attorneys met with nearly 300 people in monthly pro bono workshops to dis-cuss foreclosure, bankruptcy, and related issues.

Staff from the State Bar of California helped the California Bar Foundation and the Public Interest Clearing-house establish a Web site for attorneys and the public (www.foreclosureinfoca.org). The bar is also working with sev-eral social service agencies in the counties hit hardest by foreclosure threat, offering

the agencies the services of

volunteer attorneys who can help with loan renegotiations

on behalf of borrowers, contract review, and identification of predatory lending.

Smaller bars are also offering their assistance. The 900-member Hampden County Bar Association in Spring-field, Massachusetts, established a foreclosure task force, which has offered free public clinics while involving several members in pro bono legal assistance.

At the San Diego County Bar Association (SDBA), more than 60 volunteer attorneys were trained to provide pro bono legal services through a monthly foreclosure prevention clinic that began last spring, according to Heather Rosing, SDBA president. “It’s been a good example of how lawyers want to give back to the commu-nity,” she says.

Education—both for bar members and the public—is also key to the foreclosure response. “There are many more CLEs on bankruptcy and foreclosure to help lawyers prepare for the struggles ahead,” says Mi-chelle Behnke, a past president of the State Bar of Wisconsin. Many bars are offering such CLE at a discount to nonex-perts in real estate and foreclosure in order to attract more volunteer members.

 

Stopping financial problems before they start

The Boston Bar Association, like other bars, is focusing its education efforts on the public. With funding from the Boston Bar Foundation, the bar established the M. Ellen Carpenter Financial Literacy Program for high school stu-dents. Named for the former bar president and bankruptcy attorney who died last year, the program was launched by her in 2004. It has really taken off as a result of the foreclosure crisis, says Paul Dullea, the bar’s director of community affairs.

“It’s a way of giving kids an early grounding of what they need to do to stay out of credit trouble,” he says. “I’ve spoken to kids years later, and they found it very interesting, and it helped them.”

NCBA’s Head and other leaders say that while the focus of their programs has been to help people in need, it is also having a collateral effect on the bars. “It’s been a wonderful opportunity for lawyers to step up to the plate and help people, as well as improve the

image of the profession.”

In the meantime, many bars

are still starting, expanding, and fine-tuning their programs as

surveys and news stories show

that more foreclosure and bankruptcy trouble lies ahead for many Americans.

“It’s been overwhelming,” says the Florida bar’s Diamond, “but I hope we’ve been able to make a difference.”

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