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Vol. 38, No. 5

Deunification challenge in Michigan, big changes in Nebraska: Part of a trend?

by Dan Kittay

Efforts to deunify mandatory bar associations aren’t new; in many of the 32 states where bar membership is required in order to practice law, bills that attempt to make membership voluntary routinely get introduced in state legislatures. They rarely make it out of committee, and those that do often die at a later time, according to William E. Raftery, knowledge and information services analyst for the National Center for State Courts.

What’s different now is that in one state—Nebraska—the state’s Supreme Court has removed attorney regulation and discipline functions from the state bar association’s oversight, leaving other member services such as legal research and affinity programs to be covered by voluntary dues payments.

And in Michigan, the state’s Supreme Court is studying whether to enact a similar separation of required administrative functions covered by an assessment on lawyers, and other traditional member benefits falling under a voluntary payment.

It’s important to distinguish that the Nebraska situation and the challenge in Michigan are actions taken by the judicial branch, Raftery says. While there may be legislative activity that leads to state Supreme Court action, there has never been a legislative effort that on its own successfully led to a bar being deunified.

“There is this constitutional pushback about interfering and becoming overly involved in the judicial branch,” he says.

Michigan task force to issue report in June

The current Michigan deunification effort began in the fall of 2012, says Janet Welch, executive director of the State Bar of Michigan. The state enacted right-to-work legislation, which generally pertains to whether labor union dues can be required as a condition of employment in some workplaces. “In the aftermath of that legislation, there was some talk about whether the state bar’s status as a mandatory bar was consistent with Michigan being a right-to-work state,” Welch says.

The SBM was able to successfully refute that challenge. Last fall, the bar, as part of an ongoing effort by one of its commissions to gain greater disclosure of third-party advertisers in judicial campaigns, wrote a letter to Michigan’s secretary of state. The letter asked her to revisit an earlier opinion to incorporate the effects of the Citizens United case into Michigan law covering judicial campaigns. A week later, one of the right-to-work groups launched the current effort to deunify the bar. In January, a bill to require the split was introduced in the state Senate. The bill’s sponsor said it was connected to the request for a revised opinion, Welch notes.

The SBM then asked the state’s Supreme Court to look into the bar’s status because it has the constitutional authority to oversee the bar. The Court established a 12-person task force to study the question and to report its findings on June 2, 2014.

Task force members include Welch, two SBM past presidents, the president-elect, and some others who are prominent in the association. “The Supreme Court’s appointments were very thoughtful,” says Welch, who declined further comment on the task force because she is a member.

An update from Nebraska

In Nebraska, the timeline was much more compressed. On Dec. 6, 2013, the state’s Supreme Court ruled that the Nebraska State Bar Association had 25 days to transition from a mandatory bar to a voluntary one, says Executive Director Liz Neeley. The court took over regulatory functions and imposed an attorney assessment of $98 to cover the cost of attorney registration and discipline. While it required all attorneys to remain members of the NSBA, it made dues in the bar association voluntary.

“The timing was a real challenge for us. The Supreme Court’s opinion has created what we’re referring to as the first ‘hybrid’ state bar association,” Neeley says. “We’re in new territory because no other bar association is structured in this way.”

To further complicate matters, NSBA had already started collecting 2014 dues payments, with about 20 percent of its members paid up. Because the regulatory functions were no longer part of the bar’s role, it had to offer refunds on the portion of the dues attributable to those functions.

While the timing of the decision meant the bar had to make changes quickly, it also may have helped with member retention for 2014, Neeley says. In addition to the 20 percent who had already paid, many lawyers had already figured their dues payments into their budgets.

Still, the impact on the bar has been considerable. “We’ve taken a 25 percent hit to our budget,” Neeley says, and much of the reduction was in programs such as pro bono efforts and the bar’s minority justice commission. Staff went from 19 to 12, with three of the losses being vacancies that were not filled.

“One of the great things about a mandatory bar association is that it can be outward looking,” Neeley says. “It can not only serve the profession, but it can help serve the court system and the public. Voluntary bar associations have to be more member driven and member focused.

“So the programs that we were forced to reduce or cut because of our new budget reality were those that serve the court and the public.”

The change in approach also affects how the bar communicates with members and markets itself. “Mandatory bars aren’t as concerned with marketing the value of bar membership to bar members,” Neeley explains. “Voluntary bars are constantly communicating the value of their member benefits. That's been a philosophical switch for us.”

One possibly thorny issue waiting to play out is the fact that all Nebraska lawyers are members of the bar, whether or not they pay dues. They are also allowed to serve in leadership positions. Currently, 12 of the 93 members of the bar’s House of Delegates have not paid dues. Questions may arise if those members who don’t pay dues are allowed to have a say in which benefits are provided to paid members and which are provided to all members, Neeley says.

More challenges ahead?

Whether the change in Nebraska and the challenge in Michigan are the beginning of a new effort to deunify bars remains to be seen. Paula Littlewood, executive director of the Washington State Bar Association, has been active in studying the issue and leading discussions at meetings of the National Association of Bar Executives. She believes there is a general resentment of the legal system that has strengthened efforts at deunification.

“The consuming public is getting fed up with the legal profession,” Littlewood says. “They can't afford us, and they can’t access us.

“When they consuming public gets fed up, they go to their legislators and the executive and say, ‘We’re fed up.’ What do the elected officials do when they think the public is fed up? They have to act.”