Vol. 39, No. 5

Unified bar update: Recent challenges, new developments

by Dan Kittay

Operating a bar association always has its challenges, as any bar leader will tell you. Membership, finances, and leadership are among the issues that come up for bars of any size. For unified state bars, you can throw in the occasional challenge to the very idea of a mandatory bar.

These days, such challenges to unified bars appear to be on the increase, and they have bar leaders and observers paying attention.

"There is a lot of activity around legal and legislative challenges to unified bars. Even voluntary bars are concerned about what's going on with the unified ones," says Ken Goldsmith, legislative counsel and director for state legislation at the American Bar Association.

John Phelps, CEO/executive director of the State Bar of Arizona, believes part of the reason for the heightened activity is that there’s “a growing distrust of institutions generally, and we’re caught up in that. “I’m always in support of a healthy dose of skepticism, but I think we’ve gotten to the point where cynicism has set in.”

Phelps has faced the issue firsthand, as the Arizona House of Representatives earlier this year considered legislation that would have moved attorney regulation from the bar to the state Supreme Court. It also would have made the Arizona bar voluntary. The bill was defeated in March.

Deunification bills seem to appear in the House every other year or so, although this one, HB 2629, may very well be back next year, says Phelps.

While there were some political motivations said to be behind HB 2629, Phelps says other factors may include “a number of folks in Arizona who are members of the bar that resent the mandatory nature of it, that don’t understand the whole concept of an integrated bar, or who maybe do understand it and don’t buy into the idea.” One of the lawyers who testified in support of the bill is a former member of the bar’s board.

 “I think it’s a debate that’s probably overdue,” Phelps believes. “Many of our members [have a] certain amount of ambivalence about the mandatory bar. They don’t know any other model. It’s given us an opportunity to revisit the genesis of the integrated bar in Arizona.

“I welcome the challenge. If we can’t answer the questions about why a mandatory bar is a better model for folks in Arizona, then we ought not to be a required bar.”

Lawsuit

North Dakota lawsuit questions constitutionality of all mandatory bars

The challenge facing the unified State Bar Association of North Dakota is a pending lawsuit involving an organization that ultimately seeks to have all mandatory bars declared unconstitutional.

Fleck v. McDonald et al grew out of a child custody measure on North Dakota’s 2014 ballot called Measure 6. The measure would have required that the state “start each case with a 50-50 presumption in a family law case, and set up a presumption of shared parenting,” says Tony Weiler, the bar’s executive director, “where in North Dakota, for years, we have followed a ‘best interests of the child’ model.”

The bar’s Family Law Section opposed the measure, and the board of governors agreed, voting unanimously to donate money to a group opposing the measure.

Bar member Arnold Fleck, who supported Measure 6 (which was defeated in the election), objected to a portion of his dues supporting a cause with which he disagreed, and has sued the bar. He is represented by the Arizona-based Goldwater Institute.

The Institute believes that all unified bars are unconstitutional, says Jared Blanchard, lead attorney in the Fleck case. It also recognizes that the Keller decision allows such bars to function as long as they take proper safeguards to prevent dues money from being used for political purposes. The SBAND’s actions regarding Measure 6 violated Keller’s provisions, Blanchard says.

Weiler says the board discussed beforehand whether there were any potential Keller issues with its actions, and “they did not believe it to be a political matter.” He also noted that members who disagreed with the actions could apply for a refund of that portion of their dues associated with the activity. There were 96 requests for refunds. The Goldwater Institute says the system for identifying and deciding which activities qualify for a refund is flawed.

As of Bar Leader deadline, a hearing was planned on the Institute’s request for a preliminary injunction. No trial date has been set, Weiler says.

A ruling in the North Carolina ‘teeth-whitening’ case

The issue of others performing functions that have traditionally been performed by members of a certain profession was raised in North Carolina, in the so-called “teeth-whitening” case.

In North Carolina Board of Dental Examiners v. Federal Trade Commission, for which a number of bar associations submitted amicus briefs, the U.S. Supreme Court ruled in March that state licensing boards that are made up of “market participants” are not automatically immune from antitrust laws. Some bar leaders have expressed concern over whether such rulings could be applied to unified bars and affect their ability to regulate nonlawyers.

“I don’t read the opinion as opening the door to anarchy and overturning state supervision of professions,” says Ronald Gibson, president of the North Carolina State Bar, a unified bar that was actively involved in the case. “I interpret the opinion as requiring that professional licensing entities operate within their statutory framework.

“If the statutory framework doesn’t provide for active state supervision, and the state’s purpose is not clear, then they need to get that clarity.”

Developments to watch

Another type of challenge is happening in California. Joe Dunn, who was dismissed as executive director of the State Bar of California in November 2014, subsequently filed a lawsuit against the bar.

The State Bar of California is a strongly regulatory bar. Dunn contends that he was fired because he exposed an effort to make the bar’s disciplinary backlog appear smaller by removing files. The bar has countered that Dunn was terminated because of a number of “serious, wide-ranging allegations” against him.

There is concern in some quarters that both the firing and the lawsuit will be used to further deunification efforts in California, and may have a spillover effect on other states. Some say that the high-profile termination spotlights dysfunction and discord at the top levels of the bar and—especially if Dunn prevails—calls into question its ability to regulate lawyers. Because of the pending lawsuit and personnel issues, the State Bar of California declined to comment.

Meanwhile, there’s been a recent development in Washington state, where the limited license legal technician designation has garnered much attention—for some, as a sensible and measured reaction to unmet legal needs, and for others, as a bellwether of a diminishing role for lawyers and unified bars.

The first class of LLLTs is expected to be licensed this May; this March, the state Supreme Court—which ordered the designation itself—issued an order that allows LLLTs to share fees with attorneys and become minority partners in law firms.

The order was prompted by a petition by the Washington State Bar Association Board of Governors, which wrote in its summary that “[T]he suggested revision to the Lawyer [Rules of Professional Conduct] seek to recognize, encourage, and legitimize the association and interplay of LLLTs in the marketplace and in the profession.”

Much as with the LLLT designation itself, this order has prompted some concern and dissent as possibly opening the door for the type of alternative business structure law firms that have been started in the United Kingdom and Australia in recent years.

Others say that the change brings a necessary measure of fairness to LLLTs who will work in law firms, given that those who plan to operate outside of that setting have already been authorized to open their own offices and set their own fees.