Oregon State Bar Meeting of the Board of Governors

July 27-28, 2001

Open Session Minutes

The meeting was called to order by President Ed Harnden on Friday, July 27, 2001, at 2:50 p.m. and adjourned at 4:50 p.m., with a work session running from 1:00 p.m. to 2:45 p.m. Present on Friday, July 27, 2001, were Charles Williamson, Gordon Davis, Ronald Bryant, William Carter, Mary McCauley Burrows, Bette Worcester, Bruce Anderson (arrived 3:50 p.m.), Angel Lopez, David Hytowitz, Lisa LeSage, James Brown, Sarah Rinehart (arrived 3:38 p.m.), Agnes Sowle, Ed Harnden and Malcolm Scott. Staff present were Karen L. Garst, Rod Wegener, George Riemer, Susan Grabe, Stella Manabe, Teresa Bowen and Jeff Sapiro, present from 2:50 p.m. Ė 3:18 p.m. via telephone.

At 9:00 a.m. on Saturday, July 29, 2001, the Open Session of the Board reconvened and adjourned at 11:43 a.m. Present were Bruce Anderson, Agnes Sowle, William Carter, Ronald Bryant, Ed Harnden, James Brown, Sarah Rinehart, Angel Lopez, Bette Worcester, Lisa LeSage, Charles Williamson, Malcolm Scott, David Hytowitz, Mary McCauley Burrows and Gordon Davis. Staff present were George Riemer, Susan Grabe, Rod Wegener, Ira Zarov and Teresa Bowen. Also present was Alice Bjork, PLF Liaison.

Work Session

Stella Manabe, Affirmative Action Administrator, conducted the work session with an introduction by Angel Lopez. Stella presented the history of the OSB Affirmative Action Program, described its components and explained its goals. A question and answer period followed her presentation.

1.Report of Officers

    1. Report of the President

1.Meeting with Chief Justice Carson

The Chief Justice was pleased with the overall results of the legislative session, as much of the shortfall in the budget was added back, judicial salaries will be increased 12% over the next two years and six additional judges were approved. The Chief was also appreciative of the efforts exerted by the OSB staff and the Gleaves Commission in helping to obtain these results.

2.Appointment of Disciplinary Work Group

A Disciplinary Work Group has been appointed and is beginning to look at the disciplinary process. The group consists of James Brown, Sarah Rinehart, Bruce Anderson, Mary McCauley Burrows, Bette Worcester, Jeff Sapiro and members of the LPRC and the SPRB. The group will submit its report to the BOG in November.

3. Reciprocity

Reciprocity was approved unanimously by the Supreme Court and will go into effect January 1, 2002. A BOG committee consisting of Mr. Hytowitz and Mr. Carter will work with Mr. Riemer and the BBX to implement the new rules. Mr. Harnden expressed his appreciation to Mr. Riemer for the efforts put forth to accomplish this goal.

4.Miscellaneous

Mr. Harnden is in the process of completing the scheduling of the remaining local bar visits.

    1. Report of the President-Elect

1.Miscellaneous

Mr. Lopez expressed his appreciation for the efforts exerted in the passage of the new reciprocity rule. Mr. Lopez will go to Chicago August 3, 2001, to be present when the Oregon State Bar is presented with the Harrison Tweed Award for it Access to Justice efforts. He will be making a presentation at the NCBP meeting on the barís affirmative action and diversity programs and will be keynote speaker at the Affirmative Action Programís (OLIO) retreat in Bend.

    1. Report of the Executive Director

1.CLE Publications Update

The CLE Publications Program has been following the instructions of the consultant and its condition continues to improve from a deficit in 2000 to a slight profit in 2001 when comparing the same time period.

2.Miscellaneous

The OSB received a letter from the Canadian Bar indicating it would like the OSB to participate with them in a joint meeting in Vancouver, BC. The board discussed the matter and decided, due to the fact that reciprocity in North America appears to be an issue on the horizon, that such a meeting might be worthwhile. Ms. Garst will obtain more information and report back to the board. Ms. Garst updated the board on the upcoming OSB Convention and the HOD meeting, which will take place September 20-22, 2001. Information for the current OSB Convention and HOD meeting has been distributed to the membership and more mailings are anticipated. The information for registration will also be available on the web and there are still four openings for tradeshow spots available. Ms. Garst distributed information regarding upcoming MBA meetings and asked board members to indicate which meetings they will be able to attend. Ms. Garst also noted she has been in contact with Bill Gibson, chair of the ABA Law Practice Management Section, and may be appointed to the 'Seize the Future' Conference. The ABA would pay most expenses incurred.

2.OSB Committees, Sections, Councils, Divisions and Task Forces

    1. Legal Ethics

1.Appointment of 'Special Legal Ethics Committee/Task Force'

The Legal Ethics Committee recommends that the board appoint the current members of the LEC as the members of a Special Legal Ethics Task Force. The task force will review the ABAís Ethic 2000 Report to determine if any changes should be recommended concerning Oregonís Code of Professional Responsibility. When their terms expire on the LEC, they will remain on the task force until its work is completed, which will allow them to carry their expertise over into the years following their term expirations.

Action:Mr. Bryant moved and Ms. Worcester seconded that the board appoint a Special Legal Ethics Task Force consisting of the current LEC members with the purpose of reviewing and making recommendations to the BOG relative to the ABA 2000 Commissionís proposals for amending the ABA Model Rules of Professional Conduct. The motion carried unanimously.

The Unlawful Practice of Law Committee is putting together an informal task force with title companies and other groups to discuss possible legislation to clarify the application of state UPL statutes to title companies.

B.Client Security Fund

1.CSF Claims Recommended for Payment

Action:Mr. Scott moved and Mr. Davis seconded that the claim of $3,800.00 in Gwyn v Anusen be paid. The motion passed unanimously.

Action:Mr. Scott moved and Mr. Williamson seconded that the claim of $3,687.50 in Savoie v Correll be paid on condition that Ms. Savoie surrender the NSF check from Mr. Correll to the bar. The motion passed unanimously.

Mr. Scott commended the Client Security Committee on a job well done. He also commended Sylvia Stevens for her staff and collection work or behalf of the CSF. The financial condition of the fund is good. No change is the assessment is anticipated for 2002.

    1. Gatti Resolution

The board discussed various versions of a disciplinary rule change to be put before the House of Delegates at its September 22, 2001 meeting. The board decided to recommend one version of the rule change to the HOD for approval, but will provide additional information for the HOD to consider.

Action:Mr. Williamson moved and Ms. Sowle seconded that the following language be submitted to the HOD in the form of a resolution for the HODís September 22, 2001 meeting:

DR 1-102

* * *

(D) Notwithstanding DR 1-102(A)(1), (A)(3) and (A)(4) and DR 7-102 (A)(5), it shall not be professional misconduct for a lawyer to advise clients or others about or to supervise lawful covert activity in the investigation of violations of civil or criminal law or constitutional rights, provided the lawyerís conduct is otherwise in compliance with these disciplinary rules. 'Covert activity,' as used in this rule, means an effort to obtain information on unlawful activity through the use of misrepresentations or other subterfuge carried out by publicly funded law enforcement agencies including the federal and state departments of justice and district attorneys and publicly funded civil rights enforcement agencies including nonprofit organizations such as legal services offices and fair housing entities, and any other lawyer acting in the role of private attorney general. 'Covert activity' may be commenced by a lawyer or involve a lawyer as an advisor or supervisor only when the lawyer in good faith believes there is a reasonable possibility that unlawful activity is taking place or will take place in the foreseeable future and there is no other reasonable or practical way to obtain the information.

The motion passed - 14 yes, 1 no (Mr. Anderson), 1 absent (Mr. Tyner).

3.BOG Committees, Special Committees, Task Forces and Study Groups

    1. Policy & Governance Committee
    2. Action:Ms. Sowle reviewed the recommendations from the committee and the amendments, which would change policy to include distribution of documents by electronic means. The board unanimously approved the changes and amendments recommended by the committee.

      Action:Ms. Sowle explained the changes to the designations 'Active Emeritus' and 'Active Retired.' The committee recommended 'Active Emeritus' be changed to 'Active Pro Bono' and 'Active Retired' be changed to 'Active Emeritus' to better define the designations. The board unanimously approved the changes recommended by the committee.

      Action:The committee submitted, for the boardís approval, a letter to be sent to the CLE Committee advising it of the boardís decision to require the CLE Program to continue to pay MCLE Program Sponsor fees. The board unanimously approved the letter.

      Action:The board unanimously approved a liaison from the ONLD to participate in board meetings. Expenses for the liaison will be the responsibility of the ONLD and Ms. Sowle, Ms. Garst, Mr. Harnden and Margaret Robinson will prepare an orientation for the liaison, outlining the boardís expectations and requirements.

    3. Budget & Finance Committee
    4. Mr. Scott summarized the 2002 proposed budget. It would include $50,000 for Access to Justice, $100,000 for Public Affairs and Public Relations, $55,000 for the Consumer Advocate (Ombudsman) and $100,000 for additional staff for Discipline. The $50,000 for Access to Justice has been an ongoing expense to facility the boardís priorities, though it is not a permanent part of the budget. The $100,000 for Discipline, the $100,000 for Public Affairs and Public Relations and the $55,000 for the Consumer Advocate (Ombudsman) are new line items, however, they can be covered by the reserve received from the most recent dues increase and will not require an additional increase in dues for the next three years. The projected budget also includes the loss of rent income from the PLF. Mr. Scott will return to the board in November with additional information and a final proposed budget. Following Mr. Scottís report was discussion concerning the ombudsman position.

      Action:The board unanimously passed the committee motion to raise inactive dues from $80 to $110 per annum for 2002 and thereafter.

    5. Public Affairs Committee
    6. Susan Grabe summarized the 2001 legislative session. Overall the bar was very successful in getting its bills through the legislature with 26 of 30 being passed and 2 being tabled until next session. This was mainly due to having so many individuals in Salem assisting in the push to get the bar agenda passed. Some of the highlights of the session included the addition of six new judges, increase in judgesí salaries and the recovery of much of the shortfall in judicial funding. Future issues include the new Federal Bankruptcy Code, Indigent Defense, the effect of term limits on the legislature and the budget for next session.

    7. Executive Director Evaluation
    8. Action:The board unanimously approved the 2001 Standards for the Executive Director. Mr. Harnden will follow up with the PLF for the Executive Director and PLF CEO regarding the salary levels.

    9. Judicial Selection Committee
    10. The committee has 8 candidates to interview for the Oregon Supreme Court vacancy and will begin interviews August 1, 2001 at 8:30 a.m. If board members would like to review the nomination letters, they can be obtained from one of the committee members. Following is a list of the of the candidates:

      Rex Armstrong

      Thomas Ancil Balmer

      David Vintson Brewer

      Walter Irvin Edmonds, Jr.

      Carl Gary Kiss

      Jack L. Landau

      Paul Joseph Lipscomb

      Charles Joseph Maurice Merten

    11. Recruitment Committee

Mr. Scott presented the committee recommendations to the board for the changes of dates for BOG elections and a resolution for the House of Delegates, which, if passed, would change the selection of ABA Delegates from statewide election by the membership to election by the HOD.

Action:The committee motion to change BOG elections to October was passed unanimously.

Action:The board unanimously passed the committee motion to approve the ABA Delegate Election resolution, which follows, and to submit it to the HOD:

Whereas, the Oregon State Bar has three delegates to the ABA House of Delegates who are currently elected by the OSB membership at large for two-year terms;

Whereas, the rules and regulations of the American Bar Association permit state bars to determine the method of selection of its delegates to the ABA House of Delegates;

Whereas, the Board of Governors believes that only a small fraction of the membership knows of the duties, functions and activities of the state barís ABA delegates and that a statewide election of these delegates fails to effectively connect the state barís ABA delegates to the leadership of the Oregon State Bar;

Whereas, the Board of Governors recommends that the House of Delegates consider whether it should elect the state barís ABA delegates; now, therefore,

BE IT RESOLVED:

Effective in 2002 and thereafter, the OSB House of Delegates shall elect the state barís ABA delegates by majority vote at its annual meeting.

The Board of Governors is authorized to establish by rule the process and timelines for the filing of nominating petitions, campaigning, including the distribution of campaign materials, and for voting to elect the appropriate number of ABA delegates by the OSB House of Delegates each year.

OSB ABA delegates shall be, at the time of their election and during the full term of their service, active members of the Oregon State Bar in good standing.

The term of office of OSB ABA delegates shall be for two years from the date of their election by the OSB House of Delegates. The Board of Governors shall fill any vacancies in the office of OSB ABA delegate for the remainder of the prior delegateís term.

4.Professional Liability Fund

Mr. Zarov presented a report on the PLFís activities. The fund continues to function well financially and the audit is complete and very 'clean.' The number of claims and the severity of claims is down compared to the same timeframe last year, however, defense costs have risen significantly. The move is on schedule; the PLF will begin work from their new location on August 6, 2001. The multi-jurisdictional practice issue, which allows some attorneys to practice in Oregon without malpractice coverage, is still an issue and Mr. Zarov will present information to the board in September concerning this matter and the matter of an increase in the assessments. Mr. Zarov is looking into D&O insurance for the PLF Board as well as for the BOG. He agreed to provide Mr. Riemer with a further information on the terms of the policy. At the September meeting the PLF will submit names of individuals to fill two positions on the PLF Board.

6.Consent Agenda

Mr. Lopez informed the board this is the third meeting in which there has been no appointment to fill the vacancy on the Affirmative Action Committee.The appointment will be addressed at the next board meeting.

Action:Mr. Williamson moved, Ms. Rinehart seconded, that the Consent Agenda be approved without change and the motion carried unanimously.

7.Default Agenda

  1. Good of the Order (Non-action comments, information and notice of need for possible future board action)

Ms. Rinehart informed the board that Mr. Johnsonís position on the SPRB will remain unfilled while he is on sabbatical.

Appointments to the Presidentís Advisory Group on Future Issues will be deferred and will be presented to the board at the September meeting.