Mr. Johnson reported on the May 4 meeting with Chief Justice Carson he attended with Ms. Garst, Mr. Oleson and Mr. Riemer. Matters discussed included MCLE credit for legislators, the Judicial Department budget, legislative matters related to UPL and the appointment and election of judges. Details of the meeting are in the agenda exhibit.

Mr. Johnson provided an overview of the local bar visit schedule in April and May which involved visits to 14 county bar associations. The meetings were well attended and included discussion of issues before the bar including legislative matters, access to justice issues, and media relations projects. Mr. Johnson and Kateri Walsh, Media Coordinator, conducted the April trip to the Southern Oregon county bar associations. Mr. Rew attended the meetings in Deschutes, Lake and Klamath Counties. Mr. Orf participated in meetings in Josephine and Jackson Counties. Mr. Johnson, Ms. Garst and Mr. Rew visited the Eastern Oregon county bar associations in May.

Ms. Garst commented on Ms. Walsh’s success with new media contacts in Southern Oregon.

Mr. Rew reviewed the ABA’s recommendations regarding multidisciplinary practice to be published on June 8 and voted on in August by the ABA House of Delegates. A discussion ensued regarding whether the OSB should respond to the ABA’s recommendations. The Strategic Planning Committee (SPC) will review the matter. Mr. Davis indicated that MDP was planned to be used as a model for emerging issues by the SPC. Mr. Johnson asked that further discussion of MDP be placed on the July BOG agenda and asked that the SPC bring a recommendation to the BOG on whether the BOG should advise its delegates regarding this matter.

Mr. Rew previewed the proposed Citizens Conference outlined in item 3.D.2. He recommended that one or two BOG members participate on the steering committee. The intent is for the conference to be organized outside the bar so it does not look like a Citizens Conference run by lawyers. The Honorable Ellen Rosenblum will continue to head up this effort.

Ms. Garst reminded board members to calendar the BOG conference call meeting scheduled August 10 at noon to approve the House of Delegates agenda.

Ms. Garst reported that LASO was recently awarded $1 million in attorney fees resulting from litigation regarding Social Security benefits.

Ms. Garst reported on the work of the Communications Department to develop a series of television spots to educate the public about the law and the legal system in two areas: (1) Judge and jury program. (2) Public Service Announcements (PSA) on the 30-Second Law School.

The board discussed proposed delegate resolutions, one to abolish the HOD and the other to rescind the bar’s reserve policy. Mr. Riemer mentioned DR amendments including one that may be proposed by the Alternative Dispute Resolution Section. Other proposed topics included a possible ethics CLE on Multidisciplinary Practice (MDP) and a discussion about the independence of the judiciary. Ms. Sowle cautioned against placing too many additional items on the HOD agenda due to unfavorable feedback from last year’s meeting.

Discussion continued about the future of SJR7. It will be an item on the July board agenda.

The board discussed ideas for the HOD regional meeting agenda. Ms. Garst and Mr. Riemer were asked to develop the agenda to include DR amendments, the resolution process and its timelines, and the MDP issue. Regional HOD meetings are scheduled starting June 15 through July 22 as shown on the attached exhibit.

EXHIBIT, p. 1

Mr. Baldwin presented the Policy & Governance Committee’s recommended program advisory committee charges for the OSB committees listed in the following motion. The revised charges reflect the true nature of program committees. Specific assignments include BOG approved program outcomes. Ms. Garst indicated that the charges will be revised as needed to align with evolving program outcomes. A concerted effort has been made to clarify that the role of committees is advisory in nature to the programs.

Action:The Policy & Governance Committee moved to approve the 1999-2000 charges for the following program advisory committees: Affirmative Action, Client Security Fund, Continuing Legal Education, Lawyer Referral and Modest Means, Legal Ethics, Public Service and Information, and Unlawful Practice of Law. The motion was approved by the board (14-0-2; absent Burrows, Sumner).

Mr. Baldwin reviewed the recommendation to revise the 2000 OSB fee statement to omit the separate statement of the affirmative action and client security fee assessments and include them in the total membership fee. The board discussed the change. Some concern was expressed about the appearance of no longer showing the breakout of fees. It was explained that every member gets the detail of how the money is spent with the fee resolution that is mailed out with the HOD agenda. Mr. Lopez commented that in the early years of the Affirmative Action Program there was concern about keeping the fee amount separate to make members aware that it was not part of the general fund, but that this concern is not longer an issue.

Action:The Policy & Governance Committee moved to approve revision of the 2000 OSB fee statement to omit the separate statement of the affirmative action and client security fee assessments. The motion was approved by the board (14-0-2; absent Burrows, Sumner).

Mr. Baldwin presented the need to consider the concept of referral fees as a funding source for the OSB Lawyer Referral Service (LRS), separate and apart from any legislative issues surrounding how such a program would be implemented if approved by the board. Mr. Rew indicated that the Lawyer Referral Committee reviewed the matter, felt that lawyer referral did not need to produce income or make a profit, and voted it down. The LRC feels LRS is doing a very good job and it has expanded the modest means program. Comments in favor of not supporting referral fee funding for LRS included the following: (a) The LRS is doing an outstanding job without increased funding. (b) OTLA does not plan to participate. (c) This is a Multnomah Bar Association fund raising proposal. (d) Supporting this concept in additional funding would open a Pandora’s box in the legislature.

Action:Mr. Hytowitz moved, Ms. Rinehart seconded, to not support the concept of referral fees as a funding source for the OSB Lawyer Referral Service (LRS) and to not seek an Attorney General’s opinion or to seek legislative action on the matter. The motion was approved by the board (14-0-2; absent Burrows, Sumner).

Mr. Rew presented the background of the Access to Justice study proposed by the Access to Justice Committee, recommended the study be conducted by Michael Dale, and that up to $40,000 from the bar’s contingency fund be allocated to the study. Mr. Baldwin commented on Mr. Dale’s exceptional qualifications and that other consultants deferred to Mr. Dale when he expressed his interest. Ms. Garst asked how staff could assist in administering the study and whether Mr. Dale would need assistance with data analysis. Mr. Harnden indicated the proposed budget would allocate $35,000 to the study and $5,000 for analysis and other expenses.

Staff will work out the necessary contract arrangements with Mr. Dale. Mr. Harnden explained that the study would take six months or less to complete and the report would be available at the January, 2000 BOG meeting.

Mr. Johnson inquired about the study cost expanding from $25,000 to $40,000 and about proposed co-sponsors. Mr. Harnden explained that no response has been received to the letter sent to the Governor asking for assistance. He indicated that Chief Justice Carson will be asked about providing staff assistance to support the study.

Action:The Budget & Finance Committee moved to authorize the expenditure of up to $40,000 from the 1999 contingency fund to fund the Access to Justice Study. The motion was approved by the board (14-0-2; absent Burrows, Sumner).

Refer to related action in item 3.D.3.

Mr. Rew discussed the background of the proposed investment policy, using the Professional Liability Fund’s policy as a model, and recommended its approval. The new policy is an opportunity for the bar to balance stable fixed-income interest rates and the good return in equity market. It is important to consider ways to improve the return on the bar’s invested fund and create a more diversified portfolio. Discussions with the PLF and its investment advisor, Russ Kuhns of R.V. Kuhns & Associates, have been valuable to help the bar revise its policy and address prudent investment standards, guidelines and benchmarks. The board discussed the matter at length.

Action:The Budget & Finance Committee moved to revise BOG Policy 10.102 - Investment Policy as shown on the attached exhibit. The motion was approved by the board (13-0-2-1); absent Burrows, Sumner; abstaining Rinehart).

EXHIBIT, p. 2-3

Mr. Hittle reported that SJR7 has passed out of the Senate and is currently in the House. The bill proposes an amendment to the constitution regarding the creation of a commission for the selection and appointment of judges. He commented on efforts by concerned groups of attorneys and business professionals asking others to contact their legislators. An aggressive effort is being made to turn the measure into an interim study project.

Mr. Hittle mentioned that Judicial Department budget cutting may pit increased judgeships against increased salaries and benefits for judges. Mr. Oleson commented that, as a best case scenario, three or four new judgeships might be phased in toward the end of the biennium. The board discussed the process and role of the Public Affairs Committee in judicial matters.

Mr. Hittle reviewed the status of the Child Abuse Reporting Law (HB 2226-A), the Public Affairs Committee’s support of the bill, and Kirk Hall’s testimony before the House Judicial Criminal Law Committee on February 23. The bill would broaden the scope of individuals responsible for reporting child abuse to all adults. Although the subject was reviewed by the Public Affairs Committee, there is now concern that Mr. Hall’s testimony on behalf of the PLF went beyond law improvement. The bill was amended to preclude a right of action for violation of this statute. It has passed out of the Senate Judiciary Committee. By letter it has been communicated to Chair Bryant that the bar does not support the bill.

The board discussed at length whether Keller or related considerations are a concern because the issue may be divisive within the bar, about Mr. Hall’s comments differing from what the committee thought its position was, and plans for the Public Affairs Committee to address its process in this regard. Mr. Hittle indicated that this issue and the legislative role of the PLF will be discussed by the committee in post-session debriefing. A letter from President Johnson to Senator Bryant will be drafted to indicate the board’s neutrality on the bar bill because it may be highly divisive within the Oregon State Bar.

Mr. Hittle reviewed policy and law improvement items on the Public Affairs Committee’s tracking sheet.

Mr. Hittle recommended the board authorize Mr. Johnson to send a letter to Chief Justice Carson supporting an amendment of the MCLE rules as follows: Legislative Service: Two credit hours per month for each full month of service as a member of the Oregon Legislative Assembly while it is in session. The legislature is moving forward with a bill of its own on

this topic and it would be preferable if the Supreme Court a rule allowing this type of credit itself. A draft letter was discussed and further revisions considered.

Action:The Policy & Governance Committee moved to authorize President Mark Johnson to out send out a letter to the Chief Justice regarding the board’s position on giving MCLE credit to lawyer legislators. The motion was approved by the board (14-0-2); absent Burrows, Sumner).

The attached letter was sent to Chief Justice Carson on June 7, 1999.

EXHIBIT, p. 4-5

Mr. Harnden reported that plans to form an access to justice network will be deferred pending the results of the access to justice study. See related minutes item 3.B.1.

2.Proposed Citizens Conference (ABA Justice Initiatives Project)

Mr. Harnden discussed the recommendation to hold separate Citizens and Access to Justice Conferences in 2000 as outlined in the attached exhibit. This event was also discussed by Mr. Rew in his president-elect’s report item 1.B.2.

Action:The Access to Justice Committee moved to hold separate Citizens and Access to Justice Conferences in 2000. The motion was approved by the board (14-0-2); absent Burrows, Sumner).

EXHIBIT, p. 6

3.Proposed RFP for legal needs assessment

Mr. Harnden presented the Access to Justice study contract, proposed study goals and parameters, proposed the formation of a Study Oversight Committee, and proposed negotiating a contract with consultant Michael Dale to conduct the study. Details are included in the attached exhibit.

A lengthy discussion ensued about issues related to serving the legal needs of various levels of low income persons and various study criteria.

Action:The Access to Justice Committee moved to approve the Access to Justice study contract and proposed study goals and parameters, and to authorize the Access to Justice Committee to form a Study Oversight Committee and to negotiate a contract with consultant Michael Dale to conduct the study. The motion was approved by the board (14-0-2); absent Burrows, Sumner).

EXHIBIT, p. 7-10

Ms. Sowle reported on meetings with the Executive Director Review Committee, Karen Garst, and a human resources consultant to design an improved performance review process for the executive director. It is felt that the new process will be more beneficial to the executive director and the board. It will require each member of the committee to interview different segments of the bar such as BOG members, key staff, and the community. The timeline is to have all interviews complete with information to Ms. Sowle by July 1 to develop a report for consideration at the July BOG meeting.

Mr. Hytowitz presented recommendations for recipients of the 1999 Award of Merit and the 1999 President’s Awards as shown on the attached exhibit. He commented on the significant increase in nominations this year which he felt was due to an improved awards nomination brochure and the work of the board and staff to encourage bar groups to submit nominations. A question and answer period ensued about various candidates and the awards review and selection process.

Concern was expressed about ways to honor legislators for service to the bar such as the President’s Public Service Award. Mr. Hytowitz explained that the Awards Special Committee felt it was appropriate to focus on public service as a lawyer other than legislative activities. Other groups and county bar associations frequently honor legislators. Mr. Orf felt that it is mixing apples and oranges to put legislators under the President’s Public Service Award. Ms. Sowle commented that when choosing from highly qualified candidates, an award cannot be given to everyone. Mr. Hytowitz indicated that other highly qualified candidates nominated for the Award of Merit were not among those recommended to receive it this year.

Action:The Awards Special Committee moved to approve the recipients for the 1999 Award of Merit and the 1999 President’s Awards as shown on the attached exhibit.

EXHIBIT, p. 11

Action:Mr. Tyner moved, Ms. Rinehart seconded, to amend the main motion by nominating Lane Shetterly for the 1999 President’s Public Service Award. The motion failed (2-12-2); yes Tyner, Rinehart; absent Burrows, Sumner).

Action:The main motion was approved by the board (14-0-2); absent Burrows, Sumner).

Mr. Johnson thanked the board for its efforts to encourage so many award nominations this year.

Mr. Hytowitz presented a recommendation to establish the President’s Award of Appreciation and to approve as its first recipient Linda Clingan, Executive Director of the Campaign for Equal Justice. The Awards Special Committee felt that Ms. Clingan was an example of a person whose outstanding achievements did not match the criteria for the Award of Merit for which she was nominated in 1998 and 1999. The Special Award of Appreciation is to be established as a discretionary award of the president, subject to BOG approval. The new award is not intended to be 'advertised' in the awards nomination brochure, but to be used when appropriate candidates come to light in the traditional awards process or from other sources. The Special Award of Appreciation will be presented at the Annual Awards Luncheon.

The new award was discussed with the following comments: (a) The new award could become a repository for all kinds of other potential awards. Do we need to do this? (b) Establishing the award in BOG Policy defines its criteria, purpose and intent. (c) A special award of this nature will permit a way to not dilute the intent of the Award of Merit and the President’s Awards.

Action:The Awards Special Committee moved to waive the one meeting notice required by Bar Bylaw 4.2(B) in order to take action on proposed revisions to BOG Policy 3.300. The motion was approved by the board (10-4-2); no Hittle, Johnson, Rinehart, Tyner; absent Burrows, Sumner).

Action:The Awards Special Committee moved to approve revised BOG Policy 3.300 to establish the Special Award of Appreciation and to approve Linda Clingan as a recipient of the award in 1999. (Revisions to BOG Policy 3.300, as shown on the agenda exhibit, will be developed further by Mr. Riemer and presented to the board for approval at the July, 1999 board meeting.) The motion was approved by the board (12-2-2); no Rinehart, Tyner; absent Burrows, Sumner).

Action:Ms. Cohen moved, Ms. Rinehart seconded, to approve amendments to PLF Bylaw 8.1 and PLF Policy 2.250 - Incentive Program, subject to the attention of language indicating the value of such compensation to not exceed $500, so as to be consistent with the Federal Volunteer Protection Act. The motion was approved by the board (14-0-2); absent Burrows, Sumner).

Mr. Scott presented the Client Security Fund Committee recommendation to approve CSF Claim Nos. 98-28 and 98-29 -Loveness v. Belcher and discussed their backgrounds

Action:Mr. Scott moved, Mr. Hittle seconded, to approve CSF Claim Nos. 98-28 Loveness v. Belcher. The motion was subsequently withdrawn.

Mr. Hytowitz felt that no attorney/client relationship existed and that it was a loan brokering arrangement. Mr. Scott explained that this claim is recommended under CSF Rule 2.5.2. which relates to the lawyer acting as a fiduciary in a matter related to the lawyer’s practice. Mr. Baldwin questioned whether running funds through a trust account is the only factor that relates the matter to the attorney’s practice or if other factors exist. A lengthy discussion ensued about various facts in both claims. There was consensus to carry both claims over to the July board meeting and invite the Client Security Fund Committee chair and Ms. Stevens to be present.

Mr. Scott discussed the committee’s recommendation to approve CSF Claim No. 98-46 - Potter v. Kelley. Mr. Hytowitz felt that the client was working a fraud on her creditors and now expected to be reimbursed for her mistake. He asked what had been done to show that the lawyer is 'judgment proof' and that the judgment cannot be collected. Mr. Johnson explained the CSF Committee has investigated and determined that Phil Kelley is judgment proof. Mr. Riemer indicated that claims collections have improved considerably in recent years and that the bar will be receiving a $35,000 collection soon from an old claim. Mr. Scott praised the efforts of Ms. Stevens to single-handedly create a collection program for the bar.

Action:Mr. Scott moved, Mr. Baldwin seconded, to approve CSF Claim No. 98-46 - Potter v. Kelley in the amount of $30,074. The motion was approved by the board (13-1-2); no Hytowitz; absent Burrows, Sumner).

3.Amendments to CSF Rules 2.2 and 6.2

Mr. Scott discussed the background of the proposed amendment to CSF Rule 6.2 to increase the single CSF claim cap from $25,000 to $50,000. He felt that financial information should accompany the proposed amendment to provide Client Security Fund budget and income data. A discussion ensued regarding the proposed claim cap. Mr. Rew felt that CSF claims projections would be desirable to assist the board with its analysis. Mr. Riemer suggested carrying over the proposed amendment to the July board meeting in order to gather required financial data. There was consensus to do so.

Mr. Scott presented the proposed amendment to CSF Rules 2.2 regarding dishonest conduct. He suggested to also carry it over to the July BOG meeting to give board members more time to think about it. A discussion ensued about various aspects of the rule. Mr. Scott described the difficult, sometimes gut-wrenching, decisions that have to be made regarding claims presented to the CSF Committee. There was consensus to carry the amendment over to the board’s July meeting.

Ms. Sowle presented the recommendation of the Federal Practice and Procedure Committee that the board adopt a resolution opposing the proposed reorganization or splitting of the Ninth Circuit.

Action:Ms. Sowle moved, Mr. Hittle seconded, to adopt a resolution opposing the proposed reorganization or splitting of the Ninth Circuit. The motion was approved by the board (14-0-2); absent Burrows, Sumner).

1.Proposed Formal Ethics Opinion: Audits of insurance defense bills (Opinion Request 98-2R)

Nancy Moriarty, Legal Ethics Committee Chair, presented the proposed formal ethics opinion to address the issues facing an insurance defense lawyer who is asked by the insurance company to submit detailed billing statements to an outside (third-party) audit service. She reviewed the background of the opinion and indicated it has generated great interest from the insurance defense bar and the insurance industry. The conclusion is that client consent is required if confidences and conflicts are to be disclosed. A lively questions and answer period followed.

Action:Ms. Rinehart moved, Mr. Harnden seconded, to approval Formal Ethics Opinion 1999-157, Audits of insurance defense bills. The motion was approved by the board (14-0-2); absent Burrows, Sumner).

Action:Mr. Harnden moved, Mr. Orf seconded, to approve the following consent agenda items. The motion was approved by the board (14-0-2); absent Burrows, Sumner).

Action:The board approved by consent reinstating Ms. Bagwell pursuant to BR 8.2.

Action:The board approved by consent temporarily reinstating Mr. Bjorgum pursuant to BR 8.7, and further approved Mr. Bjorgum’s unconditional reinstatement under BR 8.2 upon receipt of a favorable criminal records report.

Action:The board approved by consent temporarily reinstating Mr. Bledsoe pursuant to BR 8.7, and further approved Mr. Bledsoe’s unconditional reinstatement under BR 8.2 upon receipt of a favorable criminal records report.

Action:The board approved by consent reinstating Mr. Bolin pursuant to BR 8.2.

Action:The board approved by consent temporarily reinstating Ms. Brooks pursuant to BR 8.7, and further approved Ms. Brooks’s unconditional reinstatement under BR 8.2 upon receipt of a favorable criminal records report.

Action:The board approved by consent reinstating Mr. Downs pursuant to BR 8.2.

Action:The board approved by consent reinstating Mr. Horn pursuant to BR 8.2 upon receipt of a favorable criminal records report and payment of $286 bar dues.

Action:The board approved by consent temporarily reinstating Mr. Lastomirsky pursuant to BR 8.7, and further approved Mr. Lastomirsky’s unconditional reinstatement under BR 8.2 upon receipt of a favorable criminal records report.

Action:The board approved by consent reinstating Mr. Lynn pursuant to BR 8.2.

Action:The board approved by consent reinstating Mr. Naughton pursuant to BR 8.2.

Action:The board approved by consent reinstating Mr. Nixon pursuant to BR 8.2 upon receipt of a favorable criminal records report.

Action:The board approved by consent reinstating Mr. Oreskovich pursuant to BR 8.2 upon receipt of the balance owing for 1999 active bar dues.

Action:The board approved by consent reinstating Mr. Shaw pursuant to BR 8.2 upon receipt of a favorable criminal records report.

Action:The board approved by consent temporarily reinstating Mr. Suarez pursuant to BR 8.7, and further approved Mr. Suarez’s unconditional reinstatement under BR 8.2 upon receipt of a favorable criminal records report.

Action:The board approved by consent reinstating Mr. Thurman pursuant to BR 8.2.

Action:The board approved by consent reinstating Ms. Wilcox pursuant to BR 8.2.

Action:Mr. Rew moved, Mr. Hittle seconded, to recommend Ms. Cadzow’s reinstatement to the Supreme Court. The motion was approved by the board (15-0-1; absent Scott).

Action:Mr. Harnden moved, Mr. Rew seconded, to waive the one meeting notice required by BOG Policy 2.200 to take action on Mr. Dehlinger’s reinstatement request. The motion was approved by the board (15-0-1; absent Scott).

Action:Mr. Harnden moved, Ms. Sowle seconded, to recommend Mr. Dehlinger’s reinstatement to the Supreme Court. The motion was approved by the board (15-0-1; absent Scott).

Action:Mr. Baldwin moved, Mr. Rew seconded, to recommend Mr. Karalovec’s reinstatement to the Supreme Court. The motion was approved by the board (14-0-1-1; absent Scott; abstaining Lopez).

Action:Ms. Sowle moved, Mr. Baldwin seconded, to recommend Mr. Mulhall’s reinstatement to the Supreme Court. The motion was approved by the board (15-0-1; absent Scott).

Action:Ms. Sowle moved, Mr. Baldwin seconded, to recommend to the Supreme Court that Ms. Starr’s reinstatement application be denied. The motion was approved by the board (14-0-1-1; absent Scott; abstaining Lopez).

Action:Mr. Orf moved, Mr. Harnden seconded, to waive the one meeting notice required by BOG Policy 2.200 to take action on Mr. Werschkul’s reinstatement request. The motion was approved by the board (15-0-1; absent Scott).

Action:Mr. Orf moved, Mr. Harnden seconded, to recommend Mr. Werschkul’s reinstatement to the Supreme Court, and to temporarily reinstate Mr. Werschkul pursuant to BR 8.7. The motion was approved by the board (15-0-1; absent Scott).