Thursday, April 25, 2013

D. C. Bar Budget: License To Steal From Members?

The National Law Journal has just published an opinion piece by Gregory Smith on proposed increases in District of Columbia Bar dues:

If you are a member of the District of Columbia Bar, your dues have gone up again—so the organization can buy a building with your money.

Oh, it hasn't happened yet. The D.C. Bar's current lease doesn't even expire until 2021. But it will. The D.C. Bar is socking away more than  $500,000 a year for a building fund. And your dues were just increased so this fund can grow next year from $1.9 million to $2.4 million.

I am a new member of the D.C. Bar board of directors, and I voted against this increase. I am not one who reflexively rejects all dues increases, regardless of needs. I have occasionally voted for dues increases while leading the Bar Association of the District of Columbia and the Atlanta Bar, when it was necessary. But they should be a last resort. And that is particularly true for a mandatory bar, where most members can't leave the organization, and bar dues are basically a tax.

No such need existed here. The D.C. Bar is, in fact, currently flush with cash. Its latest financial statements, eight months into the year, showed a positive variance from operations in dues-funded programs of $1.4 million. Operating cash at the end of February was $8.7 million—$2.6 million above a year ago. The D.C. Bar board just voted to put this year's projected leftover surplus into a separate contingency reserve, even as it simultaneously voted to raise your dues.

This is not an investment in our profession. It's an investment in real estate. As noted, separate contingency funds exist to cover emergencies. This is a pure building-fund line item, with more than half a million bucks a year being socked away annually, with your money. At a time when members are facing financial insecurity, and the D.C. Bar is running a significant surplus, I did not think this could fairly be justified. Even if the D.C. Bar should consider buying a building in 2021, must it do so in cash?

I could not stop this. I noted how we could still put $70,000 (not $570,000) into this building fund, and raise dues by only $5, not $10.  But I am a new member on the D.C. Bar board, and I was outvoted. The opposing arguments were predictable: "Our budget committee approved this, so we should go along." "$10/year isn't that much." "We started this building fund a few years ago, and are merely continuing it." "We published our proposed budget in the Washington Lawyer magazine, and no one voiced objections." "This is still below the D.C. Court of Appeals' approved dues ceilings, and our dues remain below most other jurisdictions."

I don't agree. The D.C. Bar's dues are low in part because they're spread over 100,000 members, and we are not geographically dispersed. When I joined the D.C. Bar in 2001, I recall my dues being $165/year. Now they'll be $265/year. I doubt many other jurisdictions have raised dues so fast. And this extra $100 per year per member translates into an extra $10 million per year. And more importantly, it's simply wrong to tax our members another half a million, at a time when the D.C. Bar is running a significant surplus (even raising our judges' dues in the midst of sequestration), just to pad a building fund.

I couldn't change this myself, but a new D.C. Bar election is coming. Ballots will be distributed April 30, and candidate forums will be held. Consider asking folks where they stand on dues. (I'm not running, but one candidate, Dan Schumack joined me in voting against this dues increase; all other incumbent candidates running this year for re-election voted to raise dues.) And while you're at it, you may want to ask candidates about the D.C. Bar's other recent decision, to change the election rules without even notifying the membership—with that bylaw change announced only after the vote. That's right—you recently lost your right to run for D.C. Bar president by petition. You weren't even notified that you'd been disenfranchised until after the fact. The argument at the time for why a vote shouldn't at least be delayed until notice was given to the membership?  "The D.C. Bar has never notified its members in advance (even on its website) of bylaw changes that are being considered by the board." Huh?

With the nominating committee now controlling the show, perhaps it's not surprising that both of this year's D.C. Bar presidential candidates voted for this dues increase. Maybe they will reconsider their positions now, but the D.C. Bar's centralization will only continue unless D.C. Bar members speak up—either directly or at least through the votes they cast.  So pass the word along. At the present rate, the D.C. Bar may hit its dues ceilings again in just two to three years.

Mr. Smith is entirely correct in his concerns.

 I attended a bar budget meeting that was open to bar members on April 9 to raise many of the same concerns. Unfortunately, I was one of two members that attended. I also advocated for transparency in the budget details, apparently to no avail.

My previous commentary on the bar leadership selection process (mentioned in Mr. Smith's last two paragraphs) is linked here.

A modest proposal: Gregory Smith for President of the District of Columbia Bar. (Mike Frisch)

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