April 12, 2019 – The State Bar of Wisconsin’s Board of Governors today took action on numerous petitions that would change rules and procedures that apply to attorney discipline cases handled by the Office of Lawyer Regulation (OLR).

The board also approved the State Bar’s budget for fiscal year 2020, with a $2 dues increase, and discussed a proposed increase to the Wisconsin Lawyers’ Fund for Client Protection, one of four court assessments that lawyers pay annually with bar dues. Under the proposal, the fee would increase from $20 to $25, a $5 increase.

The board also approved a new policy to support funding for the Wisconsin Judicial Council, which is not currently funded for operations, approved an informal Section Leaders Council liaison to the board until a permanent liaison is appointed, and approved a petition relating to the State Bar’s Lawyer Referral and Information Service (LRIS).

The board also heard comments from Wisconsin Attorney General Josh Kaul, who said his top priority is the opioid crisis in Wisconsin. Kaul, who won election as the state’s top lawyer in November, provided an overview on the Department of Justice’s activities.

Lawyer Discipline Petitions

An OLR Procedure Review Committee (OLR Committee) recently filed nine petitions with the Wisconsin Supreme Court to change various aspects of lawyer discipline, including referee appointments, training and authority, reinstatements, confidentiality, enforcement, permanent revocation, charging processing, and misconduct reporting.

The petitions, which seek technical and substantive changes to existing rules, are the product of OLR subcommittees that studied each aspect. The OLR Committee, chaired by Judge Gerald Ptacek, published a final report with recommendations last October.

The State Bar’s Policy Committee and the Professional Ethics Committee reviewed the OLR Committee’s final report and raised various comments for consideration by the board in February. Those committees also made recommendations for board action.

The board discussed the proposed OLR petitions at its February meeting, and took action to either oppose, support, actively monitor, or postpone further action on each petition at today’s meeting.  

The board’s action allows State Bar representatives to speak on the organization’s positions in communications with the Supreme Court, or at petition hearings.

Two of the petitions, 19-04 (referee appointment and training) and 19-05 (referee authority) are scheduled for public hearings at the Wisconsin Supreme Court on June 6. The remainder will likely receive public hearings during the Supreme Court’s next term.

Marsha Mansfield, who served as OLR Procedure Review Committee reporter, explained the petitions in a recent article published in InsideTrack last week. The following briefly summarizes the petitions and the board’s action.

Petition 19-04 (referee appointment and training) – The board supports increased training for OLR referees. The petition addresses the training and composition of the panel of attorneys and reserve judges (referees) that hear discipline cases. Under the petition, panels are limited to 24 members serving staggered, four-year terms, appointed by and functioning under the Supreme Court’s supervision.

A supporting memo says the petition “seeks to clarify the referees’ duties and establish more feasible deadlines for referees to complete and submit their reports to the Court.”

Petition 19-05 (referee authority) – The board opposes granting OLR referees authority to impose attorney discipline, except for decisions regarding consensual agreements between the parties. The petition creates a larger role for referees, allowing them to impose discipline up to a three-month law license suspension. Currently, referees only make recommendations, and the Supreme Court makes the ultimate decision on attorney discipline.

Under the petition, attorneys and OLR would have the right to appeal the referee’s decision to the Supreme Court. A supporting memo says changes are intended to create a more efficient way to conduct discipline proceedings for minor allegations.

But board members raised concerns of consistency in decision-making, and said the Supreme Court should continue to be the decision-maker in all cases in which discipline is imposed, unless the parties have reached a consensual agreement.

Other board members said delays are problematic, and referees should be allowed to make decisions in minor cases. But a super-majority voted to oppose the petition.

Petition 19-06 (OLR reinstatements) – The board supports the petition. The petition addresses the reinstatement process after an attorney’s law license has been suspended or revoked. The petition seeks to streamline the reinstatement process and allows attorneys and OLR to stipulate to reinstatement of law licenses.

According to a supporting memo, the petition “seeks to consolidate, amend, and redesign current rules governing the reinstatement process in a manner that provides due process for attorneys, allows OLR to present its position regarding reinstatement, allows members of the public to express their opinions on the reinstatement, and preserves the Court’s role in determining when reinstatement is appropriate.”

Petition 19-07 (confidentiality) – The board opposes a provision that requires attorneys to notify a supervisor(s) of an OLR investigation and opposes granting OLR authority to notify an attorney’s employer of an OLR investigation. The petition would require attorneys to provide of copy of an OLR investigation notice to their supervisors, either current or former, and gives the OLR authority to provide a copy of the notice to the attorney’s employer, if the director deems warranted.

At the last board meeting, one board member said law firm policies can determine whether an attorney must notify the firm about an investigation, and another raised concerns about notice before the investigation stage, since many complaints are meritless. Board members raised some of those same concerns before voting to oppose today.

The board also voted to actively monitor the other provisions of the petition relating to public access to OLR records, and voted to support the petition’s proposal to change the statute of limitations period, from 10 years to six years, for filing a grievance with the OLR for alleged attorney misconduct.

Petition 19-08 (OLR process) – The board supports the OLR director’s right to pursue a consensual reprimand without an investigation, but opposes the remainder of the petition, including the elimination of OLR district committees. This petition would allow the OLR director to seek reprimands, without an investigation, if the parties consent to the reprimand. The board supports that proposal.

However, the board opposes the remainder of the petition, including a proposal eliminating OLR district committees, which consist of lawyers and public members in each State Bar district appointed to assist OLR investigations.

Gov. Steve Sorenson, a former State Bar president, said the district committees allow local attorneys and the public to be involved in the attorney discipline process, which is important because they better understand the law practices in their own communities.

A supporting memo says the petition “would put into effect a streamlined disciplinary process that maximizes the effectiveness of OLR investigators and the Director and that promotes accountability throughout the disciplinary process.”

The petition would also allow for automatic license suspension for failure to respond or cooperate within 40 days of receiving notice of an OLR investigation.

The supporting memo says that under current rules, “an uncooperative respondent may deliberately delay an OLR investigation 140 or more days without sanction.”

Petition 19-09 (OLR enforcement of orders) – The board supports the petition. The petition allows OLR to file motions to compel compliance with disciplinary orders.

A supporting memo says “there is scant authority for addressing the process for enforcing disciplinary hearings” and the petition, if adopted, “would allow the OLR to seek enforcement of a disciplinary order without having to resort to the extreme measure of initiating a new disciplinary proceeding” to enforce the order.

Petition 19-10 (permanent revocation) – The board postpones action on the petition to its June meeting. The board voted on a motion to oppose the petition, which includes a provision that would allow an attorney’s law license to be permanently revoked. In a close vote, the motion failed. Other motions followed, but the board postponed further action on the issue until the next board meeting in June.

Currently, a lawyer whose law license is “revoked” may petition the Supreme Court for reinstatement after five years. The petition would allow permanent revocation of an attorney’s law license, with no opportunity for reinstatement.

Members, at this board meeting and the last meeting in February, raised arguments on both sides. Some argued that reinstatement should always be possible. Others said egregious cases could merit permanent revocation. They also highlighted the possible adverse public perception of rules that do not include the ability to permanently revoke, even though the Supreme Court decides if a revoked license should be reinstated.

Petition 19-11 (charging process) – The board supports the petition. The petition would require the OLR director to provide the complaining party (the grievant) with written notice of the decision to close the matter for lack of an allegation of possible misconduct, medical incapacity, or lack of sufficient information of cause to proceed. The notice would include a brief written statement of reasons for the director’s decision.

A supporting memo says that these changes “reflect our state’s commitment to, and tradition of, open government, and may also promote public confidence in the attorney disciplinary process by providing more information to the grievant.”

Petition 19-12 (reporting misconduct) – The board supports a provision that prohibits attorneys from making agreements that limit a person’s right to report lawyer misconduct. However, the board voted to oppose a proposed change to the standard that would trigger a lawyer’s duty to report misconduct. The petition seeks amendments to SCR 20:8.3, which currently requires a lawyer “who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects” to inform OLR or the appropriate authority.

Under the petition, a lawyer who “reasonably believes” – instead of “knows” – another lawyer has committed an ethics violation would be required to report it. The board voted against this change, meaning it voted to keep the current standard.

However, the board did support the petition’s request to amend SCR 20:1.8(3)(h)(3), which currently prohibits lawyers from making agreements with clients that limit the client’s right to report the lawyer’s conduct to disciplinary authorities.

Under the petition, the rule would prohibit such agreements with any “person.” A supporting memo says that without the proposed amendment, “an attorney is compliant with current Rule if he or she enters into an agreement with a client that prohibits any person related to or associated with the client from reporting the attorney’s misconduct.”

“The proposed Rule eliminates that possibility,” the memo states. “The Committee believes that this provides additional protection for the public and encourages accountability and ethical behavior among attorneys.”

Board Discusses $5 Client Protection Fund Fee Increase

The board discussed, but took no action on, a proposal to increase to the fee that lawyers pay to the Wisconsin Lawyers’ Fund for Client Protection (Client Protection Fund), established in 1981 to compensate clients who have suffered financial loss due to attorney misconduct. The proposal would increase the fee by $5, to $25 annually.

Currently, lawyers pay an annual $20 fee, which is assessed by the Wisconsin Supreme Court and collected by the State Bar of Wisconsin with annual dues statements.

The Supreme Court set the current Client Protection Fund fee rate in 2013. A Client Protection Fund Committee will petition the Supreme Court to increase the fee amount.

Client Protection Fund Committee Chair Steve Chiquoine, who is seeking the board’s support, informed the board that the committee reviewed financials from 2013 to the present and found that in four of the past six years, claims were deferred for payment due to insufficient available funds.

In 2017, for instance, $300,000 in approved claims were deferred for payment to clients. The fund has experienced an increase in the number of larger recoverable approved claims, and a fee increase is required in order to fulfill the fund’s mission.

Board Approves FY 2020 Budget

The board approved the State Bar budget for FY 2020 (July 1, 2019 to June 30, 2020), which includes a $2 dues increase. The board discussed the proposed budget at the February meeting, and approved it today with no changes.

The budget request of $11.77 million, fairly equivalent to the last two approved budgets, closely aligns resources with the State Bar’s strategic priorities and goals.

The State Bar’s strategic goals advance the organization’s efforts to prioritize and realign activities to improve efficiency and delivery. The board’s Strategic Planning Committee led those efforts in the last year, including a rigorous cost-benefit analysis.

The approved budget reflects more than $400,000 in expense cuts, through the elimination or reduction of numerous programs, services, and other costs.

For instance, reassignment of some critical functions among existing staff and unfilled vacancies will result in significant savings on personnel costs in FY 2020.

The State Bar’s Finance Committee determined that using $30,000 from the dues stabilization reserve fund and a $2 per member dues increase, from $258 to $260 for full dues paying members, was necessary to balance the budget.

The State Bar dues have increased by $34 in the last 14 years. Dues increased by $30 in FY 2015, the first dues increase in a decade. In FY 2018, the dues increased by $4.

About 45 percent of the revenue for the 2020 budget relies on membership dues. The remainder is funded by other revenue sources, including product sales and continuing legal education (CLE) registrations, including seminars and webcasts.

Board Establishes New Policy on Board Vacancies

The board approved a new policy for filling vacancies on the Board of Governors when a governor departs before his or her term expires.

The State Bar’s Governance Committee studied the issue, engaged in debate, and developed the process that will contribute to greater diversity and inclusion on the board. State Bar’s Executive Committee reviewed and modified the final policy.

Currently, there’s an informal process for identifying potential candidates and the board votes on candidates to fill vacancies. Under the new policy, when governor is unable or unwilling to complete their term, the State Bar will send a notice to:

1) all active status attorneys in that district;

2) the local bar association; and

3) any specialty bar associations or affinity groups.           

The notice will contain the duties, requirements and qualifications for Board of Governors’ members, and requires candidates to submit a statement of interest, including qualifications on how they contribute to the board’s diversity and inclusion. The board then selects a replacement, after the notice, consistent with the bylaws.

 

Board Approves Informal Section Leaders Council Liaison to the Board

At the request of the State Bar’s Section Leaders Council, the board agreed to appoint an informal council liaison to serve on the board, until such time as a permanent and voting member is added through an amendment to the bylaws. The Supreme Court must approve this amendment.

The Section Leaders Council is comprised of representatives from each of the State Bar’s 24 sections and facilitates effective education and support of individual bar members through active participation in State Bar governance.

Matthew McClean, chair of the Section Leaders Council, said a liaison will improve what the council believes is a “disconnect” between the State Bar sections and the board.

Board Approves Policy on Wisconsin Judicial Council

The board adopted a policy, recommended by the board’s Policy Committee, relating to the "support and funding" of the Wisconsin Judicial Council. The Judicial Council is a 21-member statutory body that studies and makes recommendations relating to: 1) court pleading, practice and procedure; and 2) organization, jurisdiction and methods of administration and operation of Wisconsin courts.

“In order to carry out these statutory responsibilities the Judicial Council needs state support to assist these important functions to advance our Judicial system,” the policy states. Currently, the Judicial Council receives no operational funding.

Board Approves Petition on Lawyer Referral and Information Service (LRIS)

The board approved a proposed petition relating to the State Bar’s Lawyer Referral and Information (LRIS) program, which acts as both a public service helping clients find legal resources and as a moderately priced marketing tool to help attorneys grow their practices.

The petition requests that LRIS be added to SCR 10.05(4)(m), which allows the State Bar to establish assistance programs for lawyers and judges. The change would apply privilege and confidentiality protections to communications through LRIS.

The State Bar will file the petition to the Supreme Court. A supporting memo says “the confidentiality which LRIS promises callers as a matter of program policy does not protect those callers from outside entities seeking information revealed in the course of the referral process.

“Providing both confidentiality and privilege to LRIS callers will allow callers to share the information needed to assist them in finding the best possible resource without the fear of exposure to adverse parties.”

In 2016, the American Bar Association’s House of Delegates adopted a resolution, encouraging rules and laws that expressly extend privilege and confidentiality provisions to lawyers and clients that use lawyer referral services.

Other Business

The board approved the Civil Rights & Liberties Section request to amend the section’s bylaws.

Upon request, interested members may obtain a copy of the minutes of each meeting of the Board of Governors. For more information, contact State Bar Executive Coordinator Jan Marks byemail or by phone at (608) 250-6106.