Board to debate fee increase.

It's been 11 years since the last one, but at its December 15 meeting in Coral Gables the Bar Board of Governors will consider asking the Supreme Court to raise annual membership fees.

The board will also take on several other issues, including three proposed ethics opinions relating to duties of attorneys hired by insurance companies to represent policyholders.

The Budget Committee, citing declining reserves and the need to meet new challenges, has proposed raising annual fees from $190 to $265 for active members and from $140 to $175 for inactive members. The board needs to act in December in order to give the Bar time to petition the Supreme Court for a rule amendment to allow fees to be raised.

"Since the last annual fee increase from $140 to $190 in the 1990-91 budget year, inflation has increased 33 percent, meaning it takes $252 of today's dollars to equal the $190 of 10 years ago," said Budget Committee Chair Jesse Diner. "The proposed increase, to $265 for active members and to $175 [from $140] for inactive members, will hopefully last for five years if no new major programs are implemented."

Diner also noted the 1990-91 fee hike was only anticipated to provide sufficient funding for three to five years, but under careful stewardship the increase lasted much longer. "Hopefully, we can make this fee increase last much longer, as well," he said.

Eleven years is the longest the Bar has gone in its 51-year history without an annual fee increase, Diner added, and shows the fiscal responsibility of the Bar. But despite careful oversight, the deficit for the just-ended 1999-2000 fiscal year was just over $1 million and would have been around $2.2 million without the solid return on the Bar's investments, he said.

That loss, according to Budget Committee Chair-elect William Kalish, is projected at $2 million for the current 2000-2001 budget, even after the return on investments. "Fiscal responsibility dictates that reserves be no less than one-third of an annual budget," Kalish continued. "After returns on investments, the Bar will fall below adequate reserves by the end of 2002. This projection is based on an investment return of eight percent, which some consider optimistic in today's market and in light of the Bar's relatively conservative investment strategy."

Diner, Kalish and President-elect Terry Russell also said the fee hike is needed so the Bar can both maintain its many improvements of the past decade and also meet new challenges.

"A strong organization should never be stalled by a lack of resources," Russell said. "The Bar must: Establish a strong program against continuing infringement on the practice of law by nonlawyers; continue to be committed to improving the access to legal services for all Floridians; keep up with technological advances and improve members' electronic access to Bar services; and augment the Clients' Security Fund."

The last fee increase led to improving and strengthening a number of Bar programs, as well as new efforts, including:

* More aggressive UPL prosecution.

* An expanded ethics advisory service, including wider availability of the toll-free ethics hotline.

* The evaluation of proposed attorney ads, and the provision of advisory opinions for both attorney advertisements and direct written communications to potential clients. Those efforts help attorneys comply with Rule Regulating The Florida Bar 4-7.

* The opening of the Center for Professionalism and the funding of its programs and activities.

* Creation of the Bar's website, along with other critical technological improvements. The website allows members to sign up for and take online CLE courses, updates them on Bar activities, provides daily clipping services on stories of interest to the legal community, provides legal research links and, most recently, allows members to send change of address information to the Bar online.

* Improvements to the Bar's Lawyer Regulation Department, including creating the Ethics School for lawyers facing minor grievance charges can get the cases dismissed in exchange for attending classes aimed at helping them avoid future problems; a grievance mediation program that is frequently used, commonly for communication-related problems, to resolve disputes, and the new Attorney Consumer Assistance Program, which seeks to screen grievance complaints to determine which can be settled cooperatively between clients and attorneys.

* Nearly doubling the contribution to the Clients' Security Fund, which compensates clients when errant lawyers misappropriate their funds. "That program serves as a visible sign of the personal and professional integrity of the vast majority of Bar members," Russell said.

Diner noted that even with the fee increase, the Bar compares favorably with other state bars and with other professions in Florida. At the $265 mark, the Bar would rank tied for 17th among the nation's 34 mandatory state bars, including being behind California ($398) and Arizona ($340). That's also lower than several voluntary bars -- which do not fund grievance programs -- including Connecticut ($525), Delaware ($355) and Tennessee ($310).

Within the state, physicians pay $400 to belong to the Florida Medical Association, teachers pay $300 to $600 for the Florida Education Association, and engineers pay $250 for the Florida Engineering Society. Those figures do not include additional state licensing fees.

Presented at the Board of Governors' October 13 meeting by the Budget Committee, only for information, the proposed annual fee hike produced an extensive discussion. Board members appeared generally supportive, but emphasized that they wanted more information and to carefully examine the budget figures.

The accompanying chart gives a breakdown on how Bar members' annual fee money is spent.

Aside from the budget, the board will hear appeals on three controversial ethics opinions approved by the Professional Ethics Committee. All involve the obligations of attorneys hired by insurance companies to represent policyholders when they are sued. The opinions have been under review, development and appeal for more than a year.

The proposed advisory opinions are:

* PAO 99-2, which holds that an attorney hired by an insurance company to represent an insured may not provide information relating to the representation to an outside auditor at the request of the insurance company without the specific consent of the insured. Such consent cannot be implied by the contract between the insured and the insurance company.

* PAO 99-3, which holds that an attorney is ethically prohibited from entering into an agreement with an insurance company to represent insureds where the attorney's independent professional judgment and the client's rights will be affected by restrictive billing practices imposed by the insurance company.

* PAO 99-4, which holds that an attorney paid on a salaried basis by an insurance company to defend company insureds faces a potential conflict of interest. Absent an actual conflict, however, the attorney ethically may undertake such representation only if: the attorney reasonably believes that he or she can adequately represent the insured's interests; the insured consents after consultation; the attorney's professional independence in representing the insured is assured; the attorney honors the duty of confidentiality owed to the insured; and the attorney is not assisting the insurer in conduct constituting the unlicensed practice of law.

On other matters, the board will hear a detailed report on the Bar's campaign to educate voters on the November merit selection and retention local referendums and to urge them to vote "yes."

Representatives of the Government Lawyer, Tax and Workers' Compensation sections will present their annual reports to the board. In addition, former Bar President Alan Dimond will report on the activities of the ABA Committee on Multijurisdictional Practice.

Former Bar President Ray Ferrero, chair of the Florida Lawyers Mutual Insurance Company, will report on that company's activities. Also expected to report will be Gerald Williams, president of Florida Lawyers Legal Insurance Company, and Michael Cohen, executive director of FLA, Inc.

The board will also be making several appointments, including two lawyers for six-year terms on the JQC. The board will also pick one lawyer for a three-year term on the Florida Rural Legal Services, Inc.'s board, one lawyer from the Southern District for a four-year term on the federal Eleventh Circuit Judicial Conference, and one lawyer from each district court of appeal jurisdiction for two-year terms on the Florida Realtor-Attorney Joint Committee.