Governor Salvador A. Mungia
6th District

I am very happy to be the Governor for the 6th District and look forward to serving our members who reside in Clallam, Grays Harbor, Jefferson, Mason, and parts of Kitsap and Pierce counties. My goal is to communicate with those within the 6th District as often as I can. The Board of Governors (BOG) addresses a number of issues at each of its meetings that affect either distinct portions of our Association or sometimes all members. I would appreciate hearing from you whenever you have any questions or comments regarding any of these.

April 25-26 BOG Meeting

On April 25 and 26, the Board of Governors held its meeting in Spokane. The following are some highlights from that meeting.

Office of Disciplinary Counsel Report
Doug Ende, chief counsel for the Office of Disciplinary Counsel, provided his quarterly report to the BOG.  We are the only self-regulated profession in the state and it is critical that we continue to perform this core function in a highly effective way in order to ensure the public about the integrity of the legal profession.  In 2007 the WSBA spent $3,952,171 to fund our discipline system which is 37% of the dues collected.  In my December 2007 Notes from the Gov I reported information regarding the 2006 statistics from OCD.  Here are some statistics from 2007.

There were 23 disbarments in 2007 which is up from the previous three years (2004/16, 2005/12, and 2006/19).  There were 26 suspensions in 2007 which was the same as in 2006.  In total, there were 74 disciplinary actions which consisted of disbarments, resignations in lieu of disbarment, suspensions, reprimands, and admonitions.  There were 2,029 written disciplinary grievances received by the Bar against attorneys in 2007 which is about a seven percent increase from 2006 (1,847).  The three largest sources of grievances against attorneys were (1) former clients (28%), (2) current clients (19%), and (3) opposing clients (17%).  It was rare that opposing counsel (1%) and other attorneys (3%) filed grievances against another attorney.  The three largest practice areas of attorneys that were the subject of a grievance remained the same as in 2006: (1) criminal law (31%), (2) family law (16%) and (3) torts (8%). 

Greater Access and Assistance Project
In order to promote WSBA's core value of access to justice, the Young Lawyer Division, together with the Access to Justice Board, has been exploring ways to expand the Greater Access and Assistance Project.  Currently, this program is operating in Spokane and Snohomish Counties by way of the Young Lawyer Sections in those counties.  The program recruits attorneys willing to provide legal representation at a greatly reduced rate (approximately $50 to $60 an hour) to people who could not otherwise afford legal representation but who were also not eligible for free legal representation from providers such as Northwest Justice Project or Columbia Legal Services.  Kitsap and Whatcom Counties are currently in the planning stages to implement this program.

The cost of expanding this program statewide is significant.  The Board of Governors is highly supportive of this project but is requesting a plan by the WYLD and ATJ that would allow the program to operate in a manner within the WSBA budgetary constraints.  The WYLD/ATJ GAAP Committee is accordingly exploring the option of having a technology-based (primarily on-line, with a possible telephone component) lawyer referral service system in order to operate a statewide GAAP.  The Committee is planning on reporting to the BOG in fall of 2008.

Financial Matters and Licensing Fees
The BOG has, within the past decade, set licensing fees in three-year cycles.  Our Budget and Audit Committee recommended that the BOG set the next licensing fees for a two-year cycle because of the quickly-changing economic climate that the economy is in.  The BOG voted in favor of setting the next fee increase for a two-year cycle.  The BOG will be making a recommendation to the State Supreme Court at an upcoming meeting as to the amount to which the licensing fees should be set.

In addition, the Budget and Audit Committee recommended moving from unrestricted reserves $300,000 to increase our operating reserve account from $1.2 million to $1.5 million.  In addition B&A recommended transferring approximately $1.1 million from unrestricted reserves to Facilities Reserves so that the total amount in Facilities Reserves would be $2.5 million.  It is undisputed that our current lease situation is substantially below market and that when the term expires we will, at the very least, face a substantial lease increase and may have to move once again to another building.  Determining that it was prudent to set aside those reserves to cushion those anticipated increased expenses, the BOG approved the recommendation.

Request for Formal Ethics Opinion regarding threatening an opposing party about immigration status
At its December 2007 meeting, the BOG requested the RPC committee to prepare for the Board's consideration a formal ethics opinion addressing the following:

Under the RPCs is it unethical for a lawyer to threaten to present criminal charges against the opposing party in a private civil matter, or to report any person to ICE in a private civil matter, in either case, solely to gain advantage for a client in the civil matter, if the criminal matter or the immigration status of the person, as the case may be, is not related to the civil claim?

The RPC committee presented a draft Formal Ethics Opinion that answered the question affirmatively by concluding that it would violate both RPC 8.4(d) and 4.4(a) for a lawyer to do so.  However, the RPC committee expressed some cautionary notes about adopting such an opinion.  The RPC Committee recommended that it may be clearer to have a Rule of Professional Conduct expressly addressing this issue instead of a Formal Ethics Opinion that relies on other provisions of the Rules of Professional Conduct.  The BOG directed the RPC Committee to draft a proposed Rule of Professional Conduct.  In the meantime the BOG will be issuing a resolution addressing this issue.

Next BOG meeting
The next BOG meeting will take place on June 6-7 in Vancouver, Washington.

March 7-8 Bog Meeting

On March 7 and 8 the Board of Governors held its meeting in Tacoma.  At this meeting, the BOG decided to hold a simultaneous bar exam in Spokane during the summer of 2010, hosted a marriage/domestic partnership forum, encouraged the Washington State Bar Foundation to increase its activities, and heard a first reading on a proposed by-law change regarding the WSBA Bar News Editor. 

Bar Exam in Spokane for 2010

A request was made that the WSBA hold the 2010 bar exam in both Bellevue and Spokane.  There were two primary reasons for the request: (1) to serve the applicants from the eastern part of the state and lessen their financial burden and (2) to acknowledge that we are a statewide bar organization and, as such, we should demonstrate our commitment to those on the east side by holding a simultaneous bar exam in Spokane.  The estimated increased cost to hold a simultaneous bar exam in Spokane is approximately $20,000 to $25,000 - a cost that will be covered by increasing the application fee.  The motion passed.

Marriage/Domestic Partnership Forum

On the first day of its meeting, the WSBA BOG hosted a marriage/domestic partnership forum in the afternoon at UWT.  The forum featured four panelists and was moderated by UW law school professor Hugh Spitzer.  The panel spoke about the recently passed legislation (HB 3104) providing additional rights to registered domestic partners and questions raised by that legislation.  At the end of the forum the members in attendance were asked to comment on the issue of whether the Board of Governors, on behalf of the WSBA, should take a stance if legislation is introduced at some future time proposing government recognition of same-sex marriage.  Members provided opinions ranging from this is a political, not an administration of justice, issue and therefore the WSBA should not become involved to the other end of the spectrum where opinions were given that this is a civil rights issue, affecting legal rights of individuals, and that the WSBA would not be fulfilling its mission unless it became involved.  While there is no proposed legislation regarding government recognition of same-sex marriage, the BOG believed it was prudent to start this dialogue now with its membership.

Washington State Bar Foundation

The Washington State Bar Foundation was established in 1957 and was reorganized in 1980 as a § 501(c)(3) corporation.  The Foundation was largely passive until 2001 when it was reinvigorated. The Foundation has been supporting programs such as the Washington Leadership Institute, the Presidents' and Governors' Diversity Scholarship Fund, and the Loan Repayment Assistance Program.  While the Foundation has been successful at supporting those three programs, and a few others, all such support has been limited.  Because the Foundation is the WSBA's foundation, the trustees were seeking input from the BOG as to the future direction that the Foundation should take.  The Foundation trustees are considering asking the BOG to have a voluntary dues check-off on the bar licensing forms where members could easily make donations to the Foundation.  In addition, the Foundation trustees are exploring the options of hiring a professional development director and entering into a financial relationship with a credit card institution for an affinity credit card program.  The BOG encouraged the trustees to make a specific proposal at a future BOG meeting that would allow the Foundation to grow.

Proposed Bylaw Change Regarding the Bar News Editor

As some of you may recall, last year the WSBA retained a new Bar News Editor. At that time, I voiced a concern that the WSBA needed to institutionalize an annual review process of the Bar News Editor.  In addition, I felt that WSBA also should have a mechanism where the position would open periodically so that no one would become a de facto editor for life and that those wanting a chance for this position should be given that opportunity.  I proposed the following by-law change amendment:

Bar News Editor

Term of contract

The WSBA will enter into a contract to retain, as an independent contractor, an editor for the WSBA Bar News.  The contract will end December 31 and will be for a time-period of three years unless the initial contract term is less than three-years in which case it may exceed three years but may not exceed four years.  While the Board of Governors will allow the Editor wide discretion in determining the content of the Bar News, the Editor serves at the pleasure of the Board of Governors.  The contract will have a provision allowing the Board of Governors to terminate the contract at any time without the need to show cause.

Before the end of the contract time-period, the WSBA will advertise the position of Bar News Editor.  The WSBA Editorial Advisory Committee, together with WSBA staff, will oversee this process and will present no less than three candidates to the Board of Governors sufficiently in advance of the end of the contract term of the existing Editor to allow the Board of Governors to choose the following Bar News Editor.  The existing Editor may apply for the position.

Evaluations

The Editorial Advisory Committee will annually review the performance of the Bar News Editor and present the evaluation at a Board of Governors' meeting within the first half of the calendar year.

This was placed on the agenda for a first-reading.  This proposal will likely come up for a vote at the BOG's June meeting. 

Next BOG meeting

The next BOG meeting will take place on April 25 and 26 in Spokane.

September 20-21 BOG Meeting

The Board of Governors met in Seattle on September 20 and 21.  The BOG selected a new Bar News Editor, voted to recommend a revision to RPC 1.5 regarding flat fees and trust accounts, adopted a new mission statement and guiding principles, adopted the final portions of the Committee on Public Defense report, and approved the budget for the upcoming fiscal year.

Bar News Editor
Forty-three applicants submitted proposals to the Bar for this position.  From that pool of forty-three, eight finalist were interviewed by the Editorial Advisory Board subcommittee.  The EAB selected three finalists that were then interviewed by the Board of Governors.  The BOG chose Michael Heatherly as the new editor.  Mr. Heatherly is an attorney from Bellingham who is a former news reporter, columnist, and editor for a couple of different publications and who also has a B.A. in editorial journalism from the UW.

RPC 1.5
I previously reported that a WSBA task force was recommending that the BOG propose a change to the State Supreme Court regarding RPC 1.5 dealing with flat fees and trust accounts.  In short, the proposed rule change would allow attorneys, under certain defined circumstances, to charge a flat fee to a client and allow the attorney to place that flat fee directly into the attorney's working account instead of into the attorney's trust account.  (For a review of the proposal, scroll down.)  The BOG unanimously voted in favor of the recommendation.  The proposal will now go to the State Supreme Court where there will be a comment period before the Court acts on the proposal.

Adoption of new mission statement and guiding principles
The Board of Governors, in determining where best to focus its efforts for the next three years, appointed a committee to make a recommendation regarding strategic goals and long-term planning.  The committee reviewed the existing mission statement of the Bar together with the existing long range planning goals.  The committee believed that the existing mission statement should be revised to reflect that a key component of the Association's core mission is to ensure the integrity of the legal profession.  In addition, the committee believed that the goal of service to the public should be placed at the beginning of the mission statement instead of the end.  The existing mission statement was:

The mission of the Washington State Bar Association is to promote justice and serve its members and the public.

The committee proposed the following mission statement:

The Washington State Bar Association's mission is to serve the public and the members of the Bar, ensure the integrity of the legal profession, and to champion justice.

The BOG unanimously adopted the revised mission statement.

The committee then formulated a list of items that it believed encapsulated core components of the WSBA's mission.  These are values that the WSBA has held, is currently holding, and will always hold in the future.  The committee believed that these items were not strategic goals but instead were principles that should always guide the WSBA.  Accordingly, the committee proposed that the BOG adopt the following as guiding principles:

• The WSBA will operate a well-managed association that supports it members and advances and promotes:
• Access to the justice system;
• Diversity, equality, and cultural understanding throughout the legal community;
• A fair and impartial judiciary;
• The public's understanding of the rule of law and its confidence in the legal system; and
• The ethics, civility, professionalism, and competency of the Bar.

The BOG unanimously adopted the guiding principles.

The committee then recommended that for the next three-year time period, the BOG focus its efforts in three areas in which the Association had not either devoted significant resources or areas that needed particular attention.  The committee recommended the BOG adopt as goals for the next three-year period the following directives:

• The WSBA engage in a systematic program review.
• The WSBA strengthen its connection with its membership.
• The BOG improve its relationship with the WSBA staff.

The BOG unanimously adopted the three strategic goals. 

Adoption of final portions of Committee on Public Defense Report
The Committee on Public Defense presented the final portions of its report.  One portion of the final report dealt with caseload standards regarding public defense.  The CPD recommended the following caseload standards:

• Felony cases: 150;
• Misdemeanor cases: 300 - however, in certain circumstances, the standard may be adjusted up to no more than 400 cases depending on certain factors;
• Civil commitment cases: 250;
• Juvenile offender cases: 250;
• Juvenile dependency and termination cases: 80 open cases;
• Appeals: 36.

The BOG adopted the recommended caseload standards.

The CPD also proposed a change to RPC 1.8 that would prohibit an attorney from agreeing to enter into an agreement with a governmental entity if the terms of the agreement required the attorney or contracting law firm to bear the costs of conflict counsel or to bear the costs of investigative or expert services unless a fair and reasonable amount specifically for those services is set out in the contract.  The proposed rule change is as follows:

RPC 1.8(m):  A lawyer shall not:

            (1) make or participate in making an agreement with a governmental entity for the delivery of indigent defense services if the terms of the agreement obligate the contracting lawyer or law firm:

                        (i) to bear the cost of providing conflict counsel; or

                        (ii) to bear the cost of providing investigation or expert services, unless a fair and reasonable amount for such costs is specifically designated in the agreement in a manner that does not adversely affect the income or compensation allocated to the lawyer, law firm, or law firm personnel; or

            (2) knowingly accept compensation for the delivery of indigent defense services from a lawyer who has entered into a current agreement in violation of paragraph (m)(1).

The BOG unanimously adopted the proposed rule change.  The proposal will now be submitted to the State Supreme Court.

Adoption of Budget
The BOG adopted a budget that contains a deficit of approximately $250,000 for the upcoming fiscal year.  The deficit will be made up from WSBA reserves.  The BOG recognizes that a balanced budget must be achieved and one of its goals is to adopt a balanced budget for the following year.

Despite running a deficit of $250,000, two items were discussed at length that would have added to the budget deficit in a significant manner.

The first was the issue of whether or not to adopt the funding of the Greater Access and Assistance Project ("GAAP") - a program that would have two benefits: (1) provide greater access to the justice system for those residents who do not qualify for government-paid civil legal services but who do not have the means to pay standard attorney fees and (2) providing opportunities for new lawyers to represent those same people but at a reduced rate.  The estimated cost of this proposal is approximately $190,000 over a three-year period.  I have been a strong advocate of the GAAP proposal but because of the budget deficit argued that the WSBA should not at this time fund the proposal but instead determine a way to have the proposal paid for within the confines of a balanced budget.  The BOG determined to have this proposal presented to the Board at its March 2008 meeting to determine whether there is a way to fund the project.

The second issue was a proposal made to have a second Bar exam site in Spokane.  The rationale behind this proposal was that there were many people from Eastern Washington who have to travel to Bellevue to take the exam and incur expenses that those in the Western part of the state do not have to incur.  The current estimate to hold a second bar exam site in Spokane is $36,000 in addition to staff time, which is considerable.  The BOG asked the WSBA executive director to provide further information on this proposal.

July 27-28 BOG Meeting

The Board of Governors met in Quincy, Washington on July 27 and 28.  The BOG took some preliminary action on selecting a new editor for the Bar News, received a report from the Trust Account Responsibilities and Retainers Task Force, and voted to approve another portion of the Committee on Public Defense's report, among other actions.  I will provide a brief report on the Bar News editor selection process, a more detailed discussion of the trust fund issue, and also bring you up to date on other Bar matters.

Bar News Editor
The WSBA is in the midst of a search for a new Bar News editor.  Probably unknown to most members of the Bar and the public, the BOG does not direct the Bar News editor regarding the content of the Bar News.  This has been the case for many years and arose from a situation years ago when the BOG interfered with the editor over content that was critical of the BOG. 

The WSBA Editorial Advisory Board received over thirty applications regarding the position and, as of this date, narrowed the search down to eight candidates.  The EAB will be conducting interviews and submitting a short list of three candidates to the BOG which will make the final selection at its September 20 meeting.

Trust Account Responsibilities and Retainers Task Force (TARRTF) Report
As I first reported to you over a year ago, the BOG withdrew Formal Ethics Opinion 186 entitled "The Proper Handling of Advance Fee Deposits and Retainers."  Since that time, there has been some uncertainty as to whether an attorney receiving a flat fee was required to place that fee in a trust account or whether, as has been historically the case for a number of attorneys, primarily those practicing in the criminal defense and family law areas, those funds could go directly into their general accounts.  Then WSBA President Brooke Taylor appointed a task force chaired by then WSBA Governor Mark Johnson (who now is the WSBA president elect-elect) to make a proposal as to whether a new ethics opinion should be adopted or whether a rule proposal should be made to the state supreme court.  Attorneys from various practices and geographic regions were appointed to the task force including Marc Christianson from Tacoma.  The Task force is recommending that the BOG propose the following change to RPC 1.5.

The Task Force's recommendation to the rule change encompasses two concepts.  The first part of the rule clarifies the "true" retainer that an attorney can have and that is a fee that is earned upon receipt and is paid by the client solely to have the attorney available to represent the client in the future.  This is a rare situation and the retainer does not include the fees for the actual work performed by the attorney.  Instead, it is simply so the client will be guaranteed that the attorney will be available.  The second part of the rule change proposal deals with the issue at hand: how to deal with a flat fee.  The proposal is as follows:

(f)  Fees and expenses paid in advance of performance of services shall comply with Rule 1.15A, subject to the following exceptions:

(1)   A lawyer may charge a retainer, which is a fee that a client pays to a lawyer to be available to the client during a specified period or on a specified matter, in addition to and apart from any compensation for legal services performed.  A retainer must be agreed to in a writing signed by the client.  Unless otherwise agreed, a retainer is the lawyer's property on receipt and shall not be placed in the lawyer's trust account.

(2)   A lawyer may charge a flat fee for specified legal services, which constitutes complete payment for those services and is paid in whole or in part in advance of the lawyer providing the services.  If agreed to in advance in a writing signed by the client, a flat fee is the lawyer's property on receipt, in which case the fee shall not be deposited into a trust account under Rule 1.15A.  The written fee agreement shall, in a manner that can easily be understood by the client, include the following: (i) the scope of the services to be provided; (ii) the total mount of the fee and the terms of payment, (iii) that the fee is the lawyer's property immediately on receipt and will not be placed into a trust account; (iv) that the fee agreement does not alter the client's right to terminate the client-lawyer relationship; and (v) that the client may be entitled to a refund of a portion of the fee if the agreed-upon legal services have not been completed.  A statement in substantially the following form satisfies this requirement: [sample statement omitted from this article].

(3)   In the event of a dispute relating to a fee under paragraph (f)(1) or (f)(2) of this Rule, the lawyer shall immediately refund to the client that portion of the fee, if any, that the lawyer reasonably believes is unearned.  If the lawyer and the client disagree about the client's entitlement to a refund or the amount of a refund, the lawyer shall, within 30 days of the accrual of the dispute, deposit into a trust account governed by RPC 1.15A the amount that a reasonably prudent lawyer would believe to be reasonably in dispute.  The lawyer shall maintain the funds in trust until the dispute is resolved.  The lawyer shall take reasonable and prompt action to resolve the dispute in compliance with Rule 1.15A(g).

(g) A lawyer shall not characterize any fee as "nonrefundable," "minimum," or "earned upon receipt."

I believe the Task Force has come up with a proposal that protects the public's interest, allows practitioner's some flexibility in their fee arrangements, and clarifies the current ambiguous situation regarding flat fees.  The WSBA Office of Disciplinary Counsel takes a contrary position and is advocating that any advance fee payment, other than the true retainer recognized in section one above, must be placed in a trust account.  As it is likely that the BOG will be taking action on this item at its September 20 meeting, I would like to hear from you as to your views on this proposal and on ODC's position.

Other Bar Matters
I had earlier reported when the Rules of Professional Conduct were revised there was some language in some of the rules that were proving to be problematic.  The State Supreme Court, accepting the recommendations of the Board of Governors, has addressed two of those issues.

On April 5, 2007, the Supreme Court entered an order approving for publication a proposed amendment to RPC 1.15A(e). The amendment would change the language of that section so that the annual written reporting requirement applicable to all client property held by a lawyer would apply to funds only. The proposed amendment was published in the April 24, 2007 Washington Reports Advance Sheets with a 60-day comment period that ended on June 22, 2007. The Court's order also stays enforcement of the existing reporting requirement during the rulemaking process.  In short, the prior rule language imposed upon all attorneys the duty to report annually to all clients regarding all property of any kind being held by the attorney for the client's benefit.  The clarification provides that the annual reporting requirement applies only to funds being held.  (For a more complete discussion of the issues scroll down to the January 11 report.)

The Court also adopted the WSBA's suggested amendment to RPC 1.8(e) pursuant to the emergency provisions of GR 9(j)(1).  Rule 1.8(e) regulates lawyer-advanced court costs and expenses.  Effective September 1, 2006, the Court had adopted the ABA Model Rule version of Rule 1.8(e), which permits repayment of advanced costs and litigation expenses to be contingent on the outcome of a matter and permits a lawyer to pay court costs and expenses of on behalf of an indigent client.  The Department of Revenue took the position that by making that change advanced costs that were reimbursed by the client were subject to the B&O tax. (For a more complete discussion of that issue scroll down to the March 2/3 report.)  The amendment became effective upon publication in the April 24, 2007.  It is unknown what the Department of Revenue is planning on doing in light of this rule change.

March 2-3 BOG Meeting

The Board of Governors met in Bellevue on March 2 and 3.  One of the major tasks for the BOG was to select a new Executive Director to replace Jan Michels who has served our organization so well over the last 8+ years.  I'm happy to report that the BOG selected Paula Littlewood, the current deputy executive director, from a field of three finalists.  I am confident that Paula will follow in Jan's steps to provide outstanding leadership for our association. 

In this month's column, I want to report on the Department of Revenue's effort to impose the B&O tax on costs advanced that are reimbursed to attorneys taking a case on contingency fee basis, the formation of a new task force to examine the proliferation of local court rules, and a report given by the Committee for Public Defense, all of which were addressed at the last BOG meeting.

DEPARTMENT OF REVENUE PLANS TO IMPOSE B&O TAX OF COSTS ADVANCED:

As you all should know, the Rules of Professional Conduct underwent a major revision that took effect September 1, 2006.  One of the amendments was a revision of RPC 1.8(e) that now allows, but does not require, attorneys to be liable for costs advanced in contingency cases.  The Washington Department of Revenue is taking the position that because RPC 1.8(e) has been amended to allow attorneys to be ultimately responsible for the costs of litigation, that when those costs advanced are reimbursed by the client the reimbursement is subject to the State's business and occupation taxes.  The Department of Revenue is relying on WAC-20-207.  This provision pertains to legal, arbitration, and mediation services.  Under subparagraph 3 there are provisions for collection business and occupation taxes.  The Department of Revenue characterizes costs advanced as overhead costs.  WAC-20-207(3)(b) provides: 

"Amounts received (or for tax payer's reporting under the accrual accounting method, accrued) to compensate for overhead costs are fully subject to tax.  Such overhead costs are taxable even though they may be separately stated in the billings or expressly denominated as costs of the client."

WAC-20-207(3)(c)(ii) currently provides an exception as follows: 

RPC 1.8(e) prohibits an attorney from financing the expenses of contemplated or pending litigation unless the client remains ultimately liable for these expenses . . . Accordingly, amounts received from a client for the direct expenses of litigation do not constitute gross income to the attorney." 

DOR is taking the position that because RPC 1.8(e) has now been changed to allow attorneys to pay for the costs of litigation then this exception no longer applies and that costs advanced should now be subject to taxation as "overhead."  Moreover, DOR is going arguing that even if RPC 1.8 is returned to its prior form, it will still seek to tax costs advanced that are reimbursed.  Its position is that unless the attorney has no responsibility or liability for the costs being advanced, then any reimbursement for such costs are subject to the B&O tax.

At our March meeting, the BOG voted unanimously to recommend to the State Supreme Court that it change RPC 1.8(e) back to its prior form that requires the client to always be liable for costs advanced.  It is clear that tax implications were not considered when RPC 1.8(e) was amended.  However, even if the State Supreme Court adopts that recommendation, there is no guarantee that DOR will drop its quest to tax costs advanced reimbursements.  I'll keep you posted.

TASK FORCE FORMED TO EXAMINE PROLIFERATION OF LOCAL COURT RULES.

President Dial, with the BOG's approval, recently appointed a task force to examine the proliferation of local court rules.  As those of you who practice in more than one jurisdiction, you are well aware of the different approaches taken by the various counties regarding their local rules.  Even practitioners practicing in one county often wonder why there is such a proliferation of local rules and whether they are really needed for the administration of justice.  Accordingly, the task force will be examining this issue and making a recommendation to the BOG.  I am the liaison from the BOG to this task force.  Accordingly, not only will I keep you posted as to the task force' work, but am also interested in your comments regarding this issue.

COMMITTEE FOR PUBLIC DEFENSE MAKES REPORT AND RECOMMENDATIONS.

In September of 2004, the BOG created and charted the Committee on Public Defense.  The CPD completed the first phase of its work and issued a comprehensive report with recommendations.  The CPD has asked the BOG to adopt the report as the official position of the WSBA.  The BOG voted to continue the question of whether to adopt the report as the official position of the WSBA until its April 13 meeting.  I encourage those interested in this issue to view the final report at http://www.wsba.org/lawyers/groups/finalreport.pdf.  I'm interested in hearing your comments as to whether the BOG should accept the report, with its recommendations, in its entirety.

January 11, 2007 BOG Meeting

The Board of Governors met in Tumwater on January 11.  I am going to devote most of this column to an issue arising from the newly implemented RPC 1.15A and then give you a brief update on the Legal Technician proposal.

RPC 1.15A: As you all should know, the Rules of Professional Conduct underwent major changes and revisions that became effective September 1, 2006.  One such change was RPC 1.15A which provides:
(e) A lawyer must promptly provide a written accounting to a client or third person after distribution of property upon request. A lawyer must provide at least annually a written accounting to a client or third person for whom the lawyer is holding property. 

In paragraph [5] of the "Washington Comments" the term "property" is defined to include "original documents affecting legal rights such as wills or deeds."  The scope of "property," is very broad as pointed out by the Executive Committee of the Real Property Probate and Trust Section and could include

a residential lease, an employment agreement, a settlement agreement, or, in its broadest sense, merely a letter from opposing counsel – all of which a client could reasonably have asked his or her attorney to retain for safekeeping.  The broad definition has raised particular concerns for real property lawyers.  Under the Rule, for example, the term expressly includes deeds, which would in turn include conformed copies of deeds, easements, etc., which are technically original documents, but have no real significance as original documents because they have been recorded.

In addition, the current rule's scope could also include negotiable instruments, unrecorded deeds, stock certificates, and original corporate records.  Under the current configuration of the rule, attorneys would have to provide an annual accounting to their clients that they are holding all such documents and keep documentation that they have complied with this requirement.

Only one other state, North Carolina, requires an annual accounting of property in an attorney's possession.  However, that requirement applies only to property held by an attorney as a fiduciary and the definition of property does not expressly include original documents.  North Carolina, Revised Rules of Professional Conduct (2003), 1.15.
The WSBA chief Disciplinary Counsel reported to the BOG the reason for the revised rule.  She pointed out that WSBA auditors frequently find that lawyers have undistributed funds in their trust accounts.  These lawyers either cannot identify ownership of the funds or can no longer find the client because so much time has passed since their last contact with the client.  The annual accounting is intended to rectify this problem by ensuring that lawyers inform clients at least once a year that funds are being held on a client's behalf. 

Regarding wills, the Chief Disciplinary counsel advised the BOG as follows:

Our Professional Responsibility Counsel … have for some time discouraged lawyers from keeping original wills.  Rather, they recommend that the client be advised of the option to deposit the wills under seal in the recently-created will registries at the Superior Courts.  [Cost of $20.]  … This eliminates the recurring problem of families who are unable to locate the decedent's will because they do not know which law firm drafted the document.  It also eliminates the burden on surviving spouses or lawyer-colleagues of deceased lawyers who find original wills among the deceased lawyer's files and then need to locate numerous former clients to return the documents. … Recently, [the] Ethics Line received a call from a lawyer who had come into possession of over one thousand original wills that were without a home due to a law firm's dissolution.

Justice Charles Johnson, after being notified of the issue in 2006, requested the WSBA to not enforce this one provision until the State Supreme Court has acted on this matter.  The Court has now asked the WSBA for input.

A motion was made, which I seconded, advising the Court that the WSBA believes that RPC 1.15A should be limited to "funds" and not to "property" with the effective date of the rule being September 1, 2006.  By a vote of 8 to 4, the motion passed.  The reasons I supported the motion were as follows.  There was not any dispute that an annual reporting requirement for client funds held made sense.  As to any document other than wills, I did not hear any arguments that there currently is a problem with anything other than wills.  As to wills, while there is a problem with "orphan wills," I did not believe that the current RPC 1.15A was the best way of addressing that problem.  Instead, it appears to me to be a very overbroad approach and one that would cause our members an undue amount of expenses without effectively promoting the public interest.

Because "orphan wills" are a problem, this issue is likely to be addressed in the near future.  As always, I appreciate any comments or questions you may have on this issue.

Practice of Law Board and the Legal Technician Proposal: As I have reported in the past, the POLB is exploring a proposal to present to the State Supreme Court allowing non-lawyers to engage in the limited practice of law.  After the BOG voted 12-2 in opposition to the proposal in March of 2006 (note: the POLB does not need BOG approval but instead reports directly to the Supreme Court) the POLB decided it would refine its proposal to a specific practice area for a pilot project.  It has selected four practice areas to explore: (1) family law, (2) housing/landlord-tenant law, (3) immigration law, and (4) elder law.  The POLB will form four committees to study these potential practice areas.  The committees will consist of no less than five members including: (1) an attorney whose practice area emphasizes the areas of practice under consideration, (2) a legal educator, (3) a person interested in practicing as a legal technician in the area, and (4) a member or former member of the POLB.  Each committee is expected to deliver a written report and recommendation to the POLB by September 14, 2007.  These committees are expected to actively seek information from interested persons and groups during their investigations.  The POLB will then determine which areas, if any, are appropriate for a pilot project.  The POLB will present its proposed pilot project to the BOG in December of 2007.  It will then make the proposal for a pilot project to the Supreme Court in February of 2008.

The rule creating the POLB included that one of its goals was to seek to determine whether affordable and reliable legal services could be provided, that otherwise are not currently being provided, if non-lawyers were allowed to engage in the limited practice of law.  As I have reported in the past, because of the proposed requirements for Legal Technicians, they would not be providing legal services for the poor nor providing legal services at a cost lower than lawyers already provide. 

The BOG will next meet on March 2 and 3, 2007 in Bellevue.

Proposed Legal Technician Rule Allowing Non-lawyers to Engage in the Limited Practice of Law

The Practice of Law Board presented a proposal to the BOG at the BOG's March meeting that would allow "Legal Technicians" to have a limited practice of law in Washington State.  The following is a brief summary of the proposal.
 
It would allow persons who have attained educational and experience requirements, and how have passed an exam provided by the WSBA, to engage in the limited practice of law.  The scope of the practice is as follows:
 
1) Interview clients to obtain relevant facts, and explain the relevancy of such information to the client;
 
2) Inform the client of applicable procedures, including deadlines, documents which must be filed, and the anticipated conduct of the court hearing;
 
3) Inform the client of applicable procedures for proper service of process for motion papes, and proper filing procedures;
 
4) Provide the client with self-help materials prepared by a lawyer or approved by the Commission, which contain information as to statutory requirements, case law basis for the client's claim, and venue and jurisdiction requirements;
 
5) Review pleadings or exhibits presented by the client from the opposing side, and explain the documents;
 
6) Select and complete forms that have been approved by the State of Washington, either through a governmental agency or by the Administrative Office of the Courts or the content of which is specified by statute; federal forms; forms prepared by a lawyer; or forms approved by the Commission; and advise the client of the significance of the selected forms to the client's case;
 
7) Perform legal research and draft legal letters and pleadings, if the work is reviewed and approved by a lawyer;
 
8) Advise client as to other documents which may be necessary (such as exhibits, witness declarations, or party declarations), and explain how such additional documents or pleadings may affect the client's case;
 
9) Assist the client in obtaining necessary documetns, such as birth, death, or marriage certificates.
 
The legal technician would be required to have CLE as part of the ongoing certification.  They would have to pay annual dues and would be subject to disciplinary procedures by the WSBA.  The legal technician would be required to have malpractice insurance.  The proposal is that the legal technician would inform clients that while information provided by the client will be treated as confidential.  Legal technicians would be held to the standard of care of a lawyer.

October 27 Board of Governors Meeting

The Board of Governors met in Spokane on October 27. The BOG received an update from the Practice of Law Board regarding the legal technicians proposal, heard concerns from a number of Seattle law firms regarding CLE credits for in-house programs, and voted to approve a Pipeline Grant program.

Paul Bastine reported to the BOG from the Practice of Law Board as to their current activities. The POLB will be considering a pilot program for legal technicians in one of four practice areas of the profession: (1) family law, (2) elder law, (3) housing/landlord tenant law, or (4) immigration law. The criminal law, immigration, mediation, and family law sections of the WSBA all voiced their opposition to the POLB of having any pilot program take place within their area of practice. Despite opposition by the family law and immigration law sections, the POLB is considering those two areas as possible areas in which to attempt to run a pilot program for legal technicians. 

The BOG considered a request by a number of Seattle law firms to recommend a change to a recently revised MCLE regulation that limited the number of credits that its lawyers could earn from in-house sponsored CLE programs. The revision to Regulation 104(e) reduced from 45 to 15 hours that a lawyer may earn as CLE credits during a reporting period that are earned from in-house sponsored CLE programs. A number of Seattle law firms have taken advantage of the fact that they can produce in-house CLE programs at a low cost to their firms. As part of the MCLE regulations, attorneys outside of the law firm sponsoring the CLE may also attend these CLE programs for no charge.  The BOG directed the MCLE Board to present a report to the BOG by February as to this issue.

In my view, this raises a number of issues regarding the mandatory requirement for lawyers to participate in continuing legal education courses. I know a number of attorneys outside the Seattle area, especially in the more rural areas, are concerned about the limited access they have to live CLE programs and how they are restricted to 15 hours per reporting period for credits from audio or videotaped programs. It will be interesting to see the report and recommendations that the MCLE Board makes to the BOG.

Finally, the BOG approved a program to institute a pipeline grant program. The grant would be administered by a committee appointed by the WSBA president. The committee will prepare, and issue, a Request for Proposal asking interested non-profit organizations to submit a grant request to the WSBA the purpose of which is to educate or interest youth in the legal profession — especially youth that are members of a community that is under-represented in the legal profession. An example of a pipeline program is run by the Texas Bar Association where every third grade class in the state is visited at least three times a year by a team composed of a judge and an attorney who meet with the students about the law and the legal profession. The grant amount is $75,000 over a three-year period and the program is set up to automatically expire after the three-year period. The BOG believed that such a program would be another step in furthering the goal of advancing diversity within our profession.

The next BOG meeting is on December 8 and will take place in LaConner, Washington.

County Bar Association Presidents in the 6th Congressional District

I want to thank each of the presidents in the six counties included in the 6th Congressional District for taking time to talk with me and helping me share information with their members. One of my goals during my term is to make sure there is better communication between all practitioners within the 6th District and the WSBA. In that regard, I intend to visit with each county bar association on a somewhat regular basis.
 
Contact your local bar association president:
 
Clallam County Bar Association
W. Brent Basden, President
Basden and Hansen
916 Georgiana
Port Angeles, WA 98362
360-452-8315
basden@tenforward.com
 
Grays Harbor County Bar Association
David Mistachkin, President
PO Box 1106
Aberdeen, WA 98520-0223
360-533-2865
dmistach@izglaw.com 

Jefferson County Bar Association
Shane Richard Seaman, President
Jefferson County Prosecutor's Office
PO Box 1220
Port Townsend, WA 98368-0920
360-385-9180
sseaman@co.jefferson.wa.us
 
Kitsap County Bar Association
Jeffrey J. Jahns, President
Kitsap County Prosecuting Attorney
M/S 35
614 Division St.
Port Orchard, WA 98366-4614
360-337-4982
jjahns@co.kitsap.wa.us
 
Mason County Bar Association
Jeanette Whitcomb Booth, President
PO Box 1417
Shelton, WA 98584-0961
360-426-7198
jeanetteboothe@msn.com
 
Tacoma-Pierce County Bar Association
Lynn Johnson, President
945 Fawcett Avenue, Ste. C
Tacoma, WA 98402-5605
253-383-3333

About Salvador Mungia

Sal Mungia is a partner in the Tacoma office of Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim. He received his undergraduate degree from Pacific Lutheran University in 1981 with high honors. He graduated from the Georgetown University Law Center in 1984 with honors.

Sal was the president of the Tacoma-Pierce County Bar Association in 1999. He is also a past president of Legal Aid for Washington in which he now serves in the capacity of a lifetime board member. Sal is a past chair of the WSBA bar leaders committee and has served on numerous WSBA committees. He was a lawyer representative to the Ninth Circuit Judicial Conference from 2003 through 2005. He has spoken at many continuing legal education seminars for various organizations including the WSBA, the Tacoma-Pierce County Bar Association, and WSTLA.

Sal is involved in his local community. He is a past commissioner of the Tacoma Human Rights Commission. He has served on the Grand Cinema Board of Directors and is currently serving as a director for the Palmer Minority Scholarship Foundation. He is a past board member of the ACLU of Washington and has been a cooperating attorney with the ACLU since 1986.

Sal's practice is civil litigation with an emphasis in medical negligence, serious personal injury, and real property litigation.  He is AV rated by Martindale Hubbell and was named in 2005 and 2006 by Washington Law and Politics as a Super Lawyer.