Bar associations should do what’s right for their members

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My recent column about the unresponsiveness of state bar associations to the needs of small law firms and sole practitioners brought strong comments from the presidents of the Minnesota State and Hennepin County Bar Associations, asserting and demonstrating that they do have the interests of these lawyers at heart.

Just as there are good and less-than-good lawyers, so are there good and less-than-good bar associations, and my column — which is written for a national audience — should have made this distinction clearer. Having spoken to the Minnesota Bar and received a very warm welcome, I acknowledge and applaud its commitment to its members.

However, based on my own experiences and the knowledge I have gained by coaching, consulting and speaking across the country, I continue to believe that many bar associations, particularly those with mandatory membership, are not so committed to serving the interests of the smaller firms that make up the great bulk of their members.
Instead, their primary focus seems to be public protection. At best, these associations exhibit only “lip-service” to the concept of helping the small firm lawyer succeed economically.

But a law firm run as a business will avoid unethical financial behavior (because ethical behavior is more profitable). A law firm run as a business will offer more effective and efficient client service (adhering to budgets, providing detailed invoices, etc.). Law firms can’t truly be professional service businesses until they are allowed to learn “The Business of Law®.” And that requires bar associations to have as a preeminent goal, at least equal to public protection, the economic needs of their lawyers-members, the folks after all who pay the dues that pay staff compensation.

Consider how some state bar associations restrict four important aspects of business conduct.

Education: State bar associations mandate CLE courses, but too many refuse to give credit for programs that help lawyers get clients and run their practices better — two essentials for any business. The head of CLE programs in Virginia recently told participants on an ABA listserv for solos that in his state “law office management topics are very carefully scrutinized, and any subject that can be interpreted as helping to make money for a lawyer is deemed to be not credit worthy.” Several years ago the State Bar of Washington rejected MCLE credit for a program on managing client expectations because its intent was to teach marketing skills to lawyers.

Insurance: Nearly half of state bar associations require mandatory disclosure of malpractice insurance coverage, but virtually none of them (Oregon is a rare exception) have programs that make mandatory insurance more affordable. Otherwise, the cheapest annual premiums range from $4,000 to $7,000 per lawyer, a cost that falls heaviest on small firms and solo practitioners.

Marketing: All state bar associations regulate marketing by lawyers, and some (Florida and Louisiana, for example) are highly restrictive. Why is marketing bad? What is wrong with helping lawyers make connections with those who can best use their services and describe those services to them? Some state marketing regulations are so restrictive that they have been invalidated in the federal courts (see the March 2010 ruling by the Second Circuit that declared most of New York’s content-based attorney advertising rules unconstitutional) or state courts (in 2009 the New Jersey Supreme Court overturned a bar association ban on lawyers mentioning their ratings or being included in legal directories).

Practice Sale: It’s no longer “illegal,” at least in most states, for a lawyer to sell a law practice. But although the ABA adopted its model rule 1.17 for practice sales in 1991, progress is still slow at the state bar level.

For example, it was not until 2008 that the New Hampshire Bar adopted its own version (with the proviso that the selling lawyer cannot continue to practice in the state), while the Ohio State Bar did not take action until 2007, and restricts lawyers from buying a practice in order to sell it.

And the California Bar is considering revising its rule to make buying and selling lawyers jump through more hoops and cause further delay in completing a sale, the net result of which will likely be lawyers finding ways around the rule to the clients’ detriment.
The ABA has amended its model rule to include permission to sell “an area of the practice.” This means a lawyer could slow down while still making a contribution to the profession and the clients he/she serves. For example, he or she could sell the estate planning portion of the practice and retain the probate portion. This would be good for all parties: the buying lawyer who can grow his/her practice, the client who is better served by counsel desirous of working on the matters involved for the client, and the selling lawyer who isn’t thrown on the junk heap waiting to die while twiddling his thumbs.

Why shouldn’t bar associations help their members learn how to be more effective with their clients, more efficient in the delivery of their legal services and more profitable, especially in these tough, troubled times? Restrictive bar association rules that prevent lawyers from using the tools they need to be successful hurt clients as well. Too often, in their zeal to do “good” for the public, some bar associations are not doing right by their members.

In the past, I’ve been supportive of the integrated bar, but I’m coming to believe that all bar associations should be voluntary … and that mandatory bars should be only for licensing and discipline. Bar associations that avoid the traps discussed above, as in Minnesota, should be commended. Bar associations that do not need to change.