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State Bar explores dues increase (UPDATE)

By: Jack Zemlicka, [email protected]//April 10, 2012//

State Bar explores dues increase (UPDATE)

By: Jack Zemlicka, [email protected]//April 10, 2012//

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After enjoying seven years of stagnant dues, Wisconsin attorneys may be on the brink of an increase in their annual membership fee with the State Bar.

The Bar’s Finance Committee is recommending a $35 dues increase starting in Fiscal Year 2014 to combat ongoing budget challenges.

“It’s difficult, but I think we’ve got to do it,” said Finance Committee member Paul Swanson. “Either that, or we cut further.”

The bar already has attempted to streamline operations during the recession, he said, even resorting to staff layoffs. Swanson said he hopes a dues increase could help avoid further layoffs or service cuts in the future.

“Cutting more staff is sort of not a good thing,” he said. “Then everyone is looking over their shoulder to be next and that takes morale down. It’s bad enough we’ve cut 10 people.”

The last time the bar raised dues was in 2005, from $210 to $224.

Bar leaders are scheduled to discuss the dues increase option with the Board of Governors during its Friday meeting in Madison. The board is scheduled to vote on a final budget for Fiscal Year 2013 at its June 13 meeting.

VIEW A HISTORY OF STATE BAR DUES

If the board endorses the $35 increase, it would tie the largest dues jump since the bar started collecting dues in 1957. That occurred in 2000 when dues increased from $175 to $210.

“It’s going to be a tough sell to the board,” Swanson said. “But we’ve tried to put it off for as long as we can. At some point, you have to be reasonable.”

Attorney board member Steve Levine said the proposal is ill-timed as new law school graduates struggle to find work and state government lawyers have seen salaries dip as a result of having to pay into retirement and health care costs.

“To be raising dues by almost 16 percent under these economic conditions is the wrong thing to do,” he said. “I think a lot of cutting could be done to avoid a dues increase.”

Although he didn’t advocate cutting staff or programs, Levine questioned the need for certain expenses contained in the recommended 2013 budget, such as $5,000 for a facilitator for Board of Governors training, a $10,000 redesign of the bar’s Wisconsin Lawyer Magazine and $22,675 to conduct an Economics of Law Practice survey.

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“That is a lot of money,” Levine said. “Are those essential things that have to be done in a time of deficit? I don’t think so.”

But Milwaukee attorney Patrick Roney, of Roney & Knupp LLC, said the proposed increase isn’t onerous, especially since the bar has attempted to trim expenses in recent years.

Dues have held steady as expenses and inflation have risen, Roney said, so it is probably time attorneys see an uptick in their dues to reflect the changes. He doesn’t want to see that turn into an annual increase, however.

“It’s not an outrageous burden,” he said. “The question is does this set a precedent to continue to raise dues at that pace. A one-time increase is easy to shoulder, but if it’s $40 next year, that will get old fast.”

Progressive increases are not the objective, Swanson said, and the Finance Committee considered several dues options before endorsing the $35 increase in 2014, designed to supplement bar revenue and sustain reserves though at least 2017.

One option considered, but rejected, to eradicate an existing $286,206 deficit was a $14.58 dues increase in 2013 to balance the single-year budget, followed by an additional $30.42 increase in subsequent years to pay for increased services and to bolster reserves.

According to budget data prepared by Lynda Tanner, State Bar assistant executive director, the organization has spent nearly $1 million of reserves since 2008, which is an “unsustainable financial situation.” The bar’s reserves have been depleted due to decreased revenue and diminished returns on investments.

Instead of a more immediate dues increase, the committee recommended using $99,667 from the Dues Stabilization Reserve to help balance the 2013 budget.

The group also recommended delaying spending $50,000 to hire a full-time Law Office Management Assistance Program advisor and, starting next year, charging for copies of the bar’s Wisconsin Lawyer Directory, which previously was free. Charging for the directory is anticipated to bring in $100,000 in additional revenue, according to budget documents.

Those are not long-term solutions, however, Swanson said, and a dues increase still looks to be the best option for sustaining the bar’s bottom line.

Should the board reject an increase, he said the bar will have little choice but to explore additional reductions.

“We’ll have to go back to the drawing board and cut the hell out of stuff next year,” Swanson said. “We’ll have to make some real tough choices and when you cut programs, that means you cut staff.”

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