Report of the Executive Director/Chief Operating Officer
Karen A. Gould
Membership in the Virginia State Bar grew slowly this year. Total “in good standing” membership increased to 45,535, an increase of 1,023 or 2.3 percent more than the previous year’s count of 44,512.
|Corporate Counsel Admittees||1,264 |
|Corporate Counsel Registrants||436 |
As of June 30, 2011, 36,503 VSB members have registered for a Member Login at vsb.org; 2,281 have elected not to be listed in the Virginia Lawyer Directory, a searchable public directory; and 4,678 members have opted not to receive the monthly E-News.
Bar activities, officers, and council during 2010-11
Karen A. Gould has served as executive director since January 1, 2008.
Irving M. Blank of Richmond served as president of the bar from June 19, 2010, until June 18, 2011. President Blank spent the first part of his term speaking in support of Virginia’s legislature providing funds to fill judicial vacancies, as the VSB Council had authorized him to do. When Governor Robert F. McDonnell announced on December 16, 2010, that he proposed to transfer $5 million from the Virginia State Bar’s cash balance — dues money that had been paid to the VSB by Virginia’s lawyers — President Blank changed his focus to defeating the transfer.
George Warren Shanks became president of the Virginia State Bar at its annual meeting on June 18, 2011. He was sworn in by Chief Justice Cynthia D. Kinser of the Supreme Court of Virginia. W. David Harless of Richmond was unopposed in the 2010 election for the office of president-elect for the 2011-12 term.
In 2011-12, Mr. Harless will serve ex officio on the VSB Executive Committee as president-elect. Brian L. Buniva, Ray W. King, and Jean K. Niebauer were elected by the council as new members of the 2011-12 executive committee, replacing Mr. Harless, Alexander N. Levay, and Susan M. Pesner. Edward L. Weiner and Robert L. Calhoun, the new chairs of the Conference of Local Bar Associations and Senior Lawyers Conference, respectively, and Christy E. Kiely, the incoming president of the Young Lawyers Conference, complete the 2011-12 additions to the executive committee.
The chair-elect of the Diversity Conference, Michael HuYoung, became its chair at the conference’s annual meeting in May 2010, and will represent the Diversity Conference at the council meetings for the 2011-12 fiscal year.
There was only one contested council election this year. In the 2nd Circuit William Drinkwater, an incumbent, and Judith L. Rosenblatt, a new member, both of Virginia Beach, were elected to three-year terms beginning July 1, 2011.
The following new members were elected unopposed to three-year council terms that begin July 1, 2011:
1st Circuit Nancy G. Parr, Chesapeake
7th Circuit Leonard C. Heath Jr., Newport News
11th Circuit Ray P. Lupold III, Petersburg
13th Circuit Eric M. Page, Richmond
18th Circuit Carolyn M. Grimes, Alexandria
19th Circuit Elizabeth S. Finberg, Vienna
Joyce M. Henry-Schargorodski, Fairfax
20th Circuit T. Huntley Thorpe III, Warrenton
25th Circuit Roscoe B. Stephenson III, Covington
The following incumbents were reelected to three-year council terms that begin July 1, 2011:
4th Circuit Ray W. King, Norfolk
9th Circuit John Tarley Jr., Williamsburg
10th Circuit Robert E. Hawthorne, Kenbridge
13th Circuit Guy C. Crowgey, Richmond
14th Circuit William J. Viverette, Richmond
15th Circuit Grayson S. Johnson, Rockville
19th Circuit Susan M. Butler, Fairfax
Daniel B. Krisky, Fairfax
Paul W. Hammack Jr., Fairfax
William L. Schmidt, Fairfax
In summary, council consists of three officers, four conference chairs, nine at-large members appointed by the Supreme Court of Virginia, and sixty-five elected members.
The VSB is indebted to President Irving M. Blank for suggesting the bar switch to permanent bar cards. The permanent bar cards were provided to associate members at renewal time in summer 2010; active members received their cards in December 2010.
VSB budget negotiations and related developments
"Currently, the VSB receives approximately $11.5 million in revenue and has approximately the same amount in budgeted expenditures. Monthly operating expenses are $960,000. If there are savings at the end of the year, they create cash balances that are used for unexpected expenses, capital expenditures, and system improvements. Unspent cash is the bar’s only source of funding for unpredictable costs incurred by court-ordered receiverships of lawyers’ practices, online legal research for members, employee benefits, leave balance payouts, unemployment compensation, attorney’s fees, and litigation expenses. The cash balances will fund salary increases when permitted, technology improvements, and additional staff in the discipline department."
Delegate Watkins M. Abbitt Jr. and Senator Frederick M. Quayle agreed to sponsor amendments to the governor’s budget canceling the $5 million transfer. Senator Charles J. Colgan also sponsored an amendment canceling the $5 million transfer.
Presentations were made by President-elect George Warren Shanks to the General Government Subcommittees of the House Appropriations and Senate Finance Committees on January 25, 2011.
On February 6, 2011, the money committees completed their work on the governor’s budget bill. The Senate plan would have restored to the VSB $2.5 million of the $5 million that McDonnell would have transferred in his budget. The House plan would have restored all $5 million that McDonnell wanted to take from the bar. The budget bill conference report, issued on February 24, 2011, restored all $5 million to the VSB fund, and that bill was approved by the assembly.
Among the eighty-four budget bill amendments proposed by the governor on March 29, 2011, was a requirement that the VSB develop a plan to reduce its dues and “ensure that revenues are within ten percent of actual item expenditures and working capital balances are sufficient for three months of item operations.” The proposed budget amendment failed when the House of Delegates did not pass it by majority vote.
The Supreme Court approved a rule change in March 2011 to Part 6, § IV, ¶ 11 of the Rules of the Virginia Supreme Court that will make it easier for the VSB to adjust dues. Instead of requiring a charge of $250 for active members and $125 for associate members, the rule now states that the VSB dues are “not to exceed” $250 for active members and $125 for associate members.
On March 31, 2011, at a special meeting, the executive committee approved the draft 2011-12 budget that included a $25 dues decrease for active members and a $12.50 decrease for associate members. The Supreme Court and VSB Council approved the dues reduction.
Additional resources dedicated to Professional Regulation DepartmentTwo additional investigators were hired midyear to help with the investigation of disciplinary complaints and unauthorized practice of law matters. In addition, Investigator Camilla H. Moffatt was reclassified to chief investigator to supervise the other investigators and establish a better system of training and management. Deputy Bar Counsel Harry M. Hirsch retired after twenty-seven years with the bar. Kathryn Ramey Montgomery was promoted to fill his position. Kara L. McGehee was hired to replace Ms. Montgomery as an assistant bar counsel.
Enterprise content and record managementOn April 1, 2011, the VSB undertook a high-level assessment of its operations and record management needs. This study gives us a road map for developing an enterprise content management program, also known as document management; an estimate of the cost — between $600,000 and $1 million; and an analysis of the return on investment in terms of improved efficiency, data backup and other security, and savings.
Online membership renewal
The VSB has instituted an online membership renewal process that includes online payment of dues by credit card. Online renewal began with the 2011 dues renewal season. It is hoped that fewer lawyers will incur late fees with the new system. Because members must individually affirm whether they are in private practice, whether they carry malpractice insurance, and whether they have any outstanding judgments, firms cannot renew online for their lawyers.
Participation by members is much higher than we expected: from the program’s inception on May 23, 2011, to the June 30 end of the fiscal year, 4,464 members renewed online, amounting to $931,470 total revenue. Of the 4,464 members who renewed online, 2,912 were active members and 1,552 were associate members.
MCLE regulatory changes delayed until November 1, 2011
The Mandatory Continuing Legal Education Board decided on July 21, 2010, to defer until November 1, 2011, the implementation of amended regulations, including a requirement that Virginia lawyers must earn at least four hours of mandatory continuing legal education credit through live, interactive programs (traditional live programs, live telephone seminars, live webcasts, and pre-recorded programs where a speaker or qualified facilitator is available during the program to lead discussion and answer questions).
Trust accounting rules simplified by Supreme Court
The Supreme Court adopted changes proposed by the council to the trust accounting rules in Rule of Professional Conduct 1.15 and in Part 6, § IV ¶ 20 of the Rules of the Virginia Supreme Court. The amendments do not create any new or additional obligations or duties in regard to trust accounts or handling funds or property.
The amendments restructure and simplify Rule 1.15 to:
- combine the requirements as they apply to lawyers and fiduciaries;
- eliminate the terms used to refer to certain records and replace them with specific descriptions of the type of records that are required to be maintained;
- eliminate the rule’s redundant definitions;
- eliminate detailed requirements from the rule that were specifically applicable to financial institutions, as that information is included in the VSB Approved Financial Institution Agreement;
- add a specific requirement to the rule that a lawyer cannot disburse funds or use property of a client or third party without the client’s consent, or convert funds or property of a client or third party, except as directed by a tribunal;
- add language to Comment  that gives additional guidance to lawyers using electronic banking transactions;
- add specific language requiring a lawyer to hold funds in escrow when a third party has made a claim against those funds; and
- add titles to subparagraphs for simplicity and clarity.
The amendments to Paragraph 20 accomplish the following: define a financial institution approved by the Virginia State Bar, clarify the different types of trust accounts that can be opened with the current opt-out provision, and outline the specific requirements that financial institutions must follow as Virginia State Bar-approved financial institutions. This new Paragraph 20 incorporates a new Virginia State Bar Approved Financial Agreement that all financial institutions must execute in order to be approved by the Virginia State Bar.
New Rule 1.18
The Supreme Court adopted Rule of Professional Conduct 1.18 on June 21, 2011, effective immediately. The rule defines a prospective client to whom the duty of confidentiality is owed, and distinguishes that prospective client from someone who unilaterally communicates with a lawyer with no reasonable expectation of forming an attorney-client relationship. The proposed amendment allows a law firm to screen the lawyer who discussed the possibility of employment by a prospective client to avoid imputation of a conflict to other lawyers in the firm.
Corporate counsel pro bono rule amended
On February 26, 2011, the VSB Council voted without dissent to recommend approval of proposed changes to the Rules of the Virginia Supreme Court governing Virginia corporate counsel: Rule 1A:5, Part I, ¶¶ (g) and (h). The changes would lift limitations and expand opportunities for corporate counsel to do pro bono work, while subjecting them to VSB regulatory authority while they do that work. The proposal was recommended by a Virginia State Bar–Virginia Bar Association task force. The Supreme Court of Virginia approved the rule change on April 15, 2011.
Rule 4.2 amended
The Supreme Court approved the proposed amendment to Rule of Professional Conduct 4.2, effective November 1, 2010, which clarified that a commonwealth’s attorney may advise a law enforcement officer regarding the legality of an interrogation or other investigative conduct when a defendant in custody, formally charged, and represented by counsel waives his or her Miranda rights and wants to give a statement without his or her counsel present. The proposed amendment had been approved unanimously by the council on October 16, 2009.
UPL legislation adopted
The General Assembly extended the statute of limitations (Va. Code § 19.2-8) for prosecuting unauthorized practice of law to two years from the date of discovery.
Disciplinary procedural rules amended
By order of the Supreme Court of Virginia on February 17, 2011, effective immediately, Rules of Court Part 6, § IV, ¶ 13, was amended in part to provide the bar with procedural authority to implement the disciplinary rules and apply its disciplinary authority to multijurisdictional respondents. For example, the amendment rule expands the definition of attorney to include foreign lawyers and other multijurisdictional attorneys authorized to practice in Virginia under the Rules of Court. The amended rule expands the definitions of suspension and revocation to provide a viable sanction for attorneys not otherwise admitted to practice in Virginia. The proposed definition adds the words “and, when applied to a lawyer not admitted or authorized to practice law in Virginia, means the exclusion from the admission to, or exercise of any privilege to, practice law in Virginia.” This language provides needed specific sanctions for those attorneys who commit ethical misconduct in Virginia but who are not licensed to practice law here.
The changes also clarify the requirements for serving as a member of a district committee, the Disciplinary Board, and the Committee on Lawyer Discipline. These requirements are also found in the bylaws of the Virginia State Bar.
The amendments also allow for the service of notices or other writings by certified mail as before, but delete the requirement for a return receipt. Delivery of certified mail can now be tracked on the Internet, obviating the need for and expense of a return receipt.
MCLE rule change approved by Supreme Court
Changes proposed by the Paragraph 17 Task Force, voted on at the October 2010 council meeting, were approved by the Supreme Court on January 7, 2011. The amended rule provides that the MCLE Board must (1) approve new regulations or amendments by a majority of the full twelve-person membership, (2) bring proposed amendments or new regulations to the council for advice and comment prior to being adopted by the MCLE Board, and (3) permit the council to reject regulations or amendments by a two-thirds vote of those members of council present and voting, once such regulations or amendments are adopted by the MCLE Board.
Approved Legal Ethics Opinions
LEO 1802 — Advising Clients on the Use of Lawful Undisclosed Recording
LEO 1849 — Ethical Issues of Lawyers Testifying Under Oath in Court to Debts Owed by the Client
LEO 1850 — Outsourcing of Legal Services
LEO 1854 — Settlement Negotiations in a Criminal Case
LEO 1462 — Is It Ethical for a Lawyer to Become a Member of a Lead-Sharing Organization?
Pending Rule Changes and Legislation
Proposal to waive in law professors
By a vote of 46-16, the council supported a proposal by Professor A. Benjamin Spencer of Washington and Lee University School of Law to allow full-time law school professors to practice in Virginia without taking the bar exam if they have been engaged in full-time, active practice in another jurisdiction for five of the previous seven years. Professor Spencer said the waiver will allow faculty to more effectively assist students in applied law clinics and to describe recent practical examples in traditional classes. The waiver would end when the teacher no longer is employed full time. The council’s vote was reported to the Supreme Court, which by letter dated April 20, 2011, agreed to amend Rule 1A:1 if Va. Code § 54.1-3931 is amended.
In October 2009, the council voted 39-25 to seek legislation requiring insurers that pay third-party liability claims to notify claimants when they disburse settlement proceeds of $5,000 or more to claimants’ attorneys. The Virginia Trial Lawyers Association (VTLA) also proposed similar legislation targeted at a broader group of payouts. Chief Justice Leroy R. Hassell Sr. asked the VSB and the VTLA to withdraw the proposed legislation in February 2010 until the other statewide bar groups were consulted.
The Supreme Court has authorized the VSB to consult with the statewide bar groups about their interest in this matter and to convene a Payee Notification Task Force of interested parties to discuss the issues. The outcome of those discussions will determine whether any proposed new legislation will be published for comment and brought before the council for a vote before being submitted to the Supreme Court for guidance on whether the legislation should be requested.
Rule 1A:3 study committee
The Supreme Court of Virginia has asked the Virginia State Bar to study what rule changes would be necessary for the VSB to revoke the certificates issued to foreign attorneys who are admitted to practice in the commonwealth pursuant to Rule 1A:1, the reciprocity rule. The study committee’s work was under way at the end of the fiscal year. The committee anticipated publishing a proposed rule change for comment and bringing the matter before the council at its October 2011 meeting.
Proposed Emergency Legal Services rule
Pending before the Supreme Court is a proposal for an Emergency Legal Services rule that would set up a system to provide emergency legal services in the event of a disaster. Under the proposal, the Virginia Supreme Court would declare an emergency to trigger the rule coming into play. Out-of-state lawyers could provide pro bono legal services to Virginia citizens within certain constraints, and displaced out-of-state lawyers could provide legal services in Virginia on a temporary basis if those services were reasonably related to the lawyer's practice in the affected jurisdiction. The proposal was unanimously approved by the council on June 19, 2008, and was submitted to the Court on July 11, 2008.Updated: Jul 20, 2011