Dues Increase FAQs
Will there be a dues increase in 2014?
No. If passed, the earliest a dues increase could be implemented would be for 2015. Although early budget estimates for 2014 showed a deficit, Bar staff has made sufficient cuts to achieve a projected balanced budget.
What is the anticipated increase?
The proposed increase would be for active members to pay an additional $25 each year between 2015 and 2018. This would increase dues for members who have practiced for three years or more from $460 to $560 by 2018. In addition, In-House counsel would also pay the additional $25, each year, for four years, while Judicial members would face an increase of $10 each year, for four years.
Why would judges only receive a $10 increase?
The Commission on Judicial Conduct ensures that judges meet standards set by the rules of professional conduct. While judges are lawyers and can be disciplined by the Bar after they have left the bench, the CJC is the primary agency responsible for enforcement. Because more than 75% of bar dues are for mandated functions such as discipline, judges pay a reduced amount.
When was the last dues increase?
The last dues increase came between 2002 and 2005. Dues were increased by $25 per year, which totaled $100 at the end of the four-year time period. If we compare dues by year, using the Consumer Price Index calculator, the $460 paid in 2005 would equal $550 in 2013 dollars. This means that the final year of the proposed increase (2018) would not be an increase in the actual dollars from 2005. As a result, the proposed increase is merely an effort to keep pace with inflation.
The Bar ran a surplus in 2013, why does it need a dues increase?
The Bar expects to have a final surplus in 2013 of about $620,000. This does not mean the Bar has an additional $620,000 in the bank, it simply means staff spent that much less than was originally budgeted. The Bar does not carry a reserve cash fund. Our reserve is the equity in our buildings (Phoenix and Tucson). The Bar also does not carry a traditional mortgage. Because we have dues income we receive early in the year, we use an equity line of credit (based on the value of the Phoenix and Tucson buildings) to pay expenses late in the year. This reduces the amount of interest we pay. Fortunately, our need to use that line of credit has decreased since we first purchased the Phoenix building. So what becomes of the surplus? Part of it will be used to fund needed capital projects (rather than using debt financing) and part of it will be used to reduce what we owe on the line of credit secured by our building.
Each year about 8-900 attorneys join the Bar, shouldn’t this revenue increase be enough?
While we have 8-900 attorneys who join the State Bar of Arizona, others retire, go inactive or leave the state. Our net gain each year is about 300 members, which may not be sustained. Also, new attorneys generally don’t pay full dues until they have been a member for three years.
Why can’t the Bar cut programs to avoid a dues increase?
The Board of Governors created a Program Review Committee to look at the various programs offered by the Bar. It’s important to understand that many of the functions performed by the Bar are not discretionary (such as Lawyer Regulation, monitoring CLE compliance, conservatorships, etc.). It is estimated that $350 of a member’s annual dues are used for mandatory functions. The remaining $110 is used for the various discretionary programs (FastCase, Member Directory, Ethics Hotline, etc). The Program Review Committee used a point system to score and ultimately rank each program. The Board of Governors has not at this point determined that any discretionary programs should be cut, with the exception of the voluntary portion of the Member Assistance Program in 2015.
How do our dues compare to other states?
The American Bar Association (ABA) conducts a regular survey of states to determine what it calls the “cost to practice” which include all mandatory fees. Using that ranking, Arizona is tied for 10th. It is important to point out that the State of Arizona picks up none of the cost for regulating of attorneys in our state. Bar dues pay all costs (including the salaries of five staff members at the Supreme Court who work with lawyer regulation issues).
Incidentally, three of the four states with the most expensive cost to practice are voluntary bar states (Connecticut, Tennessee and Pennsylvania).
Wasn’t the new discipline system introduced in 2011 supposed to reduce regulation costs?
The discipline system introduced in 2011 was designed to make the regulation process more efficient. Simple cases now move through the process much more quickly, which means there is more time devoted to complex cases. While the process is quicker, there is still a high volume of investigations. The Bar could reduce staff in this area, but it would mean a longer time for attorneys to learn the resolution of complaints they face.
The Bar owns its building. About two-thirds of the 2nd floor has been unrented for some time. Would it be wiser to sell the building and rent space elsewhere?
While problems in the commercial real estate market have made it difficult to rent the available space in our building, we are beginning to see interest from potential tenants. However, even without additional renters, a preliminary analysis indicates the effective cost to occupy our building is about $14 per square foot. Considering the current rental rate for a similar quality property is $17-19 per square foot, it appears we currently save money by owning the building.
Could we save money by sending the Arizona Attorney magazine electronically?
The award-winning Arizona Attorney magazine is considered by many members to be the number one benefit of Bar membership (based on the most recent member survey). The magazine is not only popular with members, but also with advertisers. The advertising revenue generated by the magazine allows it to make a small profit. While publishing it electronically would reduce the printing and mailing costs, it would also reduce the revenue by an even greater amount. Advertisers would not likely pay as much without the guaranteed printing and subscription base.