[WSBAPT] Fw: Board of Governors meeting, plus bifurcation update....

Sun Nov 18 15:31:44 PST 2018

More on the potential WSBA bifurcation issue.

Jackie Cyphers
Jeannette A. Cyphers, Attorney at Law
P. O. Box 908   
Edmonds, WA 98020-0908
425-776-5887
fax 425-640-0814
jacyphers at gmail.com

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-------Original Message-------

From: Paul S
Date: 11/18/2018 10:47:20 AM
To: undisclosed-recipients:,
Subject: Board of Governors meeting, plus bifurcation update....

Hello Fellow Members of the WSBA,

All views are solely my own. Feel free to share this unauthorized
communication with others. Email me at pswegle at gmail.com to be added to my
email list of concerned WSBA Members to receive future unauthorized
communications.

This update covers developments and processes regarding potentially
splitting the WSBA into a mandatory/regulatory bar and a
voluntary/professional bar, as well as a few updates from Friday's Board of
Governors (BOG) meeting. 

Supreme Court Workgroup on the WSBA Structure

On November 9, I forwarded to this email list Chief Justice Mary Fairhurst's
Nov 9 email to the BOG and WSBA senior staff. That Nov 9 email included the
attached memo, captioned "Supreme Court Workgroup on the WSBA Structure." 

The Nov 9 Memo announces, among other things, that:

The Supreme Court is convening a Workgroup on the WSBA structure.  The Chief
Justice, as chair, with 10 members will serve on the Workgroup.

The Nov 9 memo further describes the "Composition of Workgroup" as:
1 member from the Supreme Court -- Chief Justice, Mary Fairhurst, Chair
3 members from the WSBA Board of Governors (BOG)—can be either officers
and/or BOG members (BOG selects)
3 members from the WSBA Sections—can be either chairs and/or members of the
Sections (Supreme Court, in consultation with BOG, selects from
applications)
3 members from the Supreme Court appointed boards that WSBA administers—can
be either members and/or chairs (Supreme Court selects from applications)
1 public member (Supreme Court selects from applications)
Re timing, the Nov 9 memo says:

Anticipated duration: 6 to 8 months.  Meetings every 3 to 4 weeks once
Workgroup members identified.  First meeting of Workgroup will be in January
2019.

3 BOG Structure Committee Members Elected Yesterday

Yesterday, the BOG elected its 3 designees to the Workgroup: (i) me (Paul
Swegle), (ii) Dan Clark and (iii) Kyle Sciuchetti. I am honored to have been
selected by my BOG colleagues to serve with Dan and Kyle. This Workgroup
could be the most important in all of WSBA history. 

In making my pitch to be chosen for the Workgroup, I told my BOG colleagues
I still believe the WSBA is stronger as a whole, given the potential for
cost and program synergies. I also said that I am very concerned for the
future of the Sections and that protecting them financially would my
priority in any bifurcation. In making this point I noted that the
mandatory/regulatory side was far less likely to have financial concerns. I
also shared the following personal views: 
If bifurcation is ordered by the Supreme Court, (i) the Sections'
Bylaw-mandated financial reserves must be protected, (ii) the WSBA should
cut costs across the board, and (iii) substantial current costs relating to
Supreme Court-ordered boards, committees and other programs should be
shifted to the Supreme Court (the taxpayers) and no longer be born by the
Members. 
I emphasized my belief that if costs are not cut dramatically in any
bifurcation, the voluntary bar would suffer greatly, and perhaps fatally. I
have been told by many Members that they would not be willing to pay
substantially more to join two bars, but that they would join the voluntary
bar if the combined cost for both bars was less than the current total cost.

In summary, as a Workgroup member, I will focus on developing strategies for
successfully preserving our unified bar through the current constitutional
(and political) uncertainties, while fighting to ensure that any voluntary
bar mandated by the Court is established thoughtfully and on a strong
financial foundation ensuring the long-term success of the Sections and the
continuation of other important professional programs and services. 

BOG Resolution Offering Guidance to Supreme Court re Section Members

On Friday, the BOG also approved an advisory resolution stating that, in
selecting the three Section members of the Workgroup, the Court should
consider including one from a small section, one from a medium sized section
and one from a large section. Governor Stephens proposed the idea and I
helped push it through. Governor Stephens and I both served on the Section
Policy Workgroup, which used a similar tiered approach to ensure balanced
representation among the Sections.

Follow-up Email Nov 16 from Chief Justice Fairhurst.

Early on Friday, Chief Justice Fairhurst sent the following email to the BOG
and WSBA senior staff with more details about the Workgroup: 

Good morning. I will not be joining you today at your meeting. I am chairing
the  Board for Judicial Administration meeting from 9 to noon and then have
the BJA policy and planning meeting from noon to 2.

A number of you have written me directly of your interest in serving on the
Court Workgroup on WSBA Structure. The BOG will be selecting the 3 BOG
members for the Court’s Workgroup. The Court will not be appointing those.

Also, I had a question from Paula about the the role of the executive
director and WSBA staff with the Workgroup. This was my response: “I view
you and the WSBA staff as being some of the resources and those with
expertise from whom the Workgroup will hear.  I hope you (and other WSBA
staff members) will be able to attend the meetings, and like others
attending to share your thoughts, insights and perspectives.  I envision
that at some meetings you (and/or other WSBA staff) would be asked to
formally present and provide information depending on the topic.” I note
that Paula is an officer because she is Secretary and could be one of the
three you select from officers or members of the BOG.

Finally, I had hoped you could pick your representatives today but December
7 is the deadline for applications for the other categories of Workgroup
members so you could have until then if you need or want more time.  Thanks.
Hope you have a good meeting today. See you soon. Mary

Section Leaders: Come Together ASAP!  

Attention Section Leaders! You should do everything in your power to ensure
that all 3 section member appointees to the Structure Workgroup are
knowledgeable, thoughtful and capable champions for the Sections.  

As we did in the face of the Sections Policy Workgroup fiasco, you should
quickly discuss (i) whom to recruit for the Workgroup (applications due Dec
7) and (ii) whether to send one or more thoughtful recommendation letters
supporting specific applicants for the Supreme Court's consideration and
laying out any initial views or concerns about the Workgroup's mission. 

Recommendation letters haven't been solicited or encouraged by the Court,
but the Workgroup's processes are supposed to be entirely public and I
believe the Court would give consideration to articulate recommendations
from the Section Leaders. As a fellow Section Leader, I would be happy to
help with such efforts. 

In any event, Section Leaders and other WSBA Members need to take this
process very seriously.  The Supreme Court will give substantial weight to
the recommendations of the Workgroup. Our professional association hangs in
the balance as never before and the continued existence of the Sections is
at stake. 

Previously Constituted Structure Workgroup Disbanded

WSBA President Pickett made it clear that the previous Structure Workgroup
created by him and the WSBA executive staff would not continue. There was
palpable friction around this issue. Treasurer Dan Bridges raised the
awkward issue of why the BOG would not continue to maintain its own
Structure Workgroup to provide feedback to the Supreme Court's Structure
Workgroup. A certain WSBA Member in attendance was particularly upset that
Section Leaders had been left completely in the dark about the Structure
Workgroup until its most recent and apparently final meeting, which provided
no real opportunity for feedback. President Pickett stood firm that the WSBA
s Structure Workgroup was disbanded. 

Following those awkward discussions, I volunteered to hold one or more
public meetings with Section Leaders and other interested WSBA Members to
function as one or more wrap-up or hand-off meetings so that the information
and views developed in that process could be publicly discussed and handed
off to the 3 BOG members appointed to the Supreme Court's Structure
Workgroup. 

When there is more information about any such meetings, the WSBA will
publicly announce them and I will notify this group.

Friday's BOG Meeting

In the interest of efficiency, I have attached the "annotated agenda" for
Friday's BOG meeting. It's a version of the public agenda with additional
notes that the Executive Director provides the Governors to help focus our
attention and preparation. 

As a reminder, because of the Supreme Court's suspension of all BOG
governance and reform leadership efforts, only relatively innocuous matters
are being considered by the BOG. The BOG's lack of real authority/legitimacy
should now be obvious to all, the WSBA Bylaws and Washington State Bar Act
notwithstanding. 

The WSBA staff will almost certainly send out an informative recap of Friday
s meeting soon, so I will only focus on a few points of interest.
Mandatory Malpractice Insurance Task Force Charter Extension.  The BOG voted
to extend the Charter for this Task Force so it could continue its work,
including, presumably, consideration of the substantial Member input
continuing to come in. 

Legislative Priorities.  Taudd Hume, Chair of the Legislative Review
Committee, Michael Hutchings from the Corporate Act Revision Committee of
the Business Law Section, and WSBA staff member Sanjay Walvekar walked us
through some interesting and well-considered revisions to the Washington
Business Corporation Act. Here is a LINK to the related BOG materials. These
proposals, all approved by the BOG, would do three things, all of which I
believe are in the best interests of Washington corporations and
shareholders: 
Change the default rule relating to "preemptive rights" from "opt out" to 
opt in"
Change the default rule relating to "cumulative voting" from "opt out" to 
opt in"
Changing to a more objective test for determining whether a sale of assets
requires shareholder approval:
Shareholder approval would be required for a transaction that would leave
the corporation without a significant continuing business activity. A
corporation will conclusively be deemed to have retained a significant
continuing business activity if it retains a business activity that
represents at least:
25% of the total assets at the end of the most recently completed fiscal
year; and 
either (a) 25% of income from continuing operations for that fiscal year or
(b) 25% of revenues from continuing operations for that fiscal year. 
FastCase Approval.  Governor Michael Cherry and WSBA staff member Terra
Nevitt gave a compelling proposal to add FastCase as an additional Member
Benefit - something that has been under careful consideration for months.
The Board not only approved this new benefit, but also certain enhancements
to FastCase that will be coming in early 2019. Great news for Members. The
WSBA staff will provide additional details soon. Nice work Terra and Michael

Lunch with WLI Fellows.  The Washington Leadership Institute Fellows came in
for lunch and shared their most recent Community Service Project. The
project involved very innovative approaches to empowering members of migrant
communities with information and resources for combating sexual harassment.
Nice work by a strong group of dedicated attorneys.  
Please feel free to provide any comments, questions or other feedback. 

Sincerely, 

Paul Swegle
Governor, District 7N
Immediate Past Chair, Corporate Counsel Section
Member, Securities Law Committee
Washington State Bar Association
__________________________

Paul Swegle
General Counsel
(206) 300-7165

Startup GC Blog

Contract Drafting and Negotiation 
"...Swegle provides a clear methodology 

to understand and analyze business contracts 
in this exceptionally useful book...."  - Kirkus Reviews

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