Washington Lawyer

Bar Business: Budget Committee Proposes 2011-2012 Budget

From Washington Lawyer, April 2011

numbersThe District of Columbia Bar Budget Committee unanimously has approved a proposed budget for the Bar’s fiscal year that begins July 1, 2011. A public hearing to answer member questions on the proposed budget will be held at 1:30 p.m. on April 12 at the Bar’s headquarters, 1101 K Street NW, room 202.

The committee’s proposal would increase annual dues from $237 to $248 for active members, from $127 to $130 for inactive members, and from $116 to $127 for judicial members. Once again this year, these proposed dues increases are below the dues levels projected in the Bar’s 2008 dues ceiling recommendation as approved by the D.C. Court of Appeals.

The Bar’s strategic plan was used by the staff and Budget Committee to guide the development of this operating budget proposal. The plan can be viewed on the Bar’s Web site at www.dcbar.org/inside_the_bar/structure/reports/index.cfm.

The proposed budget includes a deficit in the amount of $10,172 for dues-funded activities and the mandatory course for new admittees (see chart). A deficit of $490,469 is expected for the many activities of the Bar that are supported by nondues revenue. Most of this amount—$421,744—is attributable to the D.C. Bar Pro Bono Program. The Pro Bono Program has adequate reserves to offset this budgeted deficit if current year fundraising efforts are not sufficient. The Budget Committee proposes to cover the remaining nondues deficit with nondues money from the Bar’s reserve fund.

Each year, the Bar’s Budget Committee carefully examines both revenues and expenses at the line-item level. This ensures that the budget addresses both strategic and operational needs and is based on sound fiscal judgments. The Bar’s Finance Committee, acting on information from an independent auditor, continues to recommend increasing the Bar’s operating reserves from the current level of 2.4 months to closer to six months. This remains a long-term goal of both the Budget Committee and the Bar. Darrell G. Mottley, current chair of the Budget Committee, stated that “the proposed budget that is being recommended to the Board of Governors addresses the priorities in the Bar’s strategic plan in a fiscally responsible way. It provides the resources to ensure that the Bar addresses the members’ needs in fiscal year 2011–2012 and beyond. In addition, the proposal continues to position the Bar to meet its future space needs by funding the reserve dedicated for this purpose.”

The proposed budget includes additional staff positions that are needed to address priorities in the Bar’s strategic plan. In some cases, the staff will be hired late in the fiscal year as a cost-saving measure. New staff positions that will be paid for largely with mandatory dues money will include a senior attorney to address the increasingly complex cases that are handled by the Bar’s discipline unit, a senior media specialist to coordinate and manage the Bar’s outreach to members and other customers, a multimedia specialist to deliver high-quality educational and other content online, a staff attorney to conduct new Practice Management Advisory Service training seminars, and the conversion of a part–time copy editor to a full-time position to refresh content more regularly and expand the Bar’s Web site. New staff positions that will be paid for from nondues revenue include two events and outreach assistants to enhance the deliverability of programs provided by the sections.

The budget also includes a 2.5 percent pool for staff salary adjustments and one-half percent for other adjustments. This projected increase reflects current market conditions among comparable membership organizations.

The Clients’ Security Fund (CSF) is allocated $300,000 within this operating budget. This is a decrease from the prior year budget and is based on average claims paid. The CSF acts as a “last resort” source to reimburse losses of persons victimized by attorney defalcation or misconduct. The fund is replenished annually and will be brought to $750,000 for the fiscal year beginning July 1, 2011.

The Bar continues to offer new member benefits that provide useful services to its members. It plans to make a concerted effort to increase nondues revenue that is generated largely from contributions, seminar publication sales, advertising sales, and royalties from membership benefit programs. This revenue provides funding for several Bar programs that cannot be funded from dues revenue, continuing legal education, and pro bono activities.

After receiving and considering public comments, the Budget Committee will recommend a final proposed budget to the Board of Governors for its approval. Copies of the committee’s full reports are available for review at the Bar’s headquarters during regular business hours.

1. Mandatory Activities
Total
Dues Per
Active  
Member 
A. Dues-Funded Activities

All “Dues Budget” Revenue
$22,944,318
$248.00



Proposed Net Expenses:

Board on Professional Responsibility
$7,353,871
$76.91
Executive Office
1,314,474
$13.75
Programs
2,703,146
$36.17
Clients’ Security Fund Allocation
300,000
$3.14
Administration and Finance
10,735,138
$112.27
Building Reserve
560,900
5.67
 

Total Net Expenses
22,967,529

Surplus (Deficit)
($23,211)

 

B. Mandatory Course for New Admittees

 

Budgeted Revenue
$768,580

Budgeted Expenses
$755,541

Surplus (Deficit)
$13,039

 

C. Total Dues–Funded Surplus (Deficit)
($10,172)

 
2. Non-Dues-Funded Activities

A. Pro Bono Program

     
Budgeted Revenue
$2,201,401

Budgeted Expenses
2,623,145

Net Surplus (Deficit)
$(421,744)*

 

B. Sections

 

Budgeted Revenue
$1,655,913

Budgeted Expenses
1,682,200

Net Surplus (Deficit)
($26,287)

 

C. Continuing Legal Education

 

Budgeted Revenue
$2,052,448

Budgeted Expenses
2,027,725

Net Surplus (Deficit)
$24,723

 

D. Other Non–Dues-Funded Activities

 

Budgeted Revenue
$152,208

Budgeted Expenses
219,369

Net Surplus (Deficit)
($67,161)*

 

* To be funded by net assets accumulated from prior years.