ARDC
ORGANIZATIONAL INFORMATION
Overview of ARDC | How to Contact ARDC | Department Directory | Board Member Roster
2000 Annual Report of the Attorney Registration and Disciplinary Commission
Table of Contents
II. Report on Disciplinary Matters and Non-Disciplinary Action Affecting Attorney Status
A. Investigations
B. Hearing Matters
C. Matters Filed Before the Review Board
D. Supreme Court - Disciplinary Cases
E. Supreme Court - Non-Disciplinary Action
III. Amendments to the Rules Regulating the Profession
A. Client Protection Program
B. Ethics Inquiry Program
C. Education
Review
Board
Hearing Board
Inquiry Board
Chicago
April 30, 2001
To the Honorable,
the Chief Justice and Justices of the Supreme Court
of Illinois
The annual report of the Attorney Registration and Disciplinary Commission for 2000 is submitted to the Court, to the members of the Bar of Illinois, and to the public in accordance with Supreme Court Rule 751.
The report is a statement of activities of the Commission for calendar year 2000 and an accounting and audit of the monies received and expended during the twelve-month period, which ended December 31, 2000.
Respectfully submitted,
Benedict Schwarz
II, Chairman
J. Jeffrey Allen
Donn F. Bailey, Ph.D.
Patricia Campbell Bobb
John Paul Kujawski
James J. McDonough
Brian McFadden, Commissioners
Mary Robinson, Administrator
| I. Registration Report |
The Master Roll of attorneys registered to practice law in Illinois for the year 2000 contained the names of 73,661 attorneys as of October 31, 2000. After that date, the Commission began the 2001 registration process, so that the total reported as of October 31, 2000, does not include the 1,620 attorneys who first took their oath of office in November or December 2000.
The 2000 total, which reflects an increase of only 147 attorneys over the number who registered in 1999 (as compared to average increases of 1,600 each year for the previous five years), was impacted by amendments to the rules governing registration categories and inactive status, first effective for the 2000 registration process. The amendments eliminated from Rule 756 the out-of-state registration category under which lawyers could pay a reduced fee if they did not reside, have an office in, or practice in Illinois, and deleted Rule 770, which had provided for a court-ordered inactive status that did not require annual registration or payment of any fee. At the same time, the amendments added to Rule 756 an inactive status registration category, which requires the payment of a reduced fee and annual registration, as well as a new retirement registration status, which requires no fee and no annual registration for lawyers. Lawyers who choose to register under either of those categories are not authorized to practice. The 10,400 attorneys who had previously registered as out-of-state had to choose either active, inactive or retired status. In addition, several hundred lawyers who were previously on court-ordered inactive status returned to active status and then chose one of the new registration categories, most often choosing retired status.
As a result of the changes, the number of attorneys removed from the roll for reasons including nonpayment, death, discipline and retirement (previously counted as those who had transferred to Rule 770 inactive status) jumped from 993 in 1999 to 2,407 in 2000, including 1,943 attorneys who chose to register under the new retired status.
Chart A shows further demographic information for attorneys registered in 2000 and Chart B shows the breakdown by the registration categories set forth in Rule 756.
Chart A: Age, Gender and Years in Practice for Attorneys Registered in 2000
 |
 |
|
|
|
||
Chart B: Registration Categories for 2000
Charts C and D show the distribution by Judicial Circuit and by County of the 56,460 registered attorneys who report a principal business address in Illinois. Another 17,201 attorneys report a business address outside Illinois but register as either active and able to practice in Illinois or inactive. Those 17,201 attorneys are not included in Charts C and D. For the majority of counties, there was very little change in lawyer population since 1999. The fastest growing counties with 100 or more lawyers were Adams (9.7%), Lake (5.7%), McLean (5%), LaSalle (4.7%), DuPage and Will (both 4.6%), as compared with a 1.5% increase for Cook County.
Chart C: Registration by Judicial Districts for 2000
Chart D: Registered Attorneys by County
| II. Report on Disciplinary Matters and Non-Disciplinary Action Affecting Attorney Status |
During 2000, the Commission docketed 5,716 investigations, 161 fewer investigations than 1999, continuing a yearly decline that began in 1997. Those 5,716 investigations involved charges against 3,901 different attorneys. This means that about 5% of all registered attorneys became the subject of an investigation in 2000. Nearly a quarter of the 3,901 attorneys were the subject of more than one investigation docketed in 2000, as shown in Chart 1.
Charts 2 and 3 below report the classification of investigations docketed in 2000, based on an initial assessment of the nature of the misconduct alleged, if any, and the type of legal context in which the facts apparently arose. Chart 2 reflects that the most frequent areas of a grievance are: neglect of the client’s cause, failure to communicate with the client, fraudulent or deceptive activity, excessive fees, and failure to provide competent representation.
Consistent with prior years, the top areas of practice most likely to lead to a grievance of attorney misconduct are: criminal law, domestic relations, tort, and real estate, as shown in Chart 3.
Chart 2: Classification of Charges Docketed in 2000 by Violation Alleged
Chart 3: Classification of Charges Docketed in 2000 by Area of Law
If an investigation fails to reveal sufficiently serious, provable misconduct, the Administrator will close the investigation. If an investigation produces evidence of serious misconduct, the case is referred to the Inquiry Board, unless the matter is filed directly with the Supreme Court under Rules 761, 762(a), or 763 because it is based upon a criminal conviction involving moral turpitude, because the respondent-attorney moves for disbarment prior to the referral to Inquiry, or because the matter is based upon discipline imposed by another jurisdiction. The Inquiry Board operates in panels of three, composed of two attorneys and one nonlawyer, all appointed by the Commission. An Inquiry panel has authority to vote a formal complaint if it finds evidence to support a charge, to close an investigation if it does not so find, or to place an attorney on supervision under the direction of the panel pursuant to Commission Rule 108. The Administrator cannot pursue formal charges without authorization by an Inquiry Board panel.
Comparatively few investigations result in the filing of formal charges. Charts 4 and 5 show the number of investigations docketed and terminated during 2000, and the type of action which terminated the investigations.
Chart 4: Investigations Docketed
Chart 5: Investigations Concluded in 2000
Once an Inquiry Board panel authorizes the filing of charges, a formal complaint setting forth all allegations of misconduct pending against the attorney is filed, and the matter proceeds before the Hearing Board. The Hearing Board functions much like a trial court in a civil case and is comprised of three panel members, two lawyers and one nonlawyer, appointed by the Commission. Upon filing and service of the complaint, the case becomes public. In addition to complaints alleging misconduct filed pursuant to Supreme Court Rule 753, and complaints alleging conviction of a criminal offense under Rule 761, the Hearing Board also entertains petitions for reinstatement pursuant to Rule 767, petitions for transfer to inactive status because of impairment pursuant to Rule 758, and petitions for restoration to active status pursuant to Rule 759.
Chart 6 shows the activity before the Hearing Board in 2000. Staff turnover (a loss of one-third of the attorneys assigned to investigate and prosecute the more serious cases for two consecutive years) resulted in an artificially low number of new disciplinary complaints filed in 2000. Only 97 complaints were filed, and only 110 in 1999, as compared to 136 in 1998, and 121 in 1997. By the end of 2000, all counsel positions had been filled, and as of the filing of this report, new filings appear to be on pace with the 1998 experience.
Chart 6: Matters Before the Hearing Board in 2000
Chart 7 shows the years in practice of the lawyers who were the subject of a formal complaint in 2000. The number of formal complaints filed against attorneys in practice for fewer than ten years remained high. Of the 97 disciplinary complaints filed in 2000, 21% were filed against lawyers in practice ten years or less.
Chart 7: Disciplinary Complaints Filed in 2000
Charts 8 and 9 show the types of misconduct alleged in the 97 disciplinary complaints filed during 2000 and the areas of practice in which the alleged misconduct arose. In large part, the categories most frequently seen in formal complaints track the categories most frequently seen in the initial charges, as reported in Charts 2 and 3.
Chart 8: Types of Misconduct Alleged in Complaints Filed Before Hearing Board in 2000
*Totals exceed 97 cases and 100%
because most complaints allege more than one type of misconduct
Chart 9: Area of Law Involved in Complaints Filed Before Hearing Board in 2000
Chart 10 shows the type of action by which the Hearing Board concluded 116 cases during 2000.
Chart 10: Actions Taken by Hearing Board in Matters Terminated in 2000
C. Matters Filed Before the Review Board
Once the Hearing Board files its report in a case, either party may file exceptions before the Review Board, which serves as an appellate tribunal. Chart 11 shows activity at the Review Board during 2000.
Chart 11: Trend of Matters in the Review Board in 2000
D. Supreme Court – Disciplinary Cases
Only the Supreme Court has authority to sanction attorneys for misconduct, except for a Board reprimand which can be imposed in a disciplinary case without order of the Court by either the Hearing or Review Board. In 2000, the Hearing Board administered seven reprimands and the Review Board administered one reprimand (see Charts 10 and 11). Other than Board reprimands, the Hearing and Review Board reports are recommendations to the Supreme Court. During 2000, the Court entered 120 sanctions against 120 attorneys. Chart 12 reflects the nature of the orders entered.
Chart 12: Disciplinary Sanctions Ordered by the Supreme Court in 2000
Of the 120 sanctions entered by the Supreme Court, 42% were entered pursuant to consent petitions. Twenty-one of the 39 disbarments were by consent petition.
Charts 13 and 14 provide demographic information on the 120 attorneys sanctioned by the Supreme Court during 2000, as well as the eight attorneys who were reprimanded by the Hearing Board and Review Board in 2000. As was true in prior years, the vast majority of attorneys sanctioned during 2000 have practiced more than 10 years; all are over 30 years old; and most are male. However, 21 attorneys, or 16%, practiced less than 10 years. Chart 15 (at page 12) tracks the type of misconduct that led to the sanction orders entered in 2000.
Chart 13: Attorneys Disciplined in 2000
Chart 14: County of Practice
During 2000, the Court issued opinions in three cases: In re David Eugene Eckberg, 192 Ill.2d 70, 248 Ill.Dec. 246, 733 N.E.2d 1244 (2000), In re Fred Allen Richman, 191 Ill.2d 238, 246 Ill.Dec. 365, 730 N.E.2d 45 (2000) and In re William Nelson Twohey, 191 Ill.2d 75, 245 Ill.Dec. 294, 727 N.E.2d 1028 (2000). Richman and Twohey were summarized in the 1999 ARDC Annual Report.
Eckberg, issued by the Court on July 6, 2000, concerned the Administrator’s petition filed pursuant to Rule 758, alleging respondent’s mental incapacity to practice law. A majority of the Court held that the respondent should be allowed to continue active practice without conditions where the evidence demonstrated that, subsequent to the incidents that prompted the Administrator’s intervention, respondent had voluntarily complied with his physician’s treatment recommendations and had practiced law without a complaint. Justices Miller and Harrison dissented.
Chart 15: Misconduct Committed by the 128 Lawyers Disciplined in 2000*
Disciplinary cases reach the Court in several ways. Chart 16 reflects the actions taken by the Supreme Court in disciplinary matters in varying procedural contexts in which those matters are presented.
Chart 16: Orders Entered by Supreme Court in Disciplinary Cases in 2000
E. Supreme Court – Non-Disciplinary Action
In addition to activity in disciplinary cases, the Supreme Court entertains pleadings in non-disciplinary matters that affect an attorney’s status. Chart 17 reflects the orders entered in such cases during 2000. With the amendments to Rules 756 and 770, adding an inactive status registration category and deleting Rule 770 court-ordered inactive status, effective beginning with the 2000 registration year, transfers to inactive status are now accomplished without Court order, and, therefore, are no longer reflected in Chart 17. As was true in 1999 when the rule amendments were announced, many lawyers who had transferred to inactive status under Rule 770 petitioned to return to active status under Rule 759, with the result that the number of petitions filed under Rule 759 was significantly higher for 1999 and 2000 than in past years. The transition stage will end during 2001, and there should be a significant drop-off in Rule 759 filings in future years.
Chart 17: Non-Disciplinary Actions by the Supreme Court
Chart 18: A Comparison 1988-2000
| III. Amendments to the Rules Regulating the Profession |
Supreme Court Rule 756: Annual Fees Increased
For the first time in 12 years, the Supreme Court amended Rule 756 to increase the annual fees paid by Illinois lawyers. The fee paid by active lawyers admitted to practice for three or more years was raised from $140 to $180, and the fee for inactive lawyers and for lawyers admitted to practice between one and three years was increased from $70 to $90. The Court also amended Rule 756 to exempt retired judges from paying a fee. The changes were effective November 1, 2000, for purposes of the 2001 registration year.
Supreme Court Rules 701 and 714, Rule 3.8 of the Illinois Rules of Professional Responsibility: Rules in Connection with Capital Cases
On March 1, 2001, the Supreme Court announced rule amendments pertaining to capital cases. Two of the announced changes added qualification requirements for lawyers who appear in capital cases. New Rule 714 creates a Capital Litigation Trial Bar, and sets forth criteria and procedures for admission to that Bar. Among the requirements for admission are that the lawyer have at least five years of criminal litigation experience, have experience as lead or co-counsel in at least eight felony jury trials, have completed approved training in the preparation and trial of capital cases, and have familiarity with and experience using experts in mental health and DNA profiling. An amendment to Rule 701 provides that no lawyer other than the Attorney General or the duly appointed or elected State’s Attorney of a county may appear for the State or for the defense as lead or co-counsel in a capital case unless he or she is a member of the Capital Litigation Trial Bar. The amendment to Rule 701 is effective one year after its adoption, and applies in capital cases filed by information or indictment on or after its effective date.
At the same time, the Court added a new paragraph (a) to Rule 3.8 of the Illinois Rules of Professional Conduct, providing that the duty of a public prosecutor or other government lawyer is to seek justice, not merely to convict.
Supreme Court Rule 773: Costs in Discipline Cases
Effective November 1, 2000, the Supreme Court amended Rule 773 on costs in discipline cases to limit which items may be assessed as costs, and to impose a per case limit of $1000, unless the Administrator petitions for an amount in excess of $1000 and shows good cause for assessing the excess.
Rule 8.4 of the Illinois Rules of Professional Conduct: Expanded Categories of Prohibited Discrimination
On March 26, 2001, the Supreme Court announced an amendment to Rule 8.4(a)(9)(A), which provides that a lawyer shall not commit conduct that violates a federal, state or local statute that prohibits discrimination, where the conduct reflects adversely on the lawyer’s fitness as a lawyer. Previously, the Rule described statutes that prohibited discrimination based upon race, sex, religion or national origin. The amendments expand the categories of prohibited discrimination to include discrimination based upon disability, age, sexual orientation or socioeconomic status. The Court made comparable amendments to Rule 63, Canon 3, of the Judicial Code.
Litigation Challenging Constitutionality of Rules 3.6 and 3.8 of the Illinois Rules of Professional Conduct
Amendments to Rules 3.6 and 3.8, effective December 1, 1999, governing trial publicity and duties of prosecutors were described in the 1999 Annual Report. On August 15, 2000, Richard Devine and nine other State’s Attorneys, including the president of the Illinois State’s Attorneys Association, sought declaratory and injunctive relief against the ARDC Administrator, claiming that certain of the amended provisions infringed on their First Amendment rights and were unconstitutionally vague and overbroad. In a decision issued January 22, 2001, United States District Court Judge F. Grady dismissed the case for failure to allege a justiciable case or controversy. Richard Devine, State’s Attorney of Cook County, et al. v. Mary Robinson, Administrator of the Attorney Registration & Disciplinary Commission, 131 F. Supp. 2d 963 (N.D. Ill. 2001). While he did not definitively construe the Illinois rules, Judge Grady found them “fairly susceptible to an interpretation that would render them constitutional.” No appeal was taken.
Commission Rules 55, 102 and 105: Practice before the Inquiry Board
The Commission announced amendments, effective May 1, 2001, to Commission Rules 55, 102 and 105, clarifying the Inquiry Board’s discretion to entertain appearances by respondents and adding certain notice provisions. The amended rules recite that when it deems appropriate, the Inquiry Board may allow or require the appearance of a respondent, but that the Board is not required to allow an appearance. The amendments also require that the notice to a respondent that a matter is being referred to an Inquiry panel must include information on how the respondent may request an appearance, and/or submit information for the Inquiry panel’s consideration.
Commission Rule 260: Prehearing Conferences
This rule was amended, effective May 1, 2001, to conform the rule to practice, clarifying that prehearing conferences may be conducted in person or by telephone, and that the topics listed in the rule as those to be addressed in prehearing conferences need not all be addressed at the first prehearing conference, and instead, should be covered as the chair deems appropriate.
Commission Rule 261: Substitution of Hearing Board Members
The Commission added new Rule 261, effective May 1, 2001, establishing circumstances under which parties may move to substitute the members of a Hearing panel assigned to a case. Under the rule, either party may move to substitute the chair assigned to the case as a matter of right or for cause. Parties may move to substitute the lawyer and nonlawyer members assigned to the panel only for cause. The rule also provides that motions to substitute a panel chair for cause shall be heard by the Chair of the full Hearing Board, and motions to substitute a panel member for cause shall be heard by the chair assigned to the case.
Commission Rule 501: Eligible Claims under the Client Protection Program
Effective May 31, 2000, Commission Rule 501 was amended to expand the definition of the period within which claims must be filed to allow filing either within three years of when the client knew or should have known of the lawyer’s dishonest conduct or within one year of the date the lawyer was disciplined or died. The change aligns the limitation period with the Rule’s provision that claims will be honored only if the lawyer has died or been disciplined, and it eliminates concern that a claim might have to be filed prior to the conclusion of the discipline case if the limitations period would otherwise run.
| IV. ARDC Programs |
The Client Protection Program was created by the Illinois Supreme Court in 1994 by the adoption of Rule 780. In 2000, the program paid 148 claims totaling $348,630 to clients who lost money or property due to the dishonest conduct of attorneys holding an Illinois license. The program may reimburse losses up to $10,000 for each client. The majority of claims involve sums less than $10,000. The program does not cover losses resulting from professional negligence or malpractice and does not consider claims involving contractual disputes. Awards are made out of the Disciplinary Fund. The rules governing the administration of the program are contained in Commission Rules 501 through 512.
Chart 19: Classification of Approved Claims
Chart 20: Summary of Approved Claims
The Commission’s Ethics Inquiry Program is a telephone inquiry service that allows Illinois attorneys and members of the public to call for help in resolving hypothetical questions about ethical dilemmas, the Illinois Rules of Professional Conduct and the Rules of the Commission. No legal opinion or binding advisory opinion is given.
The Ethics Inquiry Program handles over 2,200 calls each year from attorneys. This figure does not include calls received from nonlawyers. A brochure describing the program can be obtained by calling the ARDC in Chicago.
Illinois Professional Responsibility Institute: Professionalism Seminar
Since November 1996, the Commission has sponsored a seminar on law office management issues and ethical obligations of lawyers. The seminar is held three times a year for lawyers who are required to attend as part of their disciplinary sanctions or who attend voluntarily. Over 100 lawyers have attended the seminar thus far.
The seminar was created in cooperation with members from the Chicago Bar Association, Illinois State Bar Association and Cook County Bar Association, to further the Commission’s efforts to develop preventive and remedial programs for attorneys on relevant ethics issues. The Professionalism Seminar is taught mostly by select, volunteer practicing Illinois attorneys. Any attorney interested in learning more about the Professionalism Seminar, may call Mary F. Andreoni, Administrative Counsel, ARDC, Chicago.
ARDC Web Site
The Commission plans to establish an ARDC Web site sometime in 2001. Disciplinary opinions issued by the Supreme Court, Hearing Board and Review Board reports, as well as the Rules of Professional Conduct, previously published on the ARDC CD, will be accessible through the site. Other features will include the ability to search the Master Roll for certain basic, public registration information about Illinois lawyers (business address, phone, date of Illinois licensing and present registration status), as well as a mechanism for lawyers to change their address on-line.
Speeches and Presentations and Articles
The Commission continued its efforts to familiarize attorneys with the ethics rules and concerns by having its legal staff make more than 100 presentations to bar associations, law firms, law schools, continuing legal education seminars and civic groups. Any group interested in having a Commission representative speak to their group, may call Mary F. Andreoni, Administrative Counsel, ARDC, Chicago.
Also, Commission lawyers published a number of articles that appeared in various legal publications. Some of those articles will be reprinted on the ARDC’s web site.
| V. Developments During 2000 |
The ARDC Commission consists of four members of the Illinois Bar and three non-lawyers. The Commissioners, who serve without compensation, establish ARDC policies, appoint members of the ARDC Inquiry and Hearing Boards and, subject to the approval of the Supreme Court, appoint the Commission's chief executive officer, the Administrator. The ARDC Administrator is Mary Robinson. As of April 2001, the Commissioners of the ARDC include J. Jeffrey Allen of Joliet, Donn F. Bailey, Phd. of Chicago, Patricia C. Bobb of Chicago, John P. Kujawski of Belleville, James J. McDonough of Chicago, and Brian McFadden of Springfield.
Appointment of Benedict Schwarz II as Chairman
On January 23, 2001, the Illinois Supreme Court appointed Commissioner Benedict Schwarz II to be Chairman of the Commission. Mr. Schwarz is a partner in the West Dundee law firm of Schwarz, Vanek & Weiler. Admitted to practice law in 1971, he received his J.D. from The John Marshall Law School and practices in the family law area. Mr. Schwarz is a long-time member and past director of the American Academy of Matrimonial Lawyers and he is also a member of the Board of Directors of the Lawyers Assistance Program (LAP). Mr. Schwarz has served as a lawyer-member of the ARDC for almost a decade. He replaces Jay H. Janssen of Peoria, who finished his term as Chairman.
Retirement of Jay H. Janssen
On April 13, 2001, Jay H. Janssen concluded his term as a Commissioner. Mr. Janssen began his service as a Commissioner in November 1995 and served as the Commission Chair for a three-year term, which concluded on January 22, 2001. Under his administration, the Commission took action to attract and maintain a highly qualified legal staff and to obtain funding adequate to allow the Commission to meet its responsibilities effectively for several years. Mr. Janssen, a Peoria lawyer, will continue to practice as managing partner in the law firm he founded, The Janssen Law Center, concentrating in the areas of personal injury, workers' compensation, medical malpractice and products liability litigation.
Retirement of Michael J. Reagan
On October 30, 2000, Commissioner Michael J. Reagan resigned his appointment as a lawyer member commissioner upon his appointment as a federal judge to serve on the U.S. District Court, Southern District in East St. Louis. He served as a commissioner since 1995. Judge Reagan worked as a Belleville police officer before entering law school at St. Louis University, where he received his J.D. in 1980. He practiced both civil and criminal law and was past president of the Illinois Trial Lawyers Association, 1999-2000.
Death of Commissioner Linda S. Culver
On May 18, 2000, the Commission was saddened by the death of Linda S. Culver, who served as a non-lawyer member commissioner since 1997. Ms. Culver, a Springfield native, was executive vice-president and chief financial officer of Illinois National Bank in Springfield. Prior to that position, Ms. Culver was the president of the former First of America Bank and was thought to be the first female bank president in Springfield. A 1975 graduate in accounting from the University of Illinois, Ms. Culver served on a number of civic, cultural and business organizations.
Appointment of J. Jeffrey Allen as Commissioner
On April 13, 2001, the Court appointed Joliet lawyer, J. Jeffrey Allen, as a Commissioner to serve a three-year term. Mr. Allen is the Program Director and Managing Attorney of the Will County Legal Assistance Program. He received his J.D. from DePaul University College of Law in 1976. He is a former president of the Will County Bar Association, present and past chair of several ISBA committees and is active in community affairs.
Appointment of John Paul Kujawski as Commissioner
Belleville trial lawyer, John P. Kujawski was appointed by the court to fill the vacancy created by Commissioner Michael J. Reagan’s appointment to the federal bench. Mr. Kujawski received his J.D. from St. Louis University in 1973 and he is a name partner with the law firm of Kujawski and Faerber, PC, where he concentrates in personal injury and FELA litigation. Mr. Kujawski’s term will expire December 31, 2003.
Appointment of Brian McFadden as Commissioner
Effective July 6, 2000, Brian McFadden, was appointed by the Court as a non-lawyer member to fill the vacancy created by the death of Linda S. Culver, for a term expiring December 31, 2002. Mr. McFadden is the chief of staff for the mayor of Springfield, Illinois. He was previously the Assistant to the Chief of Staff for the Illinois Senate Republican Staff and he received his undergraduate degree from Southern Illinois University.
Appointment of
Leonard F. Amari as Chair of the Review Board
Leonard F. Amari was appointed to serve as chair of the Review Board on
January 23, 2001. Mr. Amari has been a member of the Review Board since
1999. He is the managing partner in the Chicago firm of Amari &
Locallo, where he concentrates in the area of real estate taxation. Mr.
Amari is a past president of the Illinois State Bar Association from
1989-90, and received his J.D. from The John Marshall Law School in
1968.
Retirement of Robert J. Downing
On March 5, 2001, Robert Downing retired from his position on the Review Board. A former judge of the First District, Illinois Appellate Court, Judge Downing is a partner in the Glenview firm of Miller, Forest & Downing. Judge Downing was appointed to the Review Board in 1990, and served as chair of the Review Board from 1995 through 1997. He received his J.D. from Loyola University Chicago and was admitted to practice law in Illinois in 1942.
Appointment of Cheryl I. Niro
Effective March 5, 2001, Cheryl I. Niro, a Chicago lawyer, was appointed by the Court to serve on the Review Board, to fill the vacancy left by the retirement of Judge Downing. She received her J.D. in 1980 from Northern Illinois University. Ms. Niro is a partner at Quinlan & Crisham, where she concentrates her practice in the areas of alternative dispute resolution, labor and employment law. She is a past president of the Illinois State Bar Association, 1999-2000.
| VI. Financial Report |
The Commission engaged the services of Grant Thornton LLP to conduct an independent audit as required by Supreme Court Rule 751(e)(7). The audited financial statements for the year ended December 31, 2000, are attached.
The statements reflect that, as was true for the previous five years, expenditures exceeded income, and the excess was funded by the operating reserve. The Supreme Court’s decision to raise the annual fee from $140 to $180 effective for purposes of the 2001 registration year will reverse that trend, and has allowed the Commission to make adjustments necessary to fund operations effectively.
The $140 fee was set in 1989, and funded operations for twelve years without intervening increases. At the time the Court ordered the increase to $180, the annual fee for Illinois lawyers was lower than the fees charged in 43 of 51 other jurisdictions (50 states and the District of Columbia), and ranked 11th out of 17 in jurisdictions without mandatory bar associations. The $180 fee is still lower than the fees charged in 37 of the 51 jurisdictions, and ranks 8th out of the 17 nonmandatory jurisdictions.
As it did for the 12 years during which the last fee schedule was in place, the Commission will carefully monitor all expenditures, and restrict spending to reasonable needs. The Commission projects that absent unforeseen events, the $180 fee should fund operations for several years without additional increases.
| 2000 COMMISSIONERS |
2000
BOARD MEMBERS
Review Board
| 2000 Audit Report |
Attorney Registration and Disciplinary Commission of The Supreme Court of Illinois
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
| NOTE A - GENERAL PURPOSE DESCRIPTION |
The Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois (the "Commission") was appointed by the Illinois Supreme Court (the "Court") under Rules 751 through 756 of the Court effective February 1, 1973, and subsequent additional rules and amendments. The Commission and the Office of the Administrator (the "Administrator") maintain the Master Roll of Attorneys and investigate and prosecute claims against Illinois attorneys whose conduct might tend to defeat the administration of justice or bring the Court or the legal profession into disrepute.
Additional significant rules of the Court applicable to the Commission’s operations are as follows:
Rule 773, as amended, provides that an attorney-respondent has a duty to pay costs involved in the enforcement of certain Supreme Court rules, costs incurred to compel witness testimony where the lawyer has not cooperated with Commission proceedings, and costs incurred to obtain records from a financial institution when an attorney-respondent fails to provide records. Effective November 1, 2000, the Commission is limited to collection of $1,000 for cost reimbursements, absent exceptional circumstances (See note C).
Rule 769 provides that every attorney has a duty to retain all financial records related to the attorney’s practice for a period of not less than seven years.
Rule 780 establishes the Client Protection Program to reimburse claimants for losses caused by the dishonest conduct of Illinois lawyers. Pursuant to section (d) of the rule, the Commission annually allocates an amount of money to pay these claims.
| NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
The accompanying financial statements reflect the financial position and activities of the Commission. Net assets are generally reported as unrestricted, unless assets are received from donors with explicit stipulations that limit the use of the assets. At December 31, 2000, the Commission has no temporarily or permanently restricted net assets.
Cash and Cash Equivalents
For purposes of the statement of cash flows, cash and cash equivalents include all deposits in checking and savings accounts. Money market accounts and cash balances held in investment trust accounts are not considered cash equivalents since the Commission intends to reinvest these funds.
Investments
Investments are stated at fair value, which generally represents quoted market value as of the last business day of the year. Investments in money market accounts are carried at cost, which approximates market value.
Fixed Assets
Fixed assets are stated at cost. Depreciation and amortization are provided over the estimated useful lives of the assets or asset groups principally on the straight-line method. Upon disposal of assets, gains or losses are included in income. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining lease period.
The estimated useful lives of the fixed assets are as follows:
Accrued Compensated Absences
The Commission’s vacation policy provides time off for full-time salaried employees based on years of service. Years of service are computed from each employee’s anniversary date of employment. Employees are not permitted to carry over vacation time from year to year without written approval from the Administrator. An accrual is included in the financial statements representing vacation time earned, but unused at December 31, 2000, along with the Commission’s related retirement contribution.
Deferred Registration Fees
The Commission
is funded by an annual registration fee assessed on Illinois attorneys.
The annual fee for the subsequent year is billed on November 1 and is
due January 1. Deferred registration fees represent the fees for
calendar year 2001 received prior to
December 31, 2000.
Deferred Rent Expense
Deferred rent expense consists of a combination of "free rent" and a lease incentive payment received from the landlord. These rent deferrals and incentive payments are being amortized over the life of the lease on a straight-line basis.
Income Taxes
The Commission has received a favorable determination letter from the Internal Revenue Service stating that it is a tax-exempt organization under Section 501(a) of the Internal Revenue Code, as an organization described in Section 501(c)(6).
Significant Estimates and Concentrations of Risk
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Commission to make estimates and assumptions that affect certain reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.
The Commission’s registration fees are sent directly by registering attorneys to a lock box under the sole supervision of LaSalle Bank (the "Bank"). The Bank accounts for the contents of the lock box, and all receipts are deposited to the Commission’s account at the Bank. The Bank sends an accounting for these funds to the Commission’s registration department for processing and comparison with the registration and billing records.
The Commission maintains most of its cash and money market funds at the Bank. The balance is insured by the Federal Deposit Insurance Corporation up to $100,000. As of December 31, 2000, the Commission’s cash in excess of FDIC insurance coverage approximated $117,400. The Commission has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its cash balances. All investment transactions are handled by the Bank’s Trust Department. All investment securities are held in safekeeping at the Trust Department.
| NOTE C - COST REIMBURSEMENTS |
The Commission receives cost reimbursements for investigative and disciplinary costs from disciplined attorneys. Cost reimbursement is billed at the time that discipline is imposed by the Court, but may not be a total reimbursement of or match the period in which the investigative disciplinary costs were incurred. Beginning in November 1995, the Commission has also regularly sought entry of judgments by the Court with interest at the rate charged by the State of Illinois (9% at December 31, 2000) for all invoices not paid within 30 days of the initial billing. The Commission has also established payment plans for disciplined attorneys. Effective November 1, 2000, the Commission will be limited to $1,000 in cost reimbursement for each disciplined attorney, absent exceptional circumstances.
Although collectibility of the cost reimbursements has been enhanced by the Commission’s judgment procedures, the Commission cannot reasonably estimate the collectibility of the cost reimbursements. Whether the Commission can fully collect all cost reimbursements is dependent upon each disciplined attorney’s ability to pay and the current economic environment. Therefore, the Commission records cost reimbursements as revenue under the cost recovery method when the reimbursements are received. In 2000, the Commission collected approximately $135,600 in cost reimbursements. At December 31, 2000, approximately $922,400 in additional amounts remain unpaid by attorney-respondents for which a corresponding allowance is recorded.
| NOTE D - FUNCTIONAL EXPENSES BY OBJECT |
An analysis of the Commission’s functional expenses, by object, is as follows:
| NOTE E - INVESTMENTS |
Investments consist of the following:
Short-term investments are readily liquid investments that mature within one year. Long-term investments are holdings with maturities in excess of one year.
The following table lists the maturities of securities held at December 31, 2000:
| NOTE F - FIXED ASSETS |
Fixed assets at December 31, 2000, consist of:
NOTE G - LEASE AND MAINTENANCE COMMITMENTS
The Commission leases its Chicago and Springfield offices under operating lease agreements. The Chicago office lease, which began in May 1993, has a term of 15 years and provides for a minimum annual base rent plus related taxes and operating expenses. In addition, the lease provided 32 months "free rent" with the first rent payment made on January 1, 1997. Pursuant to the lease, the landlord advanced a sum equal to the present value of estimated taxes and operating costs for the 32-month period and the Commission made monthly payments for actual tax and operating cost assessments during that period. This amount and the value of the "free rent" is included in deferred rent.
The Springfield office lease, which began in November 1995, has a term of 7 years and provides for a minimum annual rent. The lease gives the Commission the option to renew the lease for another 7-year period.
Rent expense under all lease agreements was approximately $1,115,600 in 2000.
Future minimum lease payments, including estimated liability for taxes and operating expenses, relating to lease agreements in excess of one year are:
| NOTE H - MEDICARE REPLACEMENT RESERVE TRUST |
On August 9, 1985, the Commission formed a trust to replace the Medicare coverage lost by its employees when the Social Security Administration ruled that Commission employees were ineligible for benefits.
Previously, the
Commission had committed to pay the future cost of Medicare premiums for
former employees meeting certain criteria who were employed by the
Commission before
March 31, 1986. Furthermore, the Commission agreed to pay eligible
former employees reimbursement credits for supplemental medical and
hospitalization insurance coverage beginning at age 65. Therefore, the
Commission records a liability associated with its employees’ lost
Medicare coverage.
The Commission engages the services of an actuary to compute the liability every other year. However, the Commission records an estimated expense annually. Management believes that any change in the benefit obligation as of and for the period ending December 31, 2000, would not have a material effect on the financial statements.
The Commission maintains a separate trust for the Medicare replacement reserve. The trust fund assets are included in the Commission’s investments (see note E). The trust fund assets at fair value as of December 31, 2000, are as follows:
The liability will increase or decrease in future years due to changes in eligible employees, benefits paid, and possible changes in assumptions based on experience factors and applicable discount rates.
NOTE I - EMPLOYEE BENEFIT PLAN
The Commission maintains a defined contribution retirement plan and trust for the benefit of all eligible employees. Based on the decision of the Social Security Administration discussed in note H, the Commission enhanced employees’ retirement benefits. Employee contributions are not permitted under the Plan’s provisions. The Commission contributes 18% of compensation for eligible employees, which approximated $860,500 in 2000. The Commission also pays the Plan’s administrative expenses, which approximated $43,500, in 2000.
Various complaints and actions have been filed against the Commission. At December 31, 2000, the Commission believes that pending matters do not present any serious prospect of negative financial consequences.