April 2004 Volume 9 Number 5

AAnnnnuuaall MMeeeettiinngg JJuunnee 1177-2-22200 OOrrllaannddoo,, FFlloorriiddaa S t a t e B a r o f G e o r g i a Local Bar Awards Attention! The Deadline is Friday, May 7, 2004, to submit your entry for the State Bar’s Local Bar Activity Awards.

Administered by the Local Bar Activities Committee, the Form of entry Local Bar Activity Awards recognize excellence in local Send one copy of your entry to: Communications Department and circuit bar associations, and are presented to Local Bar Activities Committee winners at the State Bar’s Annual Meeting. Awards are State Bar of Georgia presented for the Bar year that begins July 1, 2003, and 104 Marietta St. NW, Suite 100 ends June 30, 2004, with an exception for the Law Day Atlanta, GA 30303 Award, which may be submitted for events in either Entries should be typewritten 2003 or 2004. (double-spaced) on letter paper (8.5 x 11). Photographs, news Eligibility and competition categories articles, programs, etc. are welcome Each local or circuit bar association is eligible to submit and encouraged. Please include: an entry. The following categories relating to name; address; president; number of membership size will be used in judging the Award of members; amount of dues; and Merit, Newsletter and Law Day Awards: person(s) responsible for entry ! Over 500 members preparation. ! 251 to 500 members ! 101 to 250 members ! 51 to 100 members ! Under 50 members Award categories ! Award of Merit For more information, visit the State ! Law Day Award Bar's Web site, www.gabar.org or ! The President’s Cup contact Bonne Cella, 229.387.0446 ! Best New Entry Award ! Newsletter Award or [email protected]; Tyler Jones, ! Excellence in Bar Leadership 404.527.8736 or [email protected] Thought. Protected.

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This is an advertisement. Carl Davis is Chair of the Intellectual Property Group. He is located in the Atlanta office of Baker Donelson, Five Concourse Parkway, Suite 900, Atlanta, Georgia 30328. Phone 678.406.8700. © 2003 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC April 2004 Volume 9 Number 5

Legals 12 Theories of Stockbroker and Brokerage Firm Liability By Robert C. Port

On the Cover 24 The Affirmative Action Debate Continues: The 2004 State Bar of Bakke and Its Progeny Revisited Georgia Annual Meeting will take place at the Portofino By Laverne Lewis Gaskins Bay Hotel in Orlando, Fla., June 17-20. The Portofino Bay Hotel is a stunning re-cre- Features ation of the seaside village of 34 Post-CCreation Checklist for Georgia Business Entities Portofino, Italy, complete By John J. Scroggin down to the cobblestone streets and sidewalk cafes. 41 Midyear Meeting Draws Record Number of Attendees By C. Tyler Jones

44 Lawyers Foundation of Georgia Winter Update By Lauren Larmer Barrett

47 Putting a CAP on Lawyer-CClient Misunderstandings By C. Tyler Jones

Departments 52 In the Trenches with the First Amendment By C. Tyler Jones 4 Letter to the Editor 6 From the President 54 The Lowndes County Courthouse at Valdosta: 8 From the Executive Director The Grand Old Courthouses of Georgia By Wilber W. Caldwell 10 From the YLD President 56 It's About Time: An Overview of Part-TTime Policies 69 Bench & Bar and Practices in Atlanta Law Firms 73 Office of the General Counsel By Lynn M. Adam, Emily Hammond Meazell, 75 Lawyer Discipline and Lisa Vash Herman

77 Law Practice Management 65 Georgia Legal Services Campaign Donors 80 Pro Bono Publisher’s Statement 82 Section News The Georgia Bar Journal (ISSN-1085-1437) is published six times per year (bi-monthly) by the State Bar of Georgia, 104 Marietta St. NW, Suite 100, Atlanta, Georgia 30303. © State 85 In Memoriam Bar of Georgia 2004. One copy of each issue is furnished to members as part of their State Bar dues. Subscriptions: $36 to non-members. Single copies: $6. Periodicals postage 86 CLE Calendar paid in Atlanta, Georgia and additional mailing offices. Opinions and conclusions expressed in articles herein are those of the authors and not necessarily those of the 88 Notices Editorial Board, Communications Committee, Officers or Board of Governors of the State Bar of Georgia. Advertising rate card will be furnished upon request. Publishing of an 95 Classified Resources advertisement does not imply endorsement of any product or service offered. POSTMAS- TER: Send address changes to same address. Quick Dial Editorial Board Attorney Discipline (800) 334-6865 Rebecca Ann Hoelting ext. 720 Editor-in-Chief (404) 527-8720 Scott Fain Bertschi W. Fray McCormick Consumer Assistance Program (404) 527-8759 Conference Room Reservations (404) 527-8712 Bill Bost E. Peyton Nunez Fee Arbitration (404) 527-8750 Elizabeth Lee Branch Erick H. Rock CLE Transcripts (404) 527-8710 Erin Reynolds Chance Cynthia B. Smith Diversity Program (404) 527-8754 ETHICS Hotline (800) 682-9806 Charles Madden Cork III Robert R. Stubbs (404) 527-8741 Lynda Carney Crum Kristin H. West Georgia Bar Foundation/IOLTA (404) 588-2240 John Michael Gross Pamela Y. White-Colbert Georgia Bar Journal (404) 527-8736 Sarah Howard Lamar W. Scott Wright Lawyer Assistance Program (800) 327-9631 Lawyers Foundation of Georgia (404) 659-6867 Marcus David Liner Law Practice Management (404) 527-8772 Membership Records (404) 527-8777 Advisors Meetings Information (404) 527-8790 Pro Bono Project (404) 527-8763 Theodore Harris Davis Jr. Professionalism (404) 225-5040 D. Scott Murray Sections (404) 527-8774 Marisa Anne Pagnattaro Unauthorized Practice of Law (404) 527-8743 Young Lawyers Division (404) 527-8778 Editors Emeritus Manuscript Submissions Marisa Anne Pagnattaro, 01-02 L. Dale Owens, 87-89 The Georgia Bar Journal welcomes the submission of D. Scott Murray, 00-01 Donna G. Barwick, 86-87 unsolicited legal manuscripts on topics of interest to the William Wall Sapp, 99-00 James C. Gaulden Jr., 85-86 State Bar of Georgia or written by members of the State Bar of Georgia. Submissions should be 10 to 12 pages, Theodore H. Davis Jr., 97-99 Jerry B. Blackstock, 84-85 double-spaced (including endnotes) and on letter-size L. Brett Lockwood, 95-97 Steven M. Collins, 82-84 paper. Citations should conform to A UNIFORM SYSTEM Stephanie B. Manis, 93-95 Walter M. Grant, 79-82 OF CITATION (17th ed. 2000). Please address unsolicited articles to: Rebecca Ann Hoelting, State Bar of Georgia, William L. Bost Jr., 91-93 Stephen E. Raville, 77-79 Communications Department, 104 Marietta St. NW, Charles R. Adams III, 89-91 Robert H. Walling, 75-77 Suite 100, Atlanta, Ga., 30303. Authors will be notified of the Editorial Board’s decision regarding publication. The Georgia Bar Journal welcomes the submission of Officers of the State Bar of Georgia news about local and circuit bar association happen- William D. Barwick President ings, Bar members, law firms and topics of interest to George Robert Reinhardt Jr. President-elect attorneys in Georgia. Please send news releases and other information to: C. Tyler Jones, Director of Robert D. Ingram Secretary Communications, 104 Marietta St. NW, Suite 100, J. Vincent Cook Treasurer Atlanta, Georgia 30303; phone: (404) 527-8736; James B. Durham Immediate Past President [email protected]. Andrew W. Jones YLD President Laurel P. Landon YLD President-elect Disabilities Derek J. White YLD Past President If you have a disability which requires printed materials in alternate formats, please contact the ADA coordinator at (404) 527-8700 or (800) 334-6865.

Communications Committee Headquarters S. Kendall Butterworth Chairperson 104 Marietta St. NW, Suite 100 Aasia Mustakeem Vice-Chairperson Atlanta, GA 30303 (800) 334-6865 (404) 527-8700 FAX (404) 527-8717 Visit us on the Internet at www.gabar.org. Communications Staff South Georgia Office C. Tyler Jones Director 244 E. Second St. (31794) P.O. Box 1390, Sarah I. Bartleson Assistant Director Tifton, GA 31793-1390 (800) 330-0446 (912) 387-0446 Daniel L. Maguire Administrative Assistant FAX (912) 382-7435 Member Applauds Bar President’s Candor Editor

section (a) or (b) of this section” [essentially, he February issue of the Georgia the right to vote] “the Attorney General may” [unfortunately not “shall” since the Attorney Bar Journal was particularly inter- General is not elected either] “institute for the esting—the articles on arbitration, United States, or in the name of the United T States, a civil action or other proper proceed- Zubulake, and standing orders will each ing for preventive relief, including an appli- cause changes for the better in the way I prac- cation for a permanent or temporary injunc- tion, restraining order, or other order.” tice law. It would seem now that the “intentional”

letter to the bypassing of the citizens’ right to elect their However, the article by William D. judges is coming to an end, there is some Barwick (“Court Futures”) astounded me in panic: “if you haven’t noticed the decline and publicly commenting on a thinly veiled fall of the republic just yet, there is a reason: secret. Barwick bemoans the coming democ- we haven’t had a judicial election since [the ratization of the judicial selection process and changes],” says President Barwick, who goes recounts how (in what must have been the on to note that while these changes are cer- good ol’ days) Article VI Section VII tain, they may be temporary, because a (non- Paragraph I of the Constitution of the State of elected) committee is spending a whole year Georgia—the section which requires that the to “undertake a thorough examination of the judges of the state be elected by the citizens way Georgia [elects] judges with a view of the state—had been intentionally circum- towards recommending possible changes for vented by the judiciary. the better.” He writes: “In a traditional one-party state, I applaud his candor, I applaud the coming judicial candidates would often be selected changes, and I decry the good ol’ boy system, for open seats by the governor... and often which is on its way out (and which was creat- that judge could serve his or her entire career ed and maintained by the very persons who on the bench without election.... Judges falsely promised—upon undertaking their would intentionally retire several months government jobs—to assure equal justice to before the end of their term, again permitting all). Hopefully, the 21st century Bar shares the governor to appoint their successor, who these feelings of joy at our turning from ves- would then be listed on a ballot (if chal- tiges of mid-19th century “tradition” and lenged) as the incumbent. In other words, the hopefully Georgia’s citizens—if not its aristoc- electoral system was traditionally and inten- racy—will stand squarely against any efforts tionally bypassed....” by the committee (or anyone else) to return us Section 1971(c) of the Voting Rights Act of to “better” disenfranchisement. America con- 1965 states: tinues to be great because, slowly but surely, “Whenever any person has engaged or she excises the abuses of the past. there are reasonable grounds to believe that any person is about to engage in any act or John T. Longino practice which would deprive any other per- son of any right or privilege secured by sub- Ellijay, GA

4 Georgia Bar Journal Heaven help us, but that’s just the way we are. At risk management, legal educational programs and a Georgia Lawyers Insurance Company, we only see quarterly newsletter. We also offer insurance premium lawyers. That’s why so many legal professionals credits for claims-free and low risk practices. throughout the state rely on us for professional liability Our staff is administered by insurance professionals protection. After all, doesn’t it make sense that an and governed by lawyers practicing in Georgia, so you insurance company that serves lawyers and only can be sure that with Georgia Lawyers Insurance lawyers would know your business and understand Company on your side, it’s clear skies ahead. For a your needs better than anyone else? free policy review, or a no obligation quote, call: At Georgia Lawyers, our services include comprehensive 866-372-3435, or visit us at: www.GaLawIC.com President

By William D. Barwick Playing the Back Nine

well aware of the fact that few t really does seem as though things can be accomplished from beginning to end in the course of a

from the my year as Bar president only year. It has been my great privilege began a few weeks ago, but I this year to work on a number of I long standing projects, such as indi- was reminded how quickly the time gent defense funding and the new passes when I visited Cliff Brashier’s mentoring program, while at the same time ushering along newer office at Bar Headquarters several projects such as a Georgia Business Court and the implementation of days ago. On the wall was a sign “Even though the an online, legal research library with detachable paper numbers that service that will be available to all State Bar of Georgia lawyers at no cost other read: “ONLY 123 DAYS TO GO.” than their Bar dues. Georgia is a unified I am also happy that we have now When I asked my executive director bar, we are com- revived the committee that is charged what the sign meant, he mumbled with implementing the passage of mitted to provid- new legislation that will allow something about a reminder to Georgia to become the 42nd state to adopt, in large part, the Federal Rules ing membership change the oil in his car. of Evidence. It is my hope that this benefits that are It is usually in the last president’s legislation can be presented in the customarily offered message that an outgoing Bar pres- General Assembly’s 2005 legislative ident laments about unfinished session. It is also my hope that our by private bar business and projects that were Court Futures Committee can pre- never quite completed. I have a pare proposed legislation that will associations and slightly different take on the timing address the way we conduct judicial issues, however, as I stated in my elections and retain our judges. In whenever finan- opening message at the State Bar other words, I still have a lot of balls cially feasible.” Annual Meeting last June. As a for- in the air, and I am trying to keep mer bar association president, and them from hitting me in the nose. a member of the State Bar Board of I have had the opportunity to Governors for almost 20 years, I am report on a number of these proj-

6 Georgia Bar Journal ects in past speeches and articles, Under the leadership of the State Bar is for this reason that the Executive and I hope to outline the Business Treasurer Jay Cook, a select commit- Committee and Jay Cook’s team Court proposal in a subsequent tee drawn from a wide range of legal have been studying this offering for president’s message. We are just practices has determined that this over a year before recommending it now finalizing our plans for the research program may be one of the to the Board of Governors for recommendation of the purchase best member benefit services offered approval and implementation. of an online legal research program by the State Bar of Georgia in years. The purpose of this president’s called Casemaker, which was orig- Within the last few weeks, I have message is to call upon members of inally created by the Ohio Bar discussed Casemaker with the the State Bar to comment on Association, and which is now president of the State Bar of Texas Casemaker, as well as to provide licensed and sold to state bar and the State Bar of Alabama, both our members with any additional organizations in 15 states. Access unified bars. Texas has committed information that they may wish to will be available to every state bar to the program, and Alabama is review. Letters or e-mails to me will member with access to a computer. likely to follow suit. As more states be answered as soon as I can get to The cost for online research is free, sign up for this research service, the them, unless they are unusually and is covered by a flat payment case law libraries, including threatening, and Bar members are made by the State Bar to Federal Reporters, will increase, at also encouraged to contact their Casemaker’s owners on an annual no additional cost to existing sub- Board of Governors representative basis. This fee will add approxi- scribers. In addition to Texas, both to ask questions or make comments. mately $10 to annual dues, but the North and South Carolina have The parking garage at our Bar savings to lawyers at every level enrolled. Center will be completed this July, could amount to well into the thou- Even though the State Bar of on time and within budget, and the sands of dollars. Georgia is a unified bar, we are completion of the third floor con- This is not a program or a service committed to providing member- ference center and mock trial court- that we have approached casually, ship benefits that are customarily room will begin shortly thereafter. since it means an increase in dues. offered by private bar associations This has been an exciting Bar year, These dues will have to be paid by and whenever financially feasible. made possible by the hard work of our Bar members even if they have Our unfortunate foray into the our staff and Bar leaders. Just keep no use for Casemaker, or if their sponsorship of legal malpractice hoping that I resist the temptation legal research needs are sophisticat- insurance several years ago has to actually touch the control knobs, ed enough to require larger case forced Bar leadership to be cautious and remember—“JUST 123 DAYS report libraries than will be initially consumers, particularly when a TO GO!” available through this service. deal seems to have no downside. It SOUTH GEORGIA ADR SERVICE, LLC

MEDIATION and ARBITRATION of JERRY A. BUCHANAN – Columbus personal injury, wrongful death, commercial, real JOHN A. DRAUGHON – Macon estate and other complex litigation cases. JAMES L. ELLIOTT – Valdosta Visit our Web site (www.southgeorgiaADR.com) BENJAMIN M. GARLAND – Macon for fee schedules and biographies of our panel, ROBERT R. GUNN, II – Macon comprised of experienced Middle and South JANE M. JORDAN – Macon Georgia trial lawyers. JEROME L. KAPLAN – Macon ROBERT R. GUNN, II, MANAGING PARTNER STANLEY KARSMAN – Savannah Rachel D. McDaniel, Scheduling Coordinator BERT KING – Gray 240 THIRD STREET, MACON, GEORGIA 31201 MICHAEL S. MEYER VON BREMEN – Albany (800) 863-9873 or (478) 746-4524 PHILIP R. TAYLOR – St. Simons Island FAX (478) 743-4204 F. BRADFORD WILSON, JR. – Macon www.southgeorgiaADR.com

April 2004 7 By Cliff Brashier The Bar Center Parking Deck — A Progress Report

Members During he 500-space parking Business Hours deck for the Bar Center, Subject to space availability, all

Executive Director the home of all Georgia Bar members visiting or using the T Bar Center may park free of charge. lawyers, has a projected opening Because there are a limited number of parking spaces, free parking can- date of July 15. When completed, not be provided for lawyers who the Bar’s parking deck will be one work in other downtown buildings. Subject to space availability, mem- of the nicer decks in town. bers who need downtown parking We’ve come a long way since for business or social purposes, on

from the SKANSKA started razing the old occasion, may park free of charge. deck in April 2003. As of the Bar Members Nights Journal’s publication date, all the and Weekends “I would also like concrete has been poured and the deck is structurally complete. The Subject to availability, all Bar to thank all Bar contractors are now focusing on members may park free of charge. completing the interior and exterior Non-business hour parking is members and of the deck, to include adding ele- planned for night and weekend vators, stairwells, sidewalks and operation during events at the staff for their numerous architectural details to World Congress Center, the patience as we complement the historic building Georgia Dome, Centennial Olympic that it will serve. Park, the Atlanta Aquarium (cur- strive to provide Completion of the parking deck rently under construction) and will conclude the second phase of other area attractions to the extent it our members and the Bar Center renovation project is economically feasible to do so. and will allow the Bar to provide Membership cards and personal guests with con- parking for Bar members, Bar staff, identification will be required. tenants and public users of the con- Tenants venient, enclosed ference center. Following is a breakdown of Tenants will be entitled, at mar- parking.” who can use the parking deck: ket rates, to lease monthly parking

8 Georgia Bar Journal on the basis of one parking space for each 1,000 square feet of leased building space. In addition, unlim- ited daily parking will be offered at market rates subject to availability. Non-Member Guests Subject to availability, unlimited daily parking will be offered at market rates. In addition, the Bar will maintain a list and map of nearby monthly/daily parking facilities and endeavor to negotiate discounts for Bar Center guests. General Public Subject to availability, parking at market rates is open to the public during the posted hours of opera- tion. Night and weekend operation Photo by Daniel L. Maguire The State Bar of Georgia’s new parking deck is slated to open July 15. is planned during events at local This photo shows construction progress as of March 9. venues to the extent it is economi- cally feasible to do so. own their buildings, not one offers education designed to enhance their I would like to thank the design the facilities and programs that are understanding and respect for our team, contractors, architects and planned for this Bar Center. rule of law, the judicial system and everybody else who has worked to Member uses include CLE with- the legal profession. A mock court- make the new parking deck a real- out the high cost of hotel rent, com- room, museum of law and Woodrow ity. After facing some early foun- puter software training for lawyers Wilson’s law office will be used by dation setbacks, which led to a 25- and their staff, an Atlanta office for thousands of students each year. day extension, the project has real- meeting with clients and other attor- Your thoughts and suggestions ly come together. neys, trial and witness preparation, are always welcome. My telephone I would also like to thank all Bar depositions, mediations, arbitrations numbers are (800) 334-6865 (toll members and staff for their patience and a convenient parking space free), (404) 527-8755 (direct dial), as we strive to provide our members while visiting downtown Atlanta. (404) 527-8717 (fax) and (770) 988- and guests with convenient, enclosed The public, especially school chil- 8080 (home). parking. While most other state bars dren, will benefit from law-related

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April 2004 9 By Andrew W. Jones Thoughts from Twenty-Eight Thousand Feet

strange looks. Movie time, oh good, President he fasten seat belts light one and a half hours of Greg Kinnear and Matt Damon attached just went off. “Dad, can at the hip, no thanks. Just got the we turn the DVD on nod from Ashley, Reid is down for T the count. Two and a half hours to now?” Yes, finally after 20 prior go, pray for a long nap. YLD requests, as if I could tell how long it We made it! Only slightly trashed the airplane and didn’t was going to be until we reached make too many people miserable. I’m going to have a hard time get- 10,000 feet. The Jones family is ting our pack mule out of the over- going skiing—the first time with the head which is required to transport our carry on luggage. three children. Rutledge and Elinor, As we leave, the flight attendant says, “thanks for flying Delta,” which from the ages 6 and 4 won’t be a problem, it really means, I hope I’m not working is 20-month-old Reid who will test their return flight. Off the plane, head- ing to Deer Valley, let the fun begin! every nerve in my body. While this column doesn’t have a “My message to At the moment, little Reid is giv- whole lot to do with the practice of ing the guy in front of him a law, it is titled “from the YLD younger lawyers is Swedish massage by repeatedly President.” My message to younger kicking his seat. How long is it to lawyers is to cherish the time you to cherish the time Salt Lake? The Delta pilot informs spend with your family and loved us only three and a half hours of ones. Take advantage of your good you spend with relaxing flight time, “sit back and health and good fortune. Leave the practice of law behind every now your family and enjoy the flight.” Yeah, no problem, tell that to the guy in 34A with the and then, because it will be there loved ones. Take whiplash from Reid’s kicking. when you return. Life is about Here come the drinks. “I want a making memories with your fami- advantage of your Sprite, no a Coke, no lemonade!” ly. These memories are what put a The ordering process sounds a lot smile on your face when you are good health and like a scene from Caddyshack. old and retired. Cases and clients Finally, Sprite it is. Nothing for come and go, but family memories good fortune.” Reid, he is almost asleep. My patient last a lifetime. and loving wife Ashley is holding a We’re off to the slopes. I think I magazine up, blocking her face so just set a record for the amount of Reid can’t see her. It appears that if ski equipment one person can she looks at him he cries. The people carry. I will remember that for the around us are starting to give her rest of my life, and smile.

10 Georgia Bar Journal Consumer Pamphlet Series

The State Bar of Georgia’s Consumer Pamphlet Lawyers and Series is available at cost to Bar members, non- Legal Legal Fees Careers Bar members and organizations. Pamphlets are individually priced at 25 and 75 cents each How to be a Patents, Buying Trademarks & plus shipping. Questions? Call (404) 527-8761. Good Witness a Home Copyrights Juror’s Manual Auto How to Choose BankruptcyState Bar The following pamphlets are available: Accidents A Lawyer Selecting a of Georgia Nursing Home Auto Accidents ! Bankruptcy ! Buying a Home ! Legal Rights of State BarDivorce Selecting a Divorce ! How to Be a Good Witness ! How to Nursing Home Personal Residents Wills Care Home Choose a Lawyer ! Juror's Manual ! Lawyers and Legal Fees ! Legal Careers ! Legal Rights of Nursing Home Residents ! Patents, Trademarks and State Bar of Georgia Copyrights ! Selecting a Nursing Home ! Selecting State Bar State Bar of Georgia State Bar 11 State Bar of Georgia of Georgia of Georgia a Personal Care Home ! Wills Consumer Consumer Pamphlet Consumer Pamphlet Consumer 11 Series Pamphlet Series Pamphlet Series Series 11 Visit www.gabar.org/cps.htm for an order form and more information or e-mmail [email protected].

April 2004 11 Theories of Stockbroker and Brokerage Firm Liability

ver a lifetime, even modest savings, contributions to an IRA, or partici- By Robert C. Port pation in an employee pension plan can result in significant accumula- O tions of wealth.1 However, many individuals have neither the interest nor the desire to learn about financial markets and investments, nor do they have the

time necessary to monitor their investments on an ongoing basis. Their aversion to and

confusion about financial matters has been further accentuated by the “irrational exu-

berance”2 of the “Internet bubble” of the late 1990s, and subsequent significant decline

in the value of technology and telecommunications stock. As a result, many individuals

turn to stockbrokers, investment advisors, financial planners, insurance agents, and oth-

ers claiming to have the knowledge and experience to offer investment advice. Stockbrokers and other financial advisors are highly motivated to cultivate their clients’ trust and allegiance, and clients who lack knowledge and sophistication on financial matters have powerful incentives to believe that such advisors are trust- worthy and acting solely in the customer’s best interests.3 This trusting relationship creates an opportunity for exploitation by the advisor, which may form the basis for a vari- ety of legal claims. Common fact patterns associated with broker misconduct include mis- representation, churn- ing, unsuitable recom- mendations, unautho- rized trading, and fail- ure to supervise. Outright misrepresenta- tion and fraud may also be practiced on the unsuspecting and trust- ing client. Federal and state securities statutes and state common law typi-

12 Georgia Bar Journal cally govern civil liability in con- ates or would operate as a fraud inexcusable negligence, but an nection with losses arising from the or deceit upon any person, in extreme departure from the stan- purchase and sale of securities. The connection with the purchase or dards of ordinary care, and that self-regulatory rules of the sale of any security.6 present a danger of misleading National Association of Securities The essential elements of a Rule buyers or sellers which is either Dealers and the New York Stock 10b-5 claim are: (1) a misstatement known to the defendant or is so Exchange are also relevant to the or omission; (2) of a material fact; (3) obvious that the defendant must issue of whether a broker or finan- made with scienter, (4) upon which have been aware of it.”15 cial advisor owed or breached a the plaintiff relied; (5) that proxi- The plaintiff’s reliance must have duty to the customer. The follow- mately caused the plaintiff’s loss.7 been reasonable or justified.16 ing is a brief overview of common The standard for determining Relevant factors include: (1) the legal theories of liability that apply materiality is whether “there is a sophistication and expertise of the to broker misconduct.4 substantial likelihood that a reason- plaintiff in financial and security able shareholder would consider it matters; (2) the existence of long FRAUDULENT MIS- important” or “a substantial likeli- standing business or personal rela- REPRESENTATIONS hood that the disclosure of the omit- tionships between the plaintiff and ted fact would have been viewed by the defendant; (3) the plaintiff’s AND OMISSIONS the reasonable investor as having access to relevant information; (4) Material misrepresentations and significantly altered the ‘total mix’ the existence of a fiduciary relation- 8 omissions made in connection with of information made available.” ship owed by the defendant to the the purchase or sale of a security can “To constitute fraud, a misrepre- plaintiff, (5) concealment of fraud by violate federal and state securities sentation generally must relate to the defendant; (6) whether the plain- 9 statutes. Such claims may also pro- an existing or pre-existing fact.” A tiff initiated the stock transaction or ceed as common law fraud claims. misrepresentation of future profit sought to expedite the transaction; generally cannot constitute fraud, and (8) the generality or specificity Section 10(b) of the as it is a type of opinion and predic- of the misrepresentations.17 Securities Exchange Act tion of future events.10 “[O]utra- To prove the causation element, of 1934 and Rule 10b-5 geous generalized statements, not a plaintiff must prove both “trans- making specific claims, that are so action causation” and “loss causa- Section 10 of the Securities exaggerated as to preclude reliance tion.”18 Transaction causation is a Exchange Act of 1934,5 is an anti- by consumers” generally will be synonym for reliance, and is estab- fraud provision prohibiting the use deemed “puffing” rather than lished when the misrepresentations “in connection with the purchase fraud.11 Furthermore, the “in con- or omissions cause the plaintiff “to or sale of any security . . . any nection with” requirement in Rule engage in the transaction in ques- manipulative or deceptive device 10b-5 is not satisfied by any misrep- tion.”19 Loss causation is more dif- or contrivance.” Rule 10b-5 prom- resentations or omissions that occur ficult to prove: the misrepresenta- ulgated by the Securities Exchange after the claimant purchases or sells tion must have caused the loss suf- Commission amplifies these prohi- the security in question.12 fered by the claimant. Loss causa- bitions by making it unlawful: The Supreme Court has express- tion is satisfied “only if the misrep- (a) To employ any device, ly left open the question of whether resentation touches upon the rea- scheme, or artifice to defraud, the scienter requirement encom- sons for the investment’s decline in (b) To make any untrue state- passes not only intentional con- value.”20 Proof of loss causation is a ment of a material fact or to omit duct, but also reckless conduct.13 statutory requirement.21 to state a material fact necessary The rule in the 11th Circuit is that a in order to make the statements Section 12(2) of the showing of “severe recklessness” made, in the light of the circum- satisfies the scienter requirement.14 Securities Act of 1933 stances under which they were “Severe recklessness is limited to Section 12(2) of the Securities made, not misleading, or (c) To those highly unreasonable omis- Exchange Act of 1933 provides that engage in any act, practice, or sions or misrepresentations that any person who offers or sells a course of business which oper- involve not merely simple or even security by use of an oral or written

April 2004 13 communication that contains an ments made, in the light of the cir- municate. “The obligation to com- untrue statement of material fact or cumstances under which they are municate may arise from the confi- omits to state a material fact neces- made, not misleading.”25 Liability dential relations of the parties or sary in order to make the statement will not be found however, if “(1) from the particular circumstances not misleading is liable to the pur- [t]he purchaser knew of the untrue of the case.”32 Under Georgia law, chaser, unless the seller can show statement of a material fact or omis- “a confidential relationship impos- that he did not know and in the sion of a statement of a material fact; es a greater duty on the parties to exercise of reasonable care could or (2) [t]he seller did not know and reveal what should be revealed, not have known of the untruth or in the exercise of reasonable care and a lessened duty to discover omission.22 Scienter is not an ele- could not have known of the untrue independently what could have ment of a Section 12(2) claim. statement or misleading omission.”26 been discovered through the exer- Although the scope of liability The remedies provided under the cise of ordinary care.”33 under Section 12(2) is potentially Georgia Act are available only to a Not all representations by a bro- broad, its reach for broker miscon- buyer of securities.27 Because there ker are actionable by an investor. duct nonetheless is limited by four is very little case law construing the For example, an investor is not jus- factors. First, the claimant is limited Georgia Securities Act, the courts tified in relying upon representa- to rescission or rescessionary dam- often look to analogous federal tions consisting of mere expres- ages (the purchase price of the secu- statutes for interpretive assistance. sions of opinion, hope, expectation rity, plus interest, less income For example, although the language and puffing.34 Thus, speculations received thereon) and must tender of the Georgia statute does not or puffing as to future performance the security back to the seller. If the appear to require scienter, courts and statements that a particular claimant no longer owns the securi- have construed the section in accor- security is a “safe investment” are ty, he may seek damages represent- dance with Rule 10b-5 as requiring generally not actionable.35 ing the difference in the purchase proof of scienter.28 One of the price and the sale price. Second, only advantages of a claimant proceeding CHURNING purchasers may assert claims under under the Georgia Act, however, is “Churning occurs when a securi- Section 12(2), and they may assert provision for recovery of attorney’s ties broker buys and sells securities 29 them only against sellers and per- fees, interest, and court costs. for a customer’s account, without sons who control them. A “seller” is Common Law Fraud regard to the customer’s investment one who either transfers title to the interests, for the purpose of generat- Under Georgia law, fraud is security or who solicits the sale and ing commissions.”36 Churning is a shown when (i) a representation of receives a benefit from doing so or violation of Section 10(b) of the material fact is made (or there is a acts with the intent to benefit the Securities Exchange Act of 1934 and 23 failure to disclose a material fact); owner of the security. Third, the Rule 10b-5 promulgated thereun- (ii) that was known or should have statute of limitations is a substantive der.37 Similarly, Georgia’s “Blue been known to be false (or should element of the claim and compliance Sky” regulation promulgated under have been disclosed); (iii) that was must be affirmatively pled. Fourth, the Georgia Securities Act authoriz- made (or omitted) for the purpose Section 12(2) applies only to initial es the Georgia Commissioner of of being relied upon by another; public offerings by means of a for- Securities to take action against bro- (iv) that was in fact relied upon; (v) mal offering document (not private kers who “induc[e] trading in a cus- that caused damage.30 Under placements or secondary market tomer’s account which is excessive 24 Georgia law, a “promise to perform transactions). in size or frequency in view of the some future act is not fraud unless Georgia Securities Act financial resources and character of made with the present intent not to the account.”38 Violation of this rule The Georgia Securities Act pro- perform or with a present knowl- is an “unlawful practice” under the vides a cause of action against a sell- edge that the future event will not Georgia Securities Act39 and may er of securities for making “an untrue take place.”31 allow the buyer to invoke a statuto- statement of a material fact or Nondisclosure may provide the ry rescessionary remedy in a civil omit[ing] to state a material fact nec- basis for constructive fraud where a action against the seller.40 essary in order to make the state- party is under an obligation to com-

14 Georgia Bar Journal Proving a and faith in a broker and routinely The account maintenance cost, Churning Claim follows the advice of his broker. also known as “equity mainte- Whether a broker has acquired con- nance factor” or the “cost-equity The essence of a churning claim trol over the account is a fact-based ratio,” is a computation of the rate is that the broker has used his con- inquiry. The factors used in evaluat- of return the client must earn on trol over an account to generate ing control include: 1) the age, edu- the account to pay the commissions excessive commissions, “while at cation, intelligence, and investment and other trading fees (such as the same time leading his customer and business experience of the cus- margin interest) caused by churn- to believe that he is attempting to tomer; 2) the relationship between ing. For example, if an account fulfill the customer’s investment the customer and the account exec- with average annual equity of objectives.”41 Churning requires utive; 3) the customer’s knowledge $100,000 generates $25,000 in fees proof of three elements: (1) control of the market and the account; 4) the and commissions in a year, the over the account by the broker; (2) regularity of discussions between investor would have to earn a 25 trading in the account that is exces- the account executive and the cus- percent annualized return just to sive in light of the customer’s tomer; 5) whether the customer break even. A high account mainte- investment objectives; and (3) the actually authorized each trade; and nance cost indicates that the broker’s intent to defraud or his 6) who made the recommendations account has been excessively trad- willful or reckless disregard of the for trades.45 ed not for the client’s benefit, but customer’s interest.42 49 Excessive Activity for the benefit of the broker. Control of Churning may also be suggested Courts examine various factors to Account by Broker by an analysis of the period of time determine whether there is exces- a security is held from the date of The broker’s control may be sive activity indicative of churning, purchase to the date of sale. Very shown either by (i) the customer’s including the rate of turnover in the short holding periods, with the sale express grant of discretionary trad- customer’s account, account main- ing authority over the account, or (ii) tenance costs, the holding periods the broker’s acquiring de facto con- for the securities in the customer’s trol over the account by, for exam- account, and the significance of the ple, gaining the customer’s confi- fees generated to the broker. dence and inducing the customer to The turnover ratio is a statistical engage in excessive trading. measure of how many times in a given period the securities in a cus- Express grant tomer’s account have been of discretionary power replaced by new securities recom- In a discretionary account, the mended by the broker. “Excessive customer gives the broker discre- trading is generally held to exist tion as to the purchase and sale of when there is an annual turnover securities, including selection, tim- rate in an account in excess of ing and price to be paid or six.”46 The turnover ratio is the received. Any formal grant of dis- cost of all purchases for the rele- cretionary control given to a bro- vant period divided by the average ker must be in writing.43 A broker monthly account value for that or his representative who exercises period. Whether a particular discretionary authority over an turnover rate is excessive depends account owes his client “the high- on the investment objectives of the est obligation of good faith and customer. In long term accounts, a fair dealing.”44 lower turnover rate may be 47 De facto control deemed excessive. In trading A broker may exercise de facto accounts, a higher turnover rate is 48 control if an investor places his trust expected.

April 2004 15 proceeds immediately reinvested Unsuitable recommendations or breach of fiduciary duty. Under in other securities, may be indica- may also give rise to state law caus- Georgia law, a confidential, fiduci- tive of churning activity.50 If a sin- es of action under theories of breach ary relationship exists between a gle customer’s account provides a of contract, breach of fiduciary broker and his client.64 significant portion of the commis- duty, and negligence. The Georgia A broker’s violation of his regu- sions earned by a broker or the Blue Sky Regulations prohibit a latory duties, while generally rec- branch office in which that account broker from recommending a secu- ognized to not give rise to a private is located, this may be additional rity transaction “without reason- right of action, may provide evi- evidence of churning.51 able grounds to believe that such dence in evaluating whether the transaction or recommendation is broker properly exercised the UNSUITABLE suitable for the customer based required degree of care in his deal- RECOMMENDATIONS upon reasonable inquiry concern- ings with a customer.65 Securities ing the customer’s investment statutes and conduct rules also Unsuitable recommendations objectives, financial situation and require broker/dealer to reason- can encompass a variety of factual needs, and any other relevant infor- ably supervise their brokers “with circumstances, including over mation known by the [broker].”58 a view to preventing violations [of concentration or failure to diversi- Violation of the rule is a violation of the securities law].”66 52 53 fy, use of excessive margin, the Georgia Securities Act.59 A number of courts have held 54 failure to use hedge strategies, that a violation of regulatory rules and mutual fund or annuity UNAUTHORIZED may be the basis of a claim sound- 55 switching. NASD Conduct ing in negligence.67 Rules allow a broker to recom- TRADING mend a securities transaction only A broker is prohibited from exe- SELLING AWAY if the broker has “reasonable cuting a trade in an account unless “Selling Away” describes instances grounds for believing that the rec- the client has approved and author- where a broker sells securities outside ommendation is suitable for such ized the trade, before the trade has of the firm with which he or she is customer” based on “the facts, if been made, either by written discre- associated.68 NASD Conduct Rules any, disclosed by such customer tionary authority given to the bro- 3030 and 3040 prohibit, respectively, as to his other security holdings ker (such as a Power of Attorney), unapproved outside business activi- and as to his financial situation or by oral “time and place” discre- ties and private securities transac- and needs.”56 tion granted to the broker.60 tions. The ability of a broker to engage To prove a Rule 10b-5 cause of Unauthorized trading occurs when in “selling away” may be indicative of action for unsuitability, the plain- a broker effects trades in a client’s the brokerage firm’s failure to ade- tiff must show (1) that the securi- account without having either writ- quately supervise its brokers. ties purchased were unsuited to ten or oral authority to do so.61 Securities firms have been held customer’s needs; (2) that the bro- Generally, the courts have con- liable for the activities of their bro- ker knew or reasonably believed cluded that unauthorized trading, kers in selling away under the “con- the securities were unsuited to by itself, does not constitute a viola- trol person” liability imposed by the customer’s needs; (3) that the tion of Rule 10b-5.62 However, Section 20 of the Securities and broker recommended or pur- unauthorized trading may be suffi- Exchange Act.69 The fact that the chased the unsuitable securities cient to maintain state law claims of firm had “potential control” over for the customer anyway; (4) that, breach of contract, breach of fiduci- the conduct giving rise to the viola- with scienter, the broker made ary duty, and negligence. Georgia’s tion is generally sufficient to impose material misrepresentations (or, Blue Sky Regulations also prohibit liability.70 Additionally, respondeat owing a duty to the customer, unauthorized trading.63 superior provides a basis for recov- failed to disclose material infor- ery in such circumstances, since the mation) relating to the suitability STATE COMMON broker conducted the transactions of the securities; and (5) that the LAW CLAIMS in the apparent ordinary course of customer justifiably relied to its business of that broker.71 detriment on the broker’s fraudu- Claims may also be brought lent conduct.”57 against brokers based on negligence 16 Georgia Bar Journal VIOLATION the contract with the customer.74 ker/dealer has “some indirect Therefore, violations of industry means of discipline or influence” OF MARGIN rules and regulations by the bro- over them.77 REGULATIONS ker/dealer or registered represen- The Georgia Securities Act also tative may give rise to a breach of provides for liability of “control 72 Rule 10b-16 provides that it is contract claim if damage results. persons,” subject to a “good faith unlawful for a broker to extend Additionally, there is implied in all defense.”78 Liability under the credit to a customer in connection contracts the duty of good faith statute is predicated on control of with any securities transaction and fair dealing.75 the agent, and habit and course of unless the broker has established a dealing may be considered in procedure to assure that the cus- CONTROL determining control.79 Further, a tomer received, at the time he PERSON LIABILITY controlling person may be deemed opens his account, a written disclo- to have ratified the unauthorized sure regarding interest and other Under Section 20(a) of the act when facts put him on notice of charges. There is a division of Securities and Exchange Act, any the act and he takes no steps to opinion on whether there is an person who directly or indirectly further investigate or return pro- implied private right of action controls any person who is liable ceeds from the act.80 A controlling 73 under Rule 10b-16. for selling securities in violation of person may escape liability by the Act is liable to the same extent showing that “he did not take an BREACH OF as the seller, unless he acted in active part in the violation, that he CONTRACT good faith and did not directly or did not know of the violation and indirectly induce the conduct at that as a reasonably prudent man Most customer agreements and issue.76 A broker/dealer may be he would not have discovered the trade confirmations incorporate liable as a “controlling person” for violation.”81 industry rules and regulations into the acts of its brokers if the bro-

April 2004 17 RESPONDEAT and, where appropriate, punitive Robert C. Port is a part- damages. Such person shall also ner with Hassett Cohen SUPERIOR/AGENCY recover attorneys’ fees . . . and costs Goldstein Port & PRINCIPLES of investigation and litigation rea- Gottlieb, LLP, in Atlanta, sonably incurred.“89 where he practices com- Under common law agency prin- mercial litigation. He is a ciples, the principal (the FAIR BUSINESS member of the board of directors of broker/dealer) is liable for the torts the Sole Practitioner/Small Firm of its agents (its registered represen- PRACTICES ACT Section of the Atlanta Bar, and an arbitrator with the National tatives) done within the scope of the The Fair Business Practices Act, Association of Securities Dealers. He principal’s business.82 Under this O.C.G.A. § 10-1-390 et seq. has been received his J.D., with honors, from theory, broker/dealers typically are found not to apply to securities or the University of North Carolina in held responsible for a representa- commodities transactions. In con- 1983. tive’s unintentional acts in handling sidering the question, the court con- a customer account as well as some cluded that “where a consumer Endnotes intentional actions taken within the remedy exists, with no need to fill in 1. A 2003 study by the Internal scope of handling the account, such a legal gap or create a consumer Revenue Service concluded that at the end of 2002, $2.3 trillion was as churning and placing unautho- right, and where the industry which invested in IRA assets, compared rized trades. Georgia law has codi- is the subject matter of the situation to $637 billion invested at the end fied a number of duties of the agent explicitly defines wrongful conduct of 1990. For the year ending in to his principal, including: (1) the or unfair and deceptive practices, 2002, 46 percent of those IRA 90 assets were in mutual funds, 34 duty to exercise ordinary care, skill the FBPA has no application.” percent were in securities held in and diligence respecting the business brokerage accounts, 11 percent of his principal;83 (2) the duty to fol- CONCLUSION were held in bank deposits, and low his principal’s instructions;84 (3) the remaining 9 percent were held Bank robber Willie Sutton is pur- in annuities at life insurance com- the duty not to sell to or purchase ported to have said that he robbed panies. Peter Sailer & Kurt Gurka, from his principal for his own banks “because that’s where the Internal Revenue Service, account without first disclosing all of Accumulation and Distributions of money is.” The many trillions of Retirement Assets, 1996-2000-Results the facts;85 (4) the duty to account to dollars invested annually in stocks, from a Matched File of Tax Returns his principal for all profit he makes mutual funds, money market and Information Returns, available at 86 http://www.irs.gov/pub/irs- from his principal’s property. accounts, and other investment soi/03pete.pdf (2003). RICO vehicles provides numerous 2. Federal Reserve Chairman Alan opportunities for unscrupulous Greenspan, The Challenge of Central As a result of the Private stockbrokers and other financial Banking in a Democratic Society, Address at the American Securities Litigation Reform Act of advisors to devise schemes to part Enterprise Institute for Public 1995, conduct which could have investors from their hard earned Policy Research Annual Dinner been pursued under the federal money. A variety of legal claims and Francis Boyer Lecture securities laws cannot now be used can flow from negligent, reckless, (December 5, 1996) available at http://www.federalreserve.gov/b 87 as predicate acts for federal RICO. or fraudulent acts of financial advi- oarddocs/speech- The Georgia RICO statute, on the sors who have caused their cus- es/1996/19961205.htm. other hand, specifically provides tomers harm. Familiarity with 3. Donald C. Langevoort, Selling Hope, Selling Risk: Some Lessons for that “racketeering activity” includes these various legal theories of Law from Behavioral Economics committing, attempting to commit, recovery can provide counsel with About Stockbrokers and Sophisticated soliciting, coercing, or intimidating the means and opportunity to Customers, 84 CAL. L. REV. 627 another person to commit a willful recover losses a client has experi- (1996). 4. Since the Supreme Court’s 1987 violation of the Georgia Securities enced not because of the natural decision in Shearson/American Act of 1973, O.C.G.A. § 10-5-24.88 fluctuations of the marketplace, but Express Inc. v. McMahon, 482 U.S. Under Georgia’s RICO Act, the because of the unscrupulous or 220 (1987), the overwhelming claimant is entitled to recover “three unlawful conduct of a stockbroker majority of disputes between indi- vidual investors and their stock- times the actual damages sustained or financial advisor.

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Lawyers Direct is underwritten by Professionals Direct Insurance Company, a licensed and admitted carrier rated A- (Excellent) by A.M. Best. brokers have been resolved by 1983); Troyer v. Karcagi, 476 F. (providing a statutory basis for compulsory arbitration under the Supp. 1142, 1148 (S.D.N.Y. 1979). fraud claims). auspices of the NASD, NYSE, 13. Ernst & Ernst v. Hochfelder, 425 34. GCA Strategic Inv. Fund, Ltd. v. AMEX, or other self-regulatory U.S. 185, 193 n.12, (1976). Joseph Charles & Assocs., 245 Ga. organizations. The decisions 14. McDonald v. Alan Bush Brokerage App. 460, 464, 537 S.E. 2d 677, 682 reached by arbitration panels, Co., 863 F.2d 809, 814 (11th Cir. (2000). though publicly available, do not 1989). 35. Bogle v. Bragg, 248 Ga. App. 632, generally give a written rationale 15. Broad v. Rockwell International 637, 548 S.E.2d 396, 401 (2001) (not- for the decision, and are deemed Corp., 642 F.2d 929, 961 (5th Cir. ing that the statements were made final and not subject to appeal or 1981) (en banc). by an attorney who owed no duty judicial review except in very lim- 16. Bruschi v. Brown, 876 F.2d 1526 to the investor). ited circumstances. See, e.g., 9 (11th Cir. 1989). 36. Thompson v. Smith Barney, Harris U.S.C. § 10 (setting forth grounds 17. Id. at 1529. Upham & Co., 709 F.2d 1413, 1416 vacating an arbitration award); 18. Robbins v. Koger Props., 116 F.3d (11th Cir. 1983); see also McNeal v. O.C.G.A. § 9-9-13 (Supp. 2003) 1441 (11th Cir. 1997). Paine, Webber, Jackson & Curtis, (same). Nor do such arbitration 19. Id. (quoting Currie v. Cayman Inc., 598 F.2d 888, 890 n.1 (5th awards have the precedential Resources Corp., 835 F.2d 780, 785 Cir.1979. value of a court decision. See, e.g., (11th Cir.1988)). 37. See Hecht v. Harris, Upham & Co., El Dorado Technical Services, Inc. 20. Huddleston v. Herman & 430 F.2d 1202, 1206-1207 (9th Cir. v. Union General de Trabajadores MacLean, 640 F.2d 534, 549 (5th 1970); Armstrong v. McAlpin, 699 de Puerto Rico, 961 F.2d 317, 321 Cir. 1981), aff’d in part, rev’d in part F.2d 79 (2d Cir. 1983). (1st Cir. 1992). As a result, the on other grounds, 459 U.S. 375 38. GA. COMP. R. & REGS. r. 590-4-2- development of the law in this (1983); see also Currie v. Cayman .14(1)(a)(2). area has been stagnant, since it is Resources, 835 F.2d 780, 785 (11th 39. O.C.G.A. § 10-5-12(a)(1) (2000) not subject to the continued refine- Cir. 1988); Rousseff v. E.F. Hutton, (providing that it is “unlawful for ment, analysis, and appellate 843 F.2d 1326, 1329 (11th Cir. any person . . . [t]o offer to sell or review that would otherwise have 1988). to sell any security in violation of . occurred in litigated claims. 21. 15 U.S.C. § 78u4(b) (2000). . . any rule [or] regulation . . . 5. 15 U.S.C. § 78j(b) (2000). 22. 15 U.S.C. § 77l (2000). promulgated or issued by the 6. 17 C.F.R. § 240.10b-5 (2000). 23. See Pinter v. Dahl, 486 U.S. 622 [Georgia Commissioner of 7. See Gochnauer v. A.G. Edwards & (1988); Ryder International Corp. Securities].” ). Sons, Inc., 810 F.2d 1042, 1046 v. First American Nat’l Bank, 943 40. O.C.G.A. § 10-5-14(a) provides that (11th Cir. 1987); McDonald v. Alan F.2d 1521 (11th Cir. 1991). “[a]ny person [committing an Bush Brokerage Co., 863 F.2d 809 24. Gustafson v. Alloyd Co. Inc., 513 unlawful practice under O.C.G.A. (11th Cir. 1989). U.S. 561 (1995). § 10-5-12(a)] shall be liable to the 8. TCS Industries, Inc. v. Northway, 25. O.C.G.A. §§ 10-5-12(a) (2000); 10-5- person buying such security.” Inc., 426 U.S. 438, 449 (1976); see 14(a) (2000). 41. Manela v. Garantia Banking, Ltd., also SEC v. Carriba Air, Inc., 681 26. O.C.G.A. § 10-5-14(a) (2000). 5 F. Supp. 2d 165, 173 (S.D.N.Y. F.2d 1318, 1323 (11th Cir. 1982) 27. Kirk v. First Nat’l Bank, 439 F. 1998). (“The test for determining materi- Supp. 1141, 1145 n.1 (N.D. Ga. 42. See, e.g., Arceneaux v. Merrill ality is whether a reasonable man 1977); Collins v. Norton, 136 Ga. Lynch, Pierce, Fenner & Smith, would attach importance to the App. 105, 220 S.E.2d 279 (1975). Inc., 767 F.2d 1498, 1501 (11th Cir. fact misrepresented or omitted in 28. Currie v. Cayman Resources Corp, 1985). determining his course of action.”). 595 F. Supp. 1364 (N.D. Ga. 1984), 43. NASD Conduct Rule 2510(b), 9. Miller v. Premier Corp., 608 F.2d aff’d in part, rev’d on other grounds, NASD Sec. Dealers Man. (CCH) 973, 981 (4th Cir. 1979). 835 F.2d 780 (11th Cir. 1988); GCA R.2510 (2002); NYSE Rule 408(a), 2 10. Id.; see also Bogle v. Bragg, 248 Ga. Strategic Inv. Fund, Ltd. v. Joseph N.Y.S.E. Guide (CCH) P2408 App. 632, 637, 548 S.E.2d 396, 401 Charles & Assocs., 245 Ga. App. (1996). A broker may also be given (2001) (finding a statement that 460, 464, 537 S.E.2d 677, 682 (2000). oral “time and price” discretion to security was “a safe investment” to 29. O.C.G.A. § 10-5-14(a) (2000). sell a specified quantity of securi- be an opinion, not actionable 30. See, e.g., Fuller v. Perry, 223 Ga. ties. NASD Conduct Rule fraud). App. 129, 131, 476 S.E.2d 793, 795 2510(d)(1); NYSE 408(d). Unless 11. Cook, Perkiss & Liehe, Inc. v. (1996); Oklejas v. Williams, 165 Ga. provided otherwise in writing, Northern California Collection App. 585, 586, 302 S.E.2d 110, 111 such “time and price discretion” is Service Inc., 911 F.2d 242, 246 (9th (1983). generally understood to be limited Cir. 1990) (quoting Metro Mobile 31. Simpson Consulting v. Barclays to the day it is granted. See, e.g., CTS, Inc. v. NewVector Bank PLC, 227 Ga. App. 648, 651, Hanford v. Marion Bass Securities Communications, Inc., 643 F. Supp. 490 S.E.2d 184, 188 (1997). Corp., NASD No. 98-01422 1289, 1292 (D. Ariz. 1986), rev’d 32. O.C.G.A. § 23-2-53 (1982). (August 12, 1999). without opinion, 803 F.2d 724 (9th 33. Hunter, Maclean, Exley & Dunn, 44. Pierce v. Richard Ellis & Co., 310 Cir. 1986)). P.C. v. Frame, 269 Ga. 844, 848, 507 N.Y.S.2d 266, 268 (N.Y. Civ. Ct. 12. See Shamrock Assocs. v. Moraga S.E.2d 411, 414 (1998); see generally 1970). Corp., 557 F.Supp. 198, 203 (D. Del. O.C.G.A. § 23-2-51 to § 23-5-55 45. M&B Contracting Corp. v. Dale,

20 Georgia Bar Journal 601 F. Supp. 1106,1111 (E.D. Mich. sions earned by the broker on which the position can be sold 1984), aff’d, 795 F.2d 531 (6th Cir. plaintiff’s account exceeded the during a specific period of time. 1986); accord Leib v. Merrill, Lynch, commissions earned on all but 11- Another strategy is to create an Pierce, Fenner & Smith, Inc., 461 F. 14 of the other 8,000-9,000 accounts “equity collar” using both put and Supp. 951, 954-55 (E.D. Mich. in that office and amounted to 39 call options, which establishes both 1978), aff’d, 647 F.2d 165 (6th Cir. percent of all security commissions a floor on the stock’s value, and a 1981); Nunes v. Merrill Lynch, generated by the broker). cap on future price appreciation. Pierce, Fenner & Smith, Inc., 635 F. 52. See, e.g., Robertson v. Central 55. A broker looking to improperly Supp. 1391, 1393-94 (D. Md. 1986). Jersey Bank & Trust Co., 47 F.3d increase his commission may rec- 46. Moran v. Kidder Peabody & Co., 1268, 1275 n.4 (3rd Cir. 1995). ommend that his customer sell a 609 F. Supp. 661, 666 (S.D.N.Y. (“Diversification is a uniformly mutual fund he owns, and pur- 1985), aff’d, 788 F.2d 3 (2d Cir. recognized characteristic of pru- chase a fund offered by a different 1986); see also Freundt-Alberti v. dent investment and, in the mutual fund company. Switching Merrill Lynch, Pierce, Fenner & absence of specific authorization to can generate significant commis- Smith, Inc., 134 F.3d 1031 (11th Cir. do otherwise, a trustee’s lack of sions and sales charges benefiting 1998). diversification would constitute a the broker. Many funds impose a 47. See, e.g., In re Thomson McKinnon breach of its fiduciary obliga- surrender charge, typically one Securities, Inc., 191 B.R. 976, 983- tions.”). Commentators agree that percent, if the fund was not held 84(Bankr. S.D.N.Y. 1996) (finding it takes at least ten, and usually fif- for a minimum period (usually six that a turnover rate of 2.22 creates teen to twenty, non-correlated months or one year). Every switch a question of fact for a jury to securities to achieve adequate is a sale and purchase of securities, decide if activity was excessive). diversification and thereby reduce so it must pass suitability require- 48. See, e.g., Thompson v. Smith nonsystematic risk. See EDWIN J. ments. Switching may not place Barney, Harris Upham & Co., 539 ELTON & MARTIN J. GRUBER, the investor in a better mutual F. Supp. 859 (N.D. Ga. 1982), aff’d, MODERN PORTFOLIO THEORY AND fund, and may in fact place the 709 F.2d 1413 (11th Cir. 1983) INVESTMENT ANALYSIS 31 (3d ed. investor in a lesser known, lower- (Plaintiff who was aware that his 1987). “Diversification does reduce quality fund. options account was being con- risk, and the reduction can be 56. NASD Conduct Rule 2310(a), stantly traded, who had financial greater, the wider the range of pos- NASD Sec. Dealers Man. (CCH) R. acumen to determine his own best sible investments.” WILLIAM F. 2310 (2002). interests, and who desired fre- SHARPE, INVESTMENTS 115 (1978). 57. Brown v. E.F. Hutton Group, Inc., quent trading could not establish 53. In re Laurie Jones Canady, 991 F.2d 1020, 1031 (2d Cir. 1993). excessive trading.) Securities Exchange Act Rel. No. 58. GA. COMP. R. & REGS. r. 590-4-2- 49. See, e.g., Cmty. Hosp. of 41250, 1999 SEC LEXIS 669, *30 .14(1)(a)(3). Springfield & Clark County, Inc. v. n.27 (Securities Exchange 59. O.C.G.A. § 10-5-12(a)(1). Kidder, 81 F. Supp. 2d 863 (S.D. Commission Apr. 5, 1999) 60. See, e.g., NYSE Rule 408, 2 N.Y.S.E. Ohio 1999). (“Trading on margin increases the Guide (CCH) P 2408 (1996); NASD 50. See, e.g., Hecht v. Harris, Upham & risk of loss to a customer for two Conduct Rule 2510, NASD Sec. Co., 283 F. Supp. 417, 435-36 (N.D. reasons. First, the customer is at Dealers Man. (CCH) R.2510 (2002); Cal. 1968), modified on other risk to lose more than the amount Glisson v. Freeman, 243 Ga. App. grounds, 430 F.2d 1202 (9th Cir. invested if the value of the security 92, 99 532 S.E.2d 442, 449 (2000); 1970); Mihara v. Dean Witter & depreciates sufficiently, giving rise Gochnauer v. A.G. Edwards & Co., 619 F.2d 814, 819 (9th Cir. to a margin call in the account. Sons, Inc. 810 F.2d 1042, 1049 (11th 1980) (finding that excessive trad- Second, the client is required to Cir. 1987). ing was established where, among pay interest on the margin loan, 61. NYSE Rule 408(a); see also NASD other facts, fifty percent of the adding to the investor’s cost of Conduct Rule 2510, NASD Sec. securities were held for less than maintaining the account and Dealers Man. (CCH) R. 2510 fifteen days). increasing the amount by which (2002). 51. See, e.g., Smith v. Petrou, 705 F. his investment must appreciate 62. Brophy v. Redivo, 725 F.2d 1218, Supp. 183 (S.D.N.Y. 1989) (noting before the customer realizes a net 1220 (9th Cir. 1984); Kayne v. that commissions generated in the gain. At the same time, using mar- PaineWebber, Inc., 703 F. Supp. customer’s account represented a gin permit[s] the customers to pur- 1334, 1340 (N.D. Ill. 1989); Baker v. substantial portion of the broker’s chase greater amounts of securi- Wheat First Securities, 643 F. Supp. income); Stevens v. Abbott, Proctor ties, thereby generating increased 1420, 1432 (S.D.W.V. 1986); & Paine, 288 F. Supp. 836 (E.D.Va. commissions for [the salesper- Bischoff v. G. K. Scott & Co., Inc., 1968) (finding that the registered son].”) 687 F. Supp. 746, 750 (E.D.N.Y. representative derived 40 percent 54. For example, an advisor represent- 1986). of his income from commissions ing a client with a concentrated 63. GA. COMP. R. & REGS. r. 590-4-2- from customer’s account); Hecht v. position in one security may rec- .14(1)(a)(4). Harris, Upham & Co., 283 F. Supp. ommend the purchase of a put 64. See, e.g., E. F. Hutton & Co. v. 417 (N.D. Cal. 1968), modified on option to protect against a continu- Weeks, 166 Ga. App. 443, 445, 304 other grounds, 430 F.2d 1202 (9th ing decline in value. The put S.E.2d 420, 422 (1982) (“[T]he bro- Cir. 1970) (noting that commis- option fixes the minimum price at ker’s duty to account to its cus-

April 2004 21 tomer is fiduciary in nature, result- dence of negligence.”); Lang v. H. provides: APPLICABLE LAW, ing in an obligation to exercise the Hentz & Co., 418 F. Supp. 1376, RULES AND REGULATIONS. All utmost goodfaith.”); Minor v. E.F. 138384 (N.D. Tex. 1976) (NASD transactions shall be subject to the Hutton & Co., 200 Ga. App. 645, Rules provide evidence of the stan- applicable laws, rules and regulations 409 S.E.2d 262 (1991). The dard of care that a member should of all federal state and self-regulatory Securities & Exchange Commission receive.); see also O.C.G.A. § 51-1-6 authorities, including, but not limited (“SEC”) also concludes that the (2000) (“When the law requires a to, the rules and regulations of the common law of agency, coupled person to perform an act for the Board of Governors of the Federal with the rules of the self-regulato- benefit of another or to refrain Reserve System and the constitution, ry agencies such as the NASD and from doing an act which may rules and customs of the exchange or the NYSE, also give rise to a fidu- injure another, although no cause market (and clearing house) where ciary duty owed by brokers. See, of action is given in express terms, such transactions are executed. In re E.F. Hutton & Co., Exchange the injured party may recover for 75. O.C.G.A. § 11-1-203 (2002); Jackson Act Release No. 25,887 [1988-89 the breach of such legal duty if he Electric Membership Corp. v. Transfer Binder] Fed. Sec. L. Rep. suffers damage thereby.”); Georgia Power Co., 257 Ga. 772, (CCH) § 84,303 (July 6, 1988); O.C.G.A. § 51-1-8 (2000) (“Private 364 S.E.2d 556 (1988); see also accord, Restatement (Second) of duties may arise from statute or Restatement (Second) of Contracts Agency § 425 (agents who are from relations created by contract, § 205 (“Every contract imposes employed to make, manage, or express or implied. The violation upon each party a duty of good advise on investments have fiduci- of a private duty, accompanied by faith and fair dealing in its per- ary obligations). damage, shall give a right of formance and its enforcement.”). 65. See, e.g., Allen v. Lefkoff, Duncan, action.”). But see Lake Tightsqueeze, Inc. v. Grimes & Dermer P.C., 265 Ga. 374, 68. See, e.g., Martin v. Shearson Chrysler First Fin. Servs. Corp., 453 S.E.2d 719 (1995) (finding that Lehman Hutton, Inc., 986 F.2d 242 210 Ga. App. 178, 435 S.E.2d 486 the violation of a Bar Rule is not (8th Cir. 1993). (1993) (“[T]he failure to act in good determinative of the standard of 69. 15 U.S.C. § 78t(a) (2000). faith in the performance of con- care applicable in a legal malprac- 70. See, e.g., Martin v. Shearson tracts or duties under the Uniform tice action, but it may be a circum- Lehman Hutton, Inc., 986 F.2d 242, Commercial Code does not state stance that can be considered, along 244 (8th Cir. 1993); Harrison v. an independent claim for which with other facts and circumstances, Dean Witter Reynolds, Inc., 79 F.3d relief may be granted.”). in determining negligence). 609, 614 (7th Cir. 1996). 76. 15 U.S.C. § 78t(a) (2000). 66. Securities Exchange Act of 1934, 15 71. See, e.g., Hunt v. Miller, 908 F.2d 77. Harrison v. Dean Witter Reynolds, U.S.C. § 78o (b)(4)(E) (2000); See 1210 (4th Cir. 1990). Inc., 79 F.3d 609, 614 (7th Cir. also NASD Conduct Rule 72. 17 CFR 240.10b-16 (promulgated 1996); see also Hollinger v. Titan 3010(b)(1), NASD Sec. Dealers under the Securities Exchange Act Capital Corp., 914 F.2d 1564 (9th Man. (CCH) R. 3010 (2002); NYSE of 1934). Cir. 1990) (en banc) (finding con- Rule 405(2), 2 N.Y.S.E. Guide 73. See, e.g., Greenblatt v. Drexel trol where the primary violator (CCH) P 2405 (1996); GA. COMP. R. Burnham Lambert, Inc., 763 F.2d was a registered representative of & REGS. r. 590-4-2-.08(1). 1352, 1358 n.8 (11th Cir. 1985); the firm). 67. Quick & Reilly, Inc. v. Walker, Angelastro v. Prudential-Bache 78. O.C.G.A. § 10-5-14(c) (2000). 1991 U.S. App. LEXIS 5472, at *8 Securities, Inc., 764 F.2d 939, 950 79. DeBoard v. Schulhofer, 156 Ga. App. (9th Cir. 1991) (NASD “suitability” (3rd Cir. 1985); Robertson v. Dean 158, 159, 273 S.E.2d 907, 909 (1980). rules were relevant to “establish Witter Reynolds, Inc., 749 F.2d 530, 80. Id. the standard of care to which rea- 534-39 (9th Cir. 1984); Liang v. Dean 81. Gilbert v. Meason, 137 Ga. App. 1, sonable broker must adhere,” and Witter & Co., 540 F.2d 1107, 1113 n. 5, 222 S.E. 2d 835, 838 (1975); see the jury found broker negligent.); 25 (D.C. Cir. 1976). But see Bennett v. also Hamilton Bank & Trust Co. v. Miley v. Oppenheimer & Co., 637 United States Trust Co., 770 F.2d 308 Holliday, 469 F.Supp. 1229, 1244 F.2d 318, 333 (5th Cir. 1981) (2d Cir. 1985) (holding that no pri- (N.D. Ga. 1979). (Industry rules are “excellent tools vate right of action exists under 82. O.C.G.A. § 51-2-2 (2000). against which to assess in part the Securities Exchange Act of 1934, 83. O.C.G.A. § 10-6-22 (2000). reasonableness or excessiveness of Section 7, which controls the 84. O.C.G.A. § 10-6-21 (2000). a broker’s handling of an amount of money a brokerage firm 85. O.C.G.A. §10-6-24 (2000). investor’s account.”); Merrill may lend its customers); Walck v. 86. O.C.G.A. §§10-6-25 (2000); 10-6-30 Lynch, Pierce, Fenner & Smith, Inc. American Stock Exchange Inc., 687 (2000). v. Cheng, 697 F. Supp. 1224, 1227 F.2d 778 (3rd Cir. 1982) (holding that 87. 18 U.S.C. § 1964(c) (2000). (D.D.C. 1988) (finding that a viola- no private cause of action exists for 88. O.C.G.A. § 16-14-3(9)(A)(xxi) tion of a NASD rule provided evi- violations of Sections 6 and 7 of the (2003). See O.C.G.A. § 10-5-24(a) dence of broker’s negligence); 1934 Act.); Stern v. Merrill Lynch, (2000) (providing that a willful vio- Kirkland v. E.F. Hutton & Co., 564 Pierce, Fenner & Smith, Inc., 603 lation of the Act is a felony). F. Supp. 427 (E.D. Mich. 1983); F.2d 1073 (4th Cir. 1979) (holding 89. O.C.G.A. § 16-14-6(c) (2003) Piper, Jaffray & Hopwood, Inc. v. that no private right of action exists (emphasis added). Ladin, 399 F. Supp. 292, 299 (S.D. for violations of Regulation T). 90. Taylor v. Bear Stearns & Co., 572 F. Iowa 1975) (NYSE and NASD suit- 74. For example, the Customer Supp. 667, 675 (N.D. Ga. 1983). ability rules “are admissible as evi- Agreement of a major brokerage firm

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By Laverne Lewis Gaskins ver since the United States Supreme Court issued its decisive, but frag-

mented, holding in Regents of the University of California v. Bakke,1 the Equestion of when, if ever, colleges and universities may consider race as a factor in admissions practices has beleaguered state systems of higher education.

The plurality opinion in Bakke spawned numerous cases in the appellate courts,

including the 11th Circuit. In the 25 years since the Bakke opinion was issued, these

courts have wrestled with questions of whether promoting diversity within the stu-

dent body is a sufficiently compelling state interest to justify the use of racial pref-

erences in admissions policies, and if so, when is the process for employing prefer-

ences narrowly tailored enough to pass constitutional muster, as opposed to being

an impermissible quota system. As the debate surrounding the use of affirmative action in higher education admissions intensified, the University of Michigan took center stage when the Supreme Court issued opinions in Gratz v. Bolinger2 and Grutter v. Bolinger3 on June 23, 2003. These cases arose out of admissions practices in the university’s under- graduate programs and the University of Michigan law school, respectively. The Supreme Court’s consideration of these cases spawned an unprecedented number of amicus curiae briefs, as colleges and universities throughout the United States eagerly hoped that the Court would provide definitive answers to questions sur- rounding the role of diversity in higher education. This article will provide a summary and analysis of the Supreme Court’s land- mark decisions in the Gratz and Grutter cases. It begins with a detailed analysis of the holding in Bakke, followed by a discussion of the various ways in which federal appellate courts interpreted and applied the Bakke decision. The article concludes with a discussion of the Gratz and Grutter decisions, including the Court’s interpre- tation of the Bakke holding. THE FRAGMENTED HOLDING OF BAKKE At issue in Bakke was the University of California at Davis’ medical school’s dual system of admissions: a regular program for non-minority applicants and a special program for disadvantaged members of certain minority races.4 The plaintiff, a white male, who was denied admission to the medical school, argued violations of the Equal Protection Clause of the Fourteenth Amendment5 (hereafter the “Equal Protection

24 Georgia Bar Journal Clause”) and Section 601 of Title VI ples.”12 Powell wrote in his opinion a class action and consequently of the Civil Rights Act of 19646 that the use of race could be prop- reasoned that “the question of (hereafter “Title VI”). While Justice erly tailored to achieve the com- whether race can ever be used as a Powell announced the judgment of pelling governmental interest of factor in an admissions decision” the Court in striking down the uni- racial diversity, and he favorably was not an issue before the Court.14 versity’s admissions policy, the jus- cited an admissions process in In declining to address the issue of tices were unable to reach consen- place at Harvard University that he race in the context of a constitu- sus as to a single opinion on which believed met these criteria.13 The tional analysis under equal protec- to base this result. It is this plurality other justices, however, did not join tion grounds, Justice Stevens stated opinion of Bakke that resulted in in that part of his opinion that held that the admission practices violat- confusion and uncertainty as to the that diversity constituted such a ed Title VI because of the use of use of race in admissions. The only compelling interest. race as a factor.15 definitive aspect of Bakke is that the Unlike Powell, Justices In contrast to Justices Rehnquist, multiple opinions provided fertile Rehnquist, Stevens, Burger and Stevens, Burger and Stewart, ground for a multitude of subse- Stewart did not consider the case as Justices Marshall, Brennan, White quent interpretations as to its true holding in the context of affirmative action practices in higher education. Justice Powell delivered the judgment of the Court in Bakke and affirmed the California Supreme Court’s finding that under strict scrutiny,7 the university’s special admissions system violated the Equal Protection Clause.8 Justice Powell reasoned that the universi- ty’s use of quotas would be facially invalid if its purpose was to “assure within [the] student body some specified percentage of a particular group merely because of its race or ethnic origin.”9 Powell found that the issue of remedying past societal discrimination “does not justify a classification that imposes disad- vantages upon persons . . . who bear no responsibility for whatever harm the beneficiaries of the special admissions program are thought to have suffered” as the result of such discrimination.10 Nevertheless, Justice Powell stated that the attain- ment of a diverse student body was a “constitutionally permissible goal for an institution of higher educa- tion,”11 and that “[t]he nation’s future depends upon leaders trained through wide exposure to the ideas and mores of students as diverse as this Nation of many peo-

April 2004 25 and Blackmun did not interpret Title the cases discussed below: Smith v. University VI as barring the use of racial prefer- Hopwood v. Texas,21 Smith v. of Washington ences. Rather, they concluded that University of Washington Law “Title VI prohibits only those uses of School,22 and Johnson v. Board of Law School racial criteria that would violate the Regents of the University of Georgia.23 In contrast to the 5th Circuit, the Fourteenth Amendment if Hopwood v. Texas 9th Circuit Court of Appeals in employed by the State or its agen- Smith v. University of Washington cies.”16 These justices dissented as to In Hopwood v. Texas,24 the 5th Law School,30 upheld the universi- that part of the judgment announced Circuit Court of Appeals struck ty’s use of race-based admissions to by Justice Powell that held that the down the University of Texas Law promote racial diversity. The plain- special admissions program was School’s affirmative action compo- tiffs in Smith alleged violations of 42 unlawful.17 Instead they concluded nent of its 1992 admissions program U.S.C. Sections 1981 and 198331 and that although racial classifications as violating equal protection stan- Title VI.32 After the case was filed, call for strict scrutiny,18 state gov- dards. Four white applicants who the state of Washington passed ernments may adopt race-conscious were rejected by the law school Initiative Measure 20033 prohibiting programs if the purpose of the pro- sued, claiming that the university’s the use of any future race-based ini- gram was to remove the disparate preferential treatment of Mexican- tiatives in public school, thus ren- impact of past discrimination.19 Americans and African-Americans dering the issue of enjoining the law Overall, Bakke stands for the was unconstitutional, violated Title school’s use of preferential treat- proposition that racial classifica- VI and 42 U.S.C. Sections 1981 and ment of minorities moot.34 Having tions although suspect, are permis- 1983.25 The 5th Circuit acknowl- determined that the plaintiff’s sible if supported by a compelling edged the lower court’s finding that request for prospective relief was state purpose or interest, and the “Texas’s long history of racially dis- moot, the court then addressed the classifications are necessary to the criminatory practices in its primary issue of consideration of race in accomplishment of such purpose and secondary schools” had an admission decisions that were made or the safeguarding of such inter- impact on the law school that prior to the passage of the initiative. est. Although Justice Powell stated included “an under-representation The court held that Bakke was con- in Bakke that ethnic diversity in the of minorities in the student body.”26 trolling and concluded that Justice context of university admission Under the 1992 admissions process, Powell’s analysis “is the narrowest policies may advance a state’s com- the law school considered an appli- footing upon which a race-con- pelling interest “in attaining the cant’s race in an effort to cure this scious decision making process goal of a heterogeneous student under-representation and achieve a could stand.”35 The 9th Circuit also body,”20 the fragmented nature of diverse student body. held that educational diversity was the opinion fostered the ensuing The 5th Circuit rejected Justice a compelling governmental interest, debate regarding whether or not Powell’s diversity opinion in Bakke but that race-conscious measures to Powell’s opinion was controlling. as binding precedent citing the fact achieve this goal required strict that “no other Justice joined in that scrutiny.36 The court concluded that POST-BAKKE: THE part of the opinion discussing the prior to the passage of the initiative QUESTION OF diversity rationale.”27 The court the law school could operate a race- held that “any consideration of conscious admissions program if it DIVERSITY race or ethnicity by the law school was properly designed and not be The crux of the debate that fol- for the purpose of achieving a in violation of Title VI or the Equal lowed in the wake of Bakke is diverse student body was not a Protection Clause.37 28 whether diversity is a compelling compelling interest.” Further, the court stated that under the Johnson v. Board of state interest such that it justifies Regents of the race-sensitive admissions practices. Fourteenth Amendment, “the clas- This debate is most evident in the sification of persons on the basis of University of Georgia race for the purpose of diversity split opinions on the issue of affir- Consistent with the 5th Circuit, frustrates rather than facilitates the mative action that surfaced after but in contrast to the 9th Circuit, goals of equal protection.”29 the Bakke decision, as evidenced in the 11th Circuit in Johnson v. Board

26 Georgia Bar Journal of Regents of the University of sion pool. Under this process the narrowly tailored to serve that Georgia,38 struck down the univer- applicant’s file was read and quali- interest.48 In response to UGA’s sity’s race-conscious admissions tatively evaluated and scrutinized assertion that its admission prac- policy finding it violated Title VI. by admission officers.43 tices were analogous to those of For the first 160 years of its exis- Three rejected, white female Harvard University, which Justice tence, the University of Georgia applicants alleged that UGA’s use Powell favorably cited in Bakke, the refused to admit African-American of the bonus points resulted in 11th Circuit disagreed and went on students until it integrated in racial preferences and sexual dis- to dismiss Justice Powell’s example 1961.39 To increase minority repre- crimination in violation of Title VI, as mere dicta.49 sentation in the student body, UGA Title IX,44 and the Equal Protection utilized a three-layer system of Clause.45 In striking down UGA’s THE DECISIONS IN evaluation for the purpose of admission practices, the 11th GRATZ AND admission: Academic Index, Total Circuit declined to consider Justice Student Index and Edge Read.40 Powell’s opinion in Bakke as bind- GRUTTER The AI was calculated using each ing precedent and chose not to Against the legal backdrop of the applicant’s high school GPA and resolve the issue of whether pro- conflicting decision in the appellate 41 SAT test scores. The TSI was uti- moting student body diversity ever courts, the Supreme Court lized for those applicants who were may be considered a compelling reviewed the admissions practices 46 not admitted under the AI level. interest. While the court recog- of the University of Michigan in the The TSI awarded bonus points to nized that UGA had a history of Gratz and Grutter cases. applicants on the basis of other fac- intentional discrimination against In Gratz, white applicants who 47 tors such as parent or sibling ties to African-Americans, it reasoned were denied admission to UM’s 42 UGA, race and gender. The ER that even if diversity was a com- undergraduate program asserted process was used for TSI applicants pelling state interest, UGA had that the school’s use of race in its who were on the edge of the admis- failed to show that its policy was admission policies violated Title VI Recover up to 100% of your library costs – KEELEY AND ASSOCIATES

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April 2004 27 and the Equal Protection Clause.50 Protection Clause, Sections 1981 dard of review that racial classifica- Two admissions programs were at and 1983 and Title VI.57 The law tions under the Equal Protection issue: one in place from 1995 until school’s admission policy sought a Clause are subject to strict scruti- 1998 and the other in place from “mix of students with varying ny.66 To withstand strict scrutiny, 1999 until 2000.51 In reviewing the backgrounds and experiences who the Court stated that the universi- university’s admission practices, will respect and learn from each ty’s use of race in its admission the district court held that under other.”58 Consistent with this goal, program must be narrowly tailored Bakke, a properly devised admis- the law school’s admission policy and further a compelling govern- sions program involving the com- considered “racial and ethnic mental interest.67 The Court found petitive consideration of race and diversity with special reference to that the university’s automatic award of 20 points, or one-fifth of Universities continue to grapple with the the points need to guarantee admission to every single “appli- reality of balancing the after-effects of his- cant from an underrepresented minority group, as defined by the torical discrimination against competing university,” was not narrowly tai- lored to achieve educational diver- individuals’ interests in an effort to strike a sity68 and thus this use of race in the admissions process violated the fair balance. Equal Protection Clause, Title VI ethnic origin was constitutional.52 the inclusion of students from and Section 1981.69 The Court Nevertheless, the court found groups which have been historical- relied on Bakke in its assessment of UM’s admission policies from 1995 ly discriminated against like the university’s admissions prac- until 1998 unconstitutional because African-Americans, Hispanics and tices, and noted that Justice Powell they operated as the functional Native Americans.”59 The 6th explained that it would be reason- equivalent of a quota, and there- Circuit found Justice Powell’s opin- able “for a university to employ an fore ran afoul of Justice Powell’s ion binding60 and instructive61 and admissions program in which ‘race opinion in Bakke.53 The court, how- reversed the district court’s injunc- or ethnic background may be ever, upheld UM’s admissions pro- tion prohibiting the school from deemed a “plus” in a particular gram from 1999 to 2000 stating that considering race and ethnicity in its applicant’s file.’”70 In striking under Bakke “diversity constitutes a admissions.62 The court held that down Michigan’s freshman admis- compelling governmental interest the law school had a compelling sion practices, the Court reasoned in the context of higher education interest in achieving a diverse stu- “the admission’s program Justice justifying the use of race as one fac- dent body and that the law school’s Powell described did not contem- tor in the admissions process.”54 policy was consistent with the plate that any single characteristic The court did not find that the pol- Harvard plan cited favorably by automatically ensured a specific icy from 1999 to 2000 constituted a Justice Powell in Bakke.63 and identifiable contribution to a quota because the use of race oper- On June 23, 2003, the Supreme university’s diversity.”71 The Court ated as a “plus” factor, as opposed Court issued its opinion in Gratz, found that Michigan’s policy in to supporting a system that with Chief Justice William awarding 20 points to every under- allowed for a rigid predetermined Rehnquist delivering the opinion represented minority applicant did number of minority students.55 of the Court, and Justices not contemplate individualized In Grutter, the University of O’Connor, Scalia, Kennedy, and consideration other than determin- Michigan’s law school faced a chal- Thomas concurring.64 Justice ing whether an applicant was a lenge to its race-conscious admis- Breyer concurred in the judgment member of a minority group.72 sions program.56 The named plain- and dissented in part, and Justices In Grutter, the Supreme Court tiff in Grutter alleged that the uni- Souter, Stevens and Ginsburg dis- analyzed and upheld the University versity’s law school’s practice of sented.65 In reversing the lower of Michigan’s law school admission considering race in admissions court’s decision, the Court reaf- practices.73 Justice Sandra Day decisions violated the Equal firmed the well-established stan- O’Connor issued the majority opin-

28 Georgia Bar Journal ion74 with Justices Stevens, Souter, under the Equal Protection Clause conducting a review of each appli- Ginsburg and Breyer concurring75 the “government may treat people cant’s file that took into account not and Justices Rehnquist, Scalia, differently because of their race only race and ethnicity, but a wide Kennedy and Thomas dissenting.76 only for the most compelling rea- variety of other characteristics that In affirming the lower court’s deci- sons,” and that all racial classifica- contribute to a diverse student sion, Justice O’Connor reaffirmed tions imposed by government body.81 The Court endorsed these Justice Powell’s Bakke opinion that “must be analyzed by a reviewing efforts on the part of the law school “student body diversity is a com- court under strict scrutiny.”79 In to achieve a “critical mass” of minor- pelling state interest that can justify recognizing that all governmental ity students, noting that this admis- the use of race in university admis- uses of race are not necessarily sions process bore the hallmark of a sions.”77 The Court noted that access invalidated by strict scrutiny, the narrowly tailored plan because to legal education must “be inclu- court held that when “race-based unlike the policy analyzed in Gratz it sive of talented and qualified indi- action is necessary to further a did not function as a quota.82 viduals of every race and ethnicity, compelling governmental interest, so that all members of our heteroge- such action does not violate the CONCLUSION neous society may participate in the constitutional guarantees of equal Universities continue to grapple educational institutions that provide protection so long as the narrow- with the reality of balancing the the training and education necessary tailoring requirement is also satis- after-effects of historical discrimi- 78 80 to succeed in America.” fied.” nation against competing individu- In upholding the lower court’s The law school in Grutter engaged als’ interest in an effort to strike a decision O’Connor reaffirmed that in a broad admissions approach, fair balance. As the opinions and

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April 2004 29 dissents in Gratz and Grutter stand on his own legs, let him into the mainstream of demonstrate, opinions regarding fall also. All I ask is give him a American life should be a state affirmative action are numerous, chance to stand on his own legs! interest of the highest order. To varied, and sometimes polarized. Let him alone! . . .Your interfer- fail to do so is to ensure that Nevertheless, the Supreme Court ence is doing him positive America will forever remain a in Gratz and Grutter provided a injury.”83 divided society.”87 firm answer to the post-Bakke ques- Justice Thomas went on to state As the struggle for equality for tion of whether diversity is a com- that “[l]ike Douglass, I believe all individuals continues, so will pelling governmental interest such blacks can achieve in every avenue the debate about what is right and that the narrowly tailored use of of American life without the med- wrong with affirmative action. race in admission decisions is per- dling of university administra- missible. While the framework for tors.”84 Given that Douglass was a Laverne Lewis the use of race may have been pre- former slave who lived during an Gaskins currently served, the exact blueprint for era in which the vestiges of recent holds the position of achieving diversity that would sat- slavery were firmly entrenched in university attorney at Valdosta State isfy strict scrutiny remains to be American society, it is debatable University. Gaskins determined. whether Justice Thomas captured received her bachelor’s degree Although the decisions in the the true meaning of Douglass’ plea cum laude, an M.Ed. from Grutter and Gratz cases provided by quoting him in this context. Valdosta State University, and juris some clarification regarding the Rather, at the end of day on June doctorate degree from Florida use of race as a factor in education- 23, 2003, the eloquent sentiments State University’s College of Law. al admissions policies, the larger expressed by Justice Thurgood Prior to beginning her career in issues concerning the legacy of de Marshall in Bakke may have echoed education law, she was engaged facto and de jure discrimination and in the minds of many as they strug- in the private practice of law. what constitutes an appropriate gled with the issue of affirmative Endnotes remedy for that legacy continues to action in higher education: be fraught with legal complexity For it must be remembered that, 1. 438 U.S. 265 (1978). 2. 539 U.S. 244 (2003). and challenges. Nowhere is this during most of the past 200 3. 539 U.S. 306 (2003). fact more profoundly evident than years, the Constitution as inter- 4. Bakke, 438 U.S. at 273-75. in the juxtaposition of the opinions preted by this Court did not 5. U.S. CONST. AMEND. XIV. § 1. of Justice Thurgood Marshall in prohibit the most ingenious and 6. Title VI provides that “no person in the United States shall, on the Bakke and Justice Clarence Thomas pervasive forms of discrimina- ground of race, color, or national in Grutter, the nation’s only two tion against the Negro. Now origin, be excluded from participa- African-American justices. when a state acts to remedy the tion in, be denied the benefits of, or be subjected to discrimination Dissenting in Grutter, Justice effects of that legacy of discrim- under any program or activity Thomas invoked the words and ination, I cannot believe that receiving Federal financial assis- memory of the great abolitionist this same Constitution stands as tance.” 42 U.S.C. § 2000(d).(Title and statesman, Frederick Douglass, a barrier.85 I do not believe that VI); Bakke, 438 U.S. at 278. 7. Bakke, 438 U.S. at 290-91. in support of Thomas’s position the Fourteenth Amendment 8. Id. at 320. that the actions of the law school requires us to accept that fact. 9. Id. at 307. were unconstitutional. Quoting Neither its history nor our past 10. Id. at 310. from a speech Douglass delivered cases lend any support to the 11. Id. at 311-12. 12. Id. at 313 (quoting in part in January 1865, Thomas wrote in conclusion that a university Keyishian v. Bd. of Regents, 385 his dissent: may not remedy the cumulative U.S. 589, 603 (1967)). “The American people have effects of society’s discrimina- 13. Id. at 323-24. 14. Id. at 408 & 411. always been anxious to know tion by giving consideration to 15. Id. at 412-13. what they shall do with us . . . I race . . . 86 In light of the sorry 16. Id. at 328. have had but one answer from history of discrimination and its 17. Id. at 325-26. the beginning. Do nothing with devastating impact on the lives 18. Id. at 357 & 362. 19. Id. at 368-69. us! . . . And if the Negro cannot of Negroes, bringing the Negro 20. Id. at 314.

30 Georgia Bar Journal State"And Bar Campaign Justice for the Georgia for Legal All Services" Program

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GLSP is a nonprofit law firm recognized as a 501(c) (3) by the IRS. Please mail your check to: State Bar of Georgia Campaign for Georgia Legal Services P.O. Box 999 Atlanta, Georgia 30301 Thank you for your generosity. 21. 78 F.3d 932 (5th Cir. 1996), cert. minority applicant action codes Looking for a denied, 518 U.S. 1033 (1996). listed in the top row of grids’ cells 22. 233 F.3d. 1188 (9th Cir. 2000), cert. and minority action codes listed in new position? denied, 532 U.S. 1051 (2001). the bottom row. In 1997, the same 23. 263 F.3d 1234 (11th Cir. 2001). grids that were used in 1996 were 24. Hopwood, 78 F.3d. at 932. used again. Gratz, 122 F. Supp. at 25. Id. at 934-38. 826-27. Looking for 26. Id. at 939. 52. Id. at 819-20. 27. Id. at 944. 53. Id. at 832. a qualified 28. Id. 54. Id. at 820. 29. Id. 55. Id. at 827. th professional? 30. 233 F.3d 1188 (9th Cir. 2000), cert. 56. 288 F.3d 732 (6 Cir. 2002), aff’d, denied, 532 U.S. 1033, 121 S. Ct. 539 U.S. 306 (2003) 2192 (2001). 57. Grutter, 288 F.3d at 735. Look no further 31. 42 U.S.C. § 1983. 58. Grutter, 288 F.3d at 736. 32. Smith, 233 F.2d at 1191. 59. Id. at 737. than the State Bar 33. Initiative Measure 200 (I-200) pro- 60. Id. at 739. vided: “[T]he [S]tate [of 61. Id. at 745. of Georgia’s Washington] shall not discriminate 62. Id. at 752. against, or grant preferential treat- 63. Id. at 747. Online Career ment to, any individual or group 64. Gratz v. Bolinger, 539 U.S. 244 on the basis of race, sex, color, eth- (2003). Center nicity, or national origin in the 65. Id. operation of public employment, 66. Id. at 2427. www.gabar.org public education or public con- 67. Id. tracting.” Smith, 233 F.3d at 1192. 68. Id. at 2428. 34. Id. at 1195 (the court stated that the 69. Id. at 2430. issue of injunctive relief being 70. Id. at 2428 (quoting Bd. of Regents Post jobs moot, “[t]here can be no real of Univ. of California v. Bakke, 438 expectation that the alleged U.S. 307, 317 (1978)). Post resumes wrongs will recur now that the 71. Id. people of the state have prohibited 72. Id. Search jobs them”). 73. Grutter v. Bolinger, 539 U.S. 306 35. Id. at 1200 (2003). Search resumes 36. Id. at 1201. 74. Id. at 2331. 37. Id. 75. Id. at 2347. 38. 263 F.3d 1234 (11th Cir 2001). 76. Id. at 2365. Powered by the Legal 39. Johnson, 263 F.3d at 1239. 77. Id. at 2337. 40. Id. at 1240-41. 78. Id. at 2341. Career Center Network 41. Id. 79. Id. at 2337 (quoting Adarand 42. Id. at 1241. Contractors, Inc. v. Pena, 515 U.S. 43. Id. at 1240-41. 200, 227 (1995)). 44. 20 U.S.C. §1681. 80. Id. at 2338. 45. Johnson, 263 F.3d 1238. 81. Id. at 2343-44. 46. Id. at 1244-45. 82. Id. at 2342-43. 47. Id. at 1265. 83. Id. at 2350 (quoting “What the 48. Id. at 1264. Black Man Wants: An Address 49. Id. at 1261. Delivered in Boston Massachusetts 50. Gratz v. Bolinger, 122 F. Supp. 2d on January 26, 1865,” reprinted in 4 811 (E.D. Mich. 2000), rev’d in part THE FREDERICK DOUGLASS PAPERS and remanded, 539 U.S. 244 (2003). 59, 68 (J. Blassingame & J. 51. Under the University’s 1995 and McKivigan 1991). 4 The Frederick 1996 admission practices, decisions Douglass Papers 59, 68 were based on a set of guideline 84. Id. tables (“grids”) based on four clas- 85. Bd. of Regents of Univ. of sifications: (1) in-state non-minori- California v. Bakke, 438 U.S. 265, ty applicants; (2) out-of-state non- 387 (1978) minority applicants; (3) in-state 86. Id. at 396. minority applicants; and (4) out-of- 87. Id. state minority applicants. In 1996, only two grids were used: (1) in- state and legacy applicants; and (2) out-of-state applicants, with non-

32 Georgia Bar Journal

GBJ feature

Post-Creation Checklist for Georgia Business Entities By John J. Scroggin

Copies of the Georgia statutes can be found by going to he business has been created and organiza- www.georgia.gov and typing “Code” in the search tional documents have been signed. The command. Copies of the IRC can be found at http://uscode.house.gov/title_26.htm. remaining requirements on a new business Caution: Any document sent to a government T agency should be sent using a method which assures may appear to be a mindless set of complex rules, that you obtain a return receipt (e.g., certified mail, next restrictions, limitations, exclusions and limitations on day delivery). In the absence of a receipt, there is no proof that the form was properly filed. exclusions. This checklist is intended to provide some I. Immediate Post-Creation Matters. After the business order to that maze. It is designed to aid clients in com- entity’s creation: pleting the various post-creation requirements that A. Immediate Federal Tax Matters 1. Federal Tax Number. A Federal Employer generally apply to corporations, limited liability com- Identification Number (commonly referred to as FEIN or EI #) is used on most state and federal panies, partnerships, and limited liability partnerships tax returns and is needed to create a business created under Georgia law. financial account. It is roughly equivalent to an individual’s social security number. In order to The list assumes the entity is transacting business in obtain an FEIN, a business must file Form SS-4 Georgia, has its principal place of business in Georgia, with the IRS (available at www.irs.gov/form- is a for-profit entity, and has only U.S. citizens as own- spubs/index.html) by: ers. The list does not deal with state or federal securities ! Mailing the SS-4 to: EIN Operation, laws or the Georgia Close Corporation statutes Holtsville, NY 00501; or (O.C.G.A.§ 14-2-9). Please note that the checklist is not ! Faxing the SS-4 to: 631-687-3891 or 631-447- intended to cover every rule or requirement and that 8960; or tax and state laws change constantly. This outline ! Applying online at www.irs.gov; or reflects the laws as they existed at the beginning of ! Having an officer of the business call 770- 2004. Always consult with legal, business and tax advi- 455-2360 or 866-816-2065. sors before taking any action in reliance of this outline. a. Most filings will result in a 10-14 day delay. To The checklist provides supporting citations to the speed up this process, a request for an FEIN Official Code of Georgia and Internal Revenue Code.

34 Georgia Bar Journal can be made by telephone by an officer of the keeping its books. For most businesses the business. If this approach is made, the SS-4 choice is between the cash and accrual method. should be prepared in advance. The new FEIN However, the IRC may restrict the client’s choice is given to the officer over the phone. of an accounting method used for tax purposes. However, getting the IRS on the line can be a Consult with your tax accountant. frustrating task. B. Immediate Georgia Filing. The Georgia Secretary b. The SS-4 also contains a number of questions of State has a First Stop Business Information about the new business’s activities. Do not Center which can provide valuable information to leave any blanks on the form. For those deci- a new business owner. Such information can be sions which have not yet been made (e.g., tax accessed at www.sos.state.ga.us/firststop or by year), enter “To be Determined.” Some entries calling 404-656-7061. must be completed (e.g., address). 1. Corporate First Annual Registration. A corpo- 2. S Corporation. If the entity will be an S corpora- rate annual registration must be filed with the tion (formerly referred to as a Sub-Chapter-S Georgia Secretary of State within 90 days of the corporation), file one copy of IRS form 2553 by: creation of any corporation (O.C.G.A. § 14-2- ! Mailing it to: Internal Revenue Service 1622). The rules differ slightly for LLCs (O.C.G.A. Center, Ogden, Utah 84201; or § 14-11-1103) and LLPs (O.C.G.A. § 14-9-206.5). ! Faxing it to: 801-620-7116 (preferred File the annual registration with and filing fee by: approach). ! Mailing registration to: Georgia Secretary of a. To be effective for the current tax year, the State, Business Services and Regulation, election must be filed by the 15th day of the Suite 315, West Tower, 2 Martin Luther 3rd month after the corporation’s tax year King Jr. Drive, Atlanta, GA 30334-1530, 404- begins (IRC Section 1362(b)(1)). Make sure the 656-2817; or form is properly filled out. An improperly ! Filing online at http://www.ganet.org- filled out or incomplete form may be returned /sosonline/ (preferred approach). and the filing deadline may be missed. 2. Georgia Net Worth tax Return. All new corpo- b. If the corporation is formed at a time other rations (both S and C) are required to file a than the first day of the month, the Treasury Georgia net worth tax return (Georgia Form 600) Regulations provide for a 75-day period to by the 15th day of the 3rd month after incorpo- make the election (Temp. Treas. Reg. § ration. After the initial filing, the return is a part 18.1362-1(b)). of the annual income tax return. c. A number of restrictions must be met to quali- 3. Department of Revenue—Tax Registrations. fy as an S corporation (e.g., many types of There are a number of filings that must be made trusts cannot be S corporation shareholders). for state purposes. The Georgia Department of (IRC § 1361 et seq.). Revenue has adopted a uniform registration 3. Tax Year. Select the business entity’s tax year. packet to be used in registering for the various Generally, once the tax year is selected, it can state tax numbers. The form is available by: only be changed with IRS permission. (IRC §§ ! Contacting the Department of Revenue, 441-42). The tax year is selected on the entity’s Centralized Taxpayer Registration Unit, first income tax return. S corporations, LLCs, P.O. Box 49512, Atlanta, GA 30359-1512, partnerships, and personal service corporations 404-417-4490 or 404-656-7061 or (outside are generally required to use a calendar year, Atlanta) 800-656-4558; or although some limited exceptions apply. (IRC ! Accessing http://www2.state.ga.us/de- §§ 441(i), 444, and 1378). partments/dor/forms. 4. Accounting Method. Select the tax accounting These filings may include Georgia sales tax reg- method for the entity. Generally, once the tax istration numbers, Georgia withholding tax accounting method is selected, it can only be numbers and other Georgia filings, such as changed with IRS permission. (IRC § 446). motor carrier applications and tobacco license Generally, the business must report its income application filings. These forms are also avail- to the IRS using the method regularly used in able online at www.gatax.org.

April 2004 35 4. Department of Labor. If a business is expected the rights of owners to sell their ownership inter- to have any employees, it should file Georgia ests, how the owners will run the business, and form DOL-1A to obtain a Georgia Department how the business relationship is terminated. of Labor number (DOL number). This form is in II. Ongoing State and Federal Tax Filings. Among the addition to the withholding tax number ongoing State and Federal Filings (see the chart on page 37): obtained from the Georgia Department of A. Federal Tax Filings. A business has a number of Revenue. The DOL number is used on all filings ongoing federal tax filings. The following list is not of Georgia state unemployment tax returns exhaustive, but does provide a list of the typical (form DOL-4N). To obtain copies of the form, taxes and returns. Consult with your tax advisor. see www.dol.state.ga.us. 1. Income Tax Returns. All active business entities 5. Business License. The business should apply are required to file an annual income tax return. for local business or occupation licensees. The Extensions can be generally granted by filing IRS license fees are generally due each Jan. 1. form 7004. The extension delays only the due date Contact both county and city governments to of the return; payment of any unpaid tax liability determine what local licenses are required. must be made with the filing of the extension. Caution: If you file a non-applicable tax registration, 2. Estimated Corporate Income Tax Returns. A expect to hear from the respective governmental regular corporation having more than $500 in authorities if you subsequently fail to file the appropri- income tax liability must estimate its income ate tax returns. tax and pay that tax in equal quarterly install- C. Document the Transactions Creating the Entity. ments over the corporation’s tax year (IRC § As soon as possible after the business is created, 6655). Each quarterly payment should be the transactions which created the business should deposited at a national financial institution be documented, including property transfers, loan (e.g., national bank or savings and loan) using assumptions, and issuance of documents evidenc- IRS Form 8109. Failure to prepay sufficient cor- ing the ownership interests of the owners (e.g., porate income taxes can result in the corpora- stock certificates). If you are creating a new busi- tion’s incurring substantial penalties and inter- ness entity to hold an existing business, make sure est. If the business is a “flow-through” entity to transfer to the new entity the assets, leases, (e.g., S Corporation, LLC or LLP), it does not debts, and other aspects of the old business. generally pay entity level taxes. Instead, the Caution: If the liabilities transferred to the new busi- entity’s taxable income is allocated directly to ness entity exceed the basis of the assets being trans- the owners, who have the responsibility to pay ferred, the transferors may incur taxable income. estimated taxes, or assure that their W-2 with- Consult with your tax advisor. holding makes payment of estimated taxes D. Opening a Bank Account. As soon as possible unnecessary. after creating the business open a bank account. 3. Employment Forms. A business entity faces a In order to open the account you will generally number of employee reporting and tax filing need the FEIN, copies of the documents filed requirements. More information about these fil- with the secretary of state to create the business ing requirements can be found at www.irs.gov. entity, a resolution of the members of an LLC or a. Employee-completed Forms. When an directors of a corporation authorizing the open- employee is hired, he or she is required to fill ing of the account and naming the persons out the following forms: authorized to sign checks. Most banks will pro- (1) W-4. Each employee of the business is vide this last form to you. required to file out a W-4 prior to the first E. Managing the Relationship of the Owners. The day of employment. The W-4 contains the initial documents filed with the secretary of state’s information necessary to determine the office are the bare bones of the business’s legal proper federal income tax withholding for structure. When there is more than one owner, each employee. If the employee claims make sure to document the rights and obligations excessive exemptions, the IRS has authority of the owners, the provisions for income alloca- to deny the stated exemptions by notifying tions, any voting limitations, any restrictions on the employer.

36 Georgia Bar Journal (2) INS form I-9, Employment Verification responsible for withholding the above payroll taxes Form. Prior to starting employment each may be personally responsible for the unpaid tax. See new employee must fill out this form which IRC § 6672, which imposes a 100 percent “penalty” on demonstrates that he or she is qualified to “responsible parties” who do not withhold and pay the work in this country. tax to the government. Consider hiring a payroll report- (3) Georgia Form G-4. The Georgia equivalent ing service to handle your state and federal payroll tax of the W-4 is the G-4 and determines the filings. The cost is worth avoiding the headaches of state income taxes to be withheld. missing a payment or filing deadline. b. Form 941. Form 941, Employer’s Quarterly 4. Information Returns. In addition to the above Federal Tax Return, is filed quarterly and pro- tax returns, there are a number of information vides information on a business’s withholding returns which must be filed. (See the partial list of its employees’ income taxes and social secu- below.) rity taxes and the business’s payment of social B. Georgia Tax Filings. A Georgia business may be security taxes. Withholding tables and form subject to a number of state and local filings, 941 are normally sent to the business as a part including: of IRS Circular E, which is sent to the business 1. Business Income Taxes. Georgia business enti- after filing for a FEIN. ties are required to file an income tax return c. Form 940. Form 940, Employer’s Annual annually. A C corporation is taxed on its Federal Employment Tax Return, is filed annu- Georgia taxable income at a flat rate of 6 percent. ally and computes the business’s federal (O.C.G.A. § 48-7-21). unemployment taxes. a. S corporations are exempt from Georgia cor- Caution: Failure to file payroll tax returns or pay the porate income taxes. (O.C.G.A. § 48-7- applicable tax as required can result in the imposition 21(b)(8)(B)). If the corporation has out-of-state of substantial penalties. For example, the parties residents as shareholders, the S corporation

Quarterly Tax Returns (general rules) Tax Return Normal Due Date Federal Payroll Tax Return - Form 941 One Month After End of Calendar Quarter C Corporation Estimated Income Tax Return 15th Day After the End of the Calendar Quarter Georgia Payroll Tax Return - Form G-7 One Month After End of Calendar Quarter Georgia Quarterly Tax and Wage Report One Month After End of Calendar Quarter Annual Tax Returns (general rules for filings with the government) Tax Return Normal Due Date Federal Unemployment Return - Form 940 By January 31st Federal Wage and Tax Statements - Form W-2 and W-3 By February 28th (Electronic Filing: March 31st) Partnership Federal Income Tax Return - Form 1065 By April 15th (can be extended) S Corporation Return - Form 1120S By April 15th (can be extended) C Corporation Return - Form 1120 By the 15th Day of the 4th Month After Year End (can be extended) Federal Information Returns (e.g., 1098s, 1099s) By February 28th (Electronic Filing: March 31st)

Personal Property Tax Return Generally by March 1st or April 1st Georgia Income Tax Returns See Federal Filing Dates Annual Return to Georgia Secretary of State By April 1st (can be done online) Tax Returns Delivered to Payees Document Normal Due Date Federal Information Returns (e.g., 1098s, 1099s) January 31st Wage Statements (W-2) January 31st

April 2004 37 election is denied, unless the out-of-state return as part of their annual income tax return. shareholders pay the Georgia income tax on The net worth tax is a progressive tax rate based their portion of the corporate income. upon the net worth of the corporation. The tax (O.C.G.A. § 48-7-21(b)(8)(B)). Use Georgia ranges from $10,000 to $5,000. The net worth tax form 600 S-CA. is due whether or not the corporation has any b. LLCs and LLPs file returns, but the taxable taxable income. (O.C.G.A. § 48-13-70 et seq.) income or losses of the entity are allocated to 3. Annual Registration. All Georgia corporations, the members. LLCs, and LLPs are required to file a registration c. S corporations, LLCs, and LLPs may be with the Secretary of State between January 1st required to withhold the Georgia income taxes and April 1st of each year. See also I(B)(1), supra. on non-Georgia owners. (O.C.G.A. § 48-7-129). Caution: If the registration is not filed and/or the fee 2. Corporation Net Worth Taxes. Georgia corpo- is not paid, the entity may be involuntary dissolved by rations (both C and S) must file a net worth tax the Georgia Secretary of State. (corporations: O.C.G.A.

IMPORTANT PHONE NUMBERS AND WEBSITES Organization Phone # Website Internal Revenue Service * Federal Tax ID# 770-455-2360 www.irs.gov * Forms 800-829-3676 Federal Department of Labor 404-562-2444 www.dol.gov Social Security Administration 800-772-1213 www.ssa.gov Securities and Exchange Commission 404-842-7600 www.sec.gov Small Business Administration 800-827-5722 www.sbaonline.sba.gov Immigration and Naturalization Service 800-375-5283 www.ins.usdoj.gov Patent and Trademark Office Not Applicable www.uspto.gov

State of Georgia Website Not Applicable www.state.ga.us

Georgia Department of Revenue 404-656-4165 * Income Taxes 404-656-4095 www.gatax.org * Forms 404-656-4293 * Sales & Use Tax 404-656-4071

Georgia Secretary of State 404-656-2817 * Good Standing 404-656-2817 * Fist Stop Booklet (for new businesses) 404-656-7061 www.sos.state.ga.us * Trademarks 404-656-2861 * Securities 404-656-4910 or 656-3920 Georgia Department of Labor 404-656-3061 www.dol.state.ga.us Board of Workers’ Compensation 404-656-2048 www.state.ga.us/sbwc

Tax Forms for Other States Not Applicable www.taxadmin.org/fta/link/forms.html State and Local Governments on the Web Not Applicable www.statelocalgov.net/index.cfm

CT Corporation 404-888-6488 www.ctadvantage.com Paychex (payroll services) 678-354-7776 www.paychex.com ADP (payroll services) 800-225-5237 www.adp.com Quicken Business Software Not Applicable www.quicken.com/small_business

38 Georgia Bar Journal § 14-2-1420; LLCs: O.C.G.A. § 14-11-603). LLPs do not tax wage base is $7,000, while the state wage have a similar dissolution provisions (O.C.G.A. § 14-9- base is $8,500. The percentage is set by a 206.7 was repealed), although the failure to file an number of factors, including the employer’s annual registration for three consecutive years may unemployment record. Payment is made allow other partnerships to reserve the LLP’s name. with the filing of the return. You may want 4. Other State Tax Returns. to review the Employer’s Handbook (DOL- a. Sales Taxes. In general, Georgia sales tax 224), available from the Georgia Department returns are required to be filed by applicable of Labor at www.dol.state.ga.us. taxpayers each month. Depending upon the (2) G-1. Form G-1, State of Georgia Employer’s local sales tax options, the sales tax rates gen- Quarterly Return of Income Tax Withheld, erally range from 5 percent to 7 percent. is filed quarterly and reports the state b. Payroll Taxes. The following tax returns must income taxes withheld from the employees’ be filed with Georgia authorities and the taxes wages. Withheld taxes are normally paid paid as noted. Copies of these returns can be before the return is filed. obtained by calling the Withholding and (3) G-3. Form G-3, State of Georgia Employer’s Estimated Tax Section of the Georgia Withholding Tax Annual Reconciliation, is Department of Revenue at 404-656-4181. filed annually by February 28th. One copy (1) DOL-4. Form DOL-4, Employer’s Quarterly of each employee’s federal W-2 should be Tax and Wage Report, is filed quarterly and attached to the return. reports the state unemployment taxes due. 5. Personal Property Tax Returns. Georgia’s city Call the Georgia Department of Labor at and county governments impose personal 404-656-3061 or 404-656-5590 for more infor- property taxes on the assets of the business. mation. The unemployment tax is a percent- Contact local city and county governments to age of each employee’s wages. The federal determine what taxes may be due.

April 2004 39 C. State and Federal Employment Related Filings has not been operated as a separate legal entity, and Notices. There are a number of state filing its “liability shield” can be pierced and the own- and notice requirements, including: ers could be held liable for the entity’s debts. 1. Worker’s Compensation. Georgia law may Always treat the business entity as a business require the business to obtain worker’s compen- separate from your personal assets (e.g., do not sation insurance for its employees. (O.C.G.A. § pay personal expenses from the business, docu- 34-9-1, et seq.) The insurance is obtained from a ment business loans and other decisions, etc.). commercial insurance company. The cost of the B. Trademarks. Determine whether the business insurance is dependent upon the number of should seek trademarks for its products and serv- employees and the type of work of each employ- ices. A federal trademark may provide protection ee. Call the State Board of Worker’s across the United States. You may search the Compensation at 404-656-2048 or see existing records of the Patent and Trademark www.state.ga.us/sbwc for more information. office at www.uspto.gov. A trademark can be 2. Reporting New Hires. Georgia requires employ- obtained solely for Georgia. (O.C.G.A. § 10-1-440 ers to report the hiring of new employees to the et seq.). Call the Georgia Secretary of State’s office Georgia Department of Labor. More information at 404-656-2861 for more information. and online reporting are available at C. Tradename Filings. If the business is going to www.dol.state.ga.us or by calling 404-525-2985. operate under a tradename other than its legal 3. Termination Notice. If an employee is terminat- name, it should register that name in each county ed, the employer is required to provide a sepa- where it plans to do business under the assumed ration notice to the employee using Georgia name and in the counties in which it has its prin- Department of Labor form DOL-800. A fine of cipal business activity and business domicile. up to $1,000 can be imposed for failing to com- (O.C.G.A. § 10-1-490 et seq.). Call the clerk of the ply with the notice requirement. The form is county’s Superior Court for copies of the available at www.dol.state.ga.us. required forms. However, a tradename filing 4. Hiring Aliens. There are a number of pre- does not grant a company the exclusive right to employment obligations that must be satisfied the name. If you want to protect your business’s before hiring a non-U.S. citizen. See name, consider filing a state or federal trademark. www.dol.state.ga.us and http://uscis.gov. D. Property and Casualty Insurance. Make sure 5. COBRA. If an employee loses his or her health you have in place the proper property and casu- care coverage (e.g. because of termination of alty insurance to protect you and the business employment), the employer may be required to entity from litigation or other claims. give the employee notice of his or her right to E. Workplace Notices. Both state and federal laws continue the coverage. require that certain employment posters be D. Filing in Other States. If the entity is doing busi- prominently displayed at a workplace. A list of ness in other states, it may be required to file tax the forms can be found at www.dol.state.ga.us. returns similar to the State of Georgia returns in F. Foreign Qualifications. If the business antici- those other states. Contact your tax advisor to pates doing business in other states, determine determine the appropriate taxes. Copies of appli- whether the business must be qualified in those cable returns may be found at states. www.taxadmin.org/fta/link/forms.html. III. Other Post-Creation Matters. In addition to the John J. Scroggin, J.D., LL.M., practices above requirements, the following are some of the from a historic home in Roswell and is a post-creation decisions that the business’s organiz- graduate of the University of Florida Law ers should review. School. He is a frequent speaker on estate, tax and business planning issues. Scroggin A. Maintaining the Entity’s Separateness. is the author of more than 130 published Corporations, LLCs, and LLPs each have a legal articles and three books. More information on estate existence separate from the legal existence of its and business planning issues can be found at owners. In general, owners cannot be held liable www.scrogginlaw.com. for the entity’s liabilities. However, if the entity

40 Georgia Bar Journal GBJ feature

Midyear Meeting Draws Record Number of Attendees By C. Tyler Jones

ne of the hottest

tickets in town was Oto the Jan. 15-17 State Bar of Georgia Midyear

Meeting as a record 1,139 attendees made their way to the Sheraton

Hotel at Colony Square in Atlanta.

Members participated in numerous

CLE presentations, section meet- ings, receptions and a board dinner Photos by C. Tyler Jones at the Capital City Country Club - Recipients of the 2003 Justice Robert Benham Awards for Community Service include: (back row) James J. Dalton II, Judge William P. Adams, Brookhaven. Judge Robin S. Nash, Constance McManus, John B. Miller, Judge Stephen E. Boswell and Kenneth B. Hodges III: (front row) Cynthia Hinrichs Conference Highlights Clanton, Justice Robert Benham, Jacquelyn H. Saylor and David M. Zacks. Recipients of the Justice Robert ! John B. Miller of Savannah During the board dinner, former Benham Awards for Community (Lifetime Achievement Award) Bar President Frank Love Jr. of Service were honored during the ! Kenneth B. Hodges III of Albany Atlanta received the 2003 State Bar Jan. 16 Board of Governors Dinner. ! Judge William P. Adams of of Georgia’s Distinguished Service The objectives of the award are: to Macon Award. The Distinguished Service recognize that volunteerism ! Judge Robin S. Nash of Decatur Award is the highest honor remains strong among Georgia’s ! Cynthia Hinrichs Clanton of bestowed by the Bar for conspicu- lawyers; to encourage lawyers to Atlanta ous service to the cause of jurispru- become involved in serving their ! Jacquelyn H. Saylor of Atlanta dence and the advancement of the communities; to improve the quali- ! David M. Zacks of Atlanta legal profession in the state. ty of life of lawyers through the ! Judge Stephen E. Boswell of Earlier in the day, the Women satisfaction they receive from help- Jonesboro and Minorities in the Profession ing others; and to raise the public ! James J. Dalton II of Jonesboro Committee hosted the first-ever image of lawyers. This year’s recip- ! Constance McManus of Marietta Commitment to Equality Awards ients include: ! Judge James E. Drane of Canton Luncheon to recognize the efforts of

April 2004 41 lawyers and legal employers who Board Meeting to Speaker of the House Rep. are committed to providing oppor- Highlights Terry Coleman at an earlier occa- tunities that foster a more diverse sion at the state Capitol. legal profession for women and State Bar President William D. ! In regards to legislation issues, the lawyers of color. Charles T. Lester Barwick presided over the 194th Board took the following action: Jr. and Charles R. Morgan received meeting of the Board of Governors Proposed Amendments to Loan the 2004 Commitment to Equality of the State Bar of Georgia on Jan. Forgiveness Legislation Award. Randolph Thrower was rec- 17. Following is an abbreviated ! The Board approved ognized by having the Randolph overview of the meeting: requesting $3 million from Thrower Lifetime Achievement ! The Board, by majority voice the state for the Public Award named in his honor. The vote, approved Bar rules relating Interest Lawyers’ Fund. Thrower award was then presented to a lawyer referral service, ! The Board approved to Justice Robert Benham. The Bar which authorizes fee sharing in amending the original legis- thanks the following luncheon certain circumstances. lation to waive a six-month sponsors for their support: ! The Board approved the nomi- waiting period. The pro- ! Alston & Bird LLP nation of State Bar officers as fol- posed legislation now ! BellSouth lows: J. Vincent Cook as treasur- requires two years of service ! Dow Lohnes & Albertson PLLC er, Gerald M. Edenfield as secre- from participants. Anything ! Hunton & Williams tary and Robert D. Ingram as short of the two-year service ! Kilpatrick Stockton LLP president-elect. requirement requires a pro ! King & Spalding LLP ! The Board approved the nomi- rata repayment of the loan ! Sutherland Asbill & Brennan LLP nations of the following attor- for any unserved months. ! Womble Carlyle Sandridge & Rice neys to serve two-year terms as Business Law Section PLCC Georgia ABA Delegates: Post 1 - ! Proposed changes to the Rudolph N. Patterson, Post 3 - Corporate Code and Non- Cubbedge Snow Jr. and Post 7 - Profit Code Revisions were Linda A. Klein. Post 5 is desig- approved. nated to be filled by the immedi- Real Property Law Section ate YLD past president. ! Proposed changes to the ! Barwick presented a resolution Cancellation of Satisfied to Sen. Chuck Clay recognizing Tax Executions and the his many contributions on behalf Cancellation of Satisfied of indigent defense reform. Judgment Executions were Thereafter, he reported that a approved. similar resolution was presented

(Above) Former Bar President Frank Love Jr. of Atlanta received the 2003 State Bar of Georgia’s Distinguished Service Award.

(Right) Members of the WMPC Commitment to Equality Awards Subcommittee are seen here with recipients of the committees inau- gural awards.

42 Georgia Bar Journal State Bar President Bill Barwick presents resolutions from the Chief Justice’s Commission on Professionalism to the families of Chief Justice Thomas O. Marshall (right) and Judge Richard S. Gault (above) expressing the commission’s sincere and profound appreciation to their families for their lifetime of service to the legal profession and the State Bar of Georgia.

Georgia Appellate Practice and ! YLD President Andrew W. Jones will be asked how best to pro- Educational Resource Center reported on various activities of ceed with the 3rd floor renova- Funding request was approved. the YLD, including its annual tion at the spring meeting. ! Tom Boller provided a preview of Legislative Affairs breakfast, ! Barwick announced that Allen the upcoming legislative session increased involvement by young Tanenbaum would be sending (For up to date legislative updates Atlanta lawyers, the Community Board members proposed reso- as they relate to the Bar, visit Services Committee’s suit drive at lutions to be considered by the www.gabar.org/legislat.asp). the Midyear Meeting and its holi- ABA’s House of Delegates. ! Barwick and Sally Lockwood, day project in which it sponsored ! Durham provided a report on executive director of the Chief a family through the Department the actions of the Executive Justice’s Commission on of Family and Children Services. Committee at its meetings held Professionalism, presented reso- ! Immediate Past President James Oct. 23, 2003 and Dec. 11, 2003. lutions to the families of Chief B. Durham provided an update Following that, the Board, by Justice Thomas O. Marshall and on Bar Center activities, includ- unanimous voice vote, approved Judge Richard S. Gault express- ing leasing and the third floor the actions of the Executive ing the commission’s sincere and renovation, which is expected to Committee. profound appreciation to their cost approximately $4.1 million. ! Georgia Bar Foundation Executive families for their lifetime of serv- The Bar has received $2 million Director Len Horton presented ice to the legal profession and in grants for the educational Jim Collier with the first ever the State Bar of Georgia. facilities of this renovation of James M. Collier Award in recog- ! J. Vincent Cook and R. Chris which $1 million will be with- nition of his invaluable service to Phelps provided information on drawn if full funding is not the Georgia Bar Foundation. Casemaker, a legal research serv- obtained in 2004. The building’s ice to Bar members that is being $9 million cost has already been C. Tyler Jones is the director of studied by the Bar Computer- paid in full and the new parking communications for the State Bar Accessed Legal Research deck is funded and scheduled to of Georgia. Committee. open on July 15, 2004. The Board

April 2004 43 GBJ feature

Lawyers Foundation of Georgia Winter Update By Lauren Larmer Barrett

ane and Foy Devine gra-

ciously hosted “An JEvening in Old Buckhead” for the fellows of the Lawyers

Foundation of Georgia during the

Midyear Meeting. Guests were greeted with mint juleps served in traditional silver cups and encouraged to stroll through the Devine’s Italian Renaissance villa. Completed in Photos by Daniel L. Maguire 1921, the villa is nestled in the Harvey Weitz, Terrence Croft, Merry Croft and Jan Wellon take a wooded hills of one of Atlanta’s moment to smile for the camera. oldest neighborhoods, creating a Gold: Meeting, where the newest mem- perfect setting to enjoy a winter’s ! Ikon Legal Document Services bers were introduced and wel- evening of cocktails and conversa- ! Mellon Private Wealth comed. The foundation was creat- tion. Management ed with the vision of outstanding The reception benefited the Silver: legal professionals administering a Challenge Grant Program of the ! Attorney’s Title Guaranty Fund, fund to enhance the system of jus- Lawyers Foundation. Jane Devine, Inc. tice, to support the lawyers who with the help of Melitta Ester, deco- ! The Coca-Cola Company serve it, and to assist the communi- rated the home and grounds with Bronze: ty served by it. The fellows pro- dozens of candles and magnolia ! Brown Reporting, Inc. gram is the backbone of the foun- blossoms. Jerry Dilts and Associates ! Cushman & Wakefield dation, providing not only funds, catered the event and provided ! Esquire Depositions but inspiration and ideals as well. guests with a terrific variety of ! Gilsbar, Inc. During the meeting, Ben foods. ! Insurance Specialists, Inc. Easterlin, chairman of the Board of In addition to the gracious sup- ! LexisNexis Trustees of the Foundation, and port of the Devines, the foundation ! Prolegia Lauren Larmer Barrett, executive would like to thank Donna and Bill ! Special Counsel director, brought the fellows up to Barwick for their time and effort in ! Mauldin & Jenkins date on the progress and goals of the arranging the reception, which Fellows Program Update foundation. In addition, William raised over $10,000. The founda- Jenkins and Judge Philip Jackson tion also wants to thank the recep- Members of the fellows program introduced attendees to the BASICS tion sponsors: met on Jan. 16 during the Midyear Program, a State Bar of Georgia pro-

44 Georgia Bar Journal gram that provides training, motiva- tion and encouragement to inmates The following individuals joined the fellows program between in the Georgia Correctional System. September 1, 2003 and January 15, 2004: It is a successful anti-recidivism pro- Bert Adams, Atlanta Gwendolyn R. Keyes, Decatur gram, and the Lawyers Foundation Tara Lee Adyanthaya, Atlanta Laurel Payne Landon, Augusta John Ballard, Atlanta Edward H. Lindsey Jr., Atlanta of Georgia is proud to be able to Debra Halpern Bernes, Marietta Stephen M. Lore, Atlanta support the BASICS program in its B. J. Bernstein, Atlanta Maria Maistrellis, Atlanta Judge Diane E. Bessen, Atlanta Brad J. McFall, Cedartown efforts to help more people through- Loyd Black, Brooks Melanie S. McNeil, Marietta out the state. Daniel Bloom, Atlanta Michael Douglas McRae, Cedartown Rebecca Louise Burnaugh, Atlanta James D. Meadows, Atlanta The Lawyers Foundation is David Lee Cannon, Canton Wilson B. Mitcham Jr., Greensboro becoming an important part of the Mary Jane Cardwell, Waycross Judge Thelma W. Moore, Atlanta Alan Stuckey Clarke, Atlanta Charles Morgan, Atlanta statewide legal community. By Judge Myra Hudson Dixon, Atlanta William NeSmith, Americus John Floyd, Atlanta Judge Henry M. Newkirk, Atlanta Judge Susan Barker Forsling, Atlanta Judge Carlisle Overstreet, Augusta W. Wright Gammon Jr., Cedartown James E. Patterson, Macon Melissa Gifford, LaFayette Elizabeth A. Price, Atlanta Judge Janis C. Gordon, Decatur William M. Ragland Jr., Atlanta Steven Gottlieb, Atlanta Robert B. Remar, Atlanta Stephen F. Greenberg, Savannah Judge Penny Brown Reynolds, Atlanta John G. Haubenreich, Atlanta John E. Robinson, Decatur Judge Nina Hickson, Atlanta Rita Arlene Sheffey, Atlanta Judge Sharon Hill, Atlanta Paul R. Shlanta, Atlanta Rebecca Ann Hoelting, Atlanta James L. Smith III, Atlanta Kathleen Horne, Savannah Warren Kevin Snyder, Atlanta John Husser, Rome J. Edward Sprouse, Columbus J. Alexander Johnson, Baxley A. Thomas Stubbs, Decatur Weyman T. Johnson Jr., Atlanta Nancy F. Terrill, Macon Jane and Foy Devine graciously N. Wallace Kelleman, Stone Mountain Wade Tomlinson, Columbus opened their home during the Robert Keller, Jonesboro Laura Elizabeth Woodson, Atlanta Midyear Meeting.

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April 2004 45 funding many projects around the state, it encourages community service among Bar members. The attorneys who support the foun- dation demonstrate a commit- ment to the highest standards of the profession. Without their help, many needed and worth- while projects would not come to fruition. Their support is grateful- ly accepted and most warmly appreciated.

Lauren Larmer Barrett is the execu- tive director of the Lawyers Foundation State Bar President Elect George Robert "Rob" Reinhardt Jr., Executive of Georgia. Director of the Georgia Legal Services Program Phyllis J. Holmen and Bar Member Fielder Martin enjoy the evening’s festivities.

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46 Georgia Bar Journal GBJ feature

Putting a CAP on Lawyer-Client Misunderstandings By C. Tyler Jones

methods. CAP Director Lynda ne of the most uti- Hulsey, who is an attorney, said, “CAP does not get involved when lized, but least rec- a caller alleges serious unethical ognized services the conduct, such as commingling of O client funds, lying or stealing. Bar provides is the Consumer These cases are referred to OGC.” Assistance Program, which CAP assists attorneys as much as possible by providing a courtesy responds to inquiries from the pub- call or sending a letter when it hears from dissatisfied consumers. lic regarding Georgia’s attorneys. Hulsey said the department also But do not let the name mislead provides information and sugges- tions about effectively resolving you; CAP is as much for lawyers as conflicts in an ethical and profes- sional manner. In some cases, it is for the general public. The customer-service oriented Hulsey explained that CAP refers Donna Hunt logs another call. Since its inception in 1995, CAP has handled over 150,000 requests for assistance (calls, walk-ins and letters). It is a tribute to the five- member department’s mediation and conflict management skills that less than 33 percent of these cases are referred to the Office of the General Counsel. In January, the number of cases referred to OGC was less than 31 percent. Because, in most cases, the client’s problem does not involve professional misconduct, CAP attempts to help consumers solve problems by improving lawyer- client communications and resolv- Photos by Daniel L. Maguire ing conflicts through informal The CAP Department is staffed by: (back row) Donna Hunt, Ebony Smith, Steven Conner and (front row) Barbara Dailey and Lynda Hulsey.

April 2004 47 lawyers to the Bar’s Law Practice Management Program, Lawyer Assistance Program or the Ethics Hotline to get the information and help they need to better serve the public. Assistant CAP Director Steven Conner, who is also an attorney, said that many of the calls the department receives can be catego- rized as communication issues, and can be resolved by calling the lawyer or providing the client with ways to deal with the dispute. Sometimes, he said, consumers just need someone to vent to. He added that the attention the department’s staff gives callers helps “create a positive perception of lawyers.” It is this success that has led Lynda Hulsey takes time to catchup on paperwork during a brief reprieve other state bar associations to use from the 45 to 55 calls the department receives daily. Georgia’s CAP as a model. The explain that their lawyer has not with the Office of General department’s strong commitment violated the Georgia Rules of Counsel; or to customer service is one of the Professional Conduct. ! A court compels the production hallmarks of its success. CAP’s It is important to note that every- of the information. goal is to return calls within 24 thing CAP deals with is confiden- The purpose of the confidentiali- hours and to respond to letters tial, except: ty rule is to encourage open com- within 10 days. They usually ! Where the information clearly munication and resolve conflicts exceed both these goals. shows that the lawyer has mis- informally. “While we cannot successfully appropriated funds, engaged in For more information on CAP, resolve every problem,” Hulsey criminal conduct, or intends to call the Bar at (404) 527-8759 or said, “we listen to every problem engage in criminal conduct in visit www.gabar.org/cap. and try our best to help lawyers the future; and their clients reach a mutually ! Where the caller files a grievance C. Tyler Jones is the director of beneficial solution.” Although and the lawyer involved wants communications for the State Bar Hulsey, Conner and other CAP CAP to share some information of Georgia. staff are not permitted to give legal advice, they can suggest places for callers to go to get the advice they need. Throughout the years CAP has compiled an extensive list of local bar associations, government agencies and nonprofit organiza- tions that may provide services that meets a caller’s needs. On occasion, consumers think they have a valid complaint when they do not. In those situations, Hulsey said, “We provide con- sumers with a dose of reality” and

48 Georgia Bar Journal

State Bar of Georgia

June 17-20 Portofino Bay Hotel at Universal Orlando, A Loews Hotel Orlando, Florida main entrance to the portofino bay hotel Opening Night Be sure to join your fellow Bar members for the section- sponsored Opening Night Extravaganza at CityWalk®, one of Orlando’s hottest spots for entertainment. Don’t forget to pack your dancing shoes because the dazzling 30-acre entertainment complex offers a potpourri of live music options sure to satisfy a variety of tastes. Conference attendees will have exclusive use of select venues for Thursday evening. Venues include Pat O’Brien’s® portofino bay hotel room Orlando, Bob Marley–A Tribute To FreedomSM, and CityJazz®. There will be food stations set up throughout the block area outside and the bars will be open in each of the restaurants, along with special entertainment for kids and teens!

Keynote Address by Carl Hiaasen Carl Hiaasen will speak to attendees at the Presidential Inaugural Dinner on Saturday, June 19. Hiaasen is an entertaining and humorous commentator on the state of Florida and its political and economic scandals. He is a the Villa Pool at Portofino Bay Hotel columnist for The Miami Herald and an author. The film “Striptease,” based on one of Hiaasen’s novels, was a major motion picture starring Demi Moore and Burt Reynolds. Some of his other novels include Double Whammy, Sick Puppy, Basket Case, and HOOT, a Newbery-award winning book for young readers. 2004 Annual Meeting

Universal Orlando Resort For entertainment, Universal Studios offers three conveniently located park areas: Universal Studios® Theme Park, which follows the model of the original California studio theme park, with rides, exhibits and sets that reflect the movie industry; Universal’s Islands of AdventureSM Theme Park, a classic high-thrill amusement park, but with areas like Seuss LandingTM and Toon Lagoon®, devoted to the entertainment of younger children; and Universal CityWalk®Entertainment Complex, which contains the Thirsty Fish on the Harbor Piazza at portofino bay hotel restaurants, arcades, bars and clubs more suitable for older youths and adults. Tickets will be available at a discount to meeting attendees and their families.

CLE & Section Events Fulfill your CLE requirements or catch up with section mem- bers on recent developments in the areas you practice. Many worthwhile programs will be available, including law updates, section business meetings, alumni functions and a plenary session. waterslide at the beach pool at portofino bay hotel

Social Events Enjoy an exciting and entertaining welcoming reception, the Supreme Court reception and Annual Presidential Inaugural Dinner, along with plenty of recreational and sporting events to participate in with your colleagues and family.

Family Activities Golf, tennis, cycling, shopping, and sight-seeing all avail- able for your convenience. portofino bay hotel water taxi at night

Children’s Programs Programs designed specifically to entertain children and teens will be available.

Networking & Camaraderie in Abundance! GBJ feature

In the Trenches with the First Amendment By C. Tyler Jones

from the Atlanta Journal-Constitution, During lunch, Steve Oney, “ he First Amendment is moderated the session. author of And the Dead Shall Rise: For the second session, attendees The Murder of Mary Phagan and the often inconvenient. But had a choice between three different Lynching of Leo Frank, provided an that is besides the point. small group break out sessions. insightful account of the role the T Choices included: “Atlanta’s media played in the trial and sub- Inconvenience does not absolve the Perspectives on the World and Vice sequent lynching of Leo Frank. government of its obligation to tol- Versa,” which focused on Atlanta’s The afternoon kicked off with an varied news coverage of local and issue that is starting to generate a erate speech,” Justice Anthony international events; “The First lot interest in the state, “Electing Amendment and the War on Terror,” Judges: Campaigning in the 00s.” Kennedy is quoted as saying. which brought together a senior Panelists, who included Cobb Lawyers, judges and journalists Justice Department official and a civil County Superior Court Judge gathered at the Westin Buckhead in liberties advocate to debate how to James Bodiford; Henry County Atlanta for the 13th Annual Bar draw the lines between secrecy, secu- State Court Chief Judge Benjamin Media Conference to discuss some rity, intrusion and protection; and W. Studdard III; R. Keegan Federal of the more controversial issues of “Open Government: A Primer,” Jr., Keegan Federal & Associates; the day and how they relate to the which offered a practical nuts-and- Richard Gard, Fulton County Daily law. The theme of the Jan. 31 bolts approach to teaching people Report; Bobby Kahn, attorney and Institute of Continuing Legal how to make effective use of the political consultant; James C. Education sponsored event was “In state’s open government laws. Rawls, Powell, Goldstein, Frazer & the Trenches with the First Amendment: Controversial Speech, Judicial Elections and Protecting the Unprotected.” The first session, “Protecting Children,” treated attendees to a panel discussion regarding the impact of the courts and media reporting and commentary on the state’s protection of children. The diverse group of panelists included Jim Martin, former Department of Human Resources commissioner;

Thomas D. Morton, M.S.W., from Photos by C. Tyler Jones the Child Welfare Institute; and Jane State Bar President Bill Barwick (left) and Chief Justice Norman Fletcher Hansen, from the Atlanta Journal- (right) present Atlanta Journal-Constitution journalist Bill Rankin and columnist Constitution. Maureen Downey, Martha Ezzard with resolutions honoring their coverage of indigent defense.

52 Georgia Bar Journal Counseling for Attorneys

!Depression !Anxiety/Stress !Life Transitions !Career Concerns !Divorce/Separation !Relationship Conflicts

WSB-TV’s Richard Belcher facilitates the “Electing Judges: Campaigning in Elizabeth Mehlman, J.D., Ph.D. Clinical Psychologist the 00s” session with panelists Judge James Bodiford, Dr. Beth Schapiro, (404) 874-0937 Chief Judge Benjamin W. Studdard III, Richard Gard, James C. Rawls, R. Midtown Atlanta Keegan Federal Jr. and Bobby Kahn.

Murphy LLP; and Dr. Beth The last session of the day, SENTENCING CONSULT@TION Schapiro, Schapiro Research “Protecting the Unprotected: & @PPE@LS Group, Inc., wrestled with a hypo- Indigent Defense” moderated by WHEN IT’S TIME FOR A thetical Georgia judicial election. Gard, consisted of a high-profile CHANGE WSB-TV’s Richard Belcher facili- panel that included: Chief Justice tated the discussion, which cen- Fletcher, former Gov. Roy Barnes, Georgia and All Federal Circuits FEDERAL CRIMINAL LAW tered around: Sen. Chuck Clay and Atlanta CENTER ! The propriety of judges solicit- Journal-Constitution Columnist ing funds to run their cam- Martha Ezzard. The panel discussed Voice: 404-633-3797 Fax: 404-633-7980 paigns. the roles lawyers, judges, legislators www.MSheinLaw.com ! How judges should respond to and journalists played in spurring [email protected] personal attack campaigns. indigent defense reform in Georgia. ! Tactics judges can use to defend The panel also debated different their record. ways to fund indigent defense. NEW HOME ! Whether judges’ reputations will Much to the surprise of panelist CONSTRUCTION suffer by resorting to different Ezzard and fellow AJC journalist campaigning strategies. Bill Rankin, State Bar of Georgia COMPLAINTS ! What role the Judicial President Bill Barwick presented Residential Construction Nominating Commission plays the pair with framed resolutions & Development Expert in judicial elections. honoring their coverage of indigent • Code & Inspection Compliance During the next session, “Thou defense. • Cost/Quality Analysis Shalt Not?: Religious Speech and the In conjunction with the confer- • Materials & Labor First Amendment,” panelists, who ence, the Georgia First Amendment Evaluation included Wendell Bird, Bird & Foundation held its annual Charles 770-922-4411 [email protected] Loechl; Neil Kinkopf, Georgia State L. Weltner Freedom of Information University; and Rep. Glenn Award Banquet. The dinner is Richardson discussed issues sur- named in honor of the late Chief A-AA-AA rounding religious speech. One of the Justice Weltner, who was known as ATTORNEY REFERRAL SERVICE more controversial discussion items a champion of open government. Is your phone ringing like it was Richardson’s revelation that he Former Gov. Barnes was the recipi- used to? Last month we will introduce a bill to require all 159 ent of this year’s award. referred over 17,000 callers to Georgia county courthouses to dis- our attorneys. Are you ready to play the Ten Commandments. Chief C. Tyler Jones is the director of start getting referrals? Call us today! Justice Norman S. Fletcher, who was communications for the State Bar of Georgia. in the audience said, “I don’t under- (800) 733-55342 stand how the Legislature can trump 24-hhour paging: the federal courts.” (888) 669-44345

April 2004 53 GBJ feature

The Lowndes County Courthouse at Valdosta: The Grand Old Courthouses of Georgia By Wilber W. Caldwell

Lowndes County had been cut hapless and frustrated citizens of hen the new from Irwin and Early Counties in Lowndes to do but move the coun- 1825, and the county seat had been ty seat again. A courthouse rails of The established first at Franklinville in described as a “rough frame build- Georgia South- 1828 and later at Lowndesville in ing” was built at the new railroad W 1833. A rough courthouse was town of Valdosta, a village that ern and Florida Railroad, Macon’s erected at Franklinville and proba- boasted a population of about 200 direct route to Central Florida, bly a second at Lowndesville. By in 1860. This crude building was 1837, Troupville was the new coun- replaced by a larger frame struc- crossed the antebellum rails of the ty town, and a frame courthouse ture in 1871, followed in 1875 by a was completed there in 1847. This substantial two-story brick court- old Atlantic and Gulf Railroad at was wild and empty country house with stylish broken based Valdosta in 1889, they set in motion before the railroad arrived, but pediments and bracketed eaves. Troupville prospered apparently When The Georgia Southern and a series of events that culminated in on trade with Florida. Troupville Florida Railroad arrived in 1889, grew, and the town achieved a Valdosta was a city of more than the construction of Frank Milburn’s population of over 500 before 1850. 2,500 residents. 1905 Beaux-Arts Lowndes County In the early 1850’s, it appeared By 1900, Valdosta had doubled its that the rails from Savannah, 1890 population, boasting over 5,500 Courthouse. But Lowndes County’s bound for Thomasville, would at residents, and a movement for a new last pass through Troupville. But courthouse was underway. With the story is not a tale of just one court- alas, when the courthouse burned arrival of The Georgia Southern and house. Six courthouses preceded in 1858 and The Atlantic and Gulf Florida, the city had begun a festive began grading four miles south of period of self-promotion and local Milburn’s. the town, there was little left for the mythmaking that exemplified the

54 Georgia Bar Journal kind of zeal the New ideas finally South’s tempting promises arrived south of could generate in out-of- the Mason Dixon the-way places. Frank line, they were Milburn’s 1905 Lowndes often further dilut- County Courthouse was the ed by obligatory finale to these years of the- doses of Jeffer- atrical self-promotion. The sonian Classicism town had struggled up and and Millsian Greek out of the post-war period, Revivalism. Thus, experiencing a terrible tor- Southern interpre- nado, devastating fires and tations often dis- occasional skirmishes with played regional yellow fever and cholera, in characteristics addition to poverty and the unlike anything usual ongoing battle with found on the Rue those uniquely Southern de Rivoli. For Photo by Wilber W. Caldwell demons, ignorance, intransi- Built in 1905, Frank Milburn, architect. many Southerners, gence and brooding nostal- the elegant gia. But by the turn of the century, Additionally, unlike the previous columns of the central portico Valdosta had known a decade of generation of Southern architects, breaking away from the familiar growth despite the clouds of nation- he seemed comfortable with Beaux- horizontal mass only sang the al depression that darkened the Arts Classicism both architecturally songs of an Old South not forgot- years after 1893. By 1900, the town and as the emerging voice of ten. All of this notwithstanding, was drunk on the new wine of pros- American economic success. Milburn’s Valdosta courthouse is a perity that had been imported on the Although there can be little doubt fitting, and unusually pure, Beaux- rails of The Georgia Southern and that the poetically pure neoclassical Arts monument and a proper sym- Florida Railroad. Along with popu- lines of Milburn’s exceptional 1903 bol for Valdosta’s success. By 1910, lation explosion had come the trap- Wilcox County Courthouse at five railroads met at Valdosta. pings of New South success includ- Abbeville inspired the Lowndes ing brick buildings, electric lights, County Commissioners to engage Excerpted by Wilber W. Caldwell, improved sanitation, a proper fire this accomplished architect, in author of The Courthouse and the department, beautification programs Valdosta, Milburn would create an Depot, The Architecture of Hope and finally a cotton mill in 1899. inspiring Beaux-Arts monument in an Age of Despair, A Narrative Guide to Railroad Expansion and There can be little doubt about that rivaled any other Georgia court its Impact on Public Architecture the message broadcast by Milburn’s building of the era. The paired in Georgia, 1833-1910, (Macon: stunning 1905 Lowndes County columns and the corner pavilions with their low domes sing Parisian Mercer University Press, 2001). Courthouse. Here is a work of archi- Hardback, 624 pages, 300 photos, songs as do the Ionic pilasters and tectural sophistication. Perhaps 33 maps, 3 Appendices, complete the high balustrade. nothing could have better voiced Index. This book is available for But Lowndes County was a long Valdosta’s self-proclaimed coming- $50 from book sellers or for $40 of-age than the selection of Milburn, distance from Paris in 1905. from the Mercer University Press who in 1905 was arguably the Trickles of inspiration flowing into at www.mupress.org or call the South’s most successful architect. the American South from the Ecole Mercer Press at (800) 342-0841 Permanently retained by the presti- des Beaux-Arts arrived via a cir- inside Georgia or (800) 637-2378. gious Southern Railway and design- cuitous route, being first filtered er of over 250 major public struc- through an often insensitively com- tures from Florida to Oklahoma, mercial and shamelessly trendy Milburn was at home with most of American North. What is more, the Picturesque modes. when these modern architectural

April 2004 55 GBJ feature

It’s About Time: An Overview of Part-Time Policies and Practices in Atlanta Law Firms By Lynn M. Adam, Emily Hammond Meazell, and Lisa Vash Herman

About Time: Part-Time Policies and practices for the benefit of law omen lawyers Practices in Atlanta Law Firms, which firms and individual lawyers. is available online at www.gawl.org place enormous Background and www.atlantabar.org.1 value on flexi- For law firms, the study’s results A major impetus for the study W and recommendations invite a re- was a call to action by the commis- ble work schedules. Firms that sup- examination of scheduling options sion on Women in the Profession of the American Bar Association, port such schedules reap benefits to offer in order to stem attrition of desirable attorneys. For attorneys which has published numerous in the form of higher retention, and law students, the study offers reports on the dearth of women guidance about a variety of work leaders in the law. In 2001, the com- increased profitability, and more schedules that are now available as mission urged employers and pro- diverse leadership. In turn, the well as insight from practicing fessional organizations like GAWL attorneys about their experiences and WIP to study women’s legal profession—and, on a broad- with what law firms say about progress in the legal profession.2 working part-time and what law From the commission’s admoni- er level, society—experiences bene- firms do in practice. tion that “what isn’t measured isn’t 3 fits in the form of part-time lawyers This article first describes the done,” this study was born. genesis of It’s About Time and how To produce It’s About Time, who are better situated to devote the study was conducted. We next GAWL and WIP surveyed three present key findings and address categories of respondents in the time to activities that make lawyers specific law firm practices and cul- summer of 2002: (1) Atlanta-area better citizens. tures that undermine part-time law firms with 10 or more attor- arrangements even in law firms neys (“Survey I”); (2) law firm These core conclusions emerged that try to support them. The arti- lawyers with any part-time experi- from a new study conducted by the cle then explores the importance of ence during the three previous Georgia Association for Women part-time schedules to retaining years (“Survey II”); and (3) Lawyers and the Atlanta Bar women lawyers and maintaining Atlanta-area lawyers who had left Association Women in the client relationships. Lastly, after a law firm during the three previ- Profession Committee, with addi- challenging common myths about ous years (“Survey III”). tional funding from the Georgia the profitability of part-time attor- With the assistance of Schapiro Commission on Women. This arti- neys, we offer a summary of best Research Group, GAWL and WIP cle summarizes the full study, It’s

56 Georgia Bar Journal developed a confidential question- ! According to law firm data, women to work part-time due to naire for each category of respon- about three-fourths of part-time family obligations, was] dent.4 The questionnaires defined attorneys are women. changed to allow any lawyer the “part-time” to mean a reduced ! Ninety percent of part-timers option [of going part-time] for work schedule for reduced pay.5 said their schedule affected their family, personal or professional Thirty-seven law firms, represent- decision to stay with their firms, reasons.” —Law-Firm Policy ing more than 7,000 lawyers, making it more desirable to Billable Hours, Advancement & responded to Survey I, including 11 remain at the firm. Benefits. Although most firms did of the top 12 revenue-producing ! Full-time lawyers (adding men not report minimum-hour require- law firms in Atlanta.6 Additionally, and women together) who ments for part-time, the part-time 69 individual attorneys responded recently left a law firm left for attorneys provided data on the to Survey II and 98 responded to better schedules more often than requirements of their particular Survey III, many writing lengthy they left for bigger paychecks. arrangements. The highest percent- and heartfelt comments about their Only 22 percent reported that age of part-time respondents, 24 experiences. The individual respon- they left for “more money” in percent, cited a target of 1200 bill- dents were associates and partners, contrast to 33 percent who left able hours per year. Actual total part-time and full-time, and retired because they “wanted fewer hours reported worked by part-time and active attorneys. About three- hours” and 19 percent who respondents, however, were as high fourths of them were women, while “wanted a different schedule.” as 2250, with billable hours as high 9 one-fourth were men. Law Firm Policies as 1650, and mean billables at 1130. It’s About Time thus presents the One-third of surveyed law firms first comprehensive study of part- and Expectations did not permit part-time attorneys time policies and practices among Most Atlanta law firms reported to advance to partnership. In those Atlanta-area law firms. It also eval- that they permit part-time sched- firms, part-time lawyers (who were uates important ramifications—for ules, placing varying conditions on mostly women) were not consid- individuals, firms, and the profes- eligibility and billable-hour require- ered for partnership—regardless of sion—of the finding that many ments. Only about one-third of their performance and their senior- women, who are the “emerging firms reported having written part- ity. Of responding law firms that majority” in the law, truly value time policies. Most of the remaining reported that their part-time attor- the opportunity to work part-time two-thirds reported that while they neys were eligible for partnership, while continuing to advance their had no written policy, they never- nearly a third stated that it takes legal careers.7 theless allowed attorneys to work longer for part-timers to become Study Results part-time or had done so in the past. partners. Most law firms offered Nearly every firm in this category full benefits to part-time attorneys Key results from the study described its policy using the terms as well as bonuses and annual rais- include the following highlights: “case by case,” “ad hoc,” “individ- es. Several, however, reported that ! Women lawyers now comprise ual,” or “flexible.” part-timers were simply not eligible about one-third of law firm Reasons To Work Part-Time. Of for either bonuses or annual raises. lawyers in Atlanta. At the cur- law firms that provided written Practice Areas. Most law firms rent rate of growth, women will policies or otherwise commented on stated that part-time work was nei- make up 50 percent of Atlanta the issue, “permissible” reasons to ther more nor less suitable for any law firm lawyers within 10 years. go part-time most often included particular practice area. Those that ! A noticeable gender gap in attrition newborn care, the care of a seriously did differentiate noted that part- persisted during the three years in ill relative or personal health issues.8 time schedules were less suitable in the study, from 1999 through 2001. However, at least two law firms did litigation, but more suitable in The average annual attrition rate not restrict part-time arrangements transactional, residential real estate, among women lawyers ranged to any particular group or reason: or trusts and estates practices. from 15 percent to 19 percent, Many emphasized that the individ- “[I]n the last two years [our pol- whereas it ranged from only 11 ual attorney’s flexibility was more icy, which formerly permitted percent to 12 percent for men. important than the practice area.

April 2004 57 Nearly half of the part-time attor- them to develop their part-time are marginalized is the “environ- neys in the study were litigators; arrangements, more than one-third mental static” that accompanies significant numbers practiced labor of part-timers reported that no one some part-time arrangements; that and employment law, intellectual at the firm worked with them. is, the knowledge that some part- property law, and corporate, bank- Moreover, part-timers over- ners refuse to work with or vote to ing, or business law. whelmingly (81 percent) respond- advance part-time associates and Obstacles To Success ed that no one met with them to the sense that some peers disre- evaluate the implementation of spect or resent part-time attorneys. One noticeable result of our their arrangements. The Survey III “Others in my firm view me as research was the incongruity participants who had left a firm less committed to the practice of between firms’ reported policies after working part-time reported law and therefore unavailable and the impressions of the firms’ similar results. These findings cor- to work in certain cases or for lawyers—both full-timers and part- respond with those of a study con- certain clients. While I do have timers.10 This disconnect seems to ducted in Massachusetts, where time limitations, I have always be attributable to several factors, almost 80 percent of attorneys who been and remain committed to including insufficient dissemination worked reduced hours reported getting the work done and of firms’ part-time policies, failure that no one met with them regular- doing the best possible job for to monitor part-time arrangements, ly to discuss their work arrange- the client.” —Part-Time Attorney and cultural attitudes within firms ment and/or work satisfaction.13 (even those attempting to support These reports have led us, like Based on the foregoing data part-time attorneys). authors of similar studies, to recom- from the surveys, we concluded Lack of Publicity. For example, mend careful monitoring of part- that many law firms send mixed even firms with written policies did time schedules to ensure their suc- signals about part-time arrange- little to publicize them; lawyers cess.14 Among the benefits a law ments. Firms make part-time avail- typically learned of the availability firm could achieve from monitoring able, at least in theory, but fail to of a part-time schedule through part-time arrangements is an establish written policies, fail to word-of-mouth or other informal understanding of how the arrange- publicize the availability of part- channels. Insufficient publicity not ments are working culturally. In time schedules, fail to monitor the only gives the appearance that a this study for example, most of the success of their part-time arrange- firm discourages part-time, but participating part-time attorneys ments, and fail to ensure their part- “secret deals” with part-time attor- felt marginalized in some respect in time attorneys receive fair and pro- neys can also cause a backlash of their law firms, with 63 percent portionate treatment in terms of envy among attorneys.11 Further, reporting that “some partners ques- compensation, work assignments appropriate publicity ensures that tion [their] commitment,” and one- and promotion. As a result, part- all attorneys who are interested in a third writing that they are viewed time arrangements remain relative- part-time arrangement—especially as “a partial member” of the firm ly uncommon in law firms. those who are not mothers and may because of their part-time status. Low Usage Rates. Indeed, while be uncertain about firm support— the vast majority of law firms osten- “[After the birth of each of my are informed about a firm’s policy sibly allow attorneys to work part- children,] people in my firm were and thus know what to expect.12 time, relatively few attorneys take watching to see how I would Lack of Monitoring. Another advantage of the option even when handle the increased responsibil- problem revealed by the study was they are dissatisfied and prepared ities and to see whether I would that firms tended to enter into ad to leave their firms. The study lose my commitment to my hoc arrangements for part-time found an average usage rate among career. These perceptions, which schedules proposed by individual Atlanta law firms of 4 percent, are not always articulated to the attorneys, many of whom felt they which held steady in the three years part-time attorney, can be dam- were left alone to make the arrange- studied, from 1999 through 2001. aging.” —Part-Time Attorney ments work. While many part- The legal community thus lags timers stated that partners or prac- Environmental Static. A source behind its business counterparts in tice group leaders had worked with of part-timers’ feelings that they actual usage of part-time schedules.

58 Georgia Bar Journal According to the Bureau of Labor gap between what [part-time] poli- is my general impression that Statistics, approximately 14 percent cies say on paper and what people part-time attorneys are viewed of professionals (e.g., physicians feel free to use,” and “only one quar- as not taking their careers as and engineers) worked part-time in ter of women attorneys believed that seriously as full-time attorneys. 2002, compared to just over 4 per- they could use a flexible work It is my further impression that cent of attorneys nationwide.15 arrangement without jeopardizing part-time arrangements are A usage rate higher than 4 percent their prospects for advancement.”16 more tolerated than embraced and balance between the numbers of These very sentiments are evident in or encouraged.” women and men who work part-time the comments made by Atlanta part- —Departing Full-Time Attorney signal that a law firm’s part-time pol- timers—as well as departing icy is not stigmatized and is working lawyers who opted not to consider Women: The effectively. In this study, firms with part-time at their former firms: Pipeline Leaks fair and supportive written policies “I believe that long-term my “The pipeline leaks, and if we had higher usage rates, and their part- arrangement is hampering my wait for time to correct the prob- time attorneys were far more likely to career.” lem, we will be waiting a very long include large numbers of men. The —Part-Time Attorney time.”17 law firms with the lowest usage rates Attrition. A key finding of the tended to have only women part- “My first part-time arrange- study is that women’s attrition timers, suggesting the arrangements ment . . . had an enormous and rates were noticeably higher than are stigmatized in those firms. negative impact on my career.” men’s during each year, 1999 In Balanced Lives: Changing the —Part-Time Attorney through 2001, in the study. Culture of Legal Practice, the ABA “I am not convinced that there Women’s attrition rates (the per- cautions that law firm culture can really is such a thing as true centage of women who left a firm) suppress usage rates. The ABA cites ‘part-time’ work in a law firm. It ranged from 15 percent to 19 per- numerous studies finding a “huge

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April 2004 59 cent during this period, whereas men’s attrition rates (the percent- age of men who left a firm) ranged from only 11 percent to 12 percent. Like other studies, this study there- fore confirmed that women are sig- nificantly more likely than men to “vote with their feet” rather than work an inhospitable schedule.18 Contrary to a common misper- ception, moreover, the National Association for Law Placement has found that most women do not quit working as attorneys when they leave law firms; they move to more hospitable employers. NALP found that only 3.7 percent of lawyers leaving firms did so to pursue fam- ily or community responsibilities.19 This finding correlates with the results of Survey III in the study, in which 97 percent of the responding lawyers who recently left law firms reported that they still practice law, even though many wanted more flexible work schedules. As the ABA has commented, lawyers “move to more accommodating workplaces. The firms that lose such women, and live with high turnover rates, are paying a price in of women out of law firms and part-time year when it came disrupted client and collegial rela- leave the women who choose to time to make me a partner.” tionships, as well as in recruitment stay with less hope of achieving —Departing Full-Time Attorney and retraining expenses.”20 real power. In Atlanta, as nation- Gender Shift. Women now com- wide, women now comprise less Profitability Myths than 17 percent of law firm part- prise about one-third of law-firm The cost of attrition is a crucial ners.22 Thus even 20 years after lawyers in Atlanta, and at the current but often overlooked factor in eval- women began to account for 40 rate of growth, women will make up uating part-time profitability. Fifty- percent or more of law school stu- 50 percent of Atlanta law-firm eight percent of responding law dents, women still do not lawyers within 10 years, according to firms had not studied the prof- approach those percentages in trends found by this study. itability of part-time attorneys at law firm partnerships.23 Ensuring Moreover, roughly one-third of all. Of those who had studied prof- that part-time attorneys have a women attorneys work part-time at itability and had found part-timers fair opportunity to advance to some point during their legal careers, “not profitable,” fixed overhead 21 partnership is one of the surest compared to only 9 percent of men. costs were most often cited as the ways a law firm can increase the Partnership. Given these cause. Yet a closer look at the sur- ranks of its women partners. trends, part-time policies that are vey responses revealed that firms ineffective or that preclude part- “More than one [member of the were not evaluating the whole pic- nership for part-time attorneys partners’ committee] told me I ture when studying the profitabili- drive a disproportionate number got ‘screwed’ because of [my] ty of part-time arrangements.

60 Georgia Bar Journal Many firms neither prorate over- of partnership-track attorneys, new attorneys—again and head costs nor account for the and the part-time arrangement again.”28 Another often-over- value of retention—and are con- has kept me at my firm and in looked component of client satis- versely including the cost of attri- the legal profession.” faction is the fulfillment of corpo- tion (for recruiting, hiring and —Part-Time Attorney rate clients’ increasingly common training replacement attorneys) in diversity requirements.29 Consistent with these responses, calculations of overhead costs. This Lastly, a firm’s alumni often NALP and other organizations is “flawed accounting” because as become its clients or sources of have found that the availability of a significant Washington D.C. business referrals, and alumni are alternative work schedules is more study notes: much more likely to retain their for- likely than any other factor to mer firms as outside counsel or to “When attrition is included in increase retention rates, and refer business to their former firms overhead, it skews the picture. In improved retention directly if they had a positive experience as some firms, the only way attri- enhances the bottom line.25 In a tion is counted economically is as comprehensive 2000 report, NALP overhead. In that context, the reported that firms offering alterna- high cost of attrition dramatically tive work schedules (including flex- inflates the overhead figure and time, part-time, telecommuting and makes [part-time arrangements] job sharing) experienced a 37.1 per- look costly, despite the fact that a cent aggregate third-year attrition usable part-time policy, by rate—a full 7 percent less than the reducing attrition, would reduce 44.3 percent experienced by those overhead.”24 who did not offer such schedules.26 Indeed, firms in this study that Client Relationships had assessed the costs of attrition Closely related to profitability concluded that part-time arrange- are client relationships. Client satis- ments are profitable: faction was a main concern voiced “[It] is essential to retention and by law firms, some emphasizing cheaper in the long-run to allow the value of attorney retention as a flexible schedule[s]. ” component of client satisfaction —Large Law Firm and others citing potential limita- “Our firm understands the tions on client service as a weakness importance of retaining valued, of part-time arrangements. In prac- long-term employees and the tice, however, part-timers who split cost of hiring and training new their time between clients and other employees.” pursuits are not necessarily less —Small Law Firm available than full-timers who split their time among various clients.27 Part-time attorneys’ responses Looking at the issue from the bore out these conclusions. Ninety perspective of a client, retaining percent of part-time attorney outside counsel educated in their respondents said that the availabil- industry and in tune with their ity of a part-time schedule impact- business sensitivities—even on a ed their decision to stay at their part-time basis—is preferable to firms. Furthermore, 71 percent of losing this institutional knowledge part-timers stated that they were when an attorney leaves. “Clients not considering leaving their firms. invest a substantial amount of time “My part-time arrangement and energy in educating their out- saved my legal career. I was not side counsel . . . High attrition rates happy with the hours required frustrate clients who have to train

April 2004 61 For firms, the single most important finding leave of absence from the practice of law. Moreover, both the ABA of the GAWL and WIP Study is that women and the Massachusetts Study dis- courage arbitrary durational limi- will continue to walk away from law firms (as tations—according to the ABA, part-time arrangements should profitable mid-level and senior associates) at instead be periodically reviewed to determine their feasibility and high attrition rates until they find a work adjusted if necessary.35 A written policy should affirm schedule that makes sense for their lives. that part-time compensation, although it may be calculated under members of the firm.30 In this advancement for part-timers are any of several methods, is propor- study, 46 percent of lawyers who proportional to those of their tionate to salaries for full-time left their firms for fewer hours full-time counterparts. cohorts. Moreover, to encourage and/or a different schedule became ! Encourage a firm culture that sup- and reward business development in-house counsel. Law firms need ports flexible work schedules as a by part-time attorneys, the firm to grasp that significant numbers of legitimate choice for any attorney. should consider stating that the cus- their lawyers end up as potential Written Policies. Firms that tomary compensation for origina- clients and referral sources and will adhere to written policies help tion is paid to part-time attorneys. not hire or refer business to a firm remove the stigma attached to that has mistreated them or does working reduced hours, ensure “I like my arrangement general- not reflect their values.31 equitable treatment among part- ly, but wish I were given more time attorneys, and ensure propor- Best Practices incentive to bring in business. tionate treatment between part- There is no mechanism for that in As the highlights above suggest, time attorneys and their full-time my current arrangement, and I this study revealed that there are peers. A written policy should pro- have encountered resistance when numerous benefits to firms that vide general guidelines on eligibili- I have raised the issue.” encourage and support equitable ty and duration, types of permissi- —Part-Time Attorney part-time schedules, among them: ble schedules, compensation, work As discussed above, making part- ! Improved retention; assignments, advancement, case nership tracks available to part-time ! Greater profitability; and origination, non-billable work, and attorneys is essential to increasing ! More diversity in firm leader- monitoring. It should expressly the number of women partners and ship positions.32 state that reduced schedules are to making part-time arrangements Institutional Commitment. available to men and women for an attractive alternative to leaving Firms should demonstrate institu- any reason—including, but not the law firm. Law firms should tional commitment to part-time limited to, parenthood, pro bono therefore affirmatively state in their arrangements through mentoring, work, medical needs, bar or politi- policies when they will consider monitoring, fair treatment, flexibil- cal activities, or personal needs. part-time attorneys for partnership ity, and thorough written policies The ABA recommends that to and the criteria on which partner- that reflect these values.33 Based on further recruitment and retention, ship decisions are based, which the results of the study, and recom- firms should require only mini- should be the same factors consid- mendations of similar studies, we mum seniority, such as a year, to ered for full-time attorneys. suggest several practices for firms determine satisfactory perform- Monitoring. Law firms should wishing to achieve the benefits of ance, and consider the hiring of also consider hiring a coordinator effective part-time policies: experienced attorneys on a part- or designating a senior partner to ! Develop and communicate writ- time basis with no minimum full- serve as a monitor and mentor to ten policies that serve as guide- time requirement.34 In particular, part-time attorneys. This person lines; avoid ad hoc arrangements. the latter option would facilitate should be someone who makes it a ! Ensure that compensation, reentry into the workforce of moth- point to keep track of the schedules, bonuses, and opportunities for ers who have taken a temporary

62 Georgia Bar Journal pay, and work assignments of all of fairness, it’s about long-range prof- Endnotes the part-time attorneys to ensure it making, it’s about the integrity of 1. See generally Lisa Vash ongoing fairness and proportionali- the legal profession, and it’s about Herman, Lynn M. Adam & ty. The appointment of such a coor- our devotion to our families and Emily Hammond Meazell, It’s dinator would ensure a firm’s inter- communities. About Time: Part-Time Policies and Practices in Atlanta Law ests in retention are served and Isn’t it About Time? Firms (2004), available at would give a part-timer an outlet to http://gawl.org and discuss how the arrangement is Lynn M. Adam serves http://atlantabar.org [here- working or might be improved. as an Assistant U.S. inafter It’s About Time]. 2. Deborah L. Rhode, for ABA Flexibility. Finally, law firms and Attorney in the Public Commission on Women in the individual attorneys participating Corruption and Gov- Profession, The Unfinished in the study frequently cited flexi- ernment Fraud Section Agenda: Women and the Legal bility as a component of success. For of the U.S. Attorney’s Office in Profession, at 10 (2001), available at http://www.abanet.org- example, one small firm wrote, Atlanta. She graduated from /women/unfinishedagenda.ht “Our firm has found that flexibility George Washington University ml [hereinafter ABA and adaptability regarding both (B.A. 1988) and served on active Unfinished Agenda]. 3. Id. at 33. workload and schedules are the key duty in the United States Navy for 4. Many bar organizations in to successful part-time situations.” four years before earning a law other states have conducted Recognizing the value of flexibility, degree from George Washington similar studies. In particular, the Massachusetts Study, the ABA, University (J.D., with high honors, this study is modeled on one conducted by the Women’s Bar and the PAR Study all recommend 1994). She may be reached at Association of Massachusetts. allowing as much individualization [email protected]. See generally Women’s Bar as possible in constructing a part- Association of Massachusetts, time arrangement—even within Emily Hammond More Than Part-Time: The Effect of Reduced-Hours Arrangements 36 written policies. Meazell serves as a on the Retention, Recruitment, law clerk to the and Success of Women Attorneys Conclusion Honorable Richard W. in Law Firms (2000), available at http://www.womensbar.org/ For firms, the single most impor- Story at the U.S. WBA/partTimeReport.htm tant finding of the GAWL and WIP District Court for the Northern [hereinafter Massachusetts Study is that women will continue District of Georgia. She graduated Study]. to walk away from law firms (as from Virginia Polytechnic Institute 5. Throughout this article, the authors use the terms “part- & State University (B.S., cum profitable mid-level and senior time” and “reduced-hours” associates) at high attrition rates laude, 1996) and practiced civil interchangeably. The study did until they find a work schedule that engineering prior to earning a law not assess flex-time or telecom- makes sense for their lives. degree from the University of muting practices in the Atlanta legal community. Relatedly, the survey responses Georgia (J.D., summa cum laude, 6. See Daily Dozen, Fulton County also debunked a common myth 2002). She may be reached at emi- Daily Report, June 24, 2002. that part-time schedules are [email protected]. 7. Press Release, Catalyst, Law Women Anticipate Leaving unprofitable. It’s About Time reveals Their Employer Three Years that although law firms are off to a Lisa Vash Herman Earlier Than Men (Jan. 30, good start in promoting part-time serves as Information 2001) (quoting Martha W. arrangements, there remain signifi- Counsel in the Atlanta Barnett, past President of the office of Alston & Bird American Bar Association), cant areas for improvement. available at http://www.cata- The bottom line is that flexible LLP. She graduated lystwomen.org/press_room/pr schedules and paths to partnership from Duke University (A.B. 1987) ess_releases/women_in_law.ht are crucial to increasing the num- and earned a law degree from m. Catalyst is a nonprofit research and advisory organi- Tulane Law School (J.D., magna ber of women leaders in law firms. zation founded more than 40 The opportunity to work and cum laude, 1992). She may be years ago to study and pro- advance to partnership on a reached at [email protected]. mote women’s advancement in business. reduced-hours schedule is about

April 2004 63 8. One firm unwittingly admitted Persons at work in nonagricultur- Inc., Responding to the Diversity a possible Title VII violation al industries by class of worker Challenge, available at when it reported that it permits and usual full- or part-time status, http://careers.findlaw.com/di only women lawyers to work available at http://- versity/altmanweil/diversity_c part-time. www.bls.gov/cps/cpsaat21.pd hallenge.html. 9. One complaint of part-timers is f (2002). 30. PAR Study, supra note 9, at 11. the phenomenon of schedule 16. ABA Balanced Lives, supra note 31. Id. creep whereby projects are 9, at 16. 32. An additional benefit is that assigned and cannot be com- 17. ABA Unfinished Agenda, supra part-time attorneys have the pleted in the part-time attor- note 2, at 14. option of limiting their work ney’s allotted schedule, so that 18. See, e.g., Press Release, Catalyst, schedules in an era of ever- the part-time attorney is then Law Women Anticipate Leaving escalating billable-hour forced to work extra time. See, Their Employer Three Years requirements. On average, e.g., Deborah L. Rhode, for Earlier Than Men, (Jan. 30, 2001) part-time respondents in this American Bar Association (“Women are less satisfied with study reported that they work Commission on Women in the advancement opportunities about 1400 hours annually. Profession, Balanced Lives: than men.”). Interestingly, 1400 hours of Changing the Culture of Legal 19. Paula A. Patton, for NALP, work was considered a full- Practice, at 35 (2001), available at Beyond the Bidding Wars: A time schedule in the past—the http://www.abanet.org/wome Survey of Associate Attrition, American Bar Association n/balancedlives.html [here- Departure Destinations, and noted in its 1962 handbook inafter ABA Balanced Lives] Workplace Incentives, at 31 that, given a lawyer’s civic, (describing allocation of work); (2000) [hereinafter Beyond the administrative, and other non- Joan C. Williams & Cynthia Bidding Wars]. billable matters, there were Thomas Calvert, for The Project 20. ABA Balanced Lives, supra note only about 1300 billable hours for Attorney Retention, 9, at 20-21. in a year. See Massachusetts Balanced Hours: Part-Time 21. See Catalyst, Women in Law: Study, supra note 4, at 13 (citing Policies for Washington Law Making the Case at 19 (2001). American Bar Association, Firms, at 18 (2d ed. 2001), avail- 22. The NALP 2003-2004 National Lawyers Handbook at 287 able at http://www.pardc.- Directory of Legal Employers (1962)). org/final_report.htm [here- includes data on 34 Atlanta law 33. For a model part-time policy, inafter PAR Study] (describing firms. See NALP, Women and see It’s About Time, supra note 1, schedule creep); Massachusetts Attorneys of Color at Law Firms— at 37-39. Study, supra note 4, at 28-29 2003, available at 34. ABA Balanced Lives, supra note (describing failure to honor http://www.nalpdirectory.com 9, at 34. schedules). /nalpresearch/mw03sum.htm. 35. Id. at 37. 10. In the full report, this discon- 23. NALP reports that 2.1 percent 36. PAR Study, supra note 9, at 28; nect is particularly highlighted of Atlanta partners worked ABA Balanced Lives, supra note in three case studies that com- part-time in 2003. See Press 9, at 34-35; Massachusetts pare and contrast the responses Release, NALP, Availability and Study, supra note 4, at 48. of three unidentified firms and Use of Part-Time Provisions in their attorneys. See It’s About Law Firms—2003, available at Time, supra note 1, at 40-47. http://www.nalp.org/nalpre- Earn up to 6 CLE credits for 11. PAR Study, supra note 9, at 27 search/pt03summ.htm (2003). authoring legal articles and hav- (“The ‘secret deal’ approach to 24. PAR Study, supra note 9, at 42. ing them published. balanced hours often creates 25. Beyond the Bidding Wars, Submit articles to: resentment among those who supra note 19, at 83. Rebecca A. Hoelting are not offered the deal. Even 26. Id. Georgia Bar Journal attorneys who do not have 27. See PAR Study, supra note 9, at 104 Marietta St. NW, Suite 100 demands on their time from 45 (reasoning that even stan- Atlanta, GA 30303 sources outside the office feel dard-hours attorneys are not resentful if they believe they always available to a client Contact [email protected] cannot reduce their hours and because they divide their time for more information must ‘pick up the slack’ caused among several clients). or visit the Bar’s Web site, by attorneys who are working 28. Id. at 11. www.gabar.org/gbjsub.asp. reduced hours.”); Massachu- 29. See, e.g., Jeremy Feiler, Diversity setts Study, supra note 4, at 43. Gets Closer Scrutiny, Corporate 12. PAR Study, supra note 9, at 27. Clients Keep the Pressure on 13. Massachusetts Study, supra Outside Lawyers, PHILA. BUS. J., note 4, at 18. May 20, 2002, available at 14. See id. at 53; ABA Balanced http://www.bizjournals.com/ Lives, supra note 9, at 45. philadelphia/stories/2002- 15. See U.S. Department of Labor, /05/20/story5.html; Lisa Bureau of Labor Statistics, Walker Johnson, Altman Weil,

64 Georgia Bar Journal 2003 "And Justice for All" State Bar Campaign for the Georgia Legal Services Program

e salute our 2,867 friends who contributed $344,879! Since 1985, W the campaign has raised awareness and a sense of responsibility among individual lawyers and law firms to support critical legal aid for low-income Georgians. The following donors contributed $125 or more to the campaign between April 1, 2003 and February 13, 2004.

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DeDeyn Leigh H. Martin Douglas G. Andrews Robert A. Burroughs David Dekle Elizabeth W. & Bemon G. McBride III Stephen C. Andrews Howard S. Bush J. Christopher Desmond Celeste McCollough Palmer H. Ansley Jr. Nora Bushfield Foy R. Devine Samuel C. McCutchen Elizabeth J. Appley Kevin Todd Butler Mary Irene Dickerson James T. McDonald Jr. Arthur S. Archibald William A. Byars Neal W. Dickert Kenneth P. McDuffie Margaret L. Argent Daniel J. Cahill Jr. Linda K. DiSantis Christopher J. McFadden Alvin W. Arnold Susan A. Cahoon Anthony V. Ditaranto Willis L. Miller III W. David Arnold Louis T. Cain Jr. Jing Dong Mitchell & Shapiro, LLP Robert W. Ashmore Elizabeth C. Calhoun Marshall O. Donley III John H. Mobley II Hulett H. & Cathy W. Askew Jefferson C. Callier Lawrence M. Donovan Jr. David R. Montgomery J. Steve Astin S. Marcus Calloway A. Blair Dorminey George E. Mundy Tamara M. Ayres Campano & Sperling, LLC David N. Dorough Jr. The Honorable Margaret H. Murphy Richard J. Azar Samuel A. Cann Bryan F. Dorsey Lesly G. Murray Peter G. Babcock Jack M. Carey Sharon E. Dougherty Gretchen Nagy Judith F. Bagby The Honorable George H. Carley Roxanne Douglas Mary Margaret Oliver Nadine D. Bailey John D. Cartledge The Honorable Orion L. Douglass A. Summey Orr III Charles M. Baird Peter R. Cates Raymond J. Doumar Suzanne R. Pablo H. Burton Baker Bobby C. Caudell Derrell Dowdell James L. Pannell Irene E. Baker Raymond G. Chadwick Lester Z. Dozier Jr. Charles J. Driebe Suzanne K. Hashimi Wilbur B. King Jerald K. Meaders Steven Dubner John R. Hawkins Jr. Paul S. & Lucy G. Kish Meadows & Lewis, PC James B. Duncan III W. Ashley Hawkins Deborah S. Kitay W. Edward Meeks Jr. James M. Dunn Franklin D. Hayes Lawrence P. Klamon C. Robert Melton Hylton B. Dupree Jr. Nathan A. Hayes Wyckliffe A. Knox Jr. Patricia C. Mescher Stanley R. Durden Richard Hays Lawrence A. KohnVan John Kottis Carol P. Michel Charles Durrance Daniel Haywood Steffen T. Kraetzschmar Middle Georgia Center for Willis A. Duvall William C. Head Frank J. Kralicek Independent Living, Inc. Jerry B. Dye Helms & Helms, PC Michael Kulla Mark M. Middleton Myles E. Eastwood Denise F. Hemmann Paul M. Kurtz Ellen R. Milholland Gerald M. Edenfield Sharon B. Hermann Stuart A. Kurtz Bruce R. Millar Edenfield, Cox, Bruce & Classens, PC Paul D. Hermann Jean M. Kutner A. Montague Miller Herbert O. Edwards Catherine C. Henson Sarah B. LaBadie Dora A. Miller Michael J. Egan III Kenneth M. Henson Jr. Steven J. Labovitz Martha A. Miller William P. Eiselstein David A. Herrigel Allen L. Lacey Jr. Steven M. Mills Gregory S. Ellington Theodore M. Hester Patrick L. & Charlotte L. Lail Patrick N. Millsaps M. Jerome Elmore G. Lemuel Hewes Kipler S. Lamar Kenneth L. Millwood Michael V. Elsberry Jonathan Hewett Benjamin A. Land Currie M. Mingledorff II Jodi Laura `Ene Emmert Sandra D. Hicks Frederick P. Landers Jr. John T. Minor III The Honorable Philip F. Etheridge Zoe M. Hicks Benjamin Landey Harold L. Minsk Billy Lee Evans Mitzi L. Hill Thomas P. Lauth R. Carlisle Minter Stephanie A. Everett The Honorable Sharon N. Hill Nancy F. Lawler John L. Mixon III Jane E. Fahey Daniel F. Hinkel Carroll B. Leavell Michael L. Monahan Sean Carroll & Susan Wallis Fahey David T. Hobby Chung H. Lee Pamela G. Montgomery Leonard Farkas William E. Hoffmann Jr. Jerome D. Lee Francis X. Moore Emma B. Farmer John V. Hogan Lansing B. Lee Jr. James H. Morawetz Farrar & Hennesy Laura D. Hogue Sai H. Lee Christine M. Morgan R. Jeffrey Field Philip E. Holladay Jr. Leiden & Leiden David E. Morgan III The Honorable Duross Fitzpatrick Gwenn D. Holland Robert N. & Nancy B. Leitch Robert T. Morgan Peter Flanagan William P. Holley III Charles T. Lester Jr. Francis L. Morris Jr. John H. Fleming David S. Hollingsworth Jay J. Levin Ricky W. Morris Fleming, Jackson, Ingram & Floyd, PC Larry Hollington Ralph B. Levy James E. Moye Richard D. Flexner Stephen N. Hollomon The Honorable Harris Lewis Robert E. Mozley Ronald Fontenot Marne A. Holloway J. Curtis Lewis III Gerald S. Mullis Robert D. Fortson James E. Honkisz Peng Li Roy S. Mullman Douglas N. Fox Catherine A. Hora Christopher Liken Aasia Mustakeem Brooks S. Franklin Stanley C. House Shih-Chieh Lin Joseph R. Neal Jr. James B. Franklin Harry C. Howard James J. Long Elizabeth E. Neely Dorothy B. Franzoni Larry C. Howell Sarajane N. Love Joseph B. Neighbors III Norman C. Frost George M. Hubbard Calvin D. Lowery Terry L. Nevel Gregory L. Fullerton H. Martin Huddleston Charles W. Lykins Joseph D. Newman Christopher P. Galanek David L. Hudgins Emory S. Mabry III Alan H. Nichols Robert W. Galloway Huggins & Allen, PC Daniel I. MacIntyre, IV John P. Nixon J. Michael Garner The Honorable Willis B. Hunt Jr. Malcolm Mackenzie III Katherine Nofi Evelyn D. Gay Forrest W. Hunter Timothy J. MacMillan Sam Nunn Bruce H. Gaynes Charles D. Hurt Jr. Charles T. Magarahan Judith A. O'Brien Georgia Title Associates, Inc. Ronald S. Iddins Samuel F. Maguire Jr. Joseph M. O'Connor Kevin B. Getzendanner Jennifer Ide C. M. Maloney Patrick T. O'Connor Kay A. Giese R. William Ide III W. Michael Maloof Victoria A. O'Connor Columbus Gilmore Robert D. Ingram Rachel Allison Ma'Luf Patricia O'Kelley The Honorable Martha K. Glaze Barry G. Irwin Edwin Marger Michael J. O'Leary Richard G. Goerss Captain Carlton L. Jackson Martha M. Marion Mark D. Oldenburg The Honorable John J. Goger Cathy L. Jackson John R. Martin W. Fred Orr II Debra G. Gomez Jackson & Schiavone Laree K. Martin Christopher J. Osteen Craig R. Goodman John E. James Philip J. Marzetti James N. Osteen Jr. James E. Goodman Dallas P. Jankowski Johnny W. Mason Jr. Paul Owens Walter J. Gordon Edward Stokes Johnson Jr. Jackson R. Massey W. Marion Page John L. Gornall Jr. J. James Johnson Samuel M. Matchett Christina S. Pak Joseph Gottlieb Leroy R. Johnson James B. Matthews III Robert I. Paller Shelia M. Govan Ugbesia Howard H. Johnston Matthews & Steel James W. Paris Kevin E. Grady James V. Johnstone Paul B. Mazur A. Sidney & Joyce D. Parker Felix P. Graham Jr. Theodore C. Jonas Catherine R. McClellan William H. Parkman Michael H. Graham Andrew W. Jones Dan E. McConaughey William R. Patterson Jr Mark P. Grant Frank C. Jones M. Faye McCord Kathleen B. Pattillo Thomas S. Gray Jr. Roger S. Joyner Sari A. McCorkle Timothy J. Peaden Gary G. Grindler John R. Justice Bryan T. McCully Colonel Jon P. Pensyl The Honorable Adele L. Grubbs Kenneth S. Kaplan Julian B. McDonnell Jr. The Honorable Charles D. Peppers Sr. Alisa J. Haber Melinda M. Katz Cynthia L. McDowell Hope M. Pereira John R. & Judy A. Haeger Robert N. Katz Kenneth P. McDuffie Christian H. Perry Timothy J. Haeussler Denise Kaufman Benjamin F. McElreath Jr. Oscar N. Persons Stephen H. Hagler Gary M. Kazin Kathleen B. McEvoy Harry W. Pettigrew Floyd C. Hale Sarah K. Keech Max R. McGlamry The Honorable Guy D. Pfeiffer J. Ellsworth Hall III Charles Kelso Barry B. McGough Geraldine C. Phillips William M. Hames Paul B. Kemeness Christopher A. McGraw Brian D. Pierce Wilbur G. Hamlin Jr. Gaylen D. Kemp Joseph T. McGraw Loretta L. Pinkston Timothy Harden III Martin Kendall Julie Fegley McIntyre Melanie M. Platt Hilary Harp Kenneth A. Khoury Frank M. McKenney A. Gregory Poole Ernest V. Harris Robbman S. Kiker McKenney, Jordan & Carey Phillip M. Pope Richard J. Harris Kilpatrick & Folk William T. McKenzie Sandra J. Popson Stephen P. Harrison Chevene B. King Jr. Daniel W. McLeod Carmen V. Porreca James W. Harry III F. Carlton King Jr. Teri T. McMahon William C. Pound The Honorable Marvin B. Hartley Jr. Martin Luther King Jr., Susan E. McNally Kristie Prinz Andrew W. Hartman Observance Day Association, Inc Thomas J. McNamara Glyndon C. Pruitt Elizabeth F. Harwell Maurice L. King Jr. Thomas T. McNeely Charles N. Pursley Mercer H. Harz W. Thomas King Thomas R. McNeill Mary F. Radford Timothy C. Raffa Solomon & Associates, PC Robert P. Wildau BRINGING JUSTICE HOME William C. Randall Robert M. Souther Robert J. Wilder Macon Special Event Marie T. Ransley John I. Spangler III Frank B. Wilensky GOLD SPONSORS Warren E. Ratchford Huey W. Spearman Paul C. Wilgus Adams, Jordan & Treadwell, P.C. Carl V. Rauschenberg Jr. Robert E. Spears Jr. Donald E. Wilkes Jr. Mr. Emmett L. Goodman Jr. Judith A. Rausher Robert W. Spears Ronald F. Williams Congressman Jim Marshall Bonzo C. Reddick John C. Spinrad The Honorable Julian B. Willingham & Ms. Camille Hope Joan S. Redmond John D. Steel James O. Wilson Jr. Sell & Melton, L.L.P. William D. Reeder Susan Steger James T. Wilson Jr. Smith, Hawkins, Hollingsworth Tera L. Reese Beisbier Charles W. Stephens Jerry Wilson & Reeves, L.L.P. John D. Reeves Leigh E. Stevens Patricia A. Wilson Ms. Nancy Terrill & Mr. Camp Bacon Linda H. Register David J. Stewart John W. Winborne III Westmoreland, Patterson, Moseley Albert P. Reichert Jr. Tammy M. Stokes Walter H. Wingfield & Hinson, L.L.P. Steven M. Reilly Stone & Chapman, PC Mary L. Winship John R. Reinhardt J. Lindsay Stradley Jr. William T. Wood III SILVER SPONSORS Nancy F. Reynolds C.H. Stripling Robin L. Wooldridge Harris & James Robert L. Rhodes Jr. Alexander T. Stubbs Carl W. Wright Patti & David Richards Jonathan E. Sureck W. Scott Wright BRONZE SPONSORS W. Gene Richardson Lori M. Surmay C. Robin Wyatt Knight & Fisher Joycia C. Ricks Lt. Colonel Francine I. Swan Gerald V. Yancey Mr. Malcolm G. Lindley Robert E. Ridgway Jr. Jeffrey J. Swart The Honorable James E. Yates III Ms. Ann Elizabeth Parman Robert E. Ridgway III Kathryn A. Swenson Edward R. Zacker Eleanor & Clarence Ridley Treadwell Syfan The Honorable Gordon R. Zeese 2003 CAMPAIGN COMMITTEE Jon M. Ripans Robert E. Talley Kathryn M. Zickert William D. Barwick Richard L. Robbins Allan J. Tanenbaum Zimring & Smith, LLC President, State Bar of Georgia Lisa R. Roberts Elizabeth V. Tanis Marvin H. Zion David A. Roby Jr. Caroline J. Tanner Jerome A. Zivan James B. Durham Donald W. Rogers The Honorable Susan P. Tate Frances A. Zwenig Immediate Past President, Gail E. Ronan Cherie O. Taylor State Bar of Georgia Teresa W. Roseborough John E. Taylor Jack Rosenberg John S. Taylor IN-KIND GIFTS James Walton Boswell III Robert Rosenblum Karl M. Terrell Donna G. Barwick Jeffrey O. Bramlett George C. Rosenzweig Guyton O. Terry III Kathryn N. Hedden Lisa Chang John H. Ross Laura G. Thatcher Janet Hill Emmett L. Goodman Jr. Jewett & Alan F. Rothschild Jr. Diana M. Thibodaux Pamola Powell Thomas H. Hinson II Alan F. Rothschild Larry D. Thompson State Bar Pro Bono Project R. William Ide III William L. Rothschild Three Rivers Title Company, Inc. Weissman, Nowack, Curry & Wilco, PC Donald James Jordan E. Michael Ruberti Randolph W. Thrower Richard P. Kessler Jr. Charles L. Ruffin C.B. Thurmond III MEMORIAL GIFTS Walter E. Leggett Jr. Michael C. Russ Cornelius B. Thurmond Jr. In memory of the Honorable Charles T. Lester Jr. R. Bruce Russell Sr. Siobhan M. Tinsley H. Sol Clark Mary Ann B. Oakley Mark W. Sanders Jr. Wade H. Tomlinson III Elizabeth P. Brannen Ann Elizabeth Parman Emily S. Sanford Jeffrey J. Toney The Honorable Harris Lewis Tina Shadix Roddenbery Stephen J. Sasine Michael C. Towers Cubbedge Snow Jr. Nancy F. Terrill Jay M. Sawilowsky Christopher A. Townley Elizabeth Flournoy Thompson Jacquelyn H. Saylor Robert Travis In memory of Michael J. Gannam J. Henry Walker, IV Thomas E. Scanlon Glee A. Triplett Cubbedge Snow Jr. Pamela Y. White-Colbert David N. Schaeffer Michael H. Trotter Kenneth H. Schatten The Honorable Richard D. Tunkle In memory of Deal Gay Steven E. Scheer David L. Turner Don & Evelyn Gay Valerie J. Schieber William A. Turner Jr. Jason R. Schultz Michael W. Tyler In memory of Albert Mazo Robert C. Schwartz United States Title Services, LLC The Honorable Harris Lewis Scott A. Schweber Woodrow W. Vaughan Jr. Charity Scott Charles D. Vaughn In memory of Niels A. Holmen Claude F. Scott Jr. J. Barrington Vaught William K. Broker The Honorable William J. Self II Rex R. Veal Jenny K. Mittelman Linda R. Sessler Michael Wakefield & William C. Thompson Linda S. Sheffield Joseph L. Waldrep Michael M. Sheffield Homer J. Walker III In memory of Kyle Jones Karen W. Shelton The Honorable Ronit Z. Walker The Honorable John A. Allen We are grateful to all who contributed Thomas C. Shelton Sr. Douglas W. Wallace The Honorable Roxann Gray Daniel The Honorable Marvin H. Shoob Arthur D. Warady The Honorable Kenneth B. Followill and made this campaign such a tremen- Arnold B. Sidman W.M. Byrd Warlick The Honorable Robert G. Johnston John E. Simpson C. Wilbur Warner Jr. The Honorable Frank J. Jordan Jr. dous success. GLSP is a non-profit law Joyce F. Sims Theron D. Warren III The Honorable Douglas C. Pullen firm recognized as a 501 (c)(3) organiza- Alfred L. Singer Mark D. Wasserman The Honorable William J. Smith Sr. George N. Skene Wilson M. Watkins tion by the IRS. To support the 2004 Charles E. Sloane R. Leslie Waycaster Jr. In memory of Jane Trosten “And Justice for All” State Bar Campaign Alex W. Smith Joseph D. Weathers Catherine M. & D. Campbell Bowman Jr. Archer D. Smith III Jack M. Webb for GLSP, mail your check to: George B. Smith Craig A. Webster In memory of the Honorable Stephen Toth George B. Smith III David A. Webster The Honorable Dorothy Toth Beasley Jane S. Smith Steven R. Webster State Bar of Georgia Campaign for Jeffrey M. Smith The Honorable Carolyn S. Weeks SPECIAL PROJECT GIFTS John H. Smith Robert G. Wellon The Honorable Frank J. Jordan Jr. Georgia Legal Services Kendric E. Smith Anne W. Westbrook King & Spalding, LLP Macklyn A. Smith The Honorable Duncan D. Wheale Lawyers Foundation of Georgia, Inc. P.O. Box 78855 Philip C. Smith Benjamin T. White McKenna, Long & Aldridge, LLP Atlanta, Georgia 30357-2855. Rex D. Smith John A. White Middle Judicial Circuit Bar Association Richard A. Smith Larry J. White Nelson, Mullins, Riley & Scarborough, LLP Your generosity is appreciated! Robert B. Smith Larry J. White The Honorable J. Carlisle Overstreet Verna L. Smith Richard A. White The Honorable Thomas W. Thrash The Honorable William E. Smith Pamela Y. White Colbert Amy R. Snell Kathryn S. Whitlock for this honor, for which more than 24,000 lawyers KUDOS across the state were polled to determine the best Brian C. Meadows, an associate in Needle & in their field.

Bar Rosenberg’s chemical patent practice, was named chair-elect of the American Chemical Society’s McGuireWoods LLP was ranked by The Bond Division of Chemistry and the Law for 2004. He Buyer as one of the Top Ten Bond Counsel firms in the Southeast for 2003. McGuireWoods has one

& will serve on the division’s board for three years, as chair of the Division of Chemistry and the Law of the largest public finance practices in the in 2005 and past chair in 2006. In addition to serv- region, defined by The Bond Buyer to include ing on the ACS board, Meadows is the new pro- Alabama, Florida, Georgia, Kentucky, Louisiana, gram chair; he will organize educational programs Mississippi, North Carolina, South Carolina, and symposiums for the division at the ACS’s two Tennessee, Virginia and West Virginia. annual meetings. James M. Collier, former Powell, Goldstein, Frazer & Murphy LLP president of the Georgia

Bench announced that partner Aasia Mustakeem was Bar Foundation and a 14- appointed to the Fulton County Board of Zoning year member of the Appeals for a three-year term. Mustakeem is a Board of Governors, member of the firm’s financial products and real accepted the first annual estate department and practices in the area of com- James M. Collier Award mercial real estate. She is also a member of the from the Georgia Bar Executive Committee of the Board of Governors of Foundation. The award the State Bar of Georgia and is a past chairperson of was presented to him for the Real Property Law section of the State Bar of his extraordinary service to the Bar Foundation Georgia. and to the lawyers and citizens of Georgia.

Gary S. Freed was named one of Georgia’s Legal Jesse G. Bowles III of Bowles and Bowles in Elite Business Litigators by Georgia Trend maga- Cuthbert, Ralph Knowles Jr. of Doffermyre, zine in December 2003. Freed is a member of the Shields, Canfield, Knowles & Devine in Atlanta, Atlanta Bar Association, the Georgia Trial and Marc T. Treadwell of Adams, Jordan & Lawyers Association, the Federal Bar Association, Treadwell, P.C., in Macon were inducted into the the American Bar Association, and the Lawyers Fellowship of the American College of Trial Club of Atlanta and is a fellow in the Lawyers Lawyers at its annual meeting in Montreal. The Foundation of Georgia. He served as president of college strives to improve the standards of trial the DeKalb Bar Association from 1998-99. practice, the administration of justice and ethics, and civility and collegiality of the trial profession. Elizabeth Ann “Betty” Morgan, a partner and co- Lawyers must have a minimum of 15 years of trial head of the trademark group at Hunton & experience before they can be considered for fel- Williams LLP, was appointed vice chair of the lowship, and membership in the college cannot Trademark Law Committee for the Intellectual exceed one percent of the total lawyer population Property Owners Association. IPO is a trade asso- of any state. ciation of owners of patents, trademarks, copy- rights and trade secrets. It advocates effective pro- ON THE MOVE tection for all types of intellectual property, and communicates its positions to Congress, the U.S. In Albany Copyright Office, the U.S. Patent and Trademark Langley & Lee, LLC, announced that Joseph P. Office and other agencies. Morgan focuses her Durham Jr. has become an associate in the firm. trial practice on the prosecution, enforcement and Durham obtained his undergraduate degree from defense of trademark rights, trade secrets, copy- Valdosta State University in 2000, graduating rights, covenants-not-to-compete and patents in magna cum laude. He graduated from Mercer litigation. She currently teaches trial techniques at University’s Walter F. George School of Law in Emory University School of Law. May 2003. Langley & Lee, LLC, is located at 323 Pine Ave., Suite 300, Albany, GA 31701; (229) 431- Six attorneys at Needle & Rosenberg were high- 3036; Fax (229) 431-2249. lighted as some of Georgia’s “Super Lawyers” in Atlanta Magazine in March. Bill Needle, Sumner Charles K. “Chuck” Wainright II was named a Rosenberg, Larry Nodine, David Perryman, partner with the law firm of Watson, Spence, Lowe Gwen Spratt and Jackie Hutter were all selected and Chambless, LLP, and F. Faison Middleton IV

April 2004 69 also joined the firm as a partner. Wainright main- tains a general civil litigation and trial practice with an emphasis in business/corporate litigation and medical malpractice defense. Middleton will con-

Bar tinue his civil litigation and trial practice. The firm is located at 320 Residence Ave., Albany, GA 31701; Hodges Medlin Zidar Tempel (229) 436-1545; Fax (229) 436-6358.

& Needle & Rosenberg promoted three associates, In Atlanta Robert A. Hodges, Ph.D.; Jennifer Pearson Stites & Harbison announced that Medlin and Bernard L. Zidar and one of counsel, Michael M. Sullivan has joined the Michael J. Tempel, to officers of the firm. Hodges’ firm’s Atlanta office as counsel. He practice focuses on biotechnological, medical and will be a member of the firm’s busi- chemical inventions. Pearson Medlin, working in ness service group. Before joining the firm’s electronics and software technology Stites & Harbison, Sullivan was gener- patent practice, handles all aspects of domestic al counsel and senior vice president at Sanmina-SCI and foreign patent prosecution. Zidar is part of the Bench Corporation in Huntsville, Ala. and San Jose, Calif., firm’s litigation and mechanical patent practice one of the largest electronic manufacturing service groups, with his focus on patent prosecution and providers in the world. The office is located at 2800 counseling in the mechanical arts and litigation of SunTrust Plaza, 303 Peachtree St. NE, Atlanta, GA patent, trademark and copyright matters. Tempel 30308; (404) 739-8800; Fax (404) 739-8870. is a member of the firm’s electronics and software practice group. His practice focuses on the prepa- Rich M. Escoffery has been named a partner with ration and prosecution of patents in the electrical Elarbee, Thompson, Sapp & Wilson, and and electromechanical arts. The firm is located at Constance A. Walters, James J. Park, and Elliott Suite 1000, 999 Peachtree St., Atlanta, GA 30309- M. Friedman have joined the firm as associates. In 3915; (678) 420-9300; Fax (678) 420-9301. addition, partners Alisa L. Pittman and Vic A. Cavanaugh have been selected to lead the firm’s Troutman Sanders LLP announced that Jeffrey hospitality and service industries practice group, W. Kelley joined the law firm as a partner in the which will focus on labor and employment issues bankruptcy practice group. He was previously a particular to the restaurant and lodging indus- partner with Powell Goldstein Frazer and Murphy tries. The office is located at 800 International LLP. Kelley represents debtors, creditors’ commit- Tower, 229 Peachtree St. NE, Atlanta, GA 30303; tees and large creditors in commercial and busi- (404) 659-6700, Fax (404) 222-9718. ness bankruptcy matters and related restructur- ings. The firm is located at 600 Peachtree St. NE, Three attorneys at Needle & Rosenberg became Suite 5200, Atlanta, GA 30308-2216; (404) 885-3000; shareholders: Jacqueline F. Hutter, William F. Fax (404) 885-3900. Long and Tina Williams McKeon, Ph.D. are all new equity officers. Hutter is a registered patent Paul A. Alexander, Joseph R. Delgado Jr., Ryan attorney whose practice focuses on chemical patent A. Kurtz and Carlton C. Pilger were named part- prosecution and licensing and counseling of clients ners at Miller & Martin LLP. Alexander focuses in intellectual property matters. Long has trial and his practice in the areas of bankruptcy, creditor’s litigation experience in complex commercial mat- rights and commercial litigation; Delgado prac- ters involving patents, technology, trade secrets tices in the corporate department with an empha- and related contract and licensing issues. McKeon sis on business transactions, securities, and feder- is active in the firm’s biotechnology and litigation al, state and local tax law. Kurtz specializes in practice groups; she is experienced in copyright, commercial, business and civil litigation and arbi- trademark and patent law. Needle & Rosenberg is tration, and Pilger practices ERISA law with an located at Suite 1000, 999 Peachtree St., Atlanta, GA emphasis on HIPAA compliance. Miller & 30309-3915; (678) 420-9300; Fax (678) 420-9301. Martin’s Atlanta office is located at 1275 Peachtree St. NW, 7th Floor, Atlanta, GA 30309; (404) 962- Ruthann P. Lacey, P.C., announced that Heather 6100; Fax (404) 962-6300. L. Durham has joined the firm as an associate and will practice in the areas of probate and elder law. Jimmy Carr, Tommy Chason and John FitzGerald Durham previously worked at McGee & Oxford, announced the formation of a new firm, Carr, LLP. The firm also announced the relocation of its Chason & FitzGerald. The office is located at 6000 office to 3541-E Habersham at Northlake, Tucker, Lake Forrest Drive, Suite 440, Atlanta, GA 30328; GA 30084; (770) 939-4616; Fax (770) 939-1758. (404) 843-3889; Fax (404) 847-9297.

70 Georgia Bar Journal Bench Schulten Ward & Turner, LLP, announced that Smith Moore LLP announced that Erin S. Stone was named a partner. She will focus Allen Buckley was promoted to part- primarily on family law. In addition, Dean R. ner. Buckley’s business practice Fuchs, Joseph L. Kelly and Thomas H. Castelli emphasizes ERISA, tax, qualified and have become associates in the litigation practice nonqualified deferred compensation group. Their practice areas include commercial lit- and pension plans, employee benefits igation, personal injury, insurance defense and and executive compensation. He also has extensive employment law. The firm is located at 260 experience in ERISA litigation and is a certified pub-

Peachtree St., Suite 2700, Atlanta, GA 30303; (404) lic accountant. The firm is located at One Atlantic & 688-6800; Fax (404) 688-6840. Center, 1201 W. Peachtree St., Suite 3700, Atlanta, GA 30309; (404) 962-1000; Fax (404) 962-1200.

Chamberlain Hrdlicka Bar announced that Gary S. Patterson, Thuente, Skaar & Christensen, P.A., an Freed has joined the intellectual property firm based in Minneapolis, firm’s Atlanta office as a announced the opening of a new office in Atlanta. shareholder in the litiga- Peter S. Dardi, Ph.D., will serve as head of the new tion practice, and office. His practice in patent law spans a wide Piercy Freed William J. Piercy has range of technologies, and he has extensive experi- joined the business litigation practice. Freed brings ence representing medical device companies and experience including trade secret, restrictive companies on the cutting edge of nanotechnology. covenant, real estate, insurance, employment and The firm’s new office is located at 3490 Piedmont contract matters. He previously served as president Road NE, Suite 400, Atlanta, GA 30305; (404) 949- and managing principal of Freed & Berman, P.C. 5730; Fax (404) 949-5730. Piercy was an associate with Freed & Berman, where he practiced business litigation for the past four Mary Grace Diehl, a bankruptcy attor- years. Chamberlain Hrdlicka’s Atlanta office is locat- ney with Troutman Sanders LLP, was ed at 191 Peachtree St. NE, Ninth Floor, Atlanta, GA selected by the 11th Circuit U.S. Court 30303-1747; (404) 659-1410; Fax (404) 659-1852. of Appeals as the newest U.S. Bankruptcy Court judge for the Kilpatrick Stockton LLP announced today that the Northern District of Georgia. She has firm’s expanding London office has relocated to chaired the bankruptcy sections of both the Atlanta One Canada Square in Canary Wharf. With nearly Bar Association and the State Bar of Georgia, and she 40 attorneys, Kilpatrick Stockton is now one of the has been a fellow of the American College of 15 largest U.S. law firms in London. Kilpatrick Bankruptcy and a board member and president of the Stockton is leasing the entire 39th floor of One Southeastern Bankruptcy Law Institute. Her office is Canada Square totaling over 28,000 square feet. located at 1215 U.S. Courthouse, 75 Spring St., Atlanta, GA 30303; (404) 215-1202; Fax (404) 215-1238. Edwin J. Schklar, Robert U. Wright, Edward C. Henderson Jr. and William Brent Ney announced Burr & Forman announced that Tim the formation of Schklar, Wright & Henderson, McDowell has joined the firm as partner and LLC, a civil trial and appellate practice. The office will head the Atlanta office’s new health care is located at Suite 2250 Resurgens Plaza, 945 East practice group. McDowell brings 15 years of Paces Ferry Road, Atlanta, GA 30326; (404) 888- experience in transactional and regulatory 0100; Fax (404) 842-7222. health care law. He earned a bachelor’s degree from Davidson College in 1979 and a master’s Kilpatrick Stockton LLP announced degree in social work from the University of the addition of A. Elizabeth “Lizz” Georgia in 1982; he obtained his juris doctorate Patrick as a partner in the firm’s from Emory University School of Law in 1987. Atlanta office. She joins the construc- Burr & Forman’s Atlanta office is located at tion law and public contracts practice One Georgia Center, 600 West Peachtree St., group, where she will continue her Suite 1200, Atlanta, GA 30308; (404) 815-3000; practice in assisting owners, developers, construc- Fax (404) 817-3244. tion companies and others with planning and managing complex development and construction Mallory E. Phillips III was named projects, design and construction contract prepara- Executive Director of the Atlanta tion and negotiation, risk management, dispute office of Counsel On Call, which resolution and litigation. Kilpatrick Stockton is provides law firms and corporate located at Suite 2800, 1100 Peachtree St., Atlanta, clients with top-level legal talent on GA 30309-4530; (404) 815-6500; Fax (404) 815-6555. an as-needed basis. Phillips brings 24 April 2004 71 years of labor and employment legal experience to In Mobile, Ala. the company. Prior to joining Counsel on Call, he was an equity partner in the Atlanta offices of Sonja Bivins, a partner in the Atlanta office of Ford & Harrison, LLP. Counsel On Call’s Atlanta McGuireWoods, has been appointed as a federal

Bar office is located at 1230 Peachtree St. NE, magistrate judge in Mobile, Ala., for an eight-year Promenade II, Suite 1800, Atlanta, GA 30309; (404) term. She will handle many different aspects of 942-3525; Fax (404) 942-3780. civil and criminal cases in federal court. Bivins’

& practice at McGuireWoods has focused on repre- In Cumming senting employers in a variety of employment- related actions filed under federal and state anti- Gov. Sonny Perdue appointed Troy Russell discrimination laws. She is a member of both the McClelland III to the State Court in Forsyth County. Alabama and Georgia bars, and is the first minor- He is a partner at Dreger, Coyle, McClelland, ity to be appointed a U.S. magistrate judge in the Bergman & Pieschel, and he was the chief assistant Southern District of Alabama. The U.S. District district attorney for the Blue Ridge Judicial Circuit Court is located at 113 Saint Joseph St., Mobile, AL Court. The court is located at 100 Courthouse Square, 36602-3606; (251) 690-2371; Fax (251) 694-4238. Suite 150, Cumming, GA 30040; (770) 781-2130; Fax Bench (770) 886-2834. New Case Management System In Marietta The United States District Court for the J. Lynn Rainey, P.C., and Perry A. Phillips, L.L.C., Northern District of Georgia is in the process announced the relocation of their offices. Rainey will of transitioning to a new case management continue to create and represent community system that will provide attorneys the oppor- improvement districts as well as serve clients in tunity to file court documents via the Internet criminal court and personal injury litigation. Phillips 24 hours a day, 7 days a week. Entitled will continue to represent clients in civil litigation, Case Management/Electronic Case Filing, focusing on real estate, construction and commercial the new system will allow attorneys to file landlord/tenant matters. The new office is located at and view documents from any location with 358 Roswell St., Suite 1130, Marietta, GA 30060-8200; Web access. The court envisions bringing the (770) 421-6040; Fax (770) 421-6041. new system online sometime during the spring of 2004. Training on the system will Henry R. Thompson and John A. Pursley have be offered to interested members of the Bar. left the district attorney’s office and opened their Besides providing access at any time, the own firm, Thompson & Pursley, P.C., specializ- new system permits automatic notification of ing in criminal defense. The office is located at 305 document filings via e-mail to participants in a Lawrence St., Marietta, GA 30060; (770) 795-8060; case, the ability to download and print court Fax (770) 795-9890. documents from any location, and concurrent In Milledgeville access to case files by multiple parties. Once filed, the documents are immediately available Carl S. Cansino announced the opening of his law electronically. All divisions in the Northern office, The Cansino Law Firm, LLC. He maintains District, including Atlanta, Gainesville, Newnan a civil practice focusing primarily on criminal law, and Rome, will participate in this new system. family law, wills, estates and business law. In order to use the new system, attorneys Cansino formerly worked as an assistant district will be required to register with the court attorney in the Ocmulgee Judicial Circuit. His and receive a password. Users must also office is located at 118 S. Wilkinson St., Suite 4, have access to a personal computer running Milledgeville, GA 31059-1062; (478) 451-3060; Fax a standard platform such as Windows or (478) 451-3073. Macintosh, word processing software, Internet access and a browser, and software In Moultrie to convert documents into portable docu- Andrew W. Pope and Robert D. Jewell ment format (PDF). Scanning equipment is announced the formation of Pope & Jewell P.C. optional but may be necessary for filing They will specialize in the areas of criminal law, documents that are not in digital or elec- family law, personal injury, worker’s compensa- tronic format. Information concerning both tion, social security and civil litigation. The office the court’s “go-live” date, the availability of is located at 35 North Main St., Moultrie, GA user training and other information concern- 31768; (229) 616-1011; Fax (229) 616-7766. ing CM/ECF will be posted on the court’s Web site at www.gand.uscourts.gov.

72 Georgia Bar Journal What’s in a Name? By Paula Frederick

Next on the list is ‘The Plaintiff’s Personal fter five years in-house with an Injury Lawyers Group.’ “I like this one,” you say. “It tells people exactly what it is that we insurance company, you’ve do, which should help us weed out the folks decided to go out on your own. who are looking for a divorce lawyer.” General Counsel A Linda’s next possibility is ‘A Legal You’re going to open a practice with Linda Services Group.’ “This one is sheer genius,” Tindall, a law school classmate who wants to Linda explains. “If we can get the phone company to list us under the letter ‘A,’ we’ll leave her large firm practice. You hope to han- be first in the lawyer listings!” Finally, Linda has included Tindall & dle plaintiff’s personal injury work. Tindall, the name her father and uncle prac- You meet Linda over drinks to begin plan- ticed under for decades before their retire- ning. ment several years ago. “People in this town “I’ve been thinking about firm names,” she know the name Tindall & Tindall; I think says. “I’ve got a list of possibilities.” there’s a lot of goodwill associated with it,” First on the list is ‘Spindle, Tindall and Linda claims. “We might get more business if

Office of the Associates.’ “I like that one best,” Linda people assume that Dad and Uncle Joe are explains. “It makes us sound like name part- still running things.” ners in a firm with dozens of lawyers. Although you are dubious about some of Besides, ‘Spindle & Tindall’ sounds funny by Linda’s choices, you volunteer to run the list itself.” by the lawyers on the Bar’s Ethics Hotline to be sure there aren’t ethical problems with any of them. You share your findings with Linda the next day. “There aren’t a lot of Bar Rules that deal with firm names,” you tell Linda. “Basically, the rules require that our firm name be true and not misleading.1 The lawyer I spoke with on the Ethics Hotline shot down practically everything on your list.” “The problem with using ‘and Associates’ is that we don’t really have any associates,” you explain. “If we’re trying to make people think we’re a larger firm than we are, isn’t that misleading?”

April 2004 73 “There are problems with both top of the phone book listings. “Wow,” Linda exclaims. of the trade names too,” you add. She says that if we practice that “Spindle & Tindall is looking better “Rule 7.5(e) authorizes a lawyer to way, we have to be consistent. all the time. I’m just glad we had use a trade name, but it requires Our letterhead, business cards, this conversation before I ordered that the name include the name of and firm sign should all say the business cards!” at least one lawyer. That means same thing.” Call the Ethics Hotline at (404) that we would have to be ‘Spindle “What about Tindall & Tindall?” 527-8720 with all of your ethics & Tindall’s Plaintiff’s Personal Linda asks. “They are real people, questions. Injury Lawyers Group,’ or some- and they are both lawyers, so that thing like that.” one should be OK.” Paula Frederick is the deputy “There are a couple of other “The problem there is that we general counsel of the State Bar of problems with ‘A Legal Services aren’t Tindall & Tindall,” you Georgia. Group.’ People might be con- explain. “If we had practiced with Endnotes fused into thinking we are affili- them under that name, we could 1. Rules 7.1 and 7.5 of the Georgia ated with Georgia Legal Services, continue using it after their retire- Rules of Professional Conduct which isn’t true. The hotline ment. Since the firm has been out of apply to firm names and letter- lawyer also warned me about business for years, the Bar and Rule heads. “alpha jumping”—putting an “A” 7.5(e)(1) consider that it’s mislead- in front of our name to get to the ing for us to pick it up.”

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74 Georgia Bar Journal Discipline Notices (Dec. 12, 2003 through Feb. 12, 2004) By Connie P. Henry DISBARMENTS/VOLUNTARY personal injury case. Payne settled the case SURRENDER for $17,500, but failed to promptly notify her client of the receipt of the funds and misap- Eddie Lee Denhardt propriated all of the settlement funds for her Conyers, Ga. personal use.

Discipline Eddie Lee Denhardt (State Bar No. 217717) has been disbarred from the practice of law Richard A. Viti in Georgia by Supreme Court order dated Atlanta, Ga. Jan. 12, 2004. Denhardt pled guilty in the On Jan. 12, 2004, the Supreme Court of Gwinnett County Superior Court on 38 Georgia accepted the Petition for Voluntary counts of false statements and writings, Surrender of License of Richard A. Viti (State which are felonies. Bar No. 628650), to be effective May 17, 1993. Viti was found guilty of two counts involv-

Lawyer Lloyd E. Thompson ing income tax evasion. The United States Brunswick, Ga. Court of Appeals for the 11th Circuit Lloyd E. Thompson (State Bar No. 708950) affirmed his conviction and the United States has been disbarred from the practice of law Supreme Court denied his petition for writ of in Georgia by Supreme Court order dated certiorari. Jan. 12, 2004. In 1997 Thompson agreed to defend a client on criminal charges. SUSPENSIONS Thompson accepted a retainer of $500. William H. Norton Although Thompson appeared at the Marietta, Ga. arraignment, he failed to appear at the trial. On Jan. 12, 2004, the Supreme Court of The client appeared at trial and had to repre- Georgia ordered that William H. Norton sent himself. After he was found guilty, the (State Bar No. 546850) be suspended indefi- client demanded a return of the retainer, but nitely from the practice of law in Georgia. A Thompson refused to return the money. client hired Norton to represent him in Thompson made representations that he had divorce proceedings and paid a $5,000 fee. obtained a continuance of the client’s trial After the first hearing the client terminated and that he had so notified his client but Norton’s services and asked for a refund of these representations proved false. In aggra- the unearned fees. Norton failed to comply. vation of discipline, Thompson had received Norton shall remain suspended until he a public reprimand and an Investigative returns the client’s file and refunds the Panel reprimand and was recently suspend- unearned portion of the fees. ed based on similar conduct. Rose Eugenie Goff Sharel Lovia Payne Atlanta, Ga. Atlanta, Ga. On Jan. 12, 2004, the Supreme Court of On Jan. 12, 2004, the Supreme Court of Georgia ordered that Rose Eugenie Goff Georgia accepted the Petition for Voluntary (State Bar No. 299026) be suspended from the Surrender of License of Sharel Lovia Payne practice of law in Georgia for one year with (State Bar No. 568230). Payne was hired by conditions for reinstatement. Goff represent- an individual to represent his minor son in a ed a client in an employment discrimination

April 2004 75 case. Without informing her client, lender in two real estate closings. defendant in a contempt action Goff agreed to the taking of her Moore prepared the HUD-1 settle- arising out of his alleged failure to client’s deposition by defendant’s ment statements and signed off pay child support. Albertelli issued counsel; rescheduled the deposi- that they were accurate and true. a subpoena for documents and a tion twice; and then failed to She distributed the seller’s funds deposition upon a former col- appear. A magistrate judge granted according to seller’s instructions, league in the district attorney’s a motion for sanctions for failure to without authorization from the office seeking discovery, which prosecute and failure to appear for lender. She did not list the distribu- was arguably irrelevant to the con- deposition and assessed costs tions on the HUD-1 statement. In tempt action. He failed to advise against Goff personally. Later the mitigation of discipline, Moore has opposing counsel of the issuance of magistrate judge dismissed the not had prior discipline and she is the subpoena or of any hearings complaint with prejudice, but Goff deeply remorseful. later held on the issue and he failed to appeal the order or to PUBLIC REPRIMAND issued the subpoena without inform her client of the dismissal. checking the status of the case, Goff had no prior disciplinary James Edward Albertelli which had already been resolved. record. Goff’s right to resume prac- Jacksonville, Fla. INTERIM SUSPENSIONS tice is conditioned upon a determi- On Jan. 12, 2004, the Supreme nation by the State Bar’s Lawyer Court of Georgia ordered that Under State Bar Disciplinary Assistance Program that she would James Edward Albertelli (State Bar Rule 4-204.3(d), a lawyer who not pose a threat of harm to clients No. 007750) receive a public repri- receives a Notice of Investigation or the public. mand in open court by a judge of and fails to file an adequate the superior court where Albertelli response with the Investigative Karen Edith Moore resides or where the disciplinary Panel may be suspended from the Lithonia, Ga. infraction occurred. Before enter- practice of law until an adequate On Jan. 20, 2004, the Supreme ing private practice Albertelli response is filed. Since Dec. 12, Court of Georgia ordered that worked as an assistant district 2003, three lawyers have been sus- Karen Edith Moore (State Bar No. attorney. He represented the state pended for violating this Rule and 520037) be suspended from the in a case, which resulted in a plea one has been reinstated. practice of law in Georgia for three to the charge of aggravated stalk- years nunc pro tunc Jan. 1, 2002, ing by an individual defendant. Connie P. Henry is the clerk of the the date on which she ceased prac- After he left prosecution he under- State Disciplinary Board. ticing law. Moore represented a took to represent that former

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76 Georgia Bar Journal Back to Basics: Hot Technology Updates for 2004 By Natalie R. Thornwell remains, please contact our program for originally wrote this article in 2001, but more information and a review of specific needs for networking computers in your because the information is still relevant, office. II have made some updates and Backups addressed some of the technological changes Another scary thing is that lawyers are still

Management storing all of their work on computers, but not that have taken place since then. I am amazed performing any type of backup. Despite an at how much the landscape of technology has increasing awareness of the threat of disaster in our times, attorneys still practice without back- remained the same for law firms despite new ing up their systems. Whether you choose to tech trends. The Law Practice Management copy files to a zip or tape drive, burn CDs or DVDs, man removable hard drives, or invest in Program continues to receive more technolo- an online data storage account you must have some formal backup procedure in place in your gy related calls on its Practice Management law office. You should back up every day or as Help Line than for any other subject. frequently as you’d like to redo your work. You also must make sure that the procedure works Basic legal computing requires a few by doing test restores regularly. Ultimately, ask things. I have found that while most firms yourself: If I am away from my office and there

Law Practice have at a very minimum these systems in is a flood or fire, am I able to retrieve my work? place, every now and then I encounter firms Enough said. Backup, backup, backup. Store who still haven’t bothered to catch up. So, your backups off site and on or near your cur- here’s my short list of the basic technology rent office too. Make sure you can get data back must-haves for today’s lawyer. in case of disaster. If you need help with devel- Networked computers oping these procedures for your firm don’t hes- itate to contact our program. As scary as it sounds in 2004, there are still some law offices running multiple computers Upgrades that are not networked. This is down right Whether you have 386s (ouch!) and need to awful! With the rarest of exceptions, the ben- be on the latest and greatest system out there, efits of networking computers far outweigh or if you are on version 1.1 of some legal spe- any reason for not linking your computers cific software package, upgrading is inevitable. together. The ability to share file information Make sure you stay abreast of any upgrades and resources, like printers and copiers, is that are available. While hardware does not reason alone to hunt down a local computer require as much tweaking as software, gener- person for an estimate on running the cables ally speaking, keep your techno tools sharp from one computer to the next. And depend- and in good working order. Download the lat- ing on location, your building layout and est maintenance releases, service patches or security situation, you could even set up a bug fixes on a regular basis. What’s the old wireless network that can link your office. If saying about an ounce of prevention? Works you are one of the “techno dinosaurs” that for computers and software too.

April 2004 77 Virus Protection You would think that lawyers who are highly skilled at protecting the interests of others would have no problem protecting themselves. However, many firms operate with no form of protection from comput- er viruses. Bottom line: there are a lot of bored computer criminals and they will continue to build destruc- tive things that can harm other folks. These people make an enemy out of your inbox. Make sure you have downloaded or purchased a virus protection system for your office. Don’t think that non-networked sys- tems don’t need it, too. In fact, using floppy disks and other transportable media may make the need even more pressing! You should investi- gate firewall protection for your and on, we need to harness the software you have the ability to office. There are several reasonably power of the Internet in law offices. make much more money and save priced systems available. Many firms are making full use of much more time. I can’t think of one the Internet as they market their good reason why you would not Training firms and even collaborate with have one of these programs. They A pet peeve that I have is being clients online. Many benefits lie in are the only software programs that told that training is not necessary. being able to communicate with oth- allow you to keep a virtual copy of Everyone has to learn how to use ers. If you need help getting there, your physical files on your comput- new systems. You can spend sever- call our program to discuss the bene- er. Contact our program for help in al weeks (read whenever I have fits and the best way to get connect- deciding which program will work time or the work in the office slows ed with the rest of us. Even if you are best for you. You can’t afford not to. down) or a day or two in the connected, you will need to learn For those who already have case process. You can teach yourself how to better manage all of that management software, you will be (didn’t someone say something information. So get in touch with us glad to know I am still preaching about “the blind leading the ...”) or to get the latest ideas, tips and tricks. this sermon, but the congregation is hire professionals. You can imme- Practice/ steadily growing. There are some diately begin to get a return on believers. Case Management your investment or wait until later Automated Time (okay, much later). No one can con- I used to have trouble explaining Billing and Accounting vince me that there is no benefit to the benefits of case management proper training. I know it is software. There were just too many Recreating time entries for bills absolutely necessary! features to focus in on. It has gotten you make in the word processor and Internet much easier. Now, I just ask the doing manual ledgers should be unbeliever, “How long does it take things of the past, but unfortunately, In some form or another, we all you to find a phone number for a they are not. Today’s time and need to be able to go online. For e- particular judge on a particular case, billing and legal accounting soft- mail, legal research, visiting Web and how long does it take to update ware is the answer. Back office pro- sites, participating in listservs, a change to that number throughout cedures are needed in all businesses, downloading information, and on the office?” With case management law offices included. I can tell you

78 Georgia Bar Journal that you need it and show you why games and beam them to your country. Checkout the American Bar if you contact our program. Trust friends, or today’s newspaper or the Association’s Annual Techshow, me, you will capture more time, and latest legal research you’ve done. usually in Chicago, each year or the hopefully make more money and Newer units and the right software various LegalTech shows that may better manage your firm’s finances even let you create presentations take place in a location near you. At with these systems. and play them from the unit. If any these shows you can learn the latest Handheld Devices of this sounds intriguing, and it things about hot legal technologies should, you should look into pur- like ASPs, WiFi and collaboration If you are walking around with a chasing a hand held device. tools. Some print publications to paper calendar in your pocket or a Resources check are Law Office Computing and bulky day planner, you need to con- Law Technology News. sider getting a handheld PDA (per- If you do not know much about Finally, don’t forget to contact sonal data assistant). With many fla- legal technology, then you should the Law Practice Management vors to choose from, PDAs are still know this. There are many resources Program. We will be glad to help hot techno gadgets. These devices available to help you learn more. with assessing your legal technolo- can replace your cell phone, hold Whether it’s an online venue like a gy needs and give you a guided your entire calendar, all of your con- listserv (the Technolawyer and tour of our software library before tact records, and on some units all of Solosez are two great ones—expect a you make any purchases. your e-mail. From Blackberrys, to lot of email though) or Web sites like Palms, to Pocket PCs, you are able to www.webopedia.com or Natalie Thornwell is the director take a very large part of your prac- www.learnthenet.com that can help of the Law Practice Management tice information with you. You can you learn about technology in gen- Program of the State Bar of even buy expandable keyboards for eral, you can look to the Internet for Georgia. PDAs and stop lugging around that help. Legal technology shows also heavy laptop. You can download take place annually around the

We wish to express our sincerest appreciation to those who volunteered to serve as attorney coaches, regional coordinators, presiding judges and scoring evaluators during the 2004 mock trial season and to those financial sponsors who have already made pledges or contributed funds during the 2004 season, thus far: Georgia Bar Foundation Council of State Court Judges The Lawyers Foundation of Georgia The Young Lawyers Division of the State Bar of Georgia Criminal Law Section of the State Bar of Georgia General Practice and Trial Law Section of the State Bar of Georgia And many individual donors Thank you for your generous support!

The 2004 Regional Champion Teams are: Central High School (Central GA - Macon); South Forsyth High School (Cherokee Co. - Canton); Ware County High School (Coastal GA - Brunswick); The Walker School (Cobb Co. - Marietta); Decatur High School (Dekalb Co. - Decatur); Grady High School (Fulton Co. - Atlanta); The Wesleyan School (Gwinnett Co. - Lawrenceville); The Paideia School (Metro Atlanta - Atlanta); Northwest Whitfield High School (North GA - Dalton); Clarke Central High School (Northeast GA - Athens); Cartersville High School (Northwest GA - Rome); Savannah Country Day School, regional champ and Sol C. Johnson High School, regional runner-up (Southeast GA - Savannah); Jonesboro High School (Southern Crescent - Jonesboro); Lee County High School (Southwest GA - Columbus); Chapel Hill High School (West GA - Douglasville)

The State Champion Team will be crowned March 14th and will represent Georgia at the National High School Mock Trial Championship in Orlando, Fla. May 5-9, 2004.

For sponsorship or donation information, please contact the mock trial office: (404) 527-8779 or toll free (800) 334-6865 ext. 779 or email: [email protected]

April 2004 79 Bono Bringing Justice Home Middle Georgia Lawyers Host Special Event for GLSP By Jeanette Burroughs

Pro Hinson, L.L.P., for their long-term commit- hen a small group of ment to pro bono service. The award was especially named for Pro Bono Involvement lawyers in Macon began Coordinator Judy Davenport in appreciation planning for a fun way to of her longstanding work to engage the pri- W vate bar in pro bono service on behalf of low- bring lawyers together and encourage pro income Georgians. Last year, private attor- bono service, what resulted was “Bringing neys in Middle Georgia handled 84 pro bono cases for GLSP. Justice Home,” the first special event of its The Hon. Hugh Thompson presented the GLSP State Bar of Georgia Campaign kind ever initiated by Middle Georgia Benefactors’ award to Middle Georgia lawyers on behalf of GLSP. donors with outstanding giving histories of 15 years or more to the “And Justice for All” Middle Georgia lawyers hosted “Bringing State Bar Campaign for GLSP. Honorees Justice Home” on Feb. 5 at the Georgia Music included John D. Comer, W.W. Hemingway, Hall of Fame. More than 80 individuals Robert E. Herndon, Sallie R. Jocoy, Walter E. attended this historic occasion, including two Leggett Jr., Congressman Jim Marshall and Georgia Supreme Court justices. Other guests Camille Hope, Jack L. Sammons, Kice H. included local lawyers and judges, law school Stone, Richard B. Thornton, Homer J. Walker students and a host of other prominent sup- III and Johnny W. Warren. porters from Macon and surrounding areas. GLSP managing attorney Phil Bond pre- Justice Robert Benham started the program sented the GLSP Sustaining Partner for Justice with an inspirational speech of encourage- award to the Macon Bar Association in recog- ment to lawyers urging their increased partic- nition of the association’s 32 years of support ipation in pro bono service. and service to the Macon Regional Office. “Bringing Justice Home” provided a won- Bond expressed appreciation for Macon derful opportunity for GLSP’s volunteers lawyers who have historically been generous and donors in Middle Georgia to meet each in giving of their professional skills in the rep- other face-to-face and recognize those among resentation of low-income Georgians, which them with a distinguished history of pro represents a worthwhile and longstanding tra- bono service or giving of financial resources dition of service to the community. to GLSP. In a recognition ceremony filled GLSP’s Macon Regional Office was estab- with many memorable moments, honorees lished in 1971 with one lawyer serving two were presented awards of appreciation. The counties. The office now serves an eligible Hon. Duross Fitzpatrick presented the GLSP low-income population of 94,000 individuals Judy Davenport Pro Bono Partner award to in 23 counties, including Baldwin, Bibb, Anthony Gerrard “A.G.” Knowles and the Bleckley, Butts, Crawford, Dodge, Hancock, law firms of Akin, Webster & Matson, P.C., Houston, Jasper, Johnson, Jones, Lamar, and Westmoreland, Patterson, Moseley & Laurens, Monroe, Montgomery, Peach,

80 Georgia Bar Journal ! Sell & Melton, L.L.P. ! Smith, Hawkins, Hollingsworth & Reeves, L.L.P. ! Nancy Terrill & Camp Bacon ! Westmoreland, Patterson, Moseley & Hinson, L.L.P. Silver Sponsor ! Harris & James Bronze Sponsors ! Knight & Fisher, L.L.P. ! Malcolm G. Lindley ! Ann Elizabeth Parman The State Bar Pro Bono Project provided in-kind and financial support, for which GLSP is also

Photo Courtesy of GLSP very grateful. (Left to right) Host Committee members Nancy Terrill, Elizabeth Flournoy Many thanks to the following Thompson, Pamela White-Colbert and Emmett L. Goodman Jr. (Not pic- lawyers in Macon who planned tured are Thomas H. Hinson II, Donald James Jordan, Walter E. Leggett Jr. and hosted “Bringing Justice and Ann Elizabeth Parman.) Home:” Nancy Terrill (chairper- Pulaski, Putnam, Telfair, Treutlen, With demand far outstripping son), Emmett L. Goodman Jr., Twiggs, Wheeler and Wilkinson. In supply, GLSP’s lawyers and para- Thomas H. Hinson II, D. James 1981, the office lost eight attorney legals must choose carefully which Jordan, Walter E. Leggett Jr., Ann positions and four paralegal posi- problems to solve and which Elizabeth Parman, Elizabeth tions of which none have been fully clients to accept. The critical work Flournoy Thompson and Pamela recovered because of static federal of GLSP to provide access to justice White-Colbert. GLSP extends its funding limitations that have not and opportunities out of poverty deepest appreciation to this power- kept up with service demands. A for low-income Georgians has real- ful group who volunteered their staff of only five full-time lawyers, life consequences for the people of time and talents to bring together three paralegals and five adminis- our communities. GLSP’s Macon GLSP’s special friends, supporters trative support staff closed 2,329 Regional Office was the organiza- and staff for an evening of music, cases last year involving critical tion’s first office. Now there are 12 food, fellowship and appreciation. legal problems in the areas of fami- GLSP regional offices in the state “Bringing Justice Home” was a ly violence, consumer fraud, denial and a central administrative office successful and memorable event of health care, housing, public ben- in Atlanta. GLSP’s 154-county serv- that also demonstrates Middle efits, government errors and more. ice region is populated by more Georgia’s strong commitment to Approximately 58 percent of cases than one million impoverished promoting equal access to the civil are family law related. Many cases Georgians. justice system for all people. that cannot be handled by the office “Bringing Justice Home” was Donations to GLSP’s Macon are referred to the private bar on a made possible with the financial sup- Regional Office are tax-deductible reduced fee or pro bono basis. Last port of several individual lawyers to the extent allowed by law and year, 1,281 clients were provided and law firms in Macon. GLSP can be mailed to: Georgia Legal reduced fee referrals. An additional extends much gratitude and appreci- Services Program, Inc., P.O. Box 1,000 referrals were made through ation to the following event sponsors: 1057, Macon, GA 31201. the private lawyer referral line of Gold Sponsors the Macon Bar Association, which ! Adams, Jordan & Treadwell, Jeanette Burroughs is the direc- tor of development and commu- is administered by GLSP’s Macon P.C. nications for GLSP. Regional Office. A total of 199 ! Emmett L. Goodman Jr. lawyers currently participate on the ! Congressman Jim Marshall & private lawyer referral panel. Camille Hope

April 2004 81 News Sections Heat Up the Year With Activity By Johanna B. Merrill

ineteen sections hosted events Section at the State Bar’s 2004 Midyear NMeeting, which was held Jan. 15-17 at the Sheraton Colony Square. This

year’s meeting was the largest in Bar history,

and the well-attended section meetings con-

tributed to the record attendance. The meeting opened on Thursday, Jan. 15, with two section breakfasts. Rep. Tom Bordeaux, chairman of the House Judiciary Committee, was the guest speaker for the Government Attorneys Section breakfast. The Creditors’ Rights Section hosted a one- hour CLE program during their breakfast Photos by Daniel L. Maguire meeting. Rep. Pam Stephenson, member of the The Labor & Employment Law Section House Judiciary Committee and the hosted a lunch meeting that covered the topic Children and Youth committee, speaks to of recent developments in wage and hour the Administrative Law Section during the Midyear Meeting. law. Guest speaker Mary Kay Lynch, region- al counsel and director of the Environmental States Bankruptcy Court for the Northern Accountability Division of the District of Georgia, for his 42 years of service Environmental Protection Agency, spoke at to the bankruptcy bar. Judge Cotton was the Environmental Law Section lunch meet- appointed to the bench on May 1, 1985, and ing. During that meeting, Section Chair served as chief judge from June 1995 until his Susan Richardson presented E. Peyton retirement in December 2003. While in prac- Nunez, immediate past chair, with a plaque tice from 1962 to 1985, Judge Cotton was a commemorating her accomplishments as frequent speaker, moderator and panelist for chair. The Appellate Practice and Corporate many CLE programs and was an active mem- Counsel sections also held lunch meetings on ber of the bankruptcy sections of both the Jan. 15. State Bar and the Atlanta Bar Association, The Bankruptcy Law Section held a well- where he twice served as section chairman. attended luncheon on behalf of the recently He was also a founding member of the retired Hon. Stacey W. Cotton, of the United Southeastern Bankruptcy Law Institute. At

82 Georgia Bar Journal the start of the program, Section Chair Laura Woodson made announcements regarding section business before introducing several speakers who have worked with and known the judge over the years, including J. Michael Lamberth, James H. Bone, Judge Paul Bonapfel and C. David Butler. Bonapfel, a former law partner of the judge’s, and Butler roasted Judge Cotton in a song set to the tune of “Davy Crockett.” Following the remarks, Section Treasurer Nancy Whaley present- ed Lauren Larmer Barrett, execu- tive director of the Lawyers Foundation of Georgia, the philan- thropic arm of the Bar, with a $1,000 donation in honor of Judge Cotton. At the conclusion of the luncheon, attendees adjourned to Bertis Downs, law professor at the University of Georgia and attorney for go to one of two simultaneous sec- R.E.M., discusses the evolution of the music business in challenging times with the Entertainment & Sports Law Section during the Midyear Meeting. tion-sponsored I.C.L.E. programs. The CLE programs were followed General Practice & Trial hosted Landeau, A. Shane Nichols, by a reception for all attendees. Attorney General Thurbert Baker as a Douglas Weinstein, J. Rodgers Friday, Jan. 16, was a big day at guest speaker at their luncheon. The Lunsford III, as well as Brian K. the Midyear Meeting with nine sec- Criminal Law Section, Fiduciary Johnson, a communications spe- tion lunches and three section Law Section, Heath Law Section cialist with Trapezium receptions. and Individual Rights Section also Communications Inc. in The Entertainment & Sports held lunchtime meetings. Minnesota. Johnson led a discus- Law Section hosted a lunchtime The long day of lunches and sion regarding communications CLE event with speaker Bertis E. meetings wrapped up with the skills for litigators and transaction- Downs IV, an entertainment law Family Law Section, Workers’ al attorneys. Immediately follow- professor at the University of Compensation Law Section and ing the seminar, the section’s Georgia and counsel for the band Taxation Law Section holding Trademark Committee hosted a R.E.M. Downs’ presentation was receptions for their members. happy hour at McCormick & titled “The Evolution of Music Section members have also kept Schmick’s in CNN Center. Business in Challenging Times: their calendars full with meetings The end of February was Business and Legal Realities c. and events outside the Bar. A Carnival season, and the 2004.” prime example is the Intellectual Intellectual Property Law Section Rep. Pam Stephenson of the Property Law Section, which has celebrated Mardi Gras with a party House Judiciary Committee and been very busy in 2004. On Feb. 4 on Feb. 20 at Commune, which was Children and Youth Committee the section co-sponsored a six-hour organized by the section’s Social spoke during the Administrative CLE program, “Filling Your Committee Chair Steve Wigmore. Law Section’s luncheon. Capt. Loyd Toolbox: Skills and Updates for the Early registrants were treated to Florence, who flew Pan-American IP Lawyer” at the Bar Center in complimentary drinks and dinner. Clippers during World War II, was Atlanta. Speakers included Chair- On March 10 the section’s Patent the guest speaker at the Aviation Elect Michael Hobbs, Georgia State Committee, chaired by Wab Law Section’s lunch meeting. University Law Professor Michael Kadaba, held a patent roundtable

April 2004 83 discussion on “The Dirty Dozen: The Technology Law Section the question of when a discre- Common Mistakes Made by Patent held a quarterly meeting at tionary application is required. Practitioners” at the Bar Center, Kilpatrick Stockton LLP on March Chong Suk Lee petitioned for with lead speaker Arthur A. 12 where Richard Kemp, of Kemp mandamus in order to appeal the Gardner of Gardner Groff, PC. Little LLP, spoke about recent tech- county’s denial of her application The Entertainment & Sports nology law developments in the for a license to sell beer and wine. Law Section has also seen a busy European Union. From the superior court’s ruling, winter. On Feb. 6 the section co- You may still be shaking off the the county filed a direct appeal. sponsored the Entertainment Law chill of winter, but it is not too early The Appellate Practice Act Institute with I.C.L.E., which was to start thinking about the Bar’s specifically authorizes direct held at the Emory University Annual Meeting, June 17–20 in appeals from grants of man- School of Law. On Feb. 16 the sec- Orlando, Fla. at the Portofino Bay damus. Nevertheless the tion co-sponsored a sports semi- Hotel. Between the section-spon- Supreme Court held that an nar in Athens, along with the sored opening night celebration application for discretionary University of Georgia Student Bar that kicks off the meeting, the appeal was required. An applica- Association and the University of General Practice & Trial Section’s tion was required because “the Georgia Sports and Entertainment annual awards breakfast and other underlying subject matter” of the Society. Jeffrey Gewirtz, counsel events, you will be glad you came! appeal falls within the scope of with the Coca-Cola Company, NEWS FROM the discretionary-appeal statute. spoke on legal issues in sports The statute requires that appeals marketing. The section also held a THE SECTIONS of appeals be by application for lunchtime CLE titled “Legal Appellate Practice discretionary appeal. OCGA § 5- Issues in Theatre” on March 10 at Section 6-35 (a) (1). One Midtown Kitchen in Atlanta. It may seem paradoxical for an By Christopher McFadden Mark Williamson, Lisa Kincheloe application for discretionary Augusta-Richmond County v. Lee, and Darryl Cohen covered topics appeal to be required where a S03A1321, 2004 Fulton County D. such as actor agreements (equity direct appeal is specifically per- Rep. 180, 2004 Ga. LEXIS 6 (Ga., and non-equity), negotiating mitted, but the Appellate Practice January 12, 2004) venue agreements and nonprofit Act also specifically authorizes In Augusta-Richmond County v. status. direct appeals from final judg- Lee the Supreme Court revisited ments. The discretionary-appeal statue is best understood to include a list of exceptions to the direct-appeal statute. Nevertheless, reconsidering an earlier unpublished dismissal, the Supreme Court decided Lee on the merits. The Court did so because it had “previously accepted direct appeals involving the county and the same ordi- nance in three almost identical cases.”

Johanna B. Merrill is the section liaison for the State Bar of Georgia. Nancy Whaley (center), Bankruptcy Law Section treasurer, presents the Lawyers Foundation of Georgia, represented by executive director Lauren Larmer Barrett, with a check on behalf of Judge Stacey W. Cotton (right).

84 Georgia Bar Journal he Lawyers Foundation Inc. of Georgia sponsors activities to promote charitable, scientif- ic and educational purposes for the public, law students and lawyers. Memorial contri- T butions may be sent to the Lawyers Foundation of Georgia Inc., 104 Marietta St. NW, Suite 630, Atlanta, GA 30303, stating in whose memory they are made. The Foundation will notify the family of the deceased of the gift and the name of the donor. Contributions are tax deductible.

Betty G. Berman Phillip Daniel Ulan sons, Hill Jeffries and Lewis Atlanta, Ga. Atlanta, Ga. Mitchell Jeffries, both of Admitted 1977 Admitted 1996 Atlanta; a sister, Marianne Died January 2004 Died December 2003 Williams of Thomasville, Ga.; a brother, James Watt Dameron Black Jr. Samuel Franklin Vesser Jr. Jeffries of Olathe, Kan.; and Savannah, Ga. Atlanta, Ga. two grandchildren.

Memoriam Admitted 1938 Admitted 1976 Died December 2003 Died January 2004 Thomas P. Stamps, 51, of Gilbert Cohen Jesse W. Walters In Atlanta, died Atlanta, Ga. Albany, Ga. Dec. 24, 2003, Admitted 1947 Admitted 1949 after a battle Died February 2004 Died December 2003 with cancer. McChesney Hill “Mac” Jeffries William Warren Stamps was a sole practition- Atlanta, Ga. Greensboro, N.C. er whose practice focused on Admitted 1950 Admitted 1947 corporate and bankruptcy Died February 2004 Died January 2004 work. He was quite active in the legal community, serving Holcombe Tucker Marshall III McChesney Hill on the board of trustees of Decatur, Ga. “Mac” Jeffries, the Georgia Legal History Admitted 1974 82, of Atlanta, Foundation and as associate Died December 2003 died Feb. 14, editor of The Journal of 2004. He played Southern Legal History. Norman Martin McGuffog a key role in the Stamps was also a fellow of Atlanta, Ga. creation of Georgia’s manda- the Georgia Bar Foundation, Admitted 1973 tory CLE program. Jeffries and he served on the board Died January 2004 graduated cum laude from of directors of the Atlanta both Davidson College and Bar Association’s litigation Charles Van S. Mottola Harvard Law School, and he section. He was a member of Newnan, Ga. served as an infantry lieu- the State Bar of Georgia Admitted 1949 Bench and Bar Committee Died December 2003 tenant during World War II. He was a partner in the firm and the Lawyers Club of Atlanta. Stamps earned his Richard L. Roble of Hansell and Post (now bachelor’s degree from the Savannah, Ga. Jones Day) and was the pri- University of Illinois and his Admitted 1971 mary lawyer for First Died November 2003 National Bank of Atlanta, juris doctorate from Wake now Wachovia, for most of Forest University School of William E. Scott Jr. his legal career. He served as Law. He is survived by his Cullowhee, N.C. chairman of the board for the wife, Diana; three daughters, Admitted 1946 Atlanta Speech School, and Katherine Camilla, Elizabeth Died December 2003 as chairman of the board for Margaret and Carley Lynn Presbyterian Homes, where Stamps, and two sons, John G. Shumaker he lived. He was a deacon, George Belk and Walker Atlanta, Ga. elder and clerk of the session Paty Stamps, all of Atlanta; Admitted 1973 at First Presbyterian Church parents Helen and George Died January 2004 of Atlanta. Jeffries also stud- Stamps of Oxford, Ga.; and ied Civil War history and two brothers, Robert Fletcher Thomas P. Stamps enjoyed visiting battlefields. Stamps of Arlington, Va., Atlanta, Ga. He is survived by his wife, and John Belk Stamps of Admitted 1979 Alice Mitchell Jeffries; two Oxford. Died December 2003

April 2004 85 Note: To verify a course that you do not see listed, please call the CLE Department at (404) 527-8710. Also, ICLE seminars only list total CLE hours. For a breakdown, call (800) 422-0893.

16 April 2004 ICLE Foreclosures 1 Atlanta, Ga. 6 CLE CHATTANOOGA BAR ASSOCIATION Copyright & Trademark Law for the Non-Specialist ICLE Chattanooga, Tenn. Trials of the Century Atlanta, Ga. Calendar 6 CLE 6 CLE 1-3 NORTH ATLANTA TAX COUNCIL ICLE Getting the Most from Your Give Aways General Practice Institute Atlanta, Ga. St. Simons, Ga. 1 CLE

CLE 12 CLE LORMAN BUSINESS CENTER, INC. 2 Asset Protection Atlanta, Ga. LORMAN BUSINESS CENTER, INC. 6.7 CLE (with 1 ethics) Understanding Transportation & Logistics Law Atlanta, Ga. 20 6 CLE LORMAN BUSINESS CENTER, INC. LORMAN BUSINESS CENTER, INC. Law of Easements: Legal Issues and Practical HIPAA for Employers Consideration Athens, Ga. Atlanta, Ga. 6.7 CLE 6.0 CLE 6 22

LORMAN BUSINESS CENTER, INC. ICLE Immigration Compliance Workers’ Comp for the GP Atlanta, Ga. Atlanta, Ga. 6 CLE 6 CLE

7 LORMAN BUSINESS CENTER, INC. Covenants Not To Compete NBI, INC. Atlanta, Ga. Using a Real Estate Appraiser in Georgia 3.8 CLE Atlanta, Ga. 6 CLE (with 0.5 ethics) 23

8 ICLE International Law Section Seminar CHATTANOOGA BAR ASSOCIATION Atlanta, Ga. Annual Spring Employee Benefits Law 6 CLE and Practice Update Chattanooga, Tenn. ICLE 4 CLE YLD Successful Trial Practice 14 Atlanta, Ga. 6 CLE NBI, INC. Trying the Automobile Injury Case in Georgia ICLE Savannah, Ga. GA Non-Profit Law 6 CLE (with 0.5 ethics and 6 trial hours) Atlanta, Ga. 6 CLE 15 ICLE NBI, INC. How to Try an Animal Cruelty Case Major Land Use Laws in Georgia Atlanta, Ga. Various Locations 6 CLE 6 CLE (with 0.5 ethics)

86 Georgia Bar Journal 27 14 CLE NBI, INC. ICLE Limited Liability Companies in Georgia Defense of Drinking Drivers Various Locations Atlanta, Ga. 6.7 CLE (with 1 ethics) 6 CLE

29 ICLE Calendar Nuts and Bolts of Immigration Law ICLE Atlanta, Ga. Special Needs Trusts 6 CLE Atlanta, Ga. 6 CLE ICLE Medicine for Lawyers ICLE Atlanta, Ga. Powerpoint in the Courtroom 6 CLE Atlanta, Ga. 3 CLE NORTH ATLANTA TAX COUNCIL Current Do’s and Don’ts of Estate Planning NBI, INC. Atlanta, Ga. Fundamentals of Bankruptcy Law 1 CLE and Procedure in Georgia Various Locations 18 6.0 (with 0.5 ethics) NBI, INC. CHATTANOOGA BAR ASSOCIATION Property Tax Law in Georgia Health Plans, HIPAA, and COBRA Update, Atlanta, Ga. Under ERISA 6.7 CLE Chattanooga, Tenn. 4 CLE 20 30 ICLE Construction, Materialmen and Mechanics Liens ICLE Atlanta, Ga. Writing to Persuade 6 CLE Atlanta, Ga. 6 CLE ICLE Winning at Mediation Atlanta, Ga. 6 CLE May 2004 21 6-8 ICLE Annual Product Liability Institute ICLE Atlanta, Ga. Real Property Law Institute 6 CLE Amelia Island, Fla. 12 CLE ICLE Jury Trial 7 Atlanta, Ga. 6 CLE NBI, INC. Limited Liability Companies and Limited Liability 27-29 Partnerships in Georgia Savannah, Ga. ICLE 5.5 CLE (with 0.5 ethics) Family Law Institute Destin, Fla. 10 12 CLE

NBI, INC. 24-27 Fundamental Issues in Georgia Human Resources ICLE Savannah, Ga. Georgia Trial Skills Clinic 6 CLE UGA Law School, Athens, Ga. 24 CLE 13 25-26 NBI, INC. Essentials of Section 1031 Exchanges in Georgia ICLE Atlanta, Ga. Southeastern Admiralty Law (SEALI) Institute 6.7 CLE (with 0.5 ethics) Ponte Vedra Beach, Fla. 12 CLE April 2004 87 Formal Advisory Opinion Issued Pursuant to Rule 4-403(d)

The second publication of this opinion the lawyer will exercise his or her independ- appeared in the December 2003 issue of the ent professional judgment in deciding Georgia Bar Journal, which was mailed to the whether or not to refer a particular client to members of the State Bar of Georgia on or the financial investment adviser.

Notices about December 8, 2003. The opinion was Prudentially, this would require the lawyer filed with the Supreme Court of Georgia on to document each referral in such a way as to December 15, 2003. No review was request- be able to demonstrate that the referral choice ed within the 20-day review period, and the was not dictated by the lawyer’s financial Supreme Court of Georgia did not order interests but by the merits of the institution to review on its own motion. On January 6, whom the client was referred. The agree- 2004, the Formal Advisory Opinion Board ment must not obligate the attorney to reveal issued Formal Advisory Opinion No. 03-3 confidential information to the adviser pursuant to Rule 4-403(d). Following is the absent the consent of the client; the fees paid full text of the opinion issued by the Board. to the attorney under the agreement must not be structured in such a way as to create a STATE BAR OF GEORGIA financial interest adverse to the client or oth- ISSUED BY THE FORMAL ADVISORY erwise adversely affect the client, and the OPINION BOARD agreement must itself be in compliance with PURSUANT TO RULE 4-403 ON other laws the violation of which would be a JANUARY 6, 2004 violation of Rule 8.4 Misconduct, especially FORMAL ADVISORY OPINION NO. 03-3 those laws concerning the regulation of secu- (Proposed Formal Advisory Opinion rities enforceable by criminal sanctions. This Request No. 02-R4) is not an exhaustive list of ethical require- ments in that the terms of particular agree- QUESTION PRESENTED: ments may generate other ethical concerns. Is it ethically permissible for an attorney to enter into a “solicitation agreement” with a OPINION: financial investment adviser under which the “Anytime a lawyer’s financial or property attorney, in return for referring a client to the interests could be affected by advice the adviser, receives fees based on a percentage lawyer gives a client, the lawyer had better of gross fees paid by the client to the adviser? watch out.” ABA/BNA LAWYERS MANUAL ON PROFESSIONAL CONDUCT 51:405. In the circum- SUMMARY ANSWER: stances described in the Question Presented, While it may be possible to structure a a lawyer, obligated to exercise independent solicitation agreement to comply with ethical professional judgment on behalf of a client in requirements, it would be both ethically and deciding if a referral is appropriate and legally perilous to attempt to do so. In addi- deciding to whom to make the referral, tion to numerous other ethical concerns, Rule would be in a situation in which his or her 1.7 Conflicts of Interest: General Rule, would financial interests would be affected by the require at a minimum that a “solicitation advice given. This conflict between the obli- agreement” providing referral fees to the gation of independent professional judgment attorney be disclosed to the client in writing and the lawyer’s financial interest is gov- in a manner sufficient to permit the client to erned by Rule of Professional Conduct 1.7 give informed consent to the personal inter- which provides, in relevant part, that: est conflict created by the agreement after (A) A lawyer shall not represent or con- having the opportunity to consult with inde- tinue to represent a client if there is a sig- pendent counsel. Comment 6 to Rule 1.7 pro- nificant risk that the lawyer’s own inter- vides: “A lawyer may not allow related busi- ests . . . will materially or adversely affect ness interest to affect representation by, for the representation of the client . . . . example, referring clients to an enterprise in The Committee is guided in its interpreta- which the lawyer has an undisclosed busi- tion of this provision in these circumstances ness interest.” Additionally, the terms of the by Comment 6 to Rule 1.7: “solicitation agreement” must be such that A lawyer may not allow related business

88 Georgia Bar Journal interests to affect representation, for example, by requiring, for example, the attorney to use only materi- referring clients to an enterprise in which the lawyer als prepared or approved by the adviser. Such a restric- has an undisclosed interest. tion is not only inconsistent with the attorney’s obliga- Under Rule 1.7, client consent to such a personal tions to exercise independent professional judgment interest conflict is permissible after: “(1) consultation but also with the attorney’s obligations under Rule 1.4 with the lawyer, (2) having received in writing reason- Communications concerning the attorney’s obligation able and adequate information about the materials risks to provide information to clients sufficient for informed of the representation, and (3) having been given an decision making. opportunity to consult with independent counsel.” 3) The agreement cannot obligate the attorney to Thus, at a minimum, a “solicitation agreement” provid- provide confidential information, as defined in Rule 1.6 ing referral fees to the attorney would have to be dis- Confidentiality, to the adviser absent client consent. closed to the client in writing in a manner sufficient to 4) The fees paid to the attorney for the referral can- permit the client to give informed consent to the per- not be structured in such a way as to create a financial sonal interest conflict created by the agreement after interest or other interest adverse to the client. Rule 1.8 having the opportunity to consult with independent Conflicts of Interest: Prohibited Transactions provides counsel. “. . . nor shall the lawyer knowingly acquire an owner- In addition to this minimum requirement, there are ship, possessory, security, or other pecuniary interest numerous other ethical obligations that would dictate adverse to a client . . .” the permitted terms of such an agreement. The follow- 5) Finally, any such agreement would have to be in ing obligations are offered as a non-exhaustive list of compliance with other laws the violations of which examples for the terms of particular agreements may could constitute a violation of Rule 8.4 Misconduct. For generate other ethical concerns. example, the agreement may not violate any of the legal 1) The agreement must not bind the attorney to or administrative regulations governing trading in make referrals or to make referrals only to the adviser securities enforceable by criminal sanctions. for such an obligation would be inconsistent with the Thus, while it may be possible to structure a solicitation attorney’s obligation to exercise independent profes- agreement to comply with ethical requirements, it would sional judgment on behalf of the client in determining be both ethically and legally perilous to attempt to do so. whether a referral is appropriate and to whom the client should be referred. Both determinations must The second publication of this opinion appeared in the always be made only in consideration of the client’s December 2003 issue of the Georgia Bar Journal, which best interests. Prudentially, this would require the was mailed to the members of the State Bar of Georgia on lawyer to document each referral in such a way as to be December 8, 2003. The opinion was filed with the Supreme able to demonstrate that the referral choice was not dic- Court of Georgia on December 15, 2003. No review was tated by the lawyer’s financial interests but by the mer- requested within the 20-day review period, and the Supreme its of the institution to whom the client was referred. In Court of Georgia has not ordered review on its own motion. order to be able to do this well the lawyer would need In accordance with Rule 4-403(d), this opinion is binding to stay abreast of the quality and cost of services pro- only on the State Bar of Georgia and the person who request- vided by other similar financial institutions. ed the opinion, and not on the Supreme Court of Georgia, 2) The agreement cannot restrict the information the which shall treat the opinion as persuasive authority only. attorney can provide the client concerning a referral by Notice of Motion to Amend the Rules and Regulations of the State Bar of Georgia No earlier than thirty days after the publication of proposed amendments to the Rules is reminded that he this Notice, the State Bar of Georgia will file a Motion to or she may only do so in the manner provided by Rule Amend the Rules and Regulations for the Organization 5-102, Handbook, p. H-6. and Government of the State Bar of Georgia pursuant to This Statement, and the following verbatim text, are Part V, Chapter 1 of said Rules, 2003-2004 State Bar of Georgia Directory and Handbook, p. H-6 to H-7 (here- intended to comply with the notice requirements of inafter referred to as “Handbook”). Rule 5-101, Handbook, p. H-6. I hereby certify that the following is the verbatim text of the proposed amendments as approved by the Board Cliff Brashier of Governors of the State Bar of Georgia. Any member Executive Director of the State Bar of Georgia who desires to object to the State Bar of Georgia

April 2004 89 IN THE SUPREME COURT (2) a lawyer or law firm who purchases the prac- STATE OF GEORGIA tice of a deceased, disabled, or disappeared IN RE: STATE BAR OF GEORGIA lawyer may, pursuant to the provisions of Rule Rules and Regulations for its Organization and 1.17, pay to the estate or other representative of Government that lawyer the agreedupon purchase price; (3) a lawyer or law firm may include nonlawyer MOTION TO AMEND 2004-2 employees in a compensation or retirement MOTION TO AMEND THE RULES AND REGULA- plan, even though the plan is based in whole TIONS OF THE STATE BAR OF GEORGIA or in part on a profitsharing arrangement; COMES NOW, the State Bar of Georgia, pursuant to (4) a lawyer who undertakes to complete unfin- the authorization and direction of its Board of ished business of a deceased lawyer may pay Governors in regular meetings held on November 8, to the estate of the deceased lawyer that pro- 2003, and January 17, 2004, and upon the concurrence portion of the total compensation which fair- of its Executive Committee, presents to this Court its ly represents the services rendered by the Motion to Amend the Rules and Regulations of the deceased lawyer; and, State Bar of Georgia as set forth in an Order of this (5) a lawyer may pay a referral fee to a bar-oper- Court dated December 6, 1963 (219 Ga. 873), as amend- ated non-profit lawyer referral service where ed by subsequent Orders, 2001-2002 State Bar of Georgia such fee is calculated as a percentage of legal Directory and Handbook, pp. 1-H, et seq., and respectfully fees earned by the lawyer to whom the service moves that the Rules and Regulations of the State Bar of has referred a matter pursuant to Rule 7.3. Georgia be amended in the following respects: Direct Contact with Prospective Clients. (b) A lawyer shall not form a partnership with a I. nonlawyer if any of the activities of the partnership Proposed Amendments to the Georgia Rules of consist of the practice of law. Professional Conduct Relating to Referral Services (c) A lawyer shall not permit a person who recom- It is proposed that certain provisions of the Georgia mends, employs, or pays the lawyer to render legal Rules of Professional Conduct be amended as shown services for another to direct or regulate the lawyer’s below to expressly permit bar-operated non-profit lawyer professional judgment in rendering such legal services. referral services to share a percentage of the fee with the (d) A lawyer shall not practice with or in the form lawyer to whom the service has referred a matter. of a professional corporation or association author- ized to practice law for a profit, if: a.) Proposed Amendments (1) a nonlawyer owns any interest therein, except to Rule 5.4 of the Georgia Rules that a fiduciary representative of the estate of of Professional Conduct a lawyer may hold the stock or interest of the lawyer for a reasonable time during adminis- The State Bar of Georgia proposes amending Rule 5.4 of tration; the Georgia Rules of Professional Conduct by inserting the (2) a nonlawyer is a corporate director or officer phrases in italicized and underlined typeface as follows: thereof; or (3) a nonlawyer has the right to direct or control RULE 5.4 the professional judgment of a lawyer. PROFESSIONAL INDEPENDENCE OF A LAWYER The maximum penalty for a violation of this Rule is disbarment. (a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that: Comment (1) an agreement by a lawyer with the lawyer’s [1] The provisions of this Rule express traditional firm, partner, or associate may provide for the limitations on sharing fees. These limitations are to payment of money, over a reasonable period protect the lawyer’s professional independence of judg- of time after the lawyer’s death, to the ment. Where someone other than the client pays the lawyer’s estate or to one or more specified lawyer’s fee or salary, or recommends employment of persons; the lawyer, that arrangement does not modify the

90 Georgia Bar Journal lawyer’s obligation to the client. As stated in paragraph secure the lawyer’s employment by a client, or as a (c), such arrangements should not interfere with the reward for having made a recommendation resulting lawyer’s professional judgment. in the lawyer’s employment by a client; except that the lawyer may pay for public communications per- b.) Proposed Amendments mitted by Rule 7.1 and except as follows: to Rule 7.3 of the Georgia (1) A lawyer may pay the usual and reasonable Rules of Professional Conduct fees or dues charged by a bona fide lawyer referral service operated by an organization The State Bar proposes that Rule 7.3 of the Georgia authorized by law and qualified to do business Rules of Professional Conduct be amended as shown in this state provided, however, such organiza- below by inserting the phrases in italicized and under- tion has filed with the State Disciplinary lined typeface. Board, at least annually, a report showing its terms, its subscription charges, agreements RULE 7.3 with counsel, the number of lawyers partici- DIRECT CONTACT WITH PROSPECTIVE CLIENTS pating, and the names and addresses of lawyers participating in the service; (a) A lawyer shall not send, or knowingly permit to (2) A lawyer may pay the usual and reasonable be sent, on behalf of the lawyer, the lawyer’s firm, fees or dues charged by a bar-operated, non- lawyer’s partner, associate, or any other lawyer affili- profit lawyer referral service, including a fee ated with the lawyer or the lawyer’s firm, a written which is calculated as a percentage of the legal communication to a prospective client for the purpose fees earned by the lawyer to whom the service of obtaining professional employment if: has referred a matter, provided such bar-oper- (1) it has been made known to the lawyer that a ated non-profit lawyer referral service meets person does not desire to receive communica- the following criteria: tions from the lawyer; (i) the lawyer referral service shall be operated in (2) the communication involves coercion, duress, the public interest for the purpose of referring fraud, overreaching, harassment, intimidation prospective clients to lawyers, pro bono and or undue influence; public service legal programs, and government, (3) the written communication concerns an action consumer or other agencies who can provide the for personal injury or wrongful death or oth- assistance the clients need. Such organization erwise relates to an accident or disaster shall file annually with the State Disciplinary involving the person to whom the communi- Board a report showing its rules and regula- cation is addressed or a relative of that person, tions, its subscription charges, agreements with unless the accident or disaster occurred more counsel, the number of lawyers participating than 30 days prior to the mailing of the com- and the names and addresses of the lawyers munication; or participating in the service; (4) the lawyer knows or reasonably should know (ii) the sponsoring bar association for the lawyer that the physical, emotional or mental state of the referral service must be open to all lawyers person is such that the person could not exercise licensed and eligible to practice in this state reasonable judgment in employing a lawyer. who maintain an office within the geograph- (b) Written communications to a prospective client, ical area served, and who meet reasonable other than a close friend, relative, former client or one objectively determinable experience require- whom the lawyer reasonably believes is a former ments established by the bar association; client, for the purpose of obtaining professional (iii) The combined fees charged by a lawyer and employment shall be plainly marked “Advertisement” the lawyer referral service to a client on the face of the envelope and on the top of each page referred by such service shall not exceed the of the written communication in type size no smaller total charges which the client would have than the largest type size used in the body of the letter. paid had no service been involved; and, (c)A lawyer shall not compensate or give anything (iv) A lawyer who is a member of the qualified of value to a person or organization to recommend or lawyer referral service must maintain in

April 2004 91 force a policy of errors and omissions insur- prospective clients through personal contact justifies its ance in an amount no less than $100,000 per prohibition, particularly since the direct written contact occurrence and $300,000 in the aggregate. permitted under paragraph (b) of this Rule offers an (3) A lawyer may pay the usual and reasonable alternative means of communicating necessary infor- fees to a qualified legal services plan or insur- mation to those who may be in need of legal services. er providing legal services insurance as Also included in the prohibited types of personal con- authorized by law to promote the use of the tact are direct personal contact through an intermediary lawyer’s services, the lawyer’s partner or asso- and live contact by telephone. ciates services so long as the communications of the organization are not false, fraudulent, Direct Mail Solicitation deceptive or misleading; [3] Subject to the requirements of Rule 7.1: (4) A lawyer may pay the usual and reasonable Communications Concerning a Lawyer’s Services and para- fees charged by a lay public relations or mar- graphs (b) and (c) of this Rule 7.3: Direct Contact with keting organization provided the activities of Prospective Clients, promotional communication by a such organization on behalf of the lawyer are lawyer through direct written contact is generally per- otherwise in accordance with these Rules. missible. The public’s need to receive information con- (5) A lawyer may pay for a law practice in accor- cerning their legal rights and the availability of legal dance with Rule 1.17: Sale of Law Practice. services has been consistently recognized as a basis for (d) A lawyer shall not solicit professional employ- permitting direct written communication since this ment as a private practitioner for the lawyer, a partner type of communication may often be the best and most or associate through direct personal contact or effective means of informing. So long as this stream of through live telephone contact, with a non-lawyer information flows cleanly, it will be permitted to flow who has not sought advice regarding employment of freely. a lawyer. [4] Certain narrowly-drawn restrictions on this type (e) A lawyer shall not accept employment when the of communication are justified by a substantial state lawyer knows or it is obvious that the person who interest in facilitating the public’s intelligent selection seeks to employ the lawyer does so as a result of con- of counsel, including the restrictions of sub-paragraph duct by any person or organization prohibited under (a)(3) & (4) which proscribe direct mailings to persons Rules 7.3(c)(1), 7.3(c)(2) or 7.3(d): Direct Contact with such as an injured and hospitalized accident victim or Prospective Clients. the bereaved family of a deceased. The maximum penalty for a violation of this Rule is [5] In order to make it clear that the communication disbarment. is commercial in nature, paragraph (b) requires inclu- sion of an appropriate affirmative “advertisement” dis- Comment claimer. Again, the traditional exception for contact Direct Personal Contact with close friends, relatives and former clients is recog- [1] There is a potential for abuse inherent in solicita- nized and permits elimination of the disclaimer in tion through direct personal contact by a lawyer of direct written contact with these persons. prospective clients known to need legal services. It sub- [6] This Rule does not prohibit communications jects the lay person to the private importuning of a authorized by law, such as notice to members of a class trained advocate, in a direct interpersonal encounter. A in class action litigation. prospective client often feels overwhelmed by the situ- ation giving rise to the need for legal services, and may Paying Others to Recommend a Lawyer have an impaired capacity for reason, judgment and [7] A lawyer is allowed to pay for communications protective self-interest. Furthermore, the lawyer seek- permitted by these Rules, but otherwise is not permit- ing the retainer is faced with a conflict stemming from ted to pay another person for channeling professional the lawyer’s own interest, which may color the advice work. This restriction does not prevent an organization and representation offered the vulnerable prospect. or person other than the lawyer from advertising or rec- [2] The situation is therefore fraught with the possi- ommending the lawyer’s services. Thus, a legal aid bility of undue influence, intimidation, and overreach- agency, a prepaid legal services plan or prepaid legal ing. The potential for abuse inherent in solicitation of insurance organization may pay to advertise legal serv-

92 Georgia Bar Journal ices provided under its auspices. Likewise, a lawyer more than one (1) hour in ethics during the cal- may participate in lawyer referral programs and pay endar year, the excess ethics credit may be car- the usual fees charged by such programs, provided the ried forward up to a maximum of two (2) hours programs are in compliance with the registration and applied to the ethics requirement for suc- requirements of sub-paragraph (c)(1) or (c)(2) of this ceeding years. Rule 7.3: Direct Contact with Prospective Clients and the (3) Each active member, except newly admitted communications and practices of the organization are members, shall complete a minimum of one (1) not deceptive or misleading. hour of continuing legal education during each [8] A lawyer may not indirectly engage in promo- year in an activity of any sponsor approved by tional activities through a lay public relations or mar- the Chief Justice’s Commission on keting firm if such activities would be prohibited by Professionalism in the area of professionalism. these Rules if engaged in directly by the lawyer. This hour is to be included in, and not in addi- tion to, the twelve-hour (12) requirement. If a II. member completes more than one (1) hour in Proposed Amendments to the Part VIII of the professionalism during the calendar year, the Rules Of the State Bar of Georgia excess professionalism credit may be carried It is proposed that Rule 8-104 of Part VIII of the Rules forward up to a maximum of two (2) hours and of the State Bar of Georgia be amended to delete the applied to the professionalism requirement for current requirements regarding trial experiences. The succeeding years. State Bar proposes amending Rule 8-104 by deleting the (4) Each active member, except newly admitted stricken portions of the Rule as set out below. members, shall complete a one-time mandatory three (3) hours of continuing legal education in Rule 8-104. Education Requirements and Exemptions. Alternative Dispute Resolution by March 31, (A) Minimum Continuing Legal Education 1996. Lawyers are deemed to have satisfied this Requirement. requirement by attending any of the following: Each active member shall complete a minimum of (1) a law school class primarily devoted to the twelve (12) hours of actual instruction in an approved study of ADR; (2) a training session to be a neu- continuing legal education activity during each year tral that was approved for CLE credit or would after January 1, 1984. If a member completes more than now be eligible for CLE credit; or (3) an approved twelve (12) hours in a year after January 1, 1984, the CLE seminar devoted to ADR. Lawyers admitted excess credit may be carried forward and applied to the to the bar after July 31, 1995, may satisfy this education requirement for the succeeding year only. requirement by attending the Bridge-the-Gap Any continuing legal education activity completed seminar conducted by the Institute of Continuing between July 1, 1983, and December 31, 1983, shall be Legal Education in Georgia. The Georgia credited as if completed in 1984. Commission of Dispute Resolution will review (B) Basic Legal Skills Requirement. requests for exemption from the CLE require- (1) Any newly admitted active member must attend ment based on law school course work. the Bridge-the-Gap program of the Institute of (C) Exemptions. Continuing Legal Education in the year of his or (1) An inactive member shall be exempt from the her admission, or in the next calendar year, and continuing legal education and the reporting such attendance shall satisfy the mandatory con- requirements of this Rule. tinuing legal education requirements for such (2) The Commission may exempt an active mem- newly admitted member for both the year of ber from the continuing legal education, but admission and the next succeeding year. not the reporting, requirements of this rule for (2) Each active member, except newly admitted a period of not more than one (1) year upon a members, shall complete a minimum of one (1) finding by the Commission of special circum- hour of continuing legal education during each stances unique to that member constituting year in the area of ethics. This hour is to be undue hardship. included in, and not in addition to, the twelve- (3) Any active member over the age of seventy (70) hour (12) requirement. If a member completes shall be exempt, upon written application to

April 2004 93 the Commission, from the continuing legal experiences may be obtained before education requirements of this rule, including admission to practice but only after com- the reporting requirements. pletion of 60% of the credit hours (4) Any active member residing outside of Georgia required for law school graduation. The who neither practices in Georgia nor represents appearance of any member admitted to Georgia clients shall be exempt, upon written practice after January 1, 1988, as sole or application to the Commission, from the continu- lead counsel in the Superior or State ing legal education, but not the reporting, require- Courts of Georgia in any contested civil ments of this rule during the year for which the case or in the trial of a criminal case shall written application is made. This application constitute a certification by such member shall be filed with the annual reporting affidavit. to the court of compliance with the (5) Any active member of the Board of Bar requirements of this Rule. Examiners shall be exempt from the continuing Trial MCLE. Each active member who appears as legal education but not the reporting require- sole or lead counsel in the Superior or State Courts ment of this Rule. of Georgia in any contested civil case or in the trial (D) Requirements for Participation in Litigation: of a criminal case in 1990 or in any subsequent cal- (1) Trial Experiences. Any member admitted to endar year, shall complete for such year a minimum practice after January 1, 1988, may not appear of three (3) hours of continuing legal education as sole or lead counsel in the Superior or State activity in the area of trial practice. A trial practice Courts of Georgia in any contested civil case or CLE activity is one exclusively limited to one or in the trial of a criminal case until after such more of the following subjects: evidence, civil prac- member has obtained nine (9) litigation experi- tice and procedure, criminal practice and procedure, ences and has filed an affidavit with the State ethics and professionalism in litigation, or trial Bar of Georgia demonstrating compliance with advocacy. These hours are to be included in, and this Rule. The affidavit shall be accompanied not in addition to, the 12-hour (twelve) requirement. by a fee in the amount set by the Commission If a member completes more than three (3) trial prac- to cover the cost of administering this Rule. A tice hours, the excess trial practice credit may be car- litigation experience is defined as: ried forward and applied to the trial practice (a) actual participation in a trial or hearing requirement for the succeeding year only. under the direct supervision of a member of the Bar; or SO MOVED, this ______day of (b) observation of an entire trial or hearing; or ______, 2004 (c) observation of a State Bar of Georgia approved video tape of an entire trial or Counsel for the State Bar of Georgia hearing under the direct supervision of a member of the Bar. Litigation experiences ______may be obtained by (a), (b), (c), or any com- William P. Smith, III bination thereof, but must include: General Counsel (i) In the Superior or State Courts of State Bar No. 665000 Georgia, three jury trials (at least one of which shall be criminal and at least one ______of which shall be civil), one non-jury civil Robert E. McCormack trial or injunctive relief hearing, and Deputy General Counsel three motion hearings; and State Bar No. 485375 (ii) In a United States District Court, two jury trials (one to be criminal and one to be OFFICE OF THE GENERAL COUNSEL civil). Three of the litigation experiences State Bar of Georgia may be obtained by satisfactory comple- 104 Marietta Street, NW – Suite 100 tion of an approved mock trial course. Atlanta, Georgia 30303 Up to six (6) of the nine (9) required trial (404) 527-8720

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