******************************************************************************************ALABAMA STATE BAR

BOARD OF BAR COMMISSIONERS MEETINGAlabama State BarMontgomery, AL

Friday, January 20, 2017******************************************************************************************10:00 a.m. I. ADMINISTRATIVE

A. Call to Order

1. Invocation

2. Roll Call

B. Approval of Minutes – October 28, 2016 Board of Commissioners Meeting

II. PUBLIC REPRIMANDS (4)

III. OFFICER / STAFF REPORTS

A. President’s Report

1. Lawyer Legislator Breakfast

B. Secretary’s Report – Keith Norman

1. Travel Mileage Rate for 20172. Memorial Resolution for Tony McLain2. Memorial Resolution from the Mobile Bar Association

C. Finance Report – Merinda Hall

1. 1st Quarter Report 2016-20172. ASB Audit Report

D. Admissions Update – Justin Aday

E. Service Programs Update – Laura Calloway

F. Digital Communications Update –Eric Anderson

G. External Relations and Programs Update – Ed Patterson

AGENDAJanuary 20, 2017

PAGE 2

IV. DISCUSSION ITEMS/REPORTS

1. Legislative Update – Suzi Huffaker

2. Pro Bono Month Celebration Report and Introduction of Law Students –Kelly McTear

3. Lawyer University Report – Kelly Pate

4. Alabama State Bar Digital Communications Policies and Procedures – JonTownsend

V. ACTION ITEMS

1. Rule III Applications

2. Consider Appointment of Member to Legal Services Alabama Board ofDirectors to Replace Beth Marietta Lyons

3. Re-appointment of Board of Bar Examiners: Edgar Gentle, David Hymerand Aldos Vance

4. Approval of Debra Leo and Boyd Miller to the ADR Commission

5. Report of Succession Planning Task Force/Announcement of New ExecutiveDirector – Cooper Shattuck

6. Filling the Remaining Judicial Inquiry Commission Term of Augusta Dowd(July 2019) Upon Her Resignation

7. David Ryan Litigation – Dave Boyd and Cole Portis

AGENDAJanuary 20, 2017

PAGE 3

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ALABAMA STATE BAR FOUNDATIONBOARD OF TRUSTEES MEETING

Alabama State BarMontgomery, AL

Friday, January 20, 2017

******************************************************************************************

I. Approval of October 28, 2016 Board of Trustees Meeting Minutes

II. 1st Quarter Report 2016-2017

III. 2015-2016 Audit Report

IV. Completion of Installation of New Phone System

V. Approval of Purchase of New Air Conditioning System

AGENDAJanuary 20, 2017

PAGE 4

MEMORANDUM

TO: Board of Bar Commissioners

FROM: Keith B. Norman, Executive Director

RE: Action Items for January 20, 2017 Meeting

DATE: January 13, 2017

1. Rule III Applications – The following 11 individuals have filed applications foradmission by motion pursuant to Rule III of the Rules Governing Admission to theAlabama State Bar. They are: Brian Joseph Chapuran, (TN); Christina DiGiannantonio,(GA); Emily Camille Rutledge Early, (GA); Jason Andrew Hartsough, (GA); DanielMatthew Murdock, (GA); Daniel Anthony Necci, (WI); William David Ross, (MS);Amanda Douglas Summerlin (MS); Brett Chandler Tyler (GA); Elizabeth Whipple (GA)and Matthew Miles Williams (MS). Each candidate has met the requirements of Rule IIIin order to be considered for admission.

2. Legal Services Alabama Vacancy – Consider approval of appointment ofmember to Legal Services Alabama Board of Directors, replacing Beth Marrietta Lyons.The term is for three years.

3. Appointment of Board of Bar Examiners Members – The terms of Ed Gentle,David Hymer and Aldos Vance conclude following the February administration of thebar exam. Each has agreed to serve another four year term on the Board of BarExaminers.

4. Vacancies on the Alternative Dispute Resolution Commission – Debra Leo ofBirmingham and Boyd Miller of Mobile are recommended to fill two vacancies on theADR Commission.

5. Report of the Succession Planning Task Force – Commissioner Shattuck willmake the report on the task force’s recommendation for a new executive director.

6. Filling the Remainder Judicial Inquiry Commission Term of President-electAugusta Dowd Upon Her Resignation from JIC – Former bar commissioner MaibethPorter is recommended to fill the remaining portion of President-elect Augusta Dowd’sterm on the Judicial Inquiry Commission. The term concludes in July 2019.

7. Ratification and Approval of Expenses Incurred David Ryan Litigation –President Portis and David Boyd, attorney for the Alabama State Bar, will address thismatter.

KBN/dl

MINUTES

ALABAMA STATE BARBOARD OF BAR COMMISSIONERS MEETING

State Bar BuildingMontgomery, Alabama

Friday, October 28, 2016

1. CALL TO ORDER

President Cole Portis convened this meeting of the Alabama State Bar Board ofCommissioners at 10:00 a.m. in the board room of the Alabama State Bar building,Montgomery, Alabama. Commissioner Cooper Shattuck gave the invocation.

2. ROLL CALL

The secretary called the roll of the commission and the following commissioners werepresent:Halron W. Turner J. Levi Nichols Jana Russell GarnerTerri O. Tompkins Leslie R. Barineau John A. Smyth, IIIBarry A. Ragsdale Robert G. Methvin, Jr. LaBella S. AlvisMichael D. Ermert Allison O. Skinner Brannon J. BuckKenneth Moore Ralph E. Holt C. Zack MooreWilliam R. Lancaster Bryan E. Comer James RebarchakGeorge R. Parker Les Pittman J. Flynn MozingoC. Gibson Vance Jeffery C. Duffey J. David MartinDonald R. Rhea Tom Perry, Jr. William Randall MayMark S. Boardman Anne Malatia Glass Robert L. BowersR. Cliff Mendheim Manish H. Patel Tazewell T. Shepard, IIIRebekah K. McKinney M. Clay Martin Audrey O. StrawbridgeJ. Daryl Burt F. Patrick Loftin J. Lynn PerryErskine R. Funderburg, Jr. H. Thomas Heflin, Jr. Roy W. Williams, Jr.Lee F. Knowles Andrew D. Stanley Matthew C. MitchellDonald B. Mansell Scott L. McPherson Diandra S. DebrosseR. Cooper Shattuck Karen L. Laneaux Jeanne Dowdle RascoMonet M. Gaines Sam Irby

The following commissioners were absent:Courtney R. Potthoff Larry W. Morris Hays WebbWilliam H. Broome Emily L. Baggett Dana GrimesErik Stephen Heninger Thad Yancey, Jr. Frederick G. Helmsing, Jr.Charles C. Tatum, Jr. Eric Coale John A. Brinkley, Jr.Clint L. Maze Steven D. Adcock Sharon Hindman HesterW. Thomas Chapman, II Gregory M. Varner Rebecca G. DePalmaAshley Swink Fincher

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Also in attendance were President-elect Augusta Dowd, Immediate Past President LeeCopeland and board counselor Richard J.R. Raleigh, Jr. Staff members in attendancewere: Tony McLain, Diane Locke, Robert Thornhill, Ed Patterson, Linda Lund, MerindaHall, Justin Aday, Eric Anderson, Laura Calloway, Tripp Vickers, Mark Moody andJeremy McIntire. Also in attendance were Suzi Huffaker, legislative counsel, TracyDaniel, director of Alabama Law Foundation as well as Parker Miller, president of theYoung Lawyers’ Section.

3. APPROVAL OF THE MINUTES OF THE SEPTEMBER 16, 2016 BOARDMEETING

President Portis stated that the minutes of the September 16, 2016 Board ofCommissioners meeting had been transcribed and circulated prior to the meeting. Heasked if there were any corrections, additions or deletions. There were none.

COMMISSIONER HEFLIN MOVED TO APPROVE THE MINUTES OF THESEPTEMBER 16, 2016 BOARD OF COMMISSIONERS MEETING. THE MOTIONWAS SECONDED AND APPROVED BY UNANIMOUS VOICE VOTE.

4. REPRIMANDS

4.a. John Stanley Morgan, Etowah County, ASB 2015-1545

Mr. Morgan received a public reprimand with general publication for violating Rule1.5(a) and (e) of the Alabama Rules of Professional Conduct (ARPC).

5. PRESIDENT’S REPORT

President Portis thanked the local bar presidents in attendance and expressed hisappreciation for the work of the Local Bar Task Force in planning the local bar retreat.The president highlighted his speaking engagement in Tuskegee at a ceremony to honorFred Gray as well as at the Opening of Court ceremony. He also mentioned meeting withthe Supreme Court to discuss the bar’s assistance with the legislature on issues includingcourt funding. President Portis reported briefly on the executive director search andhighlighted ongoing committee work including Lawyer University, member benefits, andemphasis on minority participation. He concluded by noting that the state bar officerswould be meeting with law school deans in November and that the 2017 annual meetingwas scheduled for Point Clear at the Grand Hotel, July 12-15.

6. FINANCE REPORT

Finance Director Merinda Hall reviewed the year-end report for FY2015-16.

7. LOCAL BAR TASK FORCE REPORT

Commissioners Gibson Vance and Bob Methvin reported on the success of the local barretreat which was attended by 30 local bar presidents. During the conference, severalremarks were made by local bar presidents about their concerns including the costs ofhealth insurance, lawyer advertising, professionalism, mentoring and getting millenniallawyers involved with the local bar. The local bar presidents in attendance as well as

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commissioners were told of the availability of staff members from the state bar to attendand speak at local bars as a part of the roadshow program.

8. SERVICE PROGRAMS REPORT

Service Program Director Laura Calloway updated the commission on the work of theMembership Benefits Task Force. She stated that two new membership benefit proposalswere likely to be ready at the next meeting. She also reported that the task forcecontinues to meet and she encouraged commissioners as well as local bar presidents toconsider scheduling a roadshow for their local bar meetings.

9. DIGITAL COMMUNICATIONS REPORT

Director of Digital Communications Eric Anderson reminded the board of the websitesurvey and asked the commissioners to encourage local lawyers to respond to the survey.He discussed the consolidated fee invoice noting that 46 percent of the payments so farhave been online and roughly six percent by the voucher process. He stated that roughly15,000 members had purchased their license or paid special membership dues.

10. PRO BONO REPORT

Former commissioner Christy Crow provided a report on the impressive number ofactivities and events scheduled during the month of October to celebrate the month as probono month. Next, Commissioner Taze Shepard who organized the Bankruptcy Summitgave a report on the program held at the state bar featuring personnel from bankruptcycourts from across the state as well as representatives from the local volunteer lawyerprograms. Finally, Commissioner Skinner updated the commission on the AvoidForeclosure Program for Alabama. She stated that the Alabama Law Foundation, theVolunteer Lawyer Programs, Civil Justice Foundation and the Center for DisputeResolution as well as stakeholders have come together to implement this new program.She distributed a brochure describing the program to those attending the meeting.

11. LAWYERS ASSISTANCE PROGRAM REPORT

Director Robert Thornhill reported on the planning for the third annual retreat at CampSumatanga scheduled for April 7-8, 2017. He stated that it would be a time of trainingand comradery. He also noted that several articles had been prepared by the program forpublication in an upcoming issue of The Alabama Lawyer that focus on lawyerassistance.

12. LOUISIANA FLOOD PROJECT UPDATE

Parker Miller, President of the Young Lawyers’ Section, gave an overview of theassistance project including the amount of supplies and money collected to be sent toLouisiana to assist the victims of flooding.

13. REVISED BYLAWS FOR THE LEADERSHIP FORUM SECTION

Commissioner Diandra Debrosse reported that the proposed bylaw changes include aname change of the section to the Alabama State Bar Leadership Forum Alumni Section

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and would eliminate the positions of secretary and treasurer while adding two additionaldirector positions.

COMMISSIONER GAINES MOVED TO SUSPEND THE RULES IN ORDER TOCONSIDER THE PROPOSED AMENDMENTS TO THE LEADERSHIP FORUMSECTION BYLAWS. THE MOTION WAS SECONDED AND APPROVED BY THENECESSARY TWO-THIRDS VOTE.

COMMISSIONER MARTIN MOVED TO APPROVE THE PROPOSEDLEADERSHIP FORUM BYLAW CHANGES. THE MOTION WAS SECONDEDAND APPROVED BY VOICE VOTE.

(A copy of the bylaw amendments is attached to these minutes as Appendix A).

14. RULE III APPLICATIONS

The secretary reported that six individuals had requested admission by motion pursuant toRule III of the Rules Governing Admission to the Alabama State Bar. He stated theywere Adam Christopher Cobb (IN), Jennifer Lynn Foutch (IL), Donald E. Knapp, Jr.(MS), Raven Delene Perry-Beach (TN), Joshua Jerome Wendell (TX) and Benn CharlesWilson (GA). He stated that each candidate had met the requirements of Rule III in orderto be considered for admission.

COMMISSIONER VANCE MOVED TO ADMIT BY MOTION ADAMCHRISTOPHER COBB, JENNIFER LYNN FOUTCH, DONALD E. KNAPP, JR.,RAVEN DELENE PERRY-BEACH, JOSHUA JEROME WENDELL AND BENNCHARLES WILSON TO THE ALABAMA STATE BAR PURSUANT TO RULE IIIOF THE RULES GOVERNING ADMISSION TO THE ALABAMA STATE BAR. THEMOTION WAS SECONDED AND APPROVED BY VOICE VOTE.

15. AMENDMENTS TO THE RULES GOVERNING ADMISSION TO THE ALABAMASTATE BAR

Justin Aday, Director of Admissions discussed five substantive rule changes that werebeing proposed: (1) increasing the fee from $50 to $100 for postponing the bar exam;(2) allowing the bar exam fee to be carried forward for one examination only; (3)increasing the “shelf life” of the Multi-State Professional Responsibility Exam (MPRE)to 25 months; (4) a forfeiture of a bar exam fee if a candidate receives adversecharacter and fitness determination and (5) removing the requirement that areciprocity candidate certify his or her intention to conduct at least 75 percent of theirpractice in Alabama and have an office in the state under Rule III (reciprocity).Discussion ensued on the reciprocity rule and the other proposed rule changes. Afterextensive and prolonged discussion primarily opposing the proposed reciprocity rulechange, President Portis informed the commission that Items 1-4 would be voted onseparately from the proposed reciprocity rule change.

COMMISSIONER SHEPARD MOVED TO APPROVE AMENDMENTS TO ITEMS1-4 INVOLVING THE RULES GOVERNING ADMISSION TO THE ALABAMA STATEBAR. THE MOTION WAS SECONDED AND APPROVED BY VOICE VOTE.

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COMMISSIONER METHVIN THEN MOVED TO APPROVE THE AMENDMENTAS NOTED UNDER ITEM 5 RELATING TO RECIPROCITY. THE MOTION WASSECONDED. PRESIDENT PORTIS CALLED FOR A SHOW OF HANDS ON THERECIPROCITY AMENDMENT. THE VOTE REFLECTED 19 IN FAVOR AND 34OPPOSED. THE MOTION FAILED.

(A copy of the amendments (items 1-4) to the Rules Governing Admission to theAlabama State Bar are attached as Appendix B.)

16. FINANCIAL MANAGEMENT POLICY FOR SECTIONS

Finance Director Merinda Hall presented a new policy for sections that formalizedprevious rules and practices and included electronic point of sales guidelines as well asadditional guidelines for opt-out sections which had been discussed at the previousmeeting.

COMMISSIONER DEBROSSE MOVED TO APPROVE THE FINANCIALMANAGEMENT POLICY FOR SECTIONS. THE MOTION WAS SECONDED ANDAPPROVED BY VOICE VOTE.

(A copy of the new financial management policy for section’s as approved is attached tothese minutes as Appendix C).

17. LEADERSHIP FORUM CLASS 13

Mr. Tom Warburton, a member of the Leadership Forum Selection Committee, appearedbefore the commission to offer the selection committee’s recommendation of 30members and four alternates for the 13th Leadership Forum Class. The candidates andalternates were as follows:

Adams, Cassandra W.Avery, C. JasonBarlotta, Rachel V.Baxley, Charlie G.Brown, Valerie J.Chawla, PoojaChesnut, R. PatrickCornelius, Maggie J.Drummond, Krystal L.Espy, Wm M. 'Bill'Geer, III, John J.Han, Susan N.Hawthorne, Alison D.Hicks, J. BradfordHill, Jonathan C. 'Rudy'Huff, Michael P.Isbell, Jason S.Marshall, Amy C.Oswalt, Cheryl H.Penhale, Ashley N.Pickett, Kandice E.

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Pittard, Leanna B.Pruet, Daniel F.Robertson, Brandy L.Sanders, Adam L.Sheehan, W. AllenSullivan, Kristin W.Talley, Annie DonaldsonTompkins, Jason B.Williams, J. Reed

AlternatesYang, Soo SeokPayne, Joshua K.Head, Mary KatherineParrish, Russell N.

COMMISSIONER GAINES MOVED TO APPROVE THE RECOMMENDED LISTOF CANDIDATES AND ALTERNATES FOR LEADERSHIP FORUM CLASS 13.THE MOTION WAS SECONDED AND APPROVED BY VOICE VOTE.

18. NOMINEES TO THE ALABAMA BOARD OF COURT REPORTING

President Portis reported that Commissioner Leslie Barineau, Commissioner Jeff Duffeyand Mr. David Rains of Tuscaloosa had indicated their willingness to have their namesplaced in nomination and transmitted to the Lt. Governor for one of them to be appointedby the Lt. Governor to the Alabama Board of Court Reporting.

COMMISSIONER REBARCHAK MOVED TO TRANSMIT THE NAMES LESLIEBARNIEAU, JEFF DUFFEY AND DAVID RAINS TO THE OFFICE OF LT.GOVERNOR FOR HER CONSIDERATION FOR APPOINTMENT TO THEVACANCY ON THE BOARD OF COURT REPORTING. THE MOTION WASSECONDED AND APPROVED BY VOICE VOTE.

19. APPOINTMENT OF MEMBERS FOR THE JUDICIAL COMPENSATIONCOMMISSION

The president reported that the terms of Broox Garrett and Maibeth Porter on the JudicialCompensation Commission would expire in December. He stated that they had indicatedthat if the commission appoints them to another term that they would willingly serve.

COMMISSIONER DEBROSSE MOVED TO REAPPOINT BROOX GARRETT ANDMAIBETH PORTER TO ANOTHER TERM ON THE JUDICIAL COMPENSATIONCOMMISSION. THE MOTION WAS SECONDED AND APPROVED BY VOICEVOTE.

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20. CLE CREDIT FOR PRO BONO WORK

Commissioner Garner presented an amendment to the MCLE Rules on behalf of theMCLE Commission which would award three CLE credits for pro bono service (1.0 CLEcredit for each six hours of pro bono service) rendered through a VLP.

COMMISSIONER GAINES MOVED TO APPROVE THE RULE CHANGE. THEMOTION WAS SECONDED.

Discussion ensued both in favor of the proposed rule change and in opposition to the rulechange.

AFTER THE CONCLUSION OF THE DISCUSSION, PRESIDENT PORTISCALLED FOR A VOTE. THE MOTION WAS APPROVED BY VOICE VOTE.

21. 2017-2018 BUDGET REQUEST

Finance Director Merinda Hall reported on the requested budget for FY2018. She statedthat the requested amount is $6,970,000. She stated this was a 1.75 percent increase overthe FY2017 budget request.

COMMISSIONER GLASS MOVED TO APPROVE THE BUDGET AS PRESENTED.THE MOTION WAS SECONDED AND APPROVED BY VOICE VOTE.

22. ADJOURNMENT

President Portis asked if there was any further business to come before the commission.There being no further business to come before the commission, a motion was made andduly seconded to adjourn. The motion was approved by voice vote.

____________________________________J. Cole Portis, PresidentAlabama State Bar

ATTEST:

__________________________Keith B. Norman, SecretaryAlabama State Bar

AlabamaStateBar|AdmissionsOf ice

2016YearinReviewwithFive‐YearComparison

BarExam—Applicant&ExamineeStatistics

NewApplicationsbyType NewAdmissionsbyType

Character&FitnessHearingStatistics ApplicationProcessingTime(Papervs.Online)

AdmissionsDepartmentFinancials

Financial Highlights – 1st Quarter of FY 2016-17

Revenue Total revenue increased by 11.6% over last year in the State Bar Checking and Treasury Funds as anticipated, lead contributing factor being the increase in cost of dues that went into effect this year. Other notable increases in revenue included the following:

• MCLE Fees – The cost of pre-approved sponsor application fees increased by $100 with a combined increase in number of MCLE program application fees received.

• Lawyer Referral Dues/Fees – The number of membership fees collected increased by 25% as compared to 1st quarter of the prior year, also a slight increase in total LRS percentage fees.

Expenditures Total expenditures increased by 5.8% as compared to last year in the State Bar Checking and Treasury Funds due to the following:

• Salaries – Disbursement of termination benefits totaling $84k due to retirement of three employees during the quarter in addition to regular salaries.

• Rentals & Leases – Accounts for ¼ of the $51k increase in annual lease payments to the ASB Foundation that became effective in this fiscal year.

• Professional Services – Routine payments were processed more timely this year, otherwise comparable to balances of the previous year.

• Grants & Awards – New Bar Association Grant provided to the Meetings & Events Fund.

Alabama State BarComparative Budget to Actual - REVENUES

1ST QUARTER

QR-1

Revenues Increase (Decrease)

Total Budget YTD Actual Total Budget YTD Actual ActualLicense Fees 4,826,250.00 4,384,493.75 4,431,352.00 3,916,260.00 468,233.75Bar Exam Fees 575,000.00 130,900.00 505,000.00 132,142.25 -1,242.25Reciprocity Fees 35,000.00 3,125.00 50,000.00 -1,725.00 4,850.00Authorized House Counsel Fees 18,000.00 13,750.00 35,000.00 12,375.00 1,375.00Pro Hac Vice Fees 135,000.00 29,175.00 160,000.00 30,100.00 -925.00Disciplinary Admin. Fees 50,000.00 7,650.00 5,000.00 6,000.00 1,650.00Disciplinary Costs Recoupment 20,000.00 8,488.43 20,000.00 4,912.53 3,575.90Petitions for Reinstatement 10,000.00 2,269.19 15,000.00 1,500.00 769.19Miscellaneous 5,000.00 0.00 5,000.00 0.00 0.00Subtotal Fund 355 5,674,250.00 4,579,851.37 5,226,352.00 4,101,564.78 478,286.59 Special Membership Dues 884,650.00 660,100.00 625,000.00 609,775.00 50,325.00Law Student Registrations 100,000.00 18,700.00 97,000.00 17,450.00 1,250.00Bar Exam Review 2,000.00 620.00 1,400.00 600.00 20.00MCLE Fees 120,000.00 39,800.00 89,000.00 22,525.00 17,275.00Legal Specialization Fees 10,000.00 1,950.00 3,000.00 350.00 1,600.00IOLTA Non-Compliance Fees 1,000.00 0.00 200.00 0.00 0.00Miscellaneous Income 3,100.00 941.75 796.00 584.50 357.25Lawyer Referral Dues/% Fees 35,000.00 26,115.62 30,100.00 20,090.17 6,025.45Credit Card Fees 20,000.00 3,279.60 0.00 3,232.65 46.95Subtotal ASB Checking 1,175,750.00 751,506.97 846,496.00 674,607.32 76,899.65Total Revenues 6,850,000.00 5,331,358.34 6,072,848.00 4,776,172.10 555,186.24

2016-17 2015-16

Alabama State Bar Comparative Budget to Actual - EXPENSES

1ST QUARTER

QR-2

Expenses Increase (Decrease)

Total Budget YTD Actual Total Budget YTD Actual ActualSalaries 3,425,000.00 1,070,326.73 3,259,088.00 998,825.65 71,501.08Benefits 1,267,000.00 315,026.70 1,205,830.00 324,122.95 -9,096.25TOTAL PERSONNEL COSTS 4,692,000.00 1,385,353.43 4,464,918.00 1,322,948.60 62,404.83Travel In-State 125,000.00 16,347.51 120,000.00 15,860.52 486.99Travel Out-of-State 50,000.00 5,694.54 95,000.00 11,339.95 -5,645.41Rentals & Leases 884,000.00 211,171.14 795,000.00 197,547.18 13,623.96Utilities & Communications 145,000.00 25,768.20 140,000.00 27,412.07 -1,643.87Professional Services 560,000.00 52,485.89 675,000.00 43,918.32 8,567.57Supplies, Materials, Expenses 212,000.00 59,103.76 220,000.00 59,861.02 -757.26Grants, Awards 182,000.00 30,973.85 190,000.00 10,500.00 20,473.85

Total Expenses 6,850,000.00 1,786,898.32 6,699,918.00 1,689,387.66 97,510.66

2016-17 2015-16

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Treasury Fund

#0355State Bar

Checking FundClient Security

FundAlabama

Lawyers FundMeetings &

Events Fund VLP Fund TotalRevenues

License Fees 4,384,493.75 0.00 0.00 0.00 0.00 0.00 4,384,493.75

Member Dues 0.00 660,100.00 0.00 0.00 0.00 0.00 660,100.00

Professional Exam Fees 147,775.00 0.00 0.00 0.00 0.00 0.00 147,775.00

Professional Registration Fees 29,175.00 0.00 0.00 0.00 3,900.00 0.00 33,075.00

Disciplinary Fees and Costs 16,138.43 0.00 0.00 0.00 0.00 0.00 16,138.43

Petition for Reinstatement 2,269.19 0.00 0.00 0.00 0.00 0.00 2,269.19

CSF Asmts and Recoupments 0.00 0.00 427,050.00 0.00 0.00 0.00 427,050.00

Allotments and Grants 0.00 0.00 0.00 16,500.00 30,000.00 50,049.99 96,549.99

Contributions 0.00 0.00 0.00 0.00 0.00 0.00 0.00

MCLE Fees 0.00 39,800.00 0.00 0.00 0.00 0.00 39,800.00

Legal Specialization Fees 0.00 1,950.00 0.00 0.00 0.00 0.00 1,950.00

Law Student Registration Fees 0.00 18,700.00 0.00 0.00 0.00 0.00 18,700.00

Lawyer Referral Service 0.00 26,115.62 0.00 0.00 0.00 0.00 26,115.62

Annual Meeting Registration 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Legal Expo 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Leadership Forum 0.00 0.00 0.00 0.00 17,000.00 0.00 17,000.00

Special Events 0.00 0.00 0.00 0.00 2,250.00 0.00 2,250.00

Sponsorships 0.00 0.00 0.00 0.00 2,500.00 0.00 2,500.00

Ads/Subscriptions/Pub Sales 0.00 0.00 0.00 19,510.82 160.00 0.00 19,670.82

Royalties 0.00 0.00 0.00 1,164.60 0.00 0.00 1,164.60

Miscellaneous 0.00 4,841.35 36.50 0.00 202.49 0.00 5,080.34

Total Revenues 4,579,851.37 751,506.97 427,086.50 37,175.42 56,012.49 50,049.99 5,901,682.74

Alabama State BarCombined Statement of Revenues & ExpensesOctober 1, 2016 Through December 31, 2016

2 QR-3

Treasury Fund

#0355State Bar

Checking FundClient Security

FundAlabama

Lawyers FundMeetings &

Events Fund VLP Fund Total

ExpensesPersonnel Costs 1,070,326.73 0.00 0.00 0.00 0.00 0.00 1,070,326.73

Employee Benefits/Taxes 315,026.70 0.00 0.00 0.00 0.00 0.00 315,026.70

Rentals and Leases 210,432.78 738.36 0.00 0.00 0.00 0.00 211,171.14

Professional Services 15,465.80 35,807.25 0.00 6,133.48 42.00 0.00 57,448.53

CSF Claims 0.00 0.00 39,409.91 0.00 0.00 0.00 39,409.91

Printing 16,500.00 1,610.00 0.00 26,285.00 0.00 0.00 44,395.00

Grants and Awards 0.00 30,973.85 0.00 0.00 0.00 0.00 30,973.85

Postage 0.00 20,072.64 0.00 102.00 0.00 0.00 20,174.64

Advertising/Promotional 1,212.84 0.00 0.00 0.00 0.00 0.00 1,212.84

Travel In-State 16,347.51 0.00 846.72 0.00 0.00 2,190.82 19,385.05

Travel Out-of-State 4,167.67 1,526.87 0.00 0.00 0.00 0.00 5,694.54

Insurance 25,512.00 0.00 0.00 0.00 0.00 574.42 26,086.42

Office Expense 0.00 8,550.44 0.00 0.00 0.00 0.00 8,550.44

Training and Education 870.00 1,189.00 0.00 0.00 0.00 0.00 2,059.00

Utilities and Communication 2,877.94 3,364.22 0.00 0.00 0.00 0.00 6,242.16

Annual Mtg - Audio and Video 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Annual Mtg - Food and Catering 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Annual Mtg - Honorarium 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Leadership Forum 0.00 0.00 0.00 0.00 978.24 0.00 978.24

Committee and Board Mtgs 0.00 0.00 147.28 0.00 247.26 0.00 394.54

Staff/Officer Expenses 0.00 0.00 0.00 0.00 2,290.31 0.00 2,290.31

Special Events 0.00 0.00 0.00 0.00 8,321.43 0.00 8,321.43

Miscellaneous 0.00 4,325.72 0.00 0.00 100.56 0.00 4,426.28

Total Expenses 1,678,739.97 108,158.35 40,403.91 32,520.48 11,979.80 2,765.24 1,874,567.75

Surplus (Deficit) 2,901,111.40 643,348.62 386,682.59 4,654.94 44,032.69 47,284.75 4,027,114.99

Alabama State BarCash & Investments Report

FY 2016 - 2017

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Treasury Fund

#0355State Bar

Checking FundClient Security

FundAlabama

Lawyers FundMeetings &

Events Fund VLP Fund Clearing Fund TotalCash Balance - Oct 1, 2016 68,641.11$ 27,466.41$ 55,618.02$ 46,029.63$ 1,334.74$ 14,861.06$ 2,786,058.35$ 3,000,009.32$

YTD Net Balance 2,901,111.40 643,348.62 386,682.59 4,654.94 44,032.69 47,284.75 (2,733,260.30) 1,293,854.69

Transfer from (to) Investments - (400,000.00) (200,000.00) - - - - (600,000.00) Cash Balance - December 31, 2016 2,969,752.51$ 270,815.03$ 242,300.61$ 50,684.57$ 45,367.43$ 62,145.81$ 52,798.05$ 3,693,864.01$

Investments Balance - Oct 1, 2016 -$ 3,923,637.18$ 2,912,435.97$ -$ -$ -$ -$ 6,836,073.15$

Interest and Dividends Earned - 22,961.56 15,085.31 - - - - 38,046.87$

Change In Market Value - 17,781.70 5,141.22 - - - - 22,922.92$

Investment Fees - (1,961.82) (1,456.22) - - - - (3,418.04)$

Transfer to (from) Investments - 400,000.00 200,000.00 - - - - 600,000.00$ Investments Balance - Dec 31, 2016 -$ 4,362,418.62$ 3,131,206.28$ -$ -$ -$ -$ 7,493,624.90$

Alabama State Bar Sections Account Summary Report

Balances as of December 31, 2016

QR-5

Opt-In Sections Opt-Out Sections

Administrative Law 6,729.42 Elder Law 4,750.00

Appellate Practice 11,520.30 Environmental Law 2,740.00

Bankruptcy & Commercial Law 47,632.15 Family Law 20,150.00

Business Torts & Anti-Trust Law 9,879.60 Labor & Employment Law 9,070.00

Business Law 43,709.04

Communications Law 3,731.08

Construction Law 22,270.93

Criminal Justice 14,610.00

Disabilities Law 10,557.00

Dispute Resolution 3,295.37

Elections Ethics & Gov't Relations 2,409.56

Federal Court Practice 4,283.12

Government Contracts Section 2,070.00

Health Law 11,848.63

In House Counsel 7,121.24

Intellectual Property 9,196.56

International Law 9,477.02

Leadership Forum Section 10,418.31

Litigation 63,201.33

Military Law 4,494.71

Non-Resident Members Section 1,860.00

Oil, Gas & Mineral Law 2,880.09

Real Property, Probate & Trust 16,801.39

Senior Lawyers 10,445.00

Solo & Small Firm Section 17,912.91

Taxation 38,950.61

Women's Section 24,270.65

Workers' Compensation Law 18,970.37

Young Lawyers' Section 49,537.31

TOTAL $480,083.70 $36,710.00

PAGE 1 OF 11

ALABAMA STATE BAR

DIGITAL COMMUNICATIONS POLICIES & PROCEDURES

PAGE 2 OF 11

1. INFORMATION TECHNOLOGY POLICY

Inappropriate use of Alabama State Bar (ASB) information technology (IT) resources exposes the

ASB and its data to risks including potential virus attacks, compromise of network systems and

services, and legal liabilities. Effective security is a team effort involving the participation and

support of every employee who deals with information and/or information systems. It is the

responsibility of every IT user to know these rules and to conduct their activities accordingly.

These rules are in place to protect the Employee, the ASB, as well as ASB’s data. Therefore, it is

important to delineate compliant use of ASB-owned IT resources.

This policy applies to all Employees. Internet/Intranet/Extranet-related systems, including but not

limited to computer equipment, software, operating systems, storage media and network accounts

providing electronic mail, internet Access and Web browsing are the property of the ASB. These

systems are to be used for business purposes in serving the interest of the ASB and of those it

serves in the course of normal operations.

1.1 - PERSONAL USE. Limited personal use of ASB-managed computing resources is

anticipated; however, Employees and supervisors are responsible for exercising good judgment

regarding the reasonableness of personal use.

1.2 - PROHIBITED USE. Prohibited use of the ASB IT resources include, but are not limited to,

the following activities:

o Any activity that is illegal under local, state, federal, or international law;

o Activities in support of personal or private business enterprises;

o Unauthorized use of copyrighted material;

o Exporting software, technical information, encryption software, or technology, in

violation of international or regional export control laws;

o Introducing malicious software into the network or systems within reason of user’s

control;

o Making fraudulent offers of products or services;

o Making warranty statements, expressed or implied, unless part of normal duties;

o Accessing, possessing, or transmitting material that is in violation of sexual harassment

or hostile workplace laws;

o Accessing, possessing, or transmitting any sexually explicit, offensive, or inappropriate

images and/or text;

o Effecting security breaches or disruptions of network communication including

accessing data of which the Employee is not an intended recipient or logging into a server

or account that the Employee is not expressly authorized to access, unless within the

scope of regular duties.

o Executing any form of network monitoring which will intercept data not intended for the

Employee’s host, unless this activity is a part of the Employee’s normal job/duty;

o Circumventing user authentication or security of any host, network, or account;

o Interfering with or denying service to any user except in the course of assigned duties;

o Accessing web sites offering online gambling, games, and related information.

PAGE 3 OF 11

1.3 - INTERNET ACCESS & CONTENT POLICIES. Use of Internet resources for prohibited

activities and other categories of use may expose the ASB and its data to risks including virus

attacks, spyware and other malware threats, compromise of network systems and services, and

potential legal issues. To mitigate these risks, access to certain categories of Internet content is

restricted (blocked) at the discretion of the Executive Director or his or her designee. Exceptions

may be granted to access blocked web sites for Employees that have a business need for access in

order to perform their jobs. Each request for access to a blocked web site requires a legitimate

business need and written approval of the Executive Director or his or her designee.

1.4 - PERSONAL USE OF SOCIAL MEDIA SITES. Employees may use personal social media

for limited family or personal communications during normal business hours so long as those

communications do not interfere with their work. Employees and their supervisors are responsible

for exercising good judgment regarding personal use. Users shall not use their ASB email account

or password in conjunction with a personal social media site. For added security, all users of social

media are encouraged to enable SSL activation in their social media account settings.

1.5 - SOFTWARE LICENSING AND USE POLICIES. Under the provisions of U.S. copyright

law, illegal reproduction of software can be subject to civil and criminal penalties including fines

and imprisonment. Therefore, any person using any ASB managed computer system must only

use properly licensed software and must use that software in accordance with the terms and

conditions of the license agreement.

IT Users shall NOT:

o Copy, download, nor install unlicensed software

o Install personally-owned software onto ASB managed computer systems

o Install ASB-owned software on any non-ASB-owned computer systems, including home

computers, unless specifically authorized in the software license agreement.

The term “software” includes any set of coded instructions (programs) stored on computer-

readable media that commands computer functions, including any operating system and any

software application.

1.6 - POLICY ENFORCEMENT. Users should report security-related issues and policy non-

compliance to their immediate supervisor or to the Director of Digital Communications.

1.7 - STANDARDS OF EMAIL SIGNATURE.

A. Email signatures must include your name, job title (as provided by the Director of

Personnel and Operations), mailing address (P.O. Box), telephone (main line), email

address, and website address. This information should comply with the ASB Style Guide.

Should you wish to include the ASB logo or another approved logo (ASB Annual Meeting,

VLP) in your email signature, obtain the correct version of the logo from the Digital

Communications Content Manager. Only one logo may be used at any given time. You

may have multiple signatures that include different logos, but only one may be used per

signature.

PAGE 4 OF 11

1.7 - STANDARDS OF EMAIL SIGNATURE, Continued.

B. Elements that are not to be included in email signatures include colored text, very large or

complicated fonts, images, clip art, italics, personal quotes, and digital signatures.

C. All emails must include the disclaimer:

“This email, including any attachments, is for the sole use of the intended

recipient(s) and may contain private, confidential and/or privileged information.

Any unauthorized review, use, disclosure or distribution is prohibited. If you are

not the intended recipient, employee or agent responsible for delivering this email,

please contact the sender by reply email and destroy all copies of the original

email.”

D. Email signatures on mobile devices must be similar in stature to section one above. The

signature on the mobile device should contain: your name, job title, telephone number

(main line), and “This message was sent via my mobile device.”

E. For Emails to All State Bar Members or Associated Member Groups, please refer to the

ASB Broadcast Email Guidelines.

PAGE 5 OF 11

2. SOCIAL MEDIA POLICY

This section of the policy describes how the ASB, through its employees and agents, makes use of

social media. For the purpose of this document, the term “social media” shall refer to a website or

platform that allows the creation and exchange of user-generated content. In light of the ASB’s

mission, the ASB uses social media to build relationships with the legal field, the media, and the

public as part of its efforts to fulfill that mission. Its use of social media enables it to dialogue with

its various audiences about issues and trends as they affect the ASB and its members, and to ensure

that the perspectives and needs of ASB members are clearly articulated and understood. It is with

these purposes in mind that the ASB has adopted the following guidelines for social media use.

2.1 - PROCEDURE.

A. Site administration, including setup, content development and management, is the

responsibility of the state bar with input from other staff and/or members with regard to

the information posted.

B. Department directors should provide information about programs, projects and activities

in their discrete areas to the Digital Communications Content Manager on a weekly basis

so that such information may be posted. In the absence of the Digital Communications

Content Manager, any person designated by the Director of Digital Communications is

authorized to post information on any and all social media sites maintained by the state bar.

C. The ASB will maintain an official presence on a social networking site in order to maintain

control of content, provide for the most effective use of staff time and avoid confusion over

what is deemed the official bar message. Other entities within the bar (i.e., sections) are

encouraged to submit appropriate information through communication with their bar staff

liaisons.

D. ASB engages in communications with current and prospective members and the general

public via ASB-sponsored social media. ASB-sponsored social media are for business use

only and the ASB owns the accounts and all the content on such accounts. Only ASB

employees and agents who are authorized by ASB can prepare content for or delete, edit

or otherwise modify content on ASB-sponsored social media.

The following disclaimer is to be posted whenever possible on a social media site used by the

ASB:

DISCLAIMER.

The Alabama State Bar presents the information on this site as a service to our

members and other Internet users. While the information on this site is about

legal issues, it is not legal advice. Moreover, due to the rapidly changing nature

of the law and our reliance on information provided by outside sources, we make

no warranty or guarantee concerning the accuracy or reliability of the content

at this site or at other sites to which we link. You agree, through the use of this

site: We have the ability to remove objectionable posts and we will make every

effort to do so within a reasonable time frame, allowing for the manual nature

of the removal process. We reserve the right to remove any post without

providing a reason.

PAGE 6 OF 11

2.2 - STANDARDS OF SOCIAL MEDIA. When engaging in social media, ASB employees and

agents are responsible for protecting ASB’s proprietary and confidential information. Using or

disclosing ASB’s proprietary and confidential information is prohibited.

1. ASB employees and agents are responsible for ensuring that their activities do not

violate ASB policies, including in particular policies prohibiting harassment,

discrimination and retaliation. For example, employees are prohibited from using

social media to post or display comments about ASB employees, agents, members,

vendors, suppliers or other third parties that are vulgar, obscene, physically threatening

or intimidating, harassing, or otherwise constitute a violation of the ASB’s policies

against discrimination or harassment on account of an individual’s race, national origin,

religion, age, sex, sexual orientation, disability, or other protected characteristic. 2. ASB employees and agents are responsible for abiding by all applicable laws when

using social media, including without limitation intellectual property, data protection,

privacy, and libel/slander laws.

3. When an ASB employee or agent posts its personal point of view on social media site

via its personal profile, they are responsible for avoiding any statement or implication

that the views it expresses are those of the ASB. ASB employees and agents may not

at any time make statements about the ASB that cannot be substantiated. 4. If the ASB requests you to blog, chat or otherwise advertise about the ASB as part of

your job duties, the ASB employee or agent is responsible for complying with the

FTC’s guidelines concerning endorsements. This includes adequately disclosing your

relationship with the ASB. Simply listing the ASB as your employer on your profile

is not adequate disclosure.

The following is an example of an appropriate disclosure: I am the Special Events Manager

for the Alabama State Bar, the organization that is sponsoring this event. I am disclosing

this employment relationship in accordance with the Federal Trade Commission’s “Guides

Concerning the Use of Endorsements and Testimonials in Advertising.”

PAGE 7 OF 11

3. PASSWORD POLICY

The purpose of this policy is to establish a standard for creation of strong passwords, the protection

of those passwords and the frequency of change.

3.1 - PROCEDURE.

User ASB logon passwords must be changed every ninety (90) days.

o Upon entering a password five (5) times incorrectly, the user account will be disabled

for thirty (30) minutes or the user can request that Digital Communications staff

reactivate the account.

o Upon termination of any employee their password will be immediately changed or their

account will be disabled to prevent unauthorized access to ASB systems.

o If the employee being terminated had administrative access, the administrative

passwords will be changed immediately and secured by multiple staff members.

Your password must meet the following criteria:

1. The password must have at least eight (8) characters.

2. You cannot use your last five passwords.

3. The password must contain at least three (3) of the four (4) following character classes:

o English uppercase characters (A through Z)

o English lowercase characters (a through z)

o Base 10 digits (0 through 9)

o Non-alphabetic characters (for example, $, #, %, etc.)

4. The password cannot contain the user's account name or parts of the user's full name that

exceed two consecutive characters. (Your password cannot contain your name or login

name, i.e. “John” or “Doe”)

5. The password should not use only a word found in a dictionary (English or foreign).

6. The password should not use names of family, pets, friends, co-workers, fantasy characters,

etc.

7. The password should not use word or number patterns 8. Try to create passwords that can be easily remembered. One suggestion is to create a

password based on a phrase. (E.g. song title, book title.)

3.2 - PASSWORD PROTECTION STANDARDS.

1. Always use different passwords for ASB accounts from other non-ASB access (e.g.,

personal email accounts, option trading, benefits, banking, Facebook, Twitter, etc.). 2. Always use different passwords for various ASB access needs whenever possible. This is

why your ASB logon should not be the same as your database (“Alabar”) application. 3. Do not share ASB passwords with anyone, including administrative assistants or

secretaries. All passwords are to be treated as sensitive, confidential information.

PAGE 8 OF 11

3.2 - PASSWORD PROTECTION STANDARDS, Continued.

4. Passwords should never be written down. 5. Do not reveal a password in email, chat, or other electronic communication. 6. Do not hint at the format of a password (e.g., "my family name") 7. Do not reveal a password on questionnaires or security forms 8. If someone demands a password, refer them to this document and direct them to the Digital

Communications staff. 9. Always decline the use of the "Remember Password" feature of applications. 10. If an account or password compromise is suspected, report the incident to the Digital

Communications staff immediately.

PAGE 9 OF 11

4. MOBILE DEVICE POLICY

The ASB grants its employees the privilege of using smartphones, tablets, and other similar

devices of their choosing at work for their convenience. The ASB reserves the right to revoke this

privilege if users do not abide by the policies and procedures outlined below regardless of whether

the devices are or owned by the ASB or owned by the individual.

This policy is intended to protect the security and integrity of the ASB’s data and technology

infrastructure. Limited exceptions to the policy may occur due to variations in devices and

platforms.

The ASB’s employees must agree to the terms and conditions set forth in this policy in order to be

able to connect their devices to the company network.

4.1 - ACCEPTABLE USE. The ASB defines acceptable business use as activities that directly or

indirectly support the business of the ASB.

o Employees are blocked from accessing certain websites during work hours/while

connected to the corporate network that the ASB may deem unacceptable.

o Devices may not be used at any time to:

○ Store or transmit illicit materials;

○ Harass others; or

○ Engage in any illegal activities.

4.2 - PROHIBITED USE. Prohibited use of the ASB IT resources include, but are not limited to,

the following activities:

o Any activity that is illegal under local, state, federal, or international law;

o Activities in support of personal or private business enterprises;

o Unauthorized use of copyrighted material;

o Exporting software, technical information, encryption software, or technology, in

violation of international or regional export control laws;

o Introducing malicious software into the network or systems within reason of user’s

control;

o Making fraudulent offers of products or services;

o Making warranty statements, expressed or implied, unless part of normal duties;

o Accessing, possessing, or transmitting material that is in violation of sexual harassment

or hostile workplace laws;

o Accessing, possessing, or transmitting any sexually explicit, offensive, or inappropriate

images and/or text.

PAGE 10 OF 11

4.2 - PROHIBITED USE, Continued.

o Effecting security breaches or disruptions of network communication including

accessing data of which the Employee is not an intended recipient or logging into a server

or account that the Employee is not expressly authorized to access, unless within the

scope of regular duties.

o Executing any form of network monitoring which will intercept data not intended for the

Employee’s host, unless this activity is a part of the Employee’s normal job/duty;

o Circumventing user authentication or security of any host, network, or account;

o Interfering with or denying service to any user except in the course of assigned duties;

o Accessing web sites offering online gambling, games, and related information.

4.3 - DEVICES AND SUPPORT. Devices must be presented to the ASB’s IT Department for

proper job provisioning and configuration of standard apps, such as browsers, office productivity

software and security tools, before they can access the network.

4.4 - SECURITY. In order to prevent unauthorized access, devices must be password protected.

o The ASB’s strong password policy is: Passwords must be at least six characters and a

combination of upper- and lower-case letters, numbers and/or symbols. If your device

only allows a numeric password, the password must be at least four digits and the

password shall not be 1234, 4321, 1111, or other similar passwords.

o The device must lock itself with a password or PIN if it’s idle for five minutes.

o The employee’s device may be remotely wiped if: (1) the device is lost; (2) the employee

terminates his or her employment; or (3) The ASB’s IT Department detects a data or

policy breach, a virus or similar threat to the security of the ASB’s data and technology

infrastructure.

4.5 - RISKS/LIABILITIES/DISCLAIMERS.

o While the ASB’s IT Department will take every precaution to prevent the employee’s

personal data from being lost in the event it must remote wipe a device, it is the

employee’s responsibility to take additional precautions, such as backing up email,

contacts, etc.

o The ASB reserves the right to disconnect devices or disable services without notification.

o Lost or stolen devices must be reported to the ASB within 24 hours. Employees are

responsible for notifying their mobile carrier immediately upon loss of a device.

o The employee is expected to use his or her devices in an ethical manner at all times and

adhere to the ASB’s acceptable use policy as outlined above.

o The employee is personally liable for all costs associated with his or her device.

PAGE 11 OF 11

4.5 - RISKS/LIABILITIES/DISCLAIMERS, Continued.

o The employee assumes full liability for risks including, but not limited to, the partial or

complete loss of company and personal data due to an operating system crash, errors,

bugs, viruses, malware, and/or other software or hardware failures, or programming

errors that render the device unusable.

o The ASB reserves the right to take appropriate disciplinary action up to and including

termination for noncompliance with this policy.

1

Report of the Succession Planning Task Force January 10, 2017

This is a report of the actions and activities of the Alabama State Bar’s Succession Planning Task Force with respect to the succession of Keith Norman as Executive Director of the Alabama State Bar.

Background The Alabama State Bar is governed by the Board of Bar Commissioners. Ala. Code § 34-3-40(a) (1975, as amended).

The Secretary of the Alabama State Bar serves as its Executive Director. The Secretary is elected annually by the Board of Bar Commissioners who shall serve at the pleasure of the Board of Bar Commissioners.

(5) At its annual meeting, the Board of Commissioners shall elect a vice-president, whoshall be a current member of the Board of Commissioners. It also shall elect a secretary,who need not be a member of the board, and such other officers of the board and agents asthe board may deem appropriate, all of whom shall hold office at the pleasure of the boardand shall be subject to removal without cause by the board at any time.Ala. Code § 34-3-16.

Constitution and Mission The origins of the Succession Planning Task Force began in September 2015, under the leadership of President Lee Copeland. With the potential retirement of the Bar's leadership, some discussions occurred regarding how best to deal with the transitions which were inevitable.

President Lee Copeland formally appointed a Succession Planning Task Force in September 2015, and tasked it with the following:

• Develop a plan of action for the hiring and orderly transition of a new Executive Director for theAlabama State Bar;

• Establish a timeline to guide this process;• Establish guidelines as to how to conduct the search and screening and with what, if any, outside

help;• Establish guidelines as to qualifications for the new Executive Director; and• Establish guidelines as to how to conduct an organizational review to determine the key challenges

the next Executive Director will face in leading the Alabama State Bar.

See Exhibit A.

President Copeland appointed the following individuals to the Task Force (adding Augusta Dowd when she was the only qualifier for the position of President-Elect):

• Lee Copeland, Co-Chair• Cooper Shattuck, Co-Chair• David R. Boyd• Hon. Delores R. Boyd• Christina Crow• Augusta Dowd

2

• Joseph A. Fawal• Anthony “AJ” Joseph• Maibeth J. Porter• J. Cole Portis• Richard J. R. Raleigh, Jr.• Winifred Nance Watson• J. Anthony McLain, Staff Liaison

See Exhibit B.

President Cole Portis continued the Task Force, substituting himself for Copeland as co-chair.

See Exhibit C.

Chronology of Events In the summer of 2015, Keith Norman confirmed that his planned retirement date would be in the Spring of 2017.

The Task Force thus began its work in earnest with its meeting on March 10, 2016. There, the Task Force decided to spend approximately thirty (30) days soliciting information on the qualities, competencies, skills, and characteristics of the next Executive Director through a survey of the last two classes of the Leadership Forum, the Past Presidents of the Alabama State Bar, the Assistant Executive Director of the Alabama State Bar, the General Counsel of the Alabama State Bar, the Directors within the Alabama State Bar, the Chairs of the sections of the Alabama State Bar, the Board of Bar Commissioners, and others. The Task Force planned to personally speak with or interview the Past Bar Presidents.

On April 1, 2016, the survey (See Exhibit D) was distributed to those listed in Exhibit E.

The Task Force began interviews of the Past Bar Presidents listed in Exhibit E. These past presidents were also asked to complete the survey.

On April 18, 2016, the survey was closed. Exhibit F contains the results of the survey, which were distributed to the Task Force.

On July 18, 2016, the Task Force met again. The group decided a timeline and plan of action. The goal was for the Bar to have a new Executive Director selected in early 2017. In order to meet this deadline, the Task Force agreed to the following timeline and plan of action:

Date Action Notes September 30, 2016 Job posting and acceptance

of resumes • Simple posting, no detailed job description• President Portis will send an email to all bar

members announcing posting• Posting at the following, at a minimum:

ü Alabama Lawyerü Addendumü Alabar websiteü Bar Section newsletters and listservs

3

ü Local bar websites/newslettersü National Association of Bar Executivesü ABAü Alabama Lawyer’s Associationü Magic City Bar Associationü Government websites and listservs

• We will simply solicit a resume and letter ofinterest to be submitted electronically to a“dummy” and non-personal email address atthe Bar that will go directly to Diane

October 31, 2016 First round of selection concluded

• This process will depend in large part on thenumber of résumés received

• Basically, we will review the resume andgrade or rank them

• Depending on the number, we may do initialscreening interviews

• We will select the candidates who will moveonto the final interview process

November 30, 2016 Final interviews concluded • Tony’s office will review the disciplinaryrecords on our final candidates

• These final interviews will be more specificabout the candidates’ goals and our goals,and trying to find the best match

December 31, 2016 Recommendation made • Once the interviews are completed, we willcheck references and select our finalrecommendation, which will go to andthrough the Bar’s Executive Council asdirected by our President.

January 20, 2017 Approval by Board of Bar Commissioners

• Ultimately, the final candidate will besubmitted to the Board of BarCommissioners for approval

The job announcement (See Exhibit G) was posted as planned, with the following: • American Bar Association’s Division of Bar Services website• Alabama State Bar website• The Alabama Lawyer• Addendum

Thirty-eight (38) candidates submitted their resumes and letters of interest by the September 30 deadline. These were shared with the Task Force for their review and consideration before the next meeting of the Task Force.

The Task Force met on October 6, 2016, and reviewed and discussed the candidates. The Task Force unanimously agreed to conduct an initial telephone interview of sixteen (16) candidates. The Task Force was divided into four sub-committee/interview panels each made up of three Task Force members. The

4

subcommittees were tasked with scheduling preliminary telephone interviews by the end of October with the four candidates assigned to that subcommittee. These were to be preliminary interviews focusing on four basic questions:

1. What are your career goals? 2. What are you really good at? 3. What are you not good at or not interest in doing professionally? 4. Who were your last five bosses or co-workers, and how will each of them rate your performance

on a 1 – 10 scale when we talk to them? An email was sent to the sixteen (16) candidates indicating that they would be contacted about an interview. An email was sent to the other candidates explaining that they had not been chosen to continue in the interview process. The Task Force next met on October 27, 2016. After evaluation and discussion, the Task Force unanimously selected eight (8) specific candidates to be interviewed by the entire Task Force. The Task Force elected to obtain background checks on those candidates, including a review of their Bar Disciplinary Record, and requested two letters of recommendation from each. The Task Force set aside the afternoon of November 29 and the morning of November 30 to conduct the interviews. An email was distributed to the eight (8) finalists requesting execution of a release in order to secure the background checks and also requesting two letters of recommendation. Interviews were scheduled on November 29 or 30 for each of the candidates. The interviews were scheduled for one hour each in alphabetical order by the finalist’s last name. The Task Force met again on November 29 before the interviews commenced and then proceeded with the scheduled interviews on the afternoon of November 29 and the morning of November 30. The Task Force met again on the afternoon of November 30 to review and discuss the interviews. The Task Force made no decision at that time but agreed to individually confer with Cooper Shattuck, Co-Chair of the Task Force, by the end of the following week to discuss whether an individual could be recommended to the Executive Council of the Board of Bar Commissioners and ultimately to the Board of Bar Commissioners. All did so. The Task Force met again on December 13, 2016, and after discussion unanimously agreed on a recommendation for the Executive Council. The President spoke with the finalist and all of the candidates.

ASBExecutiveDirectorSurvey-ListofRecipientsName EmailAaronMcLeod Aaron.McLeod@arlaw.comAliciaBennett abennett@hillhillcarter.comAllanChason achason@chasonlaw.comAugustaDowd adowd@whitearnolddowd.comAnitaHead ahead@law.ua.eduAnthonyJoseph ajoseph@maynardcooper.comAllenHowell allen.howell@samford.eduAndrewFreeman andrew.freeman@arlaw.comAngelaParks angela.parks@alabar.orgAnneGlass anne.malatia.glass.attorney@gmail.comAdamPlant aplant@battlewinn.comAndrewSalser asalser@lloydhoganlaw.comAshleyFincher ashley.fincher@phelps.comAllisonSkinner askinner@acesin.comLeslieBarineau barineau@bellsouth.netBenjaminBarron bbarron@llln-law.comBrannonBuck bbuck@badhambuck.comBeauByrdII bbyrd@babc.comBrandonHughey bdh@ajlaw.comJamesBeaird beairdlawoffice@gmail.comBessCreswell bess.creswell@burr.comBillAthanas bill.athanas@wallerlaw.comBonnieBranum bonnie.branum@protective.comBarryRagsdale bragsdale@sirote.comBrandonEssig brandon.essig@usdoj.govWilliamBroome broomenotguilty@aol.comBrianVines bvines@hwnn.comJohnCamp campj@jccal.orgLewisAnderson canderson@balch.comChristinaCrow ccrow@jinkslaw.comClayLanham clanham@joneswalker.comRonaldMendheim cliff@pm-firm.comClintMaze clmaze@charter.netJamesEricCoale coaleje@bellsouth.netColePortis cole.portis@beasleyallen.comLeeCopeland copeland@copelandfranco.comCraigCargile craig@cargilehodnett.comCooperShattuck cshattuck@uasystem.eduCooperShattuck cshattuck@uasystem.ua.eduChristopherConte ctc@helmsinglaw.comChrisWallerJr. cwaller@ball-ball.com

ASBExecutiveDirectorSurvey-ListofRecipientsChristyGraham cwglawyer@gmail.comCharlesMoore czmlaw@gmail.comDanaJoGrimes danagrimes@danagrimesattorney.comDavidByrneIII david.byrne@beasleyallen.comDonaldMansell dbmansell@ymail.comDamonBoiles dboiles@drummondco.comJimmyBurtJr. dburt@aablaw.netDavidDowdIII ddowd@burr.comDeniseWelch dgandy@alsp.orgDianeLocke diane.locke@alabar.orgDonaldRhea drrhea@bellsouth.netEmilyBaggett ebaggett@decatur-al.govJohnBailey ebailey@rsjg.comEdPatterson ed.patterson@alabar.orgEricAnderson eric.anderson@alabar.orgErikHeninger erik@hgdlawfirm.comErskineFunderburgJr. erskine@tfrblaw.comEllenannYelverton eyelverton@raycommedia.comFrederickHelmsingJr. fhelmsing@mcdowellknight.comFlynnMozingo fmozingo@mewlegal.comFrancisLoftin fploftin@bellsouth.netDiandraDebrosse fuli@zarzaur.comGingerBusby gbusby@burr.comGibsonVance gibson.vance@beasleyallen.comGloryMcLaughlin gmclaughlin@law.ua.eduGeorgeParker gparker@babc.comGlennSmithJr. gsmith@carrallison.comMattHart hartma@jccal.orgHaysWebb hays@turnerwebb.comHaleyCox hcox@lightfootlaw.comHenryLongIII henry.long@butlersnow.comHeatherFann hfann@bfattorneys.netHeathMeherg hmeherg@co.cullman.al.usHalMootyIII hmooty@babc.comHughstonNichols hnichols@hwnn.comHowellHeflinJr. hth@asheheflinlawllc.comHubeDodd hube@hdoddlaw.comHalronTurner hwt@tokh.comJamieDurham jamie.durham@hblb.alabama.govJanaGarner janagarner@hotmail.comJamesArchibaldIII jarchibald@babc.comJohnBrowning jbrownin@burr.com

ASBExecutiveDirectorSurvey-ListofRecipientsJefferyDuffey jcduffey@aol.comJaimeConger jconger@smithstaggs.comJeanneRasco jeanne.rasco@huntsvilleal.govJeremyMcIntire jeremy.mcintire@alabar.orgJerryGabigJr. jgabig@wilmerlee.comJoelKuehnert jkuehnert@babc.comJohnAllenBrinkleyJr. john@huntsvilleattorneys.comJuanOrtega jortega@sirote.comJasonKnight jpknight@knight-knightattorneys.comJamesRebarchak jrebarchak@joneswalker.comJohnDavidSaxon jsaxon@saxonattorneys.comJohnSmythIII jsmyth@maynardcooper.comJustinAday Justin.aday@alabar.orgJohnJohnsonII jwj@csattorneys.comKatieO'Connell katie.oconnell@healthsouth.comKatherinePowell katie.taylor@butlersnow.comKimberlyBrown kcbrown@kcbrownlawfirm.comKeithMedley keith.medley@johnsonpaseur.comLeonardMoore kenmoorelaw32@gmail.comKiraFonteneau kfonteneau@jeffcodefender.orgKrisSodergren ksodergren@rosenharwood.comLauraCalloway laura.calloway@alabar.orgLeeKnowles lee@leeknowleslaw.comRobertPittman les@lespittman.comJohnNichols levinichols@lightfootnichols.comLindaLund linda.lund@alabar.orgJamesMartin martin@copelandfranco.comMarshallMartin martin@martinhelms.comMatthewMitchell matt@scottsborolawyer.comMichaelVercher mavercher@csattorneys.comMarkBoardman mboardman@boardmancarr.comRebekahMcKinney mckinney@watsonmckinney.comMikeDenniston mdenniston@babc.comMeredithPeters meredithshaypeters@yahoo.comMerindaHall Merinda.hall@alabar.orgMonetGaines mgaines@ago.state.al.usMikeErmert mike@hwnn.comMarkJohnson mjohnson@parkmanlawfirm.comManishPatel mpatellaw@andycable.comMichaelDalton mpd@chlaw.comMichaelVelezis mvelezis@bcbsal.orgNathanDickson ndickson@jinkslaw.com

ASBExecutiveDirectorSurvey-ListofRecipientsOscarPrice oscar@pricearmstrong.comPatrickBodden patrick.bodden@regions.comPrimEscalona pescalona@maynardcooper.comRamseyDuck ramseyduck@gmail.comWilliamMay randymay@allisonmay.comRebeccaBeers rbeers@rumberger.comRobertBowersJr. rbowersjr@bellsouth.netRoyalDumas rdumas@gilpingivhan.comRalphHolt reholt@holtlaw.netCharlesReynoldsJr. reynolds610@charter.netRebeccaDePalma rgd127@icloud.comRobertMethvinJr. rgm@mmlaw.netRipAndrews ripandrews@mrblaw.comRaleyWiggins rlw@redoaklegalpc.comCharlesMinor rminor@maynardcooper.comRobertThornhill Robert.thornhill@alabar.orgRogerPierce rpierce@hcplaw.comRichardRaleighJr. rraleigh@wilmerlee.comRachelRiddle rriddle@lfo.state.al.usAudreyStrawbridge s3lawaos@centurylink.netSamIrby samirby@irbyandheard.comStephenBumgarner sbumgarn@burr.comMarkScogin scoginlaw@gmail.comScottLandersMcPherson scottmcpherson@otelco.netSuzanneEdwards sdedwards@me.comSheraGrant sgrant@jeffcodefender.orgSharonHester sharon@hesterjames.comScottHolmes sholmes@tuscaloosa.comStephanieMays smays@maynardcooper.comSamuelCrosby snc@sgclaw.comStevenAdcock stevendadcock@bellsouth.netTazewellShepardIII taze@ssmattorneys.comWilliamChapmanII tchapmanlaw@att.netTimGallagher tgallagher@sasserlawfirm.comTedHosp thosp@maynardcooper.comTomLoper tloper@thegardnerfirm.comTonyMcLain tony.mclain@alabar.orgThomasRichie trichie@babc.comJohnVickers tripp.vickers@alabar.orgTerriOliveTompkins ttompkins@pjgf.comTaylorPerryJr. ttp@manleytraeger.comThadYanceyJr. tyanceylaw@troycable.net

ASBExecutiveDirectorSurvey-ListofRecipientsGregoryVarner varnergreg@yahoo.comJansenVoss voss@sssandf.comZacharyPeagler zach@peaglerhhollett.com

Alabama State Bar Succession Planning Survey Results

Executive Summary – Survey Results

The survey was distributed to 170 individuals, including past Bar Presidents and Bar Commissioners.

We received 94 responses (55% response rate).

93% of respondents believe the Executive Director should be a lawyer (68% believe an Alabama lawyer) with

over ten years’ experience said 64%.

64% of respondents believe the Executive Director should reside in the Montgomery area during the workweek.

The most important skills of the new Executive Director include communication, organization and the ability to

work with others, with ability to build consensus, implement change, social skills, and leadership experience

following thereafter.

Respondents generally said that:

o a willingness to learn would be preferred to years of legal experience;

o the new Executive Director should not have to reside in Montgomery but should be available to the

organization; but that if the new Executive Director does not reside in Montgomery, there should be a

strong person on staff to manage day-to-day operations and personnel issues;

o a willingness to travel to get to know local bar associations and circuits, as well as willingness to interact

with lawyers of all walks of life, over the importance of his/her presence in Montgomery;

o the new Executive Director needed to be the “face of the Bar” and build relationships with the Bar, the

public, and elected officials/government;

o the new Executive Director should be able to manage change and move the Bar forward in the evolving

legal landscape;

o if there was an outstanding non-lawyer candidate, they should be considered, perhaps someone with

experience at a large nonprofit or someone who has led during a time of change in a profession, not

necessarily the legal profession;

o if there was a better out-of-state/non-Alabama lawyer candidate, they should be considered, with the

caveats that they should be a fast learner, should understand the practice of law in Alabama, and have

the right skillset needed;

o the new Executive Director needed to have energy, vision, and a desire to manage people, and having

those skills might be more important the years of legal experience;

o the right skills may be more important than years of legal experience; and

o experience with other Bar associations, such as volunteer service with other Bar associations, was

important.

Some respondents said that:

o the input of current critical staff was needed;

o the new Executive Director needed to be willing to serve the Bar long term;

o a national search being conducted; and,

o the salary needed to be in line with other state agencies, not to exceed the salary of a Supreme Court

justice.

Alabama State Bar Succession Planning Survey Results

1. Do you think the Executive Director should be a lawyer?

2. Do you think the Executive Director should be an Alabama lawyer?

3. If you think the Executive Director should be a lawyer, how many years of experience do you think he/she should have?

4. Do you think that the Executive Director should reside in the Montgomery area during the workweek?

93%

7%

Yes

No

68%

32%

Yes

No

0-5 years3%

5-10 years15%

10-15 years43%

15-20 years21%

Over 20 years2%

It doesn't matter.

16%

0-5 years

5-10 years

10-15 years

15-20 years

Over 20 years

It doesn't matter.

64%

36%Yes

No

Alabama State Bar Succession Planning Survey Results 5. For each of the following skills and/or experience, rate how important you think each is for the new Executive Director to

possess.

Skill

Not important at

all

A little

important

Somewhat important

Important

Critically

important

Communication skills 1% 26% 73%

Organization skills 4% 29% 67%

Leadership experience 7% 48% 45%

Management experience – financial 3% 24% 51% 21%

Management experience – human resources 4% 30% 47% 19%

Strategic planning experience 1% 26% 45% 28%

Legislative experience 9% 22% 41% 20% 7%

Broad-based legal experience 9% 12% 46% 31% 3%

Knowledge of the Alabama State Bar 3% 7% 23% 44% 22%

Knowledge of state agency operations 2% 15% 35% 34% 14%

Ability to support the Bar President 1% 3% 17% 38% 40%

Ability to take criticism 1% 7% 48% 44%

Ability to work with others 2% 26% 72%

Ability to build consensus 1% 4% 43% 52%

Willingness and ability to travel during non-business hours

1% 5% 26% 52% 16%

Ability to manage change 1% 14% 40% 45%

Ability to implement change 1% 9% 46% 47%

Ability to delegate 1% 9% 51% 39%

Social skills 5% 49% 46%

Skills Ranked by Importance

1. Communication Skills 2. Ability to Work With Others 3. Organization Skills 4. Ability to Build Consensus 5. Social Skills 6. Leadership Experience 7. Ability to Implement Change & Ability to Take Criticism (tie) 8. Ability to Manage Change 9. Ability to Delegate 10. Ability to Support the Bar President 11. Strategic Planning Experience 12. Management Experience – Financial 13. Management Experience – HR 14. Willingness and Ability to Travel During Non-Business Hours 15. Knowledge of the Alabama State Bar 16. Knowledge of State Agency Operations 17. Broad-Based Legal Experience 18. Legislative Experience

Alabama State Bar Succession Planning Survey Results 6. What else do you think the committee should consider when hiring our Executive Director?

Respondents generally said a willingness to learn would be preferred to years of legal experience.

Respondents generally said that the new Executive Director should not have to reside in Montgomery but should be available to the organization. If the new Executive Director does not reside in Montgomery, respondents stated that there should be a strong person on staff to manage day-to-day operations and personnel issues.

Respondents emphasized willingness to travel to get to know local bar associations and circuits, as well as willingness to interact with lawyers of all walks of life, over the importance of his/her presence in Montgomery.

Respondents emphasized that the new Executive Director needed to be the “face of the Bar” and build relationships with the Bar, the public, and elected officials/government.

Respondents emphasized that the new Executive Director should be able to manage change and move the Bar forward in the evolving legal landscape.

Respondents generally answered that if there was an outstanding non-lawyer candidate, they should be considered, perhaps someone with experience at a large nonprofit or someone who has led during a time of change in a profession, not necessarily the legal profession.

Respondents generally answered that if there was a better out-of-state/non-Alabama lawyer candidate, they should be considered, with the caveats that they should be a fast learner, should understand the practice of law in Alabama, and have the right skillset needed.

Respondents generally responded that the new Executive Director needed to have energy, vision, and a desire to manage people, and having those skills might be more important the years of legal experience.

Some respondents expressed an importance in many (15-20) years of broad-based legal experience; however, others responded that having the right skills was more important than years of legal experience.

Respondents generally answered that experience with other Bar associations, such as volunteer service with other Bar associations, was important.

Some respondents said that the input of current critical staff was needed.

Some respondents said that the new Executive Director needed to be willing to serve the Bar long term. However, at least one respondent, specifically said it didn’t need to be someone long-term.

At least one respondent was interested in a national search being conducted.

At least one respondent said the salary needed to be in line with other state agencies, not to exceed the salary of a Supreme Court justice.

MINUTES

ALABAMA STATE BAR FOUNDATIONBOARD OF TRUSTEES MEETING

State Bar BuildingMontgomery, Alabama

Friday, October 28, 2016

1. CALL TO ORDER

Foundation President Cole Portis convened this meeting of the Alabama State BarFoundation Board of Trustees in the board room of the Alabama State Bar building inMontgomery, Alabama.

2. ROLL CALL

The Secretary-Treasurer called the roll of the Board of Trustees and the followingtrustees were present:

Halron W. Turner J. Levi Nichols Jana Russell GarnerTerri O. Tompkins Leslie R. Barineau John A. Smyth, IIIBarry A. Ragsdale Robert G. Methvin, Jr. LaBella S. AlvisMichael D. Ermert Allison O. Skinner Brannon J. BuckKenneth Moore Ralph E. Holt C. Zack MooreWilliam R. Lancaster Bryan E. Comer James RebarchakGeorge R. Parker Les Pittman J. Flynn MozingoC. Gibson Vance Jeffery C. Duffey J. David MartinDonald R. Rhea Tom Perry, Jr. William Randall MayMark S. Boardman Anne Malatia Glass Robert L. BowersR. Cliff Mendheim Manish H. Patel Tazewell T. Shepard, IIIRebekah K. McKinney M. Clay Martin Audrey O. StrawbridgeJ. Daryl Burt F. Patrick Loftin J. Lynn PerryErskine R. Funderburg, Jr. H. Thomas Heflin, Jr. Roy W. Williams, Jr.Lee F. Knowles Andrew D. Stanley Matthew C. MitchellDonald B. Mansell Scott L. McPherson Diandra S. DebrosseR. Cooper Shattuck Karen L. Laneaux Jeanne Dowdle RascoMonet M. Gaines Sam Irby

The following trustees were absent:

Courtney R. Potthoff Larry W. Morris Hays WebbWilliam H. Broome Emily L. Baggett Dana GrimesErik Stephen Heninger Thad Yancey, Jr. Frederick G. Helmsing, Jr.Charles C. Tatum, Jr. Eric Coale John A. Brinkley, Jr.Clint L. Maze Steven D. Adcock Sharon Hindman HesterW. Thomas Chapman, II Gregory M. Varner Rebecca G. DePalmaAshley Swink Fincher

2

3. APPROVAL OF THE MINUTES OF SEPTEMBER 16, 2016 ALABAMA STATEBAR FOUNDATION BOARD OF TRUSTEES MEETING

President Portis stated that the minutes of the Board of Trustees meeting for September16, 2016 had been transcribed and submitted to the board in advance of the meeting. Heasked if there were any corrections, additions or deletions. There were none.

TRUSTEE GLASS MOVED TO APPROVE THE SEPTEMBER 16, 2016 MINUTESOF THE ALABAMA STATE BAR FOUNDATION BOARD OF TRUSTEESMEETING. THE MOTION WAS SECONDED AND THE MINUTES WEREAPPROVED BY UNANIMOUS VOICE VOTE.

4. FINANCIAL REPORT – 4th QUARTER 2015-2016 AND YEAR-END REPORTS

The secretary-treasurer reviewed the 4th quarter report and the year-end report for thefoundation. Following his report, he asked if there any questions and there were none.

5. RENEWAL OF THE WEBSITE MAINTENANCE AND DESIGN AGREEMENTWITH MCNUTT AND COMPANY

The secretary-treasurer reported that the IT department had requested a renewal of thewebsite maintenance and design agreement with McNutt and Company. He noted thatthe amount was the same as the year before and would provide up to $15,000 formaintaining and updating the Alabama State Bar website.

TRUSTEE BOARDMAN MOVED TO APPROVE THE CONTRACT AS PROVIDED.THE MOTION WAS SECONDED AND APPROVED BY VOICE VOTE.

6. SECRETARY-TREASURER UPDATE

The secretary-treasurer next reported on several things including the annual foundationaudit that was underway. He also informed the trustees that it would be necessary topurchase a new air conditioning system for the front half of the building (the oldbuilding). He stated that the compressor in the old system had failed and was beingreplaced which would provide additional time for the air condition service provider toprovide a proposal for a new air conditioning system. The secretary-treasurer explainedthat it had been anticipated the system would need to be replaced in 2017 but because ofthe compressor failure the replacement of the entire system was necessitated sooner thanplanned. He reported that it was anticipated that the estimated cost of the new system is$15,000.

7. ADJOURNMENT

President Portis asked if there was any further business to come before the Board ofTrustees. There being none, a motion was made and seconded to adjourn. The motionwas approved.

3

____________________________________J. Cole Portis, PresidentAlabama State Bar Foundation

ATTEST:

____________________________________Keith B. Norman, Secretary-TreasurerAlabama State Bar Foundation

2016-17 2015-16

INCREASE

(DECREASE)

BEGINNING CASH BALANCE 28,783.91 27,818.23 965.68

REVENUE Ads/Publications 1,100.00 - 1,100.00 Memorials - 150.00 (150.00)

Refreshment Receipts 85.50 36.50 49.00Rental - ALF 2,000.00 - 2,000.00Rental - ASB

Computer Equipment 70,500.00 66,000.00 4,500.00Furniture & Equipment 7,500.00 6,750.00 750.00Premises 127,500.00 120,000.00 7,500.00

Total Rental - ASB 205,500.00 192,750.00 12,750.00

Royalties 3,560.99 3,581.91 (20.92)Sale of Equipment/Furniture 79.48 - 79.48

TOTAL REVENUE 212,325.97 196,518.41 15,807.56

EXPENDITURESComputer/Accessories

Equipment 13,218.05 23,082.45 (9,864.40)Maintenance & Support 19,028.31 23,060.84 (4,032.53)Software - 20,000.00 (20,000.00)

Total Computer/Accessories 32,246.36 66,143.29 (33,896.93)

Equipment Rental 1,030.11 1,200.00 (169.89)Maintenance Services

Building 2,967.02 3,800.05 (833.03)Equipment 3,534.00 3,006.01 527.99Housekeeping 12,283.52 10,541.72 1,741.80

Total Maintenance Services 18,784.54 17,347.78 1,436.76

Miscellaneous 35.00 - 35.00Mobile Communications Equipment 199.99 - 199.99

Service 1,858.58 1,793.08 65.50Total Mobile Communications 2,058.57 1,793.08 265.49

Professional Services 99.00 16,400.00 (16,301.00)Publications 806.37 643.66 162.71Refreshments 880.02 1,019.19 (139.17)Security 315.00 510.00 (195.00)Supplies 1,772.82 1,476.98 295.84Utilities 21,266.35 22,368.78 (1,102.43)

TOTAL EXPENDITURES 79,294.14 128,902.76 (49,608.62)

NET REVENUE (EXPENDITURES) 133,031.83 67,615.65 65,416.18

OTHER INCOME 50,000.00 - 50,000.00

ENDING CASH BALANCE 211,815.74 95,433.88 116,381.86

BEGINNING INVESTMENT BALANCE 2,045,218.55 2,081,523.67 (36,305.12)

INVESTMENT ACTIVITYTransfer to Checking Account (50,000.00) - (50,000.00)Investment Income 11,812.26 11,854.66 (42.40)Change in Market Value 5,377.58 30,799.28 (25,421.70)Investment Fees (1,022.61) (1,040.76) 18.15

TOTAL INVESTMENT ACTIVITY (33,832.77) 41,613.18 (75,445.95)

ENDING INVESTMENT BALANCE 2,011,385.78 2,123,136.85 (111,751.07)

ENDING CASH & INVESTMENT BALANCE 2,223,201.52 2,218,570.73 4,630.79

ALABAMA STATE BAR FOUNDATION

OCTOBER - DECEMBER

COMPARISON OF REVENUES AND EXPENDITURES

Alabama State Bar

FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

September 30, 2016 and 2015

Alabama State Bar Table of Contents

September 30, 2016 and 2015 TAB: REPORT Independent Auditors’ Report 1 TAB: FINANCIAL STATEMENTS Statements of Assets, Liabilities and Net Assets – Modified Cash Basis 3 Statements of Revenues, Expenses and Changes in Net Assets – Modified Cash Basis 4 Statements of Cash Flows – Modified Cash Basis 6 Notes to Financial Statements 7 SUPPLEMENTARY INFORMATION Schedules of Assets, Liabilities and Net Assets by Fund – Modified Cash Basis 16 Schedules of Revenues, Expenses and Changes in Net Assets by Fund – Modified Cash Basis 18 TAB: REQUIRED COMMUNICATIONS Required Communications 24 Accounting Policies, Judgments & Sensitive Estimates & CRI Comments on Quality 30 Summary of Audit Adjustments 31 TAB: INTERNAL CONTROL RECOMMENDATIONS Internal Control Findings 32

- 1 -

INDEPENDENT AUDITORS’ REPORT To the Board of Bar Commissioners Alabama State Bar We have audited the accompanying financial statements of Alabama State Bar (the Bar), which comprise the statements of assets, liabilities and net assets – modified cash basis as of September 30, 2016 and 2015, and the related statements of revenues, expenses and changes in net assets – modified cash basis and cash flows – modified cash basis for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the modified cash basis of accounting described in Note 2; this includes determining that the modified cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Bar’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bar’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

- 2 -

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the assets, liabilities and net assets of Alabama State Bar as of September 30, 2016 and 2015, and its revenues, expenses and changes in net assets for the years then ended in accordance with the modified cash basis of accounting, as described in Note 2. Basis of Accounting We draw attention to Note 2 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Report on Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The schedules of assets, liabilities and net assets by fund – modified cash basis and revenues, expenses and changes in net assets by fund – modified cash basis are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Other Matters The Alabama State Bar has not presented Management’s Discussion and Analysis that the Governmental Accounting Standards Board has determined is necessary to supplement, although not required to be a part of, the basic financial statements.

Montgomery, Alabama December 22, 2016

Alabama State Bar

Statements of Assets, Liabilities and Net Assets - Modified Cash Basis

The accompanying notes are an integral part of these financial statements. - 3 -

September 30, 2016 2015

Assets

Cash and cash equivalents 4,251,850$ 3,296,777$ Certificates of deposit 122,898 122,900

Total current assets 4,374,748 3,419,677

Investments 6,081,163 5,864,432

Total assets 10,455,911$ 9,284,109$

Liabilities and net assets

Current liabilitiesDeferred revenues 2,465,950$ 1,926,201$ Due to affiliates 79,395 81,400 Sections custodial accounts 449,007 323,245

Total current liabilities 2,994,352 2,330,846

Net assets 7,461,559 6,953,263

Total liabilities and net assets 10,455,911$ 9,284,109$

Alabama State Bar

Statements of Revenues, Expenses and Changes in Net Assets - Modified Cash Basis

The accompanying notes are an integral part of these financial statements. - 4 -

For the years ended September 30, 2016 2015

Operating revenuesLicense fees 4,113,600$ 4,087,413$ Member dues 640,375 628,080 CSF assessments and recoupments 536,494 508,130 Bar exam fees 509,317 470,152 Annual meeting 159,152 197,643 Grants 163,500 145,667 Pro Hac Vice fees 127,700 124,575 MCLE fees 113,750 93,750 Law student registration fees 99,000 98,600 Reciprocity fees 32,575 23,100 Advertising 77,961 93,999 Leadership forum 21,945 21,954 Lawyer referral service fees 33,366 27,076 Sponsorships 72,915 61,375 Disciplinary fees and costs 63,191 43,595 Authorized house counsel 16,950 11,125 Petition for reinstatement 6,750 8,250 Royalties 9,526 7,735 Bar exam review fees 1,535 1,130 Specialization fees 5,750 10,088 Miscellaneous 139,719 33,563

Total revenues 6,945,071 6,697,000

Operating expensesPersonnel costs 3,121,394 3,152,718 Employee benefits 847,196 875,400 Payroll taxes 220,682 217,719 Rentals and leases 804,864 704,818 Professional services 443,450 488,867 CSF claims 301,131 159,601 Printing 206,460 178,503 Grants 134,775 140,067 Postage 89,186 102,867 Advertising 46,892 42,272 Travel - in state 85,474 125,600 Travel - out of state 80,123 38,195

(Continued)

Alabama State Bar

Statements of Revenues, Expenses and Changes in Net Assets - Modified Cash Basis (Continued)

The accompanying notes are an integral part of these financial statements. - 5 -

For the years ended September 30, 2016 2015

Insurance 28,141 28,111 Office expense 44,963 46,187 Training and education 21,883 10,474 Utilities and communication 37,946 42,799 Audio and video 28,675 32,631 Leadership forum 71,113 79,751 Food and beverage 123,492 137,317 Honorarium 17,504 28,861 Committee and board meetings 11,011 17,631 Staff expenses 61,966 43,209 Termination costs 15,889 - Miscellaneous 35,326 66,264

Total expenses 6,879,536 6,759,862

Operating income (deficit) 65,535 (62,862)

Nonoperating revenues (expenses)Investment return 456,350 67,272 Investment fees (13,589) (15,326)

Total nonoperating revenues 442,761 51,946

Excess (deficit) revenues over expenses 508,296 (10,916)

Net assets, beginning of year 6,953,263 6,964,179

Net assets, end of year 7,461,559$ 6,953,263$

Alabama State Bar

Statements of Cash Flows - Modified Cash Basis

The accompanying notes are an integral part of these financial statements. - 6 -

For the years ended September 30, 2016 2015

Increase (decrease) in cash and cash equivalents

Cash flows from operating activities:Cash receipts from operations $ 7,445,077 $ 7,102,533 Cash receipts from Volunteer Lawyers Program 163,500 145,667 Cash payments to suppliers of goods and services (6,879,536) (6,759,862)

Net cash provided by operating activities 729,041 488,338

Cash flows from investing activities:Proceeds from maturities of investments 2,127,140 1,583,119 Purchases of investments (2,044,209) (1,847,493)Interest and dividends received 156,690 149,274 Investment fees paid (13,589) (15,326)

Net cash provided by (used in) investing activities 226,032 (130,426)

Net increase in cash and cash equivalents 955,073 357,912

Cash and cash equivalents, beginning of year 3,296,777 2,938,865

Cash and cash equivalents, end of year $ 4,251,850 $ 3,296,777

Reconciliation of Operating Income (Deficit) to NetCash Provided by Operating Activities:

Operating income (deficit) 65,535$ (62,862)$

Adjustments to reconcile operating income (deficit) to netcash provided by (used in) operating activities:

Deferred revenues 539,749 483,755 Due to affliates (2,005) 12,275 Sections custodial accounts 125,762 55,170

Net cash provided by operating activities 729,041$ 488,338$

Alabama State Bar

Notes to Financial Statements

- 7 -

NOTE 1: NATURE OF OPERATIONS The Alabama State Bar (the Bar) was authorized by an act of the State of Alabama Legislature in 1923 to be a nonprofit public corporation. The Bar was incorporated for the purpose of promoting professional responsibility and competence of its members, improving the administration of justice and increasing the public understanding of and respect for the law. The Bar was created as an integrated bar association. The Bar is a special-purpose governmental entity. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Bar is presented to assist in understanding the Bar’s financial statements. The financial statements and notes are representations of the Bar’s management, who is responsible for their integrity and objectivity. These accounting policies conform to the modified cash basis of accounting and have been consistently applied in the preparation of the financial statements.

Basis of Presentation The accompanying financial statements have been prepared in conformity with the modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Under this basis, revenues are recognized when received rather than when earned and expenses are recognized when paid rather than when the underlying obligation is incurred. The cash basis has been modified to record deferred revenues from dues and fees, to record certain amounts due to affiliates, to record certain custodial funds held and to recognize unrealized gains and losses on investments with readily determinable values. All activities of the Bar are accounted for within a single proprietary (enterprise) fund. Proprietary funds are used to account for operations that are (a) financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the cost (expenses) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The accounting and financial reporting treatment applied to the Bar is determined by its measurement focus. The transactions of the Bar are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation are included on the statements of assets, liabilities and net assets – modified cash basis.

Alabama State Bar

Notes to Financial Statements

- 8 -

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation (Continued)

To ensure observance of limitations placed on the use of resources available to the Bar, the accounts are maintained in accordance with the principles of fund accounting. The accounts of the Bar are organized by funds and the operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, net assets, revenues and expenses as appropriate. All financial transactions have been recorded and reported by the following fund groups: State Treasury Fund – This fund accounts for member receipts that are required to be deposited to the Treasury of the State of Alabama. These include license fees, exam fees, Pro Hac Vice fees, reciprocity fees, disciplinary fees and costs, and certain other receipts. Alabama State Bar Association Fund – This fund accounts for member receipts that are not required to be deposited to the Treasury of the State of Alabama. These include special membership dues, MCLE fees, law student registration fees, lawyer referral fees, and certain other receipts. Clearing Account Fund – This fund was established in 2014 to provide the ability for members to remit all amounts due to the Bar with a single payment option. The fund receives payments from members and then remits those payments to the proper Bar fund or affiliated organization. Client Security Fund – This fund was created by the Supreme Court in 1987 to provide for reimbursement of clients for their loss on money because of the dishonest conduct of a member attorney. The fund receives and disburses funds for this purpose. Meetings and Events Fund – This fund accounts for receipts and disbursements associated with the Bar’s annual meeting and other programmatic events. Volunteer Lawyers Fund – This fund accounts for the activities of The Volunteer Lawyers Program (VLP), a program of the Bar. The program’s purpose is to coordinate the provision of free legal services to low-income Alabamians in civil matters. Alabama Lawyer Fund – This fund accounts for the receipts and disbursements associated with the Bar’s publication – The Alabama Lawyer.

Use of Estimates The presentation of financial statements in conformity with the modified cash basis of accounting requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Alabama State Bar

Notes to Financial Statements

- 9 -

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Cash Equivalents For the purpose of presentation in the Bar’s statements of assets, liabilities and net assets – modified cash basis, cash equivalents are short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash and (b) so near to maturity that they present insignificant risk of changes in value due to changing interest rates. Investments GASB statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, issued March 1997, establishes accounting and financial reporting standards for investments held by governmental entities. It essentially requires all investments to be carried at fair value in the statement of assets, liabilities and net assets – modified cash basis, with all investment income, including changes in fair value, reported as revenue in the statement of revenues, expenses and changes in net assets – modified cash basis. Therefore, all investments are reported at fair value for the years ended September 30, 2016 and 2015, and investment income includes changes in fair value. GASB Statement No. 40, Deposits and Investment Risk Disclosures, addresses disclosures on deposits and investments, focusing on common investment risks related to interest rate risk, credit risk, custodial credit risk, foreign currency risk and concentration of credit risk. This pronouncement requires additional disclosure to be presented in the notes but has no impact on the net assets of the Bar.

The Bar’s investment policy allows for the following types of investments:

Equities – no-load equity index funds comprised of stock issues listed on the New York, American and NASDAQ stock exchanges which have annual operating expenses of less than one percent. U.S. Governmental or U.S. Agency Bonds – maturity not to exceed ten years. Corporate Bonds – Standard and Poor rating of at least “A” and/or Moody’s rating of at least “A”, and a maturity of not more than ten years. Fixed Investment Funds – no-load, fixed investment funds which have annual operating expenses of less than one percent. Mortgage-Backed Securities (GNMA, FNMA, and FHLMC), cash management accounts, U.S. Treasury Bills, short-term U.S. Government or Agency notes and certificates of deposit.

Deferred Revenue Deferred revenue consists of dues and fees received from licensees for a future budget period.

Alabama State Bar

Notes to Financial Statements

- 10 -

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Sections Custodial Accounts The Alabama State Bar provides for a number of specialized membership groups which are referred to as Sections. In addition to being a member of the Bar, licensees may become a member of one or more Sections as well. The Sections are separate, self-governing organizations. For certain Sections, in connection with its collection of dues and fees, the Bar collects the Sections dues, holds those dues, and makes disbursements at the direction of the individual Sections. Amounts received and not yet disbursed are reported as a liability in the accompanying statements of assets, liabilities and net assets – modified cash basis.

Net Assets Net assets comprise the various net earnings from operating and nonoperating revenues, expenses and contributions of capital. The Bar maintains only unrestricted net assets. The Bar has no net assets that are invested in capital assets, net of related debt; or restricted for capital activity and debt service. Income Taxes The Bar is exempt from income taxes as an organization created by the State of Alabama Legislature to perform a function of a public nature customarily performed by governmental instrumentalities and is an administrative arm of the Supreme Court of the State of Alabama.

Operating Revenues and Expenses Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and/or services. It also includes all revenue and expenses not related to capital and related financing, noncapital financing, or investing activities. Advertising The Bar’s policy is to expense advertising costs as the costs are incurred. Advertising costs for the years ended September 30, 2016 and 2015 amounted to $46,892 and $42,272, respectively. Subsequent Events Subsequent events have been evaluated through December 22, 2016, which represents the date the financial statements were available to be issued.

Alabama State Bar

Notes to Financial Statements

- 11 -

NOTE 3: INVESTMENTS The fair value of investments consisted of the following: September 30, 2016 % of Total 2015 % of Total

Mutual funds - equities 2,648,738$ 43% 2,297,874$ 40%Corporate bonds 1,326,705 22% 1,109,956 19%Mortgage backed securities 406,228 7% 262,082 4%U.S. government agency securities 507,863 8% 719,745 12%U.S. government guaranteed securities 1,191,629 20% 1,474,775 25%

Total investments 6,081,163$ 100% 5,864,432$ 100%

Interest Rate Risk Interest rate risk is the risk that changes in interest rates may adversely affect the fair value of the investment portfolio. As of September 30, 2016, the Bar had the following investments and maturities:

Less than 1 1 - 5 6 - 10 More than 10 Total

Mutual funds - equities -$ -$ -$ 2,648,738$ 2,648,738$ Corporate bonds 227,006 888,934 210,765 - 1,326,705 Mortgage backed securities - - 45,988 360,240 406,228 U.S. government agency securities - - 75,411 432,452 507,863 U.S government guaranteed

securities - 946,961 244,668 - 1,191,629

Total 227,006$ 1,835,895$ 576,832$ 3,441,430$ 6,081,163$

Investment Maturities in Years

Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligation to the Bar. See “Summary of Significant Accounting Policies – Investments” for additional information concerning permitted investments of the Bar. As of September 30, 2016, the Bar’s Corporate Bonds were rated Aaa to A by Moody’s Investor Services or Standard and Poor’s Rating Services, meeting the criteria of the Bar. As of September 30, 2016, the U.S. Governmental Agency Securities, U.S. Government Guaranteed Securities and Mutual Funds were not rated.

Alabama State Bar

Notes to Financial Statements

- 12 -

NOTE 3: INVESTMENTS (CONTINUED) Custodial Credit Risk Custodial credit risk is the risk that in the event of the failure of a custodial agent, the Bar may not be able to recover the value of the investments or collateral securities that are in the possession of that outside party. All investments of the Bar are registered in the name of the Bar’s designated trustee. Concentration Risk Concentration risk is the risk of loss that may be attributed to the magnitude of an investment in a single type of security. The table below lists all investments by investment provider and type as of September 30, 2016:

MortgageMutual Corporate Backed U.S. Gov U.S. Gov % of

September 30, 2016 Funds Bonds Securities Agency Guaranteed Total Total

Vanguard 500 Index Fund-SIGN 2,339,920$ -$ -$ -$ -$ 2,339,920$ 38.47%Ishares CORE S&P Mid-Cap ETF 202,670 - - - - 202,670 3.33%Ishares CORE S&P Small-Cap ETF 106,148 - - - - 106,148 1.75%FHLMC 5% - - 17,401 - - 17,401 0.29%FHLMC 4.5% - - 52,587 - - 52,587 0.86%FHLMC 4% - - 63,946 - - 63,946 1.05%FHLMC 3.5% - - 149,948 - - 149,948 2.47%FHLMC 3% - - 67,297 - - 67,297 1.11%FHLMC 2.5% - - 55,049 - - 55,049 0.91%U.S. Treasury Note 0.75% - - - - 301,022 301,022 4.95%U.S. Treasury Note 0.875% - - - - 280,515 280,515 4.61%U.S. Treasury Note 1.25% - - - - 261,388 261,388 4.30%U.S. Treasury Note 1.75% - - - - 140,077 140,077 2.30%U.S. Treasury Note 2.000% - - - - 104,590 104,590 1.72%U.S. Treasury Note 2.625% - - - - 104,037 104,037 1.71%FNMA 6% - - - 56,940 - 56,940 0.94%FNMA 5.5% - - - 5,268 - 5,268 0.09%FNMA 5% - - - 27,952 - 27,952 0.46%FNMA 4.5% - - - 46,229 - 46,229 0.76%FNMA 4% - - - 77,233 - 77,233 1.27%FNMA 3.5% - - - 150,006 - 150,006 2.47%FNMA 3% - - - 114,957 - 114,957 1.89%FNMA 2.5% - - - 29,278 - 29,278 0.48%ABBOTT Labs 5.125% - 35,028 - - - 35,028 0.58%American Express Credit 2.6% - 34,989 - - - 34,989 0.58%Anheuser-Busch INBEV Fin 1.9% - 69,666 - - - 69,666 1.15%Apple Inc. 1% - 35,950 - - - 35,950 0.59%Astrazeneca 1.75% - 35,269 - - - 35,269 0.58%Bank of Montreal Series 1.75% - 34,926 - - - 34,926 0.57%Branch Banking & Trust 1% - 35,989 - - - 35,989 0.59%Boeing Co 4.875% - 34,738 - - - 34,738 0.57%

(Continued)

Alabama State Bar

Notes to Financial Statements

- 13 -

NOTE 3: INVESTMENTS (CONTINUED)

MortgageMutual Corporate Backed U.S. Gov U.S. Gov % of

September 30, 2016 Funds Bonds Securities Agency Guaranteed Total Total

Caterpillar Inc. 7.9% - 33,072 - - - 33,072 0.54%Chevron Corp 1.104% - 35,974 - - - 35,974 0.58%Cisco Systems Inc. 1.6% - 34,255 - - - 34,255 0.56%Cisco Systems Inc. 2.5% - 34,397 - - - 34,397 0.57%ComCast Corp. 5.7% - 69,183 - - - 69,183 1.14%John Deere Capital Corp 2.3% - 34,825 - - - 34,825 0.57%Fifth Third Bank 2.25% - 34,568 - - - 34,568 0.57%General Electric Capital Corp 5.3% - 34,375 - - - 34,375 0.57%Gilead Sciences, Inc 3.65% - 35,519 - - - 35,519 0.58%Glaxosmithkline Cap 1.5% - 52,131 - - - 52,131 0.86%Goldman Sachs Group Inc. 7.5% - 35,038 - - - 35,038 0.58%Intel Corp 3.3% - 35,550 - - - 35,550 0.58%International Business 3.45% - 34,604 - - - 34,604 0.57%J P Morgan Chase & Co 6.3% - 69,068 - - - 69,068 1.14%Morgan Stanley 3.7% - 70,696 - - - 70,696 1.16%Oracle Coporation 5.75% - 34,233 - - - 34,233 0.56%Pepsico Inc 1% - 36,006 - - - 36,006 0.59%Pfizer Inc. 6.2% - 34,524 - - - 34,524 0.57%Royal Bank of Canada 1.2% - 52,977 - - - 52,977 0.87%Shell Int 1.375% - 34,903 - - - 34,903 0.57%Target Corp 5.375% - 34,852 - - - 34,852 0.57%Toronto-Dominion Bank 2.625% - 34,766 - - - 34,766 0.57%Toyota Motor Credit Corp 3.4% - 35,577 - - - 35,577 0.59%United Health Group, Inc. 1.45% - 35,083 - - - 35,083 0.58%Wachovia Corp 5.75% - 33,974 - - - 33,974 0.56%

Total 2,648,738$ 1,326,705$ 406,228$ 507,863$ 1,191,629$ 6,081,163$ 100%

NOTE 4: RELATED PARTIES AND OPERATING LEASES Alabama State Bar Foundation (Foundation) The Bar and the Foundation’s operations are conducted in common facilities and are related through common Board members. The Foundation was created for the purpose of constructing and maintaining a building and also acquiring and maintaining certain other furniture, fixtures, and office equipment. The Bar leases the building, furniture, fixtures, and office equipment from the Foundation under annual lease agreements. Rental expense associated with these leases was $771,000 and $672,000 for the years ended September 30, 2016 and 2015, respectively.

Alabama State Bar

Notes to Financial Statements

- 14 -

NOTE 4: RELATED PARTIES AND OPERATING LEASES (CONTINUED) Alabama Law Foundation (Law Foundation) The Bar and the Law Foundation’s operations are conducted in common facilities and are related through common Board members. The Law Foundation was created to provide grants to organizations that provide free legal aid to the poor in civil cases, for projects that improve the administration of justice and for law-related education. A portion of certain fees collected by the Bar are remitted to the Law Foundation. The Bar remitted $89,200 and $80,600 for the years ended September 30, 2016 and 2015, respectively. As of September 30, 2016 and 2015, the Bar had $70,220 and $75,000 due to the Law Foundation, respectively. Additionally, the Bar’s volunteer lawyer’s fund received grant funds in the amount of $59,000 and $74,000 from the Law Foundation for the years ended September 30, 2016 and 2015, respectively. Alabama Lawyers Assistance Foundation (Assistance Foundation) The Bar and The Assistance Foundation’s operations are conducted in common facilities and are related through common Board members. The Assistance Foundation was organized for 1) the establishment and maintenance of a program to identify and assist lawyers impaired by alcohol, substance abuse, addiction, and other mental health conditions; 2) the education of the public, judiciary, lawyers, and law students concerning the problems caused by alcohol, substance abuse, addiction, and other mental health conditions, 3) to increase awareness of the assistance available for those who are impaired and to provide encouragement and assistance to lawyers recovering from alcohol, substance abuse, addiction, and other mental health conditions. A portion of certain fees collected by the Bar are remitted to the Assistance Foundation in connection with its purposes. The Bar remitted $15,900 and $23,350 in fees to the Assistance Foundation for the years ended September 30, 2016 and 2015, respectively. The Bar had amounts due to the Assistance Foundation in the amount of $9,175 and $6,400 as of September 30, 2016 and 2015, respectively. NOTE 5: CONCENTRATION OF CASH AND CREDIT RISK The Bar’s cash balances are protected by The Federal Depository Insurance Corporation (FDIC – to $250,000 at each institution). The Bar also participates in The Security for Alabama Funds Enhancement, or SAFE Program. The SAFE Program provides for participating banks to pledge eligible collateral to further protect deposits of public funds. As a result, the Bar did not have any uninsured balances as of September 30, 2016 and 2015.

Alabama State Bar

Notes to Financial Statements

- 15 -

NOTE 6: RETIREMENT PLAN The Bar participates in the Employees’ Retirement System of Alabama (ERS), an agent multiple-employer public employee retirement plan. The ERS was established October 1, 1945, under the provisions of Act 515 of the Alabama Code and is administered by a separate Board of Control. The plan covers qualified persons employed by certain state-supported institutions. During the 2012 regular session of the Alabama Legislature, a new defined benefit plan tier (tier 2) was created for employees hired on or after January 1, 2013. For the years ended September 30, 2016 and 2015, employee participation requires contributions of earnable compensation of 7.50% and 6.00%, respectively for tier 1 and tier 2 employees. The Bar contributes an actuarially determined percentage which is set annually. The employer rates for the year ended September 30, 2016 were 11.94% and 10.84%, respectively for tier 1 and tier 2 employees. The employer rates for the year ended September 30, 2015 were 13.45% and 13.31%, respectively for tier 1 and tier 2 employees. Benefits vest after 10 years of credited service. Participants retiring after attaining the age of 60 are entitled to the computed annual retirement benefit, payable monthly for life. Upon resignation, plan members receive accumulated contributions and proportional accumulated interest on those contributions. Employer contributions made to the plan on behalf of employees for the years ended September 30, 2016 and 2015 were $420,930 and $440,573, respectively.

Supplementary Information

Alabama State Bar

Schedules of Assets, Liabilities and Net Assets by Fund - Modified Cash Basis

See independent auditors’ report. - 16 -

September 30, State Alabama Client Meetings Volunteer Alabama

Treasury State Bar Clearing Security and Events Lawyers Lawyer SectionsFund Association Account Fund Fund Fund Fund Fund Total

Assets

Cash and cash equivalents 134,985$ 337,888$ 2,786,058$ 548,683$ 4,379$ 14,861$ 46,102$ 378,894$ 4,251,850$ Certificates of deposit - - - - - - 122,898 - 122,898 Due from (to) other funds 2,165,875 299,925 (2,735,638) 199,525 - - 200 70,113 -

Total current assets 2,300,860 637,813 50,420 748,208 4,379 14,861 169,200 449,007 4,374,748

Investments - 3,661,642 - 2,419,521 - - - - 6,081,163

Total assets 2,300,860$ 4,299,455$ 50,420$ 3,167,729$ 4,379$ 14,861$ 169,200$ 449,007$ 10,455,911$

Liabilities and net assets

Current liabilitiesDeferred revenues 2,117,225$ 348,575$ -$ 150$ -$ -$ -$ -$ 2,465,950$ Due to affiliates 28,975 - 50,420 - - - - - 79,395 Sections custodial accounts - - - - - - - 449,007 449,007

Total current liabilities 2,146,200 348,575 50,420 150 - - - 449,007 2,994,352

Net assets 154,660 3,950,880 - 3,167,579 4,379 14,861 169,200 - 7,461,559

Total liabilities and net assets 2,300,860$ 4,299,455$ 50,420$ 3,167,729$ 4,379$ 14,861$ 169,200$ 449,007$ 10,455,911$

2016

Alabama State Bar

Schedules of Assets, Liabilities and Net Assets by Fund - Modified Cash Basis

See independent auditors’ report. - 17 -

September 30, State Alabama Client Meetings Volunteer Alabama

Treasury State Bar Clearing Security and Events Lawyers Lawyer SectionsFund Association Account Fund Fund Fund Fund Fund Total

Assets

Cash and cash equivalents 164,496$ 293,767$ 2,190,196$ 298,476$ 18,397$ 1,279$ 57,571$ 272,595$ 3,296,777$ Certificates of deposit - - - - - - 122,900 - 122,900 Due from (to) other funds 1,686,550 235,046 (2,139,596) 167,150 - - 200 50,650 -

Total current assets 1,851,046 528,813 50,600 465,626 18,397 1,279 180,671 323,245 3,419,677 .

Investments - 3,514,456 - 2,349,976 - - - - 5,864,432

Total assets 1,851,046$ 4,043,269$ 50,600$ 2,815,602$ 18,397$ 1,279$ 180,671$ 323,245$ 9,284,109$

Liabilities and net assets

Current liabilitiesDeferred revenues 1,650,900$ 275,151$ -$ 150$ -$ -$ -$ -$ 1,926,201$ Due to affiliates 30,800 - 50,600 - - - - - 81,400 Sections custodial accounts - - - - - - - 323,245 323,245

Total current liabilities 1,681,700 275,151 50,600 150 - - - 323,245 2,330,846

Net assets 169,346 3,768,118 - 2,815,452 18,397 1,279 180,671 - 6,953,263

Total liabilities and net assets 1,851,046$ 4,043,269$ 50,600$ 2,815,602$ 18,397$ 1,279$ 180,671$ 323,245$ 9,284,109$

2015

Alabama State Bar

Schedules of Revenues, Expenses and Changes in Net Assets by Fund - Modified Cash Basis

See independent auditors’ report. - 18 -

For the year ended September 30,State Alabama Client Meetings Volunteer Alabama Eliminating

Treasury State Bar Security and Events Lawyers Lawyer JournalFund Association Fund Fund Fund Fund Entries Total

Operating RevenuesLicense fees 4,113,600$ -$ -$ -$ -$ -$ -$ 4,113,600$ Member dues - 640,375 0 - - - - 640,375 CSF assessments and recoupments - - 536,494 - - - - 536,494 Bar exam fees 509,317 - - - - - - 509,317 Annual meeting - - - 159,152 - - - 159,152 Grants - - - - 163,500 - - 163,500 Pro Hac Vice fees 127,700 - - - - - - 127,700 MCLE fees - 113,750 - - - - - 113,750 Law student registration fees - 99,000 - - - - - 99,000 Reciprocity fees 32,575 - - - - - - 32,575 Alabama State Bar allotment - - - 60,000 - 99,000 (159,000) - Advertising - - - - - 77,961 - 77,961 Leadership forum - - - 21,945 - - - 21,945 Lawyer referral service fees - 33,366 - - - - - 33,366 Sponsorships - - - 72,915 - - - 72,915 Disciplinary fees and costs 63,191 - - - - - - 63,191 Authorized house counsel 16,950 - - - - - - 16,950 Petition for reinstatement 6,750 - - - - - - 6,750 Royalties - - - - - 9,526 - 9,526 Bar exam review fees - 1,535 - - - - - 1,535 Specialization fees - 5,750 - - - - - 5,750 Miscellaneous 15,889 2,952 30,066 22,654 68,004 154 - 139,719

Total revenues 4,885,972 896,728 566,560 336,666 231,504 186,641 (159,000) 6,945,071

Operating ExpensesPersonnel costs 2,917,473 - 55,672 - 148,249 - - 3,121,394 Employee benefits 787,205 - 18,195 - 41,796 - - 847,196 Payroll taxes 201,533 4,016 4,136 - 10,997 - - 220,682 Rentals and leases 790,684 14,180 - - - - - 804,864 Professional services 269,998 172,022 - - - 1,430 - 443,450

(Continued)

2016

Alabama State Bar

Schedules of Revenues, Expenses and Changes in Net Assets by Fund - Modified Cash Basis (Continued)

See independent auditors’ report. - 19 -

For the year ended September 30,State Alabama Client Meetings Volunteer Alabama Eliminating

Treasury State Bar Security and Events Lawyers Lawyer JournalFund Association Fund Fund Fund Fund Entries Total

CSF claims - - 301,131 - - - - 301,131 Printing 99,000 13,964 - 2,823 58 189,615 (99,000) 206,460 Grants 134,275 60,500 - - - - (60,000) 134,775 Postage - 82,487 - - - 6,699 - 89,186 Advertising 11,636 27,092 - 8,164 - - - 46,892 Travel - in state 70,982 2,880 5,674 - 5,938 - - 85,474 Travel - out of state 67,054 13,069 - - - - - 80,123 Insurance 25,860 - - - 2,281 - - 28,141 Office expense - 44,890 73 - - - - 44,963 Training and education 7,110 14,773 - - - - - 21,883 Utilities and communication 17,584 20,362 - - - - - 37,946 Audio and video - - - 28,675 - - - 28,675 Leadership forum - - - 71,113 - - - 71,113 Food and beverage - - - 123,492 - - - 123,492 Honorarium - - - 17,504 - - - 17,504 Committee and board meetings - - - 11,011 - - - 11,011 Staff expenses - - - 61,966 - - - 61,966 Termination costs - 15,889 - - - - - 15,889 Miscellaneous 264 (896) 979 25,936 8,603 440 - 35,326

Total expenses 5,400,658 485,228 385,860 350,684 217,922 198,184 (159,000) 6,879,536

Operating income (deficit) (514,686) 411,500 180,700 (14,018) 13,582 (11,543) - 65,535 (Continued)

2016

Alabama State Bar

Schedules of Revenues, Expenses and Changes in Net Assets by Fund - Modified Cash Basis (Continued)

See independent auditors’ report. - 20 -

For the year ended September 30,State Alabama Client Meetings Volunteer Alabama Eliminating

Treasury State Bar Security and Events Lawyers Lawyer JournalFund Association Fund Fund Fund Fund Entries Total

Nonoperating revenues (expenses)Investment return - 279,433 176,845 - - 72 - 456,350 Investment fees - (8,171) (5,418) - - - - (13,589)

Total nonoperating revenues - 271,262 171,427 - - 72 - 442,761

Excess (deficit) revenues over expenses (514,686) 682,762 352,127 (14,018) 13,582 (11,471) - 508,296

Net assets, beginning of year 169,346 3,768,118 2,815,452 18,397 1,279 180,671 - 6,953,263 Transfers 500,000 (500,000) - - - - - -

Net assets, end of year 154,660$ 3,950,880$ 3,167,579$ 4,379$ 14,861$ 169,200$ -$ 7,461,559$

2016

Alabama State Bar

Schedules of Revenues, Expenses and Changes in Net Assets by Fund - Modified Cash Basis

See independent auditors’ report. - 21 -

For the year ended September 30,State Alabama Client Meetings Volunteer Alabama Eliminating

Treasury State Bar Security and Events Lawyers Lawyer JournalFund Association Fund Fund Fund Fund Entries Total

Operating RevenuesLicense fees 4,087,413$ -$ -$ -$ -$ -$ -$ 4,087,413$ Member dues - 628,080 - - - - - 628,080 CSF assessments and recoupments - - 508,130 - - - - 508,130 Bar exam fees 470,152 - - - - - - 470,152 Annual meeting - - - 192,643 5,000 - - 197,643 Grants - - - - 145,667 - - 145,667 Pro Hac Vice fees 124,575 - - - - - - 124,575 MCLE fees - 93,750 - - - - - 93,750 Law student registration fees - 98,600 - - - - - 98,600 Reciprocity fees 23,100 - - - - - - 23,100 Alabama State Bar allotment - - - 40,000 - 111,500 (151,500) - Advertising 6,300 - - - - 87,699 - 93,999 Leadership forum - - - 21,954 - - - 21,954 Lawyer referral service fees - 27,076 - - - - - 27,076 Sponsorships - - - 61,375 - - - 61,375 Disciplinary fees and costs 43,595 - - - - - - 43,595 Authorized house counsel 11,125 - - - - - - 11,125 Petition for reinstatement 8,250 - - - - - - 8,250 Royalties - - - - - 7,735 - 7,735 Bar exam review fees - 1,130 - - - - - 1,130 Specialization fees - 10,088 - - - - - 10,088 Miscellaneous - 4,844 210 27,211 1,000 298 - 33,563

Total revenues 4,774,510 863,568 508,340 343,183 151,667 207,232 (151,500) 6,697,000

Operating ExpensesPersonnel costs 2,925,598 - 79,915 - 147,205 - - 3,152,718 Employee benefits 820,741 - 23,984 - 30,675 - - 875,400 Payroll taxes 203,975 (3,125) 5,928 - 10,941 - - 217,719 Rentals and leases 696,274 8,544 - - - - - 704,818 Professional services 262,779 225,966 - - - 122 - 488,867

(Continued)

2015

Alabama State Bar

Schedules of Revenues, Expenses and Changes in Net Assets by Fund - Modified Cash Basis (Continued)

See independent auditors’ report. - 22 -

For the year ended September 30,State Alabama Client Meetings Volunteer Alabama Eliminating

Treasury State Bar Security and Events Lawyers Lawyer JournalFund Association Fund Fund Fund Fund Entries Total

CSF claims - - 159,601 - - - - 159,601 Printing 111,500 18,171 - 4,885 - 155,447 (111,500) 178,503 Grants 134,200 45,867 - - - - (40,000) 140,067 Postage - 97,302 - - - 5,565 - 102,867 Advertising 10,810 25,410 - 6,052 - - - 42,272 Travel - in state 113,153 3,014 3,019 - 6,414 - - 125,600 Travel - out of state 31,091 7,104 - - - - - 38,195 Insurance 25,277 96 - - 2,738 - - 28,111 Office expense - 46,174 13 - - - - 46,187 Training and education 2,478 7,996 - - - - - 10,474 Utilities and communication 25,327 17,472 - - - - - 42,799 Audio and video - - - 32,631 - - - 32,631 Leadership forum - - - 79,751 - - - 79,751 Food and beverage - - - 137,317 - - - 137,317 Honorarium - - - 28,861 - - - 28,861 Committee and board meetings - - - 17,631 - - - 17,631 Staff expenses - - - 43,209 - - - 43,209 Miscellaneous - (18) 6,889 52,540 6,145 708 - 66,264

Total expenses 5,363,203 499,973 279,349 402,877 204,118 161,842 (151,500) 6,759,862

Operating income (deficit) (588,693) 363,595 228,991 (59,694) (52,451) 45,390 - (62,862) (Continued)

2015

Alabama State Bar

Schedules of Revenues, Expenses and Changes in Net Assets by Fund - Modified Cash Basis (Continued)

See independent auditors’ report. - 23 -

For the year ended September 30,State Alabama Client Meetings Volunteer Alabama Eliminating

Treasury State Bar Security and Events Lawyers Lawyer JournalFund Association Fund Fund Fund Fund Entries Total

Nonoperating revenues (expenses)Investment return - 44,689 22,536 - - 47 - 67,272 Investment fees - (10,165) (5,161) - - - - (15,326)

Total nonoperating revenues - 34,524 17,375 - - 47 - 51,946

Excess (deficit) revenues over expenses (588,693) 398,119 246,366 (59,694) (52,451) 45,437 - (10,916)

Net assets, beginning of year 208,039 3,919,999 2,569,086 78,091 53,730 135,234 - 6,964,179 Transfers 550,000 (550,000) - - - - - -

Net assets, end of year 169,346$ 3,768,118$ 2,815,452$ 18,397$ 1,279$ 180,671$ -$ 6,953,263$

2015