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Commercial National Of Little Rock


January 1981 Vol. 15, NO.1





Phillip Carroll, President James Cypert, President-Elect


Dennis Shackleford Clint Huey Webster l. Hubbell Gus B. Walton, Jr. David R. Malone Thomas D. Ledbetter Robert G. Serio LeRoy Froman Floyd Thomas, Jr. Charles Carpenter D. Mac Glover Tommy Womack


Phillip Carroll James Cypert E. Harley Cox, Jr. Don M. Schnipper Herschel H. Friday Louis B. Jones

Cover On the Courthouse Square in Arkansas Second Injury Fund Norwood Phillips Lobbying The Lawmakers ....•..............Robert L. Brown Client Representation Before IRS Rupert A. Stuart Tax Duties Of Personal Representatives And Attorneys. . . . . . . . . . . Paul J. Nicholson Law Schooi Libraries ...............•........Ruth Brunson George E. Skinner

44 4 8 15 26 38

REGULAR FEATURES Presdienl's Report Phillip Carroll 2 Juris Dictum 36 Legal Economics . . . . . . . . . . • . • . • . • . • . . . . . . . . . . . . . . . . . . . . .. 30 Law Schooi News 12 Oyez-Oyez Carol Utley 18 In Memoriam. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20 Executive Council Notes ...........•...........W. C. Barrier 41 Service Directory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. IBC C. E. Ransick 43 Addenda W. Christopher Barrier 24 Context AICLE News Claibourne W. Patty, Jr. 32 .Sidney H. McCullum 3 The Arkansas Bar Foundation. . . . . . Advising Innovators Robert R. Keegan 6 Ethics 34 AEGiS 22 Lawyer's Mart 40

EDITOR C. E. Ransick The Arkansas Lawyer (USPS 546~040) is published quarterly by the Arkansas Bar Association, 400 West Markham, Little Rock. Arkansas 72201. Second class

postage paid at Little Rock, Arkansas. Subscription price to non-members of the Arkansas Bar Association $6.00 per year and to members $3.00 per year included


Robert T. Dawson E. Alvin Schay Cyril Hollingsworth

in annual dues. Any opinion expressed herein is that of the author, and not necessarily that of the Arkansas Bar Association, The Arkansas Lawyer, or the Editorial Committee. Contributions to The Arkansas Lawyer are welcome and should be sent in two copies to the Arkansas Bar Center, 400 West Markham, Little Rock, Arkansas 72201. All Inquiries regarding advertising should be sent to The Arkansas Lawyer. above address.

January 1981 /Arkansas Lawyer/1


THE CONSTITUTION OF 1980 With considerable pride, I report that the House of Delegates, authorized to speak for the Arkansas Bar Association, overwhelmingly endorsed the proposed Constitution of 1980. Who sez lawyers are reactionary, unadventuresome, and afraid to accept change? Dr. Robert A. Leflar refers to the document as a ticket into the 20th Century coming just about as the 21 st Century arrives. Who can speak with more authority? Now the job remains for individual lawyers to urge their friends to vote for the new Constitution. The Arkansas Bar Association has furnished each one of its members a copy annotated to show the significant changes from existing law. Obviously, any conscientious lawyer can find several things about the document with which he or she would disagree, but lawyers are trained to weigh legal theories and to find where the balance lies. We have a clear duty to read the proposed Constitution and express an opinion to all who will listen. No greater challenge has faced the lawyers of this State in any era.


and have found 27 articles in the law reviews and bar journals expressing one view or the other. There seems to be a total absence of "hard data" proving that one system is better than another. Some empirically-based research has come from Missouri and Texas. "Twenty Years of the Missouri Non-Partisan Court Plan," Mo. B. J. 32:370-6 (1976); "The Selection of Judges in Texas," 5 Houston L. Rev. 430 (1968); "The Promise and the Performance of the Missouri Plan: Judicial Selection in the Fifty States," 32 U. of Miami L. Rev. 509 (1978). For what it is worth, one writer has stated that six of eight lawyers in the two major cities of Missouri prefer the Missouri Plan. The key to success appears to be a true nominating commission. The American Judicature Society (1974) pp 60-68; Judicial Selection in New Jersey, 5 Seton Hall L. Rev. 765 (1975). On September 20, the House of Delegates approved merit selection by a vote of 25 to 20. Improving the selection process is only a partial solution. Until judicial salaries are high enough to attract good lawyers to the bench, we will have to rely on self-sacrificing individuals who are willing to give of themselves and their families. In most instances, this has brought us good judges, but it does not leave one feeling very secure about the future.

JUDICIAL POLLS Voters have a choice on the issue of how to select judges at the appellate court level. One is the "Missouri Plan" which incorporates these three concepts: (1) A permanent, non-partisan committee of laymen, lawyers and a Supreme Court Justice which independently generates, screens, and s'ubmits a list of three nominees; (2) Appointment of one of the nominees by the Governor for a probationary period; (3) The Judge then runs for election unopposed on a non-partisan ballot. The other choice is non-partisan election of judges. Clearly, either one of these choices is superior to the existing system which subjects candidates to the rigors and heavy expenses of party primaries and a general election. While I favor merit selection, honesty compels me to acknowledge that good arguments can be made in favor of both pians. I have searched the Index of Legal Periodicals since 1973 2/Arkansas Lawyer/January 1981

Regardless of what happens in November with regard to judicial selection, it is clear to me that lawyers must be more assertive when judicial candidates run for office, whether there be partisan election, non-partisan elections, or merely the issue of whether a judge should be retained in office for another term. Bill Wilson of Little Rock chairs a committee that is studying the problem. There is solid evidence available that voters considered as a group know very little about judicial candidates, and that the outcome of a judicial race probably hinges more on the number of yard signs a candidate erects than on his professionalism. In 1976, a poll was taken in Texas of779 voters chosen at random. 84.6% could not name the judicial candidate for whom they were about to vote or for whom they had just voted. The candidacy of Donald Yarbrough for the Supreme Court evoked a widespread controversy, and he was opposed by the State Bar of continued on page 19

ARKANSAS BAR fOUNDA TION By: Sidney H. McCollum Chairman

In my report to you in the October issue of the Arkansas Lawyer, I stated that one of the goals or programs of work for the Bar Foundation during this year, was to try to raise the level of professionalism among the members of the Bar. We want to impress upon each practicing attorney that he is indeed practicing a profession and not simply managing a business for fun and profit. The Free Symposium, which was sponsored by the Bar Foundation and made available to all the lawyers of the state in late Septernber discussed the avoidance of malpractice. This is only a part of what we are getting at in trying to "develop professionalism." The principles and problems which were discussed in the symposium merely define the perimeters of the problem. They draw the bottom line below which no lawyer dare perform or function. Of course the professionalism we seek requires much higher standards than the bottom line of malpractice. By the way, I'd like to thank Jim Cypert, of Springdale, Marjorie Niblock, of Fayetteville, Jim West, of Fort Smith, David Malone and Dean Epstein, of Fayetteville Law School, and of course Col. C. E. Ransick for the excellent job they did with the Symposium. The Symposium was well done, well received, and well attended. We did not have all the lawyers we would have liked to have had attend the Symposium, and certainly not all those who shoUld have been there were there, but we did have about twice as many as "those who know about these things" predicted we would have. I think this is an indication of the interest the lawyers of the state have in resolving these problems and becoming better professionals. A recent discussion among various sections of the American Bar Association concerning the code of professional responsibility and whether or not to simply scrap it and start over with a new code or amend the existing code,

also points to the interest of our fellow lawyers in the problem at hand. However, simply changing the code or drawing up a new code is doing nothing more than drawing the bottom line, or bottom limit, beyond which behavior will be condemned. Again this is not really the problem we are trying to define. Jacques Barzun, Professor Emeritus, at Columbia University in New York, in his article "The Professions Under Seige", after pointing out that codes were just minimum limits, did state that they gave professionals a way to police themselves and a way of screening and disciplining those who fall below our expectations. He went on to point out that that's not the true problem. He said it this way: "Policing, being negative, is not enough. It will not effect moral regeneration, which can come about only when the members of a group feel once more confident that ethical behavior is widely practiced, approved, and admired." It is this type feeling that the Foundation is trying to instill in the members of the Bar of Arkansas. The Public Education Committee of the Arkansas Bar Foundation has already taken some giant steps in this direction. Over the past few years under the able leadership of Chris Barrier of Little Rock, the Committee in conjunction with the Arkansas Bar Association Public Education Committee, has undertaken many projects which are directly beneficial to a lawyer in his relationships with his clients and the public in general. Much has been written about the "Image" of the lawyer and many projects have been undertaken to improve that image. The Foundation's Education Committee has printed several pamphlets to assist lawyers in their relationships with their clients in explaining Wills, explaining legal fees, telling laymen what it is like to be a witness and what is expected of

them in deposition and many 0lher similar projects. (This years committee is presently examining some other areas in which pamphlets may be appropriate, such as the laymen's rights in traffic court and what can happen when you buy on time or in installment notes.) In the past the committee has sponsored and taken around the State an exhibit called The Guardians, depicting the role of local law enforcement officers in guarding citizens against crime and other danger. Also Chris Barrier's column in the Arkansas Lawyer known as Context has been an invaluable source of assistance in helping the lawyer relate to his public, to his client, and to provide day to day suggestions on how to better practice law and run his office so that he can be more professional. Many of the projects done by the public Education Committee have been directed toward the public image of the lawyer or improving his PR or public relations, this again is only part of the problem of becoming more professional. This year the Public Education Committee is chaired by Robert L. Brown of Little Rock. Bob and his committee will be working in the weeks ahead on projects and programs to bring the idea of professionalism not only to the pUblic but to the lawyers themselves. PR stands not only for public relations but also for professional responsibility. There are many of us who feel that if the professional responsibility standards are met then the other PR will fall right in line. Maybe if we clean up our own act and develop the desire to do better than minimum requirements and more than minimum effort in civic pro-bono and bar Association work the image will not need special attention. There are many ways in which these ideas may be brought to the attention of the attorneys throughout the state and the lay people. There may be pUblic information forums, panel discussions, continued on page 28 January 1981/Arkansas Lawyer/3


The law regarding the Second Injury Fund and apportionment is much like that of the entire Workers' Compensation Act: "If you don't like it, stick around and it will probably change in the next few days." The statutory law relative to the Second Injury Fund and apportionment is all found in Section 13(f) and subsections thereto. There are sweeping changes which will go into effect on January 1, 1981. The full impact of these changes cannot be appreciated, however, until the appellate courts have interpreted them. I would certainly not be so presumptious as to guess what interpretation will be placed on Section 13(1) after it is effective in its amended form. I am advised that the Workers' Compensation Commission is of the firm opinion that the 1981 amendment is substantive and not procedural and that therefore it will only apply to injuries occurring on or after January 1, 1981. While I agree with this interpretation, I hasten to suggest that O1Jr appellate courts may not. This is merely one of the areas relative to the new law that undoubtedly will be questioned before the Workers' Compensation Commission and in the courts. In its present state, the Second Injury Fund is almost impregnable and can only be reached in unique situations. The Second Injury Fund is funded by payment of carriers and self-insureds into the fund, of which the State Treasurer is custodian, of the su'm of $500.00 in every case of injury causing death in which there are no persons entitled to compensation. In its present form, it applies only to employees who have previously lost a hand, arm, foot, leg or eye and subsequently through the total loss of another member become permanently, totally disabled. In such a situation, the last employer is responsible for only that degree of dis4/Arkansas Lawyer/January 1981

ability which would have existed had the prior disability not existed, with the Second Injury Fund being responsible for the payment of the balance due. However, effective January 1, 1981, the Second Injury Fund takes on a broad new perspective. As the law will be, it is not necessary that the prior injury to be a scheduled member nor is it necessary that the subsequent injury likewise be to a scheduled member, but simply that the second injury, combined with the first injury, cause a degree of permanent disability. Bear in mind that Section 13(f), as it will be amended, does not require that the employed be permanently, totally disabled, as it does now. In such a case, after the compensation liability for the employer for the last injury, considered alone, has been determined by either the ALJ or the Commission, then the degree or percentage of the employee's disability that is attributable to all injuries shall then be determined and the Second Injury Fund shall be responsible for the difference. As you can see, this gives a much larger base to cases which will involve the Second Injury Fund. It is indeed surprising that the General Assembly has passed legislation which is favorable to the employer or his carrier. We all know that the insurance lobby is about as strong as a $2.00 suitcase and such legislation comes as a pleasant shock. It appears to me that the Act, as amended effective January 1, 1981, relative to Second Injury Fund is not actuarially sound and will probably result in bankruptcy of the Second Injury Fund within the foreseeable future. If this is true, then legislation providing for new sources of income to the Second Injury Fund must be passed. If not, then in the event of an insolvent Second Injury Fund, a permanently disabled employee will be without a remedy after he has been paid benefits

(Editor's Note: At the Fourth Annual Workers' Compensation Institute, March 21, 1980, Norwood Phillips discussed "Apportionment and the Second Injury Fund". Many attendees requested that he publish his discussion paper, especially for the benefit of interested practitioners on Workers' Compensation who were unable to attend the Institute. Mr. Phillips is currently the Chairman of the Workers' Compensation Section of the Arkansas Bar Association. He also is the co-author of the Association's Workers' Compensation System and its 1980 update.) calculated solely upon his last disability. Before we look at the law regarding apportionment, we must be apprised of the applicable law regarding successive injuries. If the second occurrence is merely a recurrence of the original injury, then the employer and/or its carrier at the time of the original injury is liable for the payment of additional benefits. On the other hand, if subsequent occurrence is an aggravation of the prior injury, then the subsequent employer and/or his carrier is responsible for the payment of additional benefits. It appears that the key word relative to whether an occurrence is a recurrence or an aggravation is "symptomatic." If the employee remains symptomatic following his initial injury, then the subsequent event will probably be interpreted to be a recurrence of the original injury and will place responsibility on the original employer. Moss Y_ EI Dorado Drilling Company, 237 Ark. 80, 371 SW.2d 528. On the other hand, if the claimant is asymptomatic following the initial injury and the subsequent occurrence causes him to become symptomatic, then the subsequent employer will probably be responsible for the pay-

ment of additional benefits. Burks,lnc. vs. Blanchard, 259 Ark. 76, 531, S.w.2d 465. The situation often arises where the employer remains the same, but the carrier changes between the prior and subsequent injuries. In such a case the rule remains consistent. If the claimant continues to be symptomatic following the initial injury, then the prior carrier remains responsible for the subsequent occurrence, notwithstanding that it has gone off the risk. If, however, the claimant becomes asymptomatic following the initial injury and subsequently an occurrence comes about which causes him to be again symptomatic, then the subsequent carrier probably becomes liable for the payment of additional benefits. I point out that many cases arise where an injured employee is deprived of benefits for a prolonged period of time, not because the authenticity of his disability is questioned, but simply because two carriers are unable to agree as to whether he has sustained an aggravation or simply suffered a recurrence. Often such an issue can be resolved only after hearings at the Commission level and a determination by the courts. Each carrier is usually reluctant to accept responsibility for the payment of benefits for fear that such an act would be construed to be an admission of liability. It is submitted that such a perplexing problem could be solved by a simple amendment to the Workers' Compensation Act. The amendment should give the Workers' Compensation Commission the power to enter an ex parte order directing one or the other carrier to pay benefits while the claim is pending without prejudice to it and with the right to recover the amount of its payments from the other carrier, with appropriate interest, should it finally be determined that the responsibility for payment properly rested upon the nonpaying carrier. There should be a safeguard in the amended law which makes it applicable only where the injury and disability are admitted by both carriers with the only issue being which carrier is responsible for benefits. In examining the law as it now is relative to apportionment, we should first look to Larson as we all know that insofar as workers' compensation law goes Larson is the prophet and his book the Bible. Larson, Workmen's Compensation Law, ยง59.31, Page 10-285 states that to be apportionable, an impairment must have been independently producing some degree

of disability before the accident and must be continuing to operate as a source of disability after the accident. As could be expected, Arkansas has followed this rule, the Supreme Court holding that the entire disability precipitated by an industrial injury of a claimant suffering from a latent disability is compensable, and no attempt should be made to weigh relative contribution of industrial injury and latent defect. McDaniel vs. Hilyard Drilling Company, 233 Ark. 142,343 S.w.2d 416; C. Finkbeiner, Inc. vs. Flowers, 251 Ark. 241, 471 S.w.2d 722. In both of these cases, the preexisting disability was latent. On the other hand, a review of 13(f) (2) (ii) states: "If an employee has a prior permanent disability not occasioned by an injury resulting while in the employ of the same employer in whose employ he received a subsequent permanent disability, the amount of compensation for the subsequent injury shall be as follows: if the subsequent injury is one that is not scheduled under Section 13(c), the injured employee shall be paid compensation for the healing period and for the degree of disability that would have resulted from the subsequent injury if the previous disability had not existed." In cases that fit this definition, the Arkansas Supreme Court has interpreted the section literally. The landmark case is Davis vs. Stearns-Rogers Construction Co" 248 Ark. 344, 451 S. W.2d 469. The Supreme Court stated: "Our understanding of Ark. Stat. Anno. ยง81-1313(f) (2) (ii), is that if Davis' prior disabilities are contributing factors to his present, total disability, then Stearns-Rogers Construction Company, as a subsequent employer, is not liable for 100% of the permanent, total disability but only for that degree that would have existed had the prior disability not existed." The Supreme Court, in the Davis case, supra, recognized the well reasoned rationale from Larson on workers' compensation (Vol. 2, ยง59.31): "While at first glance it might appear that the apportionment rule favors the employer and nonapportionment the employee, in practice the nonapportionment rule provided the worst of the two evils from the standpoint of the handicapped person. As soon as it became clear that a particular state had adopted a rule requiring an employer to bear the full cost of total disability for the loss of the crippled worker's remaining arm or leg,

employers had a strong financial incentive to discharge all handicapped workers who might bring upon them this kind of aggravated liability. While the loss of a single eye might mean a compensation liability of $5,000.00 for a man with two good eyes but $26,000.00 to a man with only one, the compensation insurance premium on the latter would naturally be markedly greater. It has been said, for example, that within 30 days following the announcement of the nonapportionment rule in Oklahoma, between 7,000 and 8,000 one-eyed, one-legged, onehanded men were displaced in Oklahoma." A very recent Court of Appeals case held that where the preexisting disability is not the result of a work-related injury then the provisions of Section 13(f) (2) (ii) do not apply. Marshall vs. Ouachita Hospital, CA 80-144 (Opinion delivered July 9,1980). The rationale of the holding of the Court of Appeals was that since Section 13(f) (2) (ii) uses the words "previous disability" that the definition of disability contained in the Act at Section 2(e) must apply. Section 2(e) defines disability to be "incapacity because of accidental injury arising out of and in the course of employment. ..." The Court of Appeals therefore concluded that the previous disability must have been the result of a compensable injury in order to apply Section 13 (f) (2) (ii). However, the Court of Appeals recognized that Section 13(f) (2) (ii) as it will be on January 1, 1980, is as follows: "81-1313. Compensation for disability. (i) Second Injury. (1) Commencing January 1, 1981, all cases of permanent disability where there has been previous disability or impairment shall be compensated as herein provided. Compensation shall be computed on the basis of the average earnings at the time of the last injury. If any employee who has a permanent partial disability or impairment, whether from compensable injury or otherwise, receives a subsequent compensable injUry resulting in additional permanent partial disability so that the degree or percentage of disability caused by the combined continued on page 28 January 1981/Arkansas Lawyer/5

ADVISING INNOVATORS by Robert R. Keegan COPyri9ht 198() Robert R. Keegan

Who Needs A Company Patent Policy? Company Patent Policy should be coordinated with policy respecting trademarks and copyrights, but only patents and inventions are discussed in this article. Two aspects are of interest to a small company, the first to establish a profit from innovation, and the second to avoid losses associated with possible infringement of the rights of others to their innovations. The first aspect will occupy this article; the second aspect will have to await later consideration. In most cases, the best possible reward from an innovation is the profit generated by manufacturing and marketing products of the innovation. There is also a possibility of profit from licensing use of the innovation by others. A good patent policy shouid commence before any innovation has been made. Employees of the company who have even a modest possibility of making inventions of value should be required to sign Employee Invention Agreements. The Employee Invention Agreement provides that, in consideration of the employee's salary, the employee will assign his inventions to the company. Normally the company would take assignments only of those inventions which were related to or helpful in the company business. Empioyees should also agree to maintain the secrecy of any trade secrets or confidential business information in their possession so that the interests of the company will not be injured by disclosure to outside parties. One must take cognizance of similar obligations of new employees to previous employers; assurances should be obtained from new employees that any such obligations have been revealed. The com6/Arkansas Lawyer/January 1981

pany should, of course, take care to avoid being a party to breach of known obligations to a previous employer. Employees should be encouraged to make a written disclosure of any idea for improving the company's products or procedures. Forms should be available which will assist the employee in supplying the pertinent information, and there should be procedures for promptly reviewing such disclosures and advising the employee of decisions respecting them. A system of awards for invention disclosures which are beneficial to the company is most desirable. Inventions which are sufficiently important for a patent application should result in an award to the inventor; other inventions may be made which are beneficial but on which the company determines that it is not in its interest to file a patent application. These may also merit an award. One person in company management should have the responsibility for monitoring the company operations to identify, record, and develop worthwhile inventions and innovations made by company personnel. The process needs to be highly selective, since only from about one percent to ten percent will be found to be susceptible of successful development by the company. Depending upon the size and the organization of the company, the selection of inventions for patenting may be done by a single individual or by a small committee. Preferably, the selection process should not be dominated by an individual with a large personal role in generating innovations, although technological expertise may be essential in the selection process. A primary consideration in selecting inventions for patent protection

is the prospect for commercialization of the invention from a practical and business point of view. Securing a patent in no way contributes to profit in and of itself and, in fact, is a SUbstantial item of expense. On the other hand, a patent may significantly enhance the profit from a product or manufacturing process which is effectively commercialized. Probable patentability is a factor which may be evaluated with the aid of technical and legal expertise (a preliminary patentability search may be in order). The estimated probability of patentability which should be required before going forward with patent protection is strongly dependent upon two factors; degree of commercialization planned and the advantages of the idea over competitive products or processes. Some attention should be given to the possibility of maintaining the innovation as a trade secret, either in lieu of or in addition to filing a patent application. Assuming that a patent application is filed, it is important that the contact with the inventor and others involved with the development of the invention not be lost. In particular, patent counsel should be made aware of any improvements or changes in the product or process. Consideration should be given to a further inventor's award upon grant of a patent. A wellpublicized award to the inventor of a patented invention is very effective in making employees invention conscious. While substantial profits can be made from a successful program for licensing patents or inventions, success does not come easy in an invention licensing program. Licenses almost invariably must be sold, and the

skills involved in selling invention licenses are no less than those in product or service marketing programs. Furthermore, the average company is less familiar with and less well organized to market invention licenses than it is to market its own product or service. Licensing also involves greater likelihood of litigation to enforce one's patent rights against any users of the invention who refuse a license or who later repudiate it. Litigation is an expensive procedure involving activities which are generally not much to the liking of company management. However, litigation may be necessary to preserve a profitable situation which has been obtained by good invention management, even in absence of licensing. Use proper patent marking on products, and other steps, to advise would-be infringers of the company's determination to protect its patent rights. It serves to lessen the likelihood that expensive litigation will ultimately have to be undertaken. Avoiding problems with inventions or patents of others is the subject for another article; however, one point needs to be made here. The ability to obtain a patent on an invention does not mean that the product of the invention can be made without infringing a previous patent. Conversely one may be unable to obtain a patent and yet be able to market the product without liability to any prior patentee (any prior relevant patents may be expired). Take note therefore that only half the story has been told here, and other evaluations and analyses are required to avoid problems with patents or inventions of others. With a well formulated and well executed policy in respect to inventions arising in the course of the company's operations, these matters may be dealt with smoothly and maximum advantage will accrue from innovations of officers or employees of the company.


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Many practicing attorneys have occasion sooner or later to contact their congressmen or senators to ask for help. It may simply be a request for copy of newly enacted legislation, like the Bankruptcy Code which became effective last year. Or a recent Supreme Court decision, hot off the presses. Or some esoteric FDA regulation to help in a products liability case. Such document requests are handled routinely by congressional staffs as they should be. Oftentimes, though, lawyers will write, call, or visit their congressmen with persuasion in mind. A break for an agricultural interest in a tax bill pending before the Ways and Means Committee, for example. Or assistance in reviving a grant proposal for a rural water project which lies comatose in some abyss of the bureaucracy. It is this latter category of activity whether it be pleading, cajoling, or arguing a case before the lawmaker that I call "lobbying". Here I must issue a caveat. While I spent two and one-half years in the Governor's office (1972-1974) and more than three years in Washington (1975-1978) observing various degrees of lobbying activity, my first sally into the field met with dismal failure. Last year I sought to chart a bill that could only be described as for the common good through the Scylla and Charybdis of the Arkansas General Assembly. Despite my best efforts, my 8/Arkansas Lawyer/January 1981

bill got a mere five votes in Committee. The legislators even refused to study my proposal in anticipation of the next general session, a ploy which usually allows the sponsor and lobbyist to exit gracefully with their dignity in tact. I was lucky to get out of there with the bill still in one piece. Hence, I can only conclude that good lobbying technique may be a lot easier to talk about than to put into practice. But like Mr. Justice Stewart said about smut, I know bad lobbying when I see it. And during my tenure in Washington, I saw a lot of it, both by professionals on location and by Arkansas constituents, including lawyers. Either erroneous information was conveyed or the information was transmitted in a fashion not reasonably calculated to penetrate the overworked mental processes of our lawmakers. Or, worst of all, the communication simply groused about a problem (some deficiency within the Occupational Safety and Health Administration, for example) without offering a practical solution or reasonable course of action for the congressman to follow. Two oft-repeated lobbying techniques were so counter-productive with the lawmakers I observed that they qualify for special mention here. The first is what I call the Deloss Walker approach; that is, the lobbyist who tries to give the senator or congressman political advice and threatens catas-

trophe if his advice is not followed. "You'll lose all of Desha County if you don't support this bill," the typical plea goes. That's the unpardonable sin. I have watched a curtain literally fall over the member's eyes and his lip curl in disdain when that technique was invoked. A fact that some lobbyists lose sight of is that the lawmakers are the politicians, and they don't need someone on the make telling them what is in their best political interests. The second highly questionable technique is the Vanguard Missile approach where the lobbyist comes in with a beautifully packaged pitch that somehow fails to get off the ground. I remember in 1976 Congress was in the throes of deciding whether to fund a less expensive navy fighter plane dubbed the F-18 Fighter ("Tomcat") which does everything but juggle donuts. A lobbyist who represented a company which was interested in manufacturing the F-18 came into the Senator's office with a one hundred page brochure, replete with impressive glossy prints and engineering designs of the proposed plane and left it with the Senator's receptionist. That brochure alone must have paid the overhead that year for the P.R. firm that prepared it. Anyone who thinks that that information will get to a senator or much less that a member of congress will read something that voluminous when it gets to him is more than an optimist; he's deluded.

Which leads me to a digression on the professional lobbyist, who unlike the typical allorney representing a client in Washington on a one shot deal, lobbies for a living all day every day. I remember when I first arrived in Washington in January, 1975 to work for Senator Dale Bumpers. I was driving to work with another of the Senator's uninitiated aides who will go nameless because of his recently acquired eminence. And we decided that for the first six months of 1975 we would circulate the rumor among the professional lobbyists that the best way to get to Senator Bumpers was to satisfy all of Bob Brown's base wants and desires and for the next six months we would circulate the same rumor for aide X. It was an ingenious idea. Probably the best idea I had in my three and one-half years in Washington. Unhappily, the plan was never implemented. (Or at least not successfully.) But the truth of the maller is some lobbyists would have believed the rumor and tried to do exactly that. For professional lobbyists are not introverts. The rawest example of lobbying I observed was the lobbyist who stands at the main door of the House of Representatives shouting to members as they rush into vote on a special interest issue: "This is an aye vote, Joe." Or "this is a no vote, Bill." I saw that happen quite frequently, especially on the House side of Congress. I don't know how effective that technique is. I'd like to think not very effective, because the appearance of it, if nothing else, is so wrong. But I'm afraid it does have an impact-as a reminder to the incredibly busy congressmen, if nothing else.

Some lobbyists who work the Arkansas General Assembly are no better. I recall driving to work last January and hearing a radio newscast about a state representative who had introduced a resolution to stop lobbyists at the Arkansas State House from actually participating in voice votes. I suspect that those lobbyists guilty of the infraction were simply living out their suppressed desires, But one of the most frustrating things I experienced in Washington were the professional lobbyists, who were paid to be "up to speed" on issues but who were woefully out of touch. Either they were not conversant with a bill's terms; or, out of date on what had happened to the bill in Committee by amendment or otherwise; or not familiar with their employer's position on a proposed change. These are the people who are supposed to be sharp, intelligent information centers for the Congress, And when they fail to be, particularly at a key time, when things are breaking quickly, as they often are in Washington, it couldn't be more harmful for everyone or more aggravating. Now for my tips to the lawyer/embryonic lobbyist. There are only six, THE FIRST IS DON'T TRY TO CON A CON. I can't tell you how many times I heard people come into a representatives or senator's office on what was obviously a pocket book issue for them-something like federal money to establish an irrigation project abutting their land-and conclude their pitch to the member with, "And Congressman, this will mean more jobs for Arkansas," or "And Senator, this will be better for Arkansas consumers."

Those people may have thought that they were telling the lawmaker what he wanted to hear, but generally, that sort of calculated appeal does nothing more than breed contempt. My point is that our congressional delegation knows all the tricks, and it shows a certain lack of respect for them if you don't acknowledge that fact. MY SECOND TIP IS AVOID SWAMP FEVER. Or at least avoid certain kinds of it. And by swamp fever I mean the mass mailings which I think are overrated in effectiveness, especially form lellers and preprinted postcards, For one thing, most form letters will get a form response back. Not only law firms have word processing equipment these days. Also, Congress is fully aware that it's not that difficult to get signatures to simulate a groundswell of popular opinion, Often, it's a maller of walking around the workshop or the general store. Moreover, certain issues always get a knee jerk response from special interest groups and everyone knows it. Abortion, the Panama Canal, labor law reform, national health insurance, Salt II. On labor law reform, in particular, I recall boxes of mail-postcards and form letters----<:oming in on both sides of the issue, That kind of war of the mimeograph machines not only loses effectiveness, but it begins to have a negative effect after a point. Now don't misunderstand me, A letter campaign can be effective. Individualized, well thought out comments on issues do have an impact and the member usually reads them, That should be the approach of attorneys in particular. continued on page 10

Editor's Note: If anyone should have a "feef" for lobbying-well, Bob Brown is such a lawyer. Brown was US. Representative Jim Guy Tucker's Administrative Assistant during 1977-78. He served as Legislative Assistant to Senator Dale Bumpers during 1975-76 and Legal Aide to then Governor Bumpers from June 1972 to January 1975, He is now in private practice in Uttle Rock. He holds a B.A. (Magna Cum Laude) from the University of the South; a M.A. from Columbia University; and his LL. B. from the University of Virginia Law School. His academic awards include Phi Beta Kappa, Woodrow Wilson Fellowship, Rhodes Scholar Finalist and Law School scholarship. He is a member of numerous professional, civic and religious organizations.

January 1981/Arkansas Lawyer/9

Lobbying... Tips, continued from page 9 TIP NUMBER THREE. LOVE AN AIDE, BUT ONLY THE RIGHT ONE. Learn who actually advises the congressman on the issue of interest to you-who does he have confidence in. Then, bird-dog that person and make sure that he or she is well briefed on a continuing basis. Here, the maxim of the wheel that squeeks the loudest gets the grease is very appropriate. Some aides have tremendous power and influence. Judge Richard Arnold was a good example. Ark Monroe (Senator Bumpers) and Bruce Lindsey (Senator Pryor) are others. Ferret out those who do; sometimes the aides in favor change with office politics being what they are. But concentrate on that person. In Congress, aides are extensions of the member himself. They can do as much for you and sometimes more than the member can. And they're much more accessible. They're only a long distance telephone call away and the good aides always return their calls. TIP NUMBER FOUR. BELIEVE ME, BREVITY IS THE SOUL OF WIT. Be brief and informative. Make a couple of key points, especially if you are talking with or writing directly to the senator or representative himself. Otherwise your message will have the staying power of coins thrown up against the wall. Include legitimate Arkansas statistics. Not to can, but to inform. What will the effect be on the representative's district or on the state as a whole-<ln per capita income and revenues. Those are questions that will come to his mind if you don't cover them. TIP NUMBER FIVE. AVOID THE PURE PARTY LINE IN LETTERS OR TESTIMONY OR A VISIT. I remember in the House Ways and Means Committee hearing a representative berate a national special interest lobbyist for wasting his and the Committee's time by spewing forth an uncompromising, stereotypal position for his client that was of no help to the Committee in trying to reach a compromise position. "I could have written that statement in my sleep," the member shouted. The lobbyist was chagrined and silent, of course. Maybe lobbying, whether professional or individual, should just be the advocation of one position, leaving the judging to the legislators. But I don't think so and more importantly the lawmakers I've known don't think so either. 10/Arkansas Lawyer/January 1981

A good lobbyist strives to help the member find a middle ground. I can assure you that those who do are much more vital to the legislative process and much more appreciated. TIP NUMBER SIX IS AVOID THE D.C. LAW FIRM ORNAMENT. D.C. law firms like COVington & Burling and Arnold & Porter may know how to cut it better with the U.S. Supreme Court and some regulatory commissions (I even doubt this), but they are not half as effective as good old Lawyer Allworthy from the congressman's home district on an issue of importance to that district. In that situation, a kind of xenophobia is likely to consume the member when a hotshot D.C. attorney for hire insinuates himseif into an Arkansas problem. (This tip in particular should be welcomed news.) My final point is not a tip but falls into the best-kept secret category. It's in answer to the question: who has the most influence on a member's vote: His wife? Top aide? Friends back home? Or pressure groups? I'd have to say at times, any and all of the above. But most consistently it's the member's own peers; that is, the other senators and representatives who influence him the most. Time and again a senator will walk onto the floor and ask another member who is knowledgeable on the issue (usually someone on the legislative committee through which the bill passed whose political philosophy is compatible with his own) how to vote.

Those of you who have watched the voting process from the senate or house galleries have seen these conversations. . That's another reason why lobbying committee members for the legislation involved is so important. They influence the votes of other members. Hence, the best way to impact on a particular member of Congress may well be to work with a member of the legislative committee he is close to personally and philosophically and then watch the rippling effect. . There have not been many articles on communication techniques. Maybe this is because the job of congreSSional pressure has been tarred with such a dubious brush that approaches to lobbying are more often whispered ~n back rooms. But if that is the case, It s wrong. No longer is the typical lawmaker's ear limited to major campaign contributors. And goodness knowS, we all have an overriding interest in a well briefed and informed Congress. Most of this advice, admittedly, has been just good common horse sense. In Washington, though, detailed ,nformation goes hand in hand with effective representation. The lawmakers know that and they are hungry for data that will help them win their cases. If you provide them with just that ,n an effective manner, avoiding some of the pitfalls noted above, you will be three bases to home.


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January 1981/Arkansas Lawyer/11

LAW SCHOOL NEWS Dean David G. Epstein Assistant Dean Ellen Brantley

SCHOOL OF LAW, UNIVERSITY OF ARKANSAS, FAYETTEVILLE (Editor's Note: With this issue, we welcome Dean David G. Epstein as the regular columnist for the Law School News from the School of Law, University of Arkansas, Fayetteville.)

Since I have been in Arkansas, both law schools have used this column to "boast" about the books and law review articles by faculty members, the speeches by deans, and the lectures at the law school by prominent legal figures. I could use this space to name the twelve facuity members working on articles or the five faculty members working on books or to list the bar associations and Rotary Clubs that I have visited. And, with a fall continuing legal education calendar that includes Dan Dobbs, Bill Young, and Irving Younger, we have at least our share of "name" lecturers to tout. This month, however, I am going to do something a little different. Instead of bragging on myself or the faculty, I would like to focus on our students and our educational program for our students. Class of 1983 On August 21, 1980, 197 men and women were welcomed to the study of law by Attorney General Steve Clark, President-Elect of the Arkansas Bar Association Jim Cypert, and the faCUlty of the University of Arkansas School of Law. The University of Arkansas School of Law decided to reduce its entering class from around 225 to around 190. This is making it possible to offer each first year student one of his or her basic first year courses in a "small section" of no more than 25. This year, for exam12/Arkansas Lawyer/January 1981

pie, each first year student is taking either contracts or torts in a small section. With only 25 students, a professor can call on each student regularly, monitor each student's progress, require written assignments throughout the semester, and teach lawyering skills. Each first year student is also taking a two hour course on Legal Method that is designed to develop the two most basic lawyering skills: (1) the ability to analyze a legal problem and (2) the ability to communicate that analysis to others. The course surveys the three forms of legal materials that lawyers commonly work with~ases, statutes, and administrative agency regulations and rulings.

Skills Training Third year students again have the opportunity to develop more technical lawyering skills through classroom instruction in Trial Advocacy and Office Practice and by working in the University of Arkansas School of Law's clinical programs. Professor Carlton Bailey, the director of the Law School's clinical program, is rapidly establishing himself as one of the national leaders in clinical legal education. This summer, Professor Bailey was one of approximately 50 professors who attended a national seminar on clinical legal education sponsored by the Association of American Law Schools in Montana. Professor Bailey was one of 13 clinical law teachers from around the country who met in Washington, D.C. on September 22, 1980, to plan for future federal support of clinical legal education. And in October Professor Bailey will be travelling to South Carolina to present

a demonstration on clinical teaching at a regional conference for law teachers in the Southeastern United States. Joe Reed has joined the law school clinic as supervising attorney. Joe has had significant practice experience, and the students are enjoying and benefitting from working with him. The University of Arkansas School of Law recently received a major grant from the United States Department of Education for its clinical program.

Student Activities As always, law school learning is not limited to the classroom. University of Arkansas law students are again involved in a wide variety of extracurricular activities that add to their legal experience and knowledge. The editors of the Arkansas Law Review are working on a Uniform Commercial Code symposium issue honoring Joe Barrett of Jonesboro, one of the leading figures in the development and history of the UCC. Officers of the Review include: Ann Faford, Kankakee, Illinois; Buck Farrow, Fayetteville, Arkansas; James Goldie, SI. Joe, Arkansas; Randall Lamb, Delight, Arkansas; Jacqueline Morgan, Clay, Louisiana; Randall Sandiffer, Arkadelphia, Arkansas; Michael Smith, Melbourne, Arkansas; Beverly Stites, Sallisaw, Oklahoma; Robert Topping, Bull Shoals, Arkansas; Stephen Wood, Fayettevi lie, Arkansas. Students at the University of Arkansas School of Law are again competing in the National Moot Court Competition sponsored by the Bar of the City of New York. Doug Carson of Fayetteville, Arkansas; Charles Harwell of Wayne, Michigan; and Robert Topping of Bull Shoals, Arkansas, are now writing their



brief on this year's problem which involves federal regulation of commodities fraud. After completing their brief and engaging in numerous practiceoral arguments, the team will compete in the regional competition in Oklahoma City in November. This year's moot court team is being coached by Professor Don Garner, who administered a very successful moot court program at Southern Illinois University before joining our faculty. A Student Research Group chaired by Kent Jolliff of Little Rock, Arkansas, is providing legal research assistance from the Arkansas Bar. Law students are again assisting lawyers with both traditional legal research and computer-assisted iegal research. Gary Hartman, a new Assistant Law librarian, will be supervising all computer assisted legal research. Before joining

our library staff, Gary was the librarian for a major Washington, D.C. law firm, Cadwalader, Wickersham & Taft; he has extensive experience in computer-assisted legal research. Students are also active in local, state, and national bar activities. Mark Robens, a third-year student from Phoenix, Arizona, is Governor of the 10th Circuit of the American Bar Association Law Student Division; Kent Jolliff is Lt. Governor. Construction Students and faculty are not the only ones working at the law school. Waterman Hall is being remodelled and the building is, at times, full of carpenters, electricians, and masons. An office is being built in the library for the new assistant law librarian; a room is

being added to the library so that LEXIS, WESTLAW, and EDUCOM can be relocated in a more convenient area. A locker area is being converted to offices for student organizations and a new student lounge. The space formerly used for a student lounge and student organizations is being divided into interviewing rooms for law firms, a room to house our new word processing equipment, and office space. Additional office space is needed for the Law and Agricultural program and other new law school programs. Finally, the courtroom is being remodelled to facilitate videotaping of litigation skills courses. The contractors promise that they will finish all of this work well before Christmas. When the remodelling is finished, Waterman Hall will be much more functional, much more attractive. In the meantime,...

SCHOOL OF LAW, UNIVERSITY OF ARKANSAS AT LITTLE ROCK SBA Wins National Award The 1980 Law Day events sponsored by the Student Bar Association were recognized by the Law Student American Bar Association which selected UALR's SBA as a co-winner of the Association's Law Day Competition. Law Day events included a speech and question and answer session with Governor Clinton, a similar program with Jim Guy Tucker, Chairman of the White House Conference on the Family, and an Awards Banquet at which Judge Henry Woods was the speaker. Nancy Echols was chairperson of the Law Day CommiMe.

Title XI Grant The Clinical program of the School of Law has received a grant from the U.S. Department of Education for the third year. The grant is awarded to help finance innovative legal education, and is used to hire attorneys to assist faculty members in supervising students enrolled in the clinic.

New Scholarships The Rose Law Firm of Little Rock has established through the Arkansas Bar Foundation two scholarships at the School of Law. A $10,000 scholarship fund has been established in the firm's name, and a $5,000 fund has been established in the name of Judge U. M. Rose, a former partner in the firm who served as President of the American Bar Association. The income from these funds will be used to provide scholarships for students selected by the School of Law Scholarship Committee. The UALR Association has established a full tuition scholarship which will be awarded each semester. In addition, the Association has established a scholarship in memory of Dean Carmichael of the Arkansas Law School. This scholarship was donated by graduates of the Arkansas Law School. The law clerks of U.S. District Judge Oren Harris have estabiished a scholarship fund in Judge Harris's honor at the UALR School of Law. The fund is a continuing one to which the law clerks, and other friends of Judge Harris, will

continue to contribute. Anyone interested in contributing to this new Judge Oren Harris Scholarship Fund should send their check to the fund in care of UALR School of Law. A Frederick Spies Memorial Fund has been established in honor of Professor Spies who died in August. A memorial to Professor Spies appears in the In Memoriam Section of this issue. Contributions to the Memorial Fund may be sent in care of the UALR School of Law.

Professor Morris Arnold to Teach at School of Law Professor Morris ("Buzz") Arnold will be a visiting Professor of Law at the UALR School of Law in the spring semester. Professor Arnold, a native of Texarkana, is currently vice-president and Director of the Office of the President at the University of Pennsylvania. Professor Arnold has a bachelor's degree in electrical engineering and a law degree from the University of Arkansas at Fayetteville. He served as continued on page 14 January 1981!Arkansas Lawyer!13

Law School News, continued from page 13 editor-in-chief of the Arkansas Law Review. He also holds the LL.M. and S.J.D. degrees from Harvard University. He served on the law school faculty of Indiana University from 1971 to 1976 when he joined the faculty of the University of Pennsylvania Law School. In 1978-79 he was Associate Dean of the Law School and became director of the Office of the President in August, 1979. He was named vice-president in January, 1980. Professor Arnold is the author of a number of books and journal articles on legal history. He will teach courses in legal history and property at UALR. Faculty News Donaghey Distinguished Professor Robert R. Wright has been elected Vice-Chairman of the Little Rock Planning Commission. On October 14, he addressed the Greater Little Rock Legal Secretaries Association on "The Law of Property." Professor Susan Webber served on an American Bar Association inspection team which visited the University of Baltimore School of Law on October 6-8. Professor L. Lynn Hogue spoke on the Local Government and General Provision Article of the proposed Arkansas Constitution at a News Media Seminar held September 25. On September 24, Professor Hogue ap-

peared before the Involuntary Commitment Subcommittee of the Joint Interim Committee on Judiciary of the Arkansas Bar Association's Committee on the Mentally Disabied, which has proposed legislation revising the involuntary commitment procedure. The 1980 supplement to Professor Fred Peel's Consolidated Tax Returns has been published by Callaghan & Co. Professor Peel was one of a panel of speakers on Mining Industry Taxation at the 1980 Convention of The American Mining Congress in San Francisco on Monday, September 22. On September 4, Dean Robert Walsh spoke to the Union County Bar Association. On September 9, he addressed the North Little Rock Rotary Club and on September 11, the Searcy Kiwanis Club. He discussed the development of the School of Law and the future of the legal profession in Arkansas. Dean Walsh was reappointed to the Pulaski County Bar Association Executive Committee for the 1980-81 year. Professor Fred Harris attended the 1980 Conference of the Southwest Association of Pre-Law Advisors in New Orieans on October 2-3. He has been elected Treasurer of the Labor Law Section of the Arkansas Bar Association, and appointed to the Section's Newsletter Committee. The work of Assistant Dean Clay Patty with the Arkansas Institute for Continuing Legal Education is discussed in his separate article in this issue.

Law School Holds Developmental Disabilities Conference The UALR School of Law sponsored a Conference on Developmental Disabilities and the Law, funded by the Governor's Planning Council on Developmental Disabilities. Professor L. Lynn Hogue of the School of Law was the director of the Conference, which was cosponsored by the Arkansas Bar Association Committee on the Mentally Disabled, of which Professor Hogue is Chairman, and the Arkansas Institute for Continuing Legal Education. The Conference was held on October 10-11 at the Camelot Inn and the School of Law. Because of the grant, the conference was free to participants Over 100 lawyers and others interested in the legal problems of the developmentally disabled attended.

Fall Altheimer Lecture Professor Norval Morris of the University of Chicago Law School delivered the Fall 1980 Altheimer lecture on Friday, September 19. He spoke on "Mental Illness and the Criminal Law," which is the subject of a book he is currently writing. A portion of Professor Morris's book will be published first in the UALR Law Journal. The lecture was followed by a reception at the Law Center, at which Arkansas Bar Association's members attending the Fall Legal Institute were special guests. ~

"CHrISTIan Lawyers have unique responsibilities and opportunities

CHRISTIAN LEGAL SOCIETY P.O. Box 2069 Oak Park, Illinois 60303 (312) 848-6335 State Chairman: Jay Dickey, Jr., P.O. Box 6038. 208 East Fifth Street, Pine Btuff, Arkansas 71601, 501/534-6302

14/Arkansas Lawyer/January 1981




Since I left the Internal Revenue Service, having been a revenue agent, I have had some 30 years of experience in representing taxpayers in dealings with this agency of the federal government. And, incidentally, with some exceptions I have found the personnel of Internal Revenue Service excellent. However, it must be remembered that these people are employees of the federal government and necessarily their position is not impartial. If we consider the situation like a tennis match with both sides out to win, and the decorum at most times good; then, I think we have the picture. Let us assume that a federal individual income tax return has been filed and now the revenue agent is conducting a field audit or examination of such return. We are to represent the taxpayer to his best interest, but we are not to use unfair tactics or participate to any extent in fraud. Following I shall outline several possible situations and recommended handling: At the outset it is usually recommended by all competent tax advisors that in routine examinations, when fraud is not at issue, we should be courteous and cooperative with the agent. Yes, I agree. But, we should not overdo this. To appear too agreeable and friendly may very well cause the revenue agent to become suspicious not only of the taxpayer but of his representative. It is better to observe the conventional niceties but yet appear confident and wide open and to arrange conferences, etc., to the convenience of all concerned-not just for the convenience of the government. And, during the course of the revenue agent's examination, supply him with records requested but don't stand over him while he works. Allow him leeway and leave him alone. Answer proper questions but don't volunteer information. Usually after the revenue agent has completed his examination he will want to discuss the case. In most instances it is best for the discussion to be between the revenue agent and the taxpayer's

representative without the taxpayer being present. Listen at this point and determine just what the revenue agent has in mind. FIRST SITUATION The revenue agent has found several items that are obviously in favor of the government and he wants agreement on same. It would be utterly impossible to win these issues at any subsequent review or conference. What to do? Agree, of course. There would be nothing to gain by attempting to bargain or do otherwise. It is certainly not in order to cause the government unnecessary expense and inconvenience or to charge a client an additional fee for fighting a "dead horse" case. Moreover, it is not good for a tax advisor to acquire the reputation of fighting all proposals and constantly taking worthless cases up to higher authority. If we don't agree at this point-when the revenue agent is right, yet ready to settle and close the case-he is antagonized, and quite naturally so. He may very well continue the audit and of importance to note is that possibly he may raise other issues to the detriment of the taxpayer. Since he is not to have an agreed case, why shouldn't he build up a bigger case for his record? SECOND SITUATION Secondly, let us consider the situation when two controversial issues are raised by the revenue agent, for example: (a) disallowance of loss on show horse operation, the revenue agent taking the position that it was a hobby loss and hence not deductible; and (b) disallowance of family partnership-the revenue agent claiming that it was not a valid partnership for federal income tax purposes. During the discussion the revenue agent indicates that he is more determined to disallow (a) than (b). It develops that on the basis of an agreed case he will only disallow (a) and will recognize the family partnership as being valid. (Let us assume that the taxpayer can at this time conveniently

Rupert A. Stuart is a member of the Louisiana and Arkansas Bars. He received his B.B.A. at the University of Texas, and his L.L.B. at Loyola University, New Orleans. He practiced in New Orleans prior to returning to Arkansas, his native State, about eight years ago. As indicated in his article, he was an IRS revenue agent and now practices in Fayetteville, Arkansas.

pay the deficiency and interest.) The taxpayer's representative firmly believes that neither (a) nor (b) should be disallowed by the revenue agent. However, it is not certain that the taxpayer would win either or both issues in a federal court. The choices? (a) Sign agreement form with the revenue agent and pay the deficiency and interest resulting from disallowance of the "hobby" loss. The right to file claim for refund would be preserved since the agreement form signed with the revenue agent would permit this procedure. (b) Do not sign agreement form and in all probability be prepared to fight both issues, that is, issues (a) and (b) and possibly other issues. The deficiency and interest would not have to be paid at this time and the taxpayer would have the opportunity to present his arguments to higher authority; if unsuccessful in administrative hearings he could take his case to the United States Tax Court. While decisions of this nature are difficult to make-there being various factors involved and pros and cons of this procedure or that-I would, under the hypotheticar example presented above, decide to "agree" with the revenue agent and accordingly sign agreement form. My reasoning is as follows: by signing agreement form with the revenue continued on page 16 January 1981/Arkansas Lawyer/15

Internal Revenue Service, continued from page 15 agent, and assuming the settlement is subsequently approved by the Internal Revenue Service, we would have won one issue and temporarily lost the other. The type of agreement form submitted by the revenue agent does not preclude the right to file a claim for refund (with reference to deficiency and interest pertaining to the disallowance of the"hobby" loss). This should not be done too soon; it would be better to wait until just before the income tax return involved prescribes by law. The prescriptive period is three years from dale of filing. For example, if a 1979 return is involved, and if such return was filed on or before April 15, 1980, we would have until April 15, 1983, to file the claim for refund. This could be done a few days before April 15, 1983, and the taxpayer's claim would be protected. Moreover, the chances are that the Internal Revenue Service would not audit the claim until after April 15, 1983, that is, after the prescriptive period had run. The advantage to taxpayer: Internal Revenue Service cannot do more than reject the claim or offset same but cannot set up additional tax except in case of fraud or substantial understatement of gross income. Incidentally in filing claims for refund with the Internal Revenue Service a safe procedure to follow (since there are instances when claims are lost in the mails or inadvertently misplaced) is to type a letter (in duplicate) enclosing the claim and identifying same and requesting Internal Revenue Service to receipt one copy of the letter. This the Internal Revenue Service will do and the claim (with letter, in duplicate, attached) should be mailed. After the claim is properly filed at a later date the Internal Revenue Service will investigate same and will either allow or disallow same. Under the circumstances presented here the claim will probably be disallowed. The file will then be sent to the appellate division for consideration. In the appellate division will be found well trained and most capable men who have more leeway and authority to settle cases than the revenue agent or his group supervisor. (Of course, many of the appellate division men were formerly revenue agents who were promoted after years of experience.) After the file is received by the appellate division the taxpayer and/or his representative will have an opportunity for a hearing with a conferee of the appellate division. l6/Arkansas Lawyer/January 1981

Also a written protest (and the careful preparation of same, as discussed below, is very important) shall be filed before the conference. In the protest all pertinent facts, citation of rulings, jurisprudence, etc., and taxpayer's arguments should be presented. All data incorporated in the protest should be in verified form. If success is had with the appellate division, then the matter is ended. If not successful there, the taxpayer's next step would be the filing of suit at the proper time in the United States District Court or Court of Claims for refund of deficiency and interest. Someone might contend that it would have been better to have followed the other procedure, discussed above, in dealing with the revenue agent. If agreement form had not been signed with the revenue agent the case would have been referred eventually to the appellate division for consideration. The proposed deficiency and interest would not have had to be paid until final disposition of the case. Assume this other procedure was followed and that in the appellate division the taxpayer is fighting both issues, namely, "hobby" loss and family partnership. (Also, remember that the appellate division may raise other issues not previously raised.) Of course, if success is achieved on all issues at the appellate division everything would be fine. But, what if the taxpayer is only partially successful? Can he sign agreement form on that basis and take the other issue(s) to court? (The United States Tax Court is the court of jurisdiction before the deficiency and/or interest is paid.) No, he cannot, since the usual agreement form signed with the appellate division precludes the right of subsequent filing of claim for refund. The agreement form signed with the revenue agent, on the other hand, preserves this right of filing claim for refund. Therefore, under the circumstances, and for the reasons expressed above, I recommend reaching agreement with the revenue agent. THIRD SITUATION Let us now assume another hypothetical situation. The revenue agent has completed his examination and discussion is in order. It develops that there are some minor adjustments against the taxpayer which should properly be made. One other issue, that of entertainment and travel expenses, he also proposes to disallow. These expenses are fairly high. The taxpayer's representative strongly be-

Iieves that the taxpayer should be entitled to the deduction. Recommended procedure: tentatively agree to the minor adjustments which are in order and try to persuade the revenue agent to allow the entertainment and travel expenses. (However, on items like entertainment and travel expenses, the revenue agent, If he has any doubt at all will probably not be persuaded.) Advise the revenue agent of your contentions with reference to this deduction and that In faIrness to your client you cannot agree to his (the revenue agent's) proposal to disallow the deduction. If the revenue agent is still adamant, then request him to send in his report. Upon receipt of the 30 day letter I'd made written request for a conference at the Appeals Office or Appellate Division. And, I would not recommend partial agreement (to save interest). At the Appeais office there will be more to "give and take" with all issues open. The procedure at the hearing is informal although the protest (which is submitted before) is more formal. The importance of careful and thorough preparation of the written protest cannot be over emphasized. Here is the key to the whole thing. If the taxpayer has a good case it must be properly presented. This is the opportunity to clearly and accurately set forth the facts.(Often revenue agents' reports are sketchy and poorly prepared, and this is to the taxpayers' advantage.) In presenting the facts I have found the question and answer method useful, for example, in a situation like reasonableness of an executive's salary. To get the facts over, ask questions-think of the most embarrassing questions, even questions apparently against interest, questions the toughest examiner could ask-and then answer such questions clearly, concisely and definitely to the point. To enhance the effectiveness of the question and answer technique, I place a vertical line in the center of the page. On the left side are the questions; on the right side, directly opposite, are the related answers. This type of presentation is impressive and presents the factual situation in a vivid. convincing and succinct manner. Some illustrative questions in the reasonable salary case could be: Q. How much time did you spend

each week at the Country Club playing golf? A. I usually played on Saturday or Sunday afternoons.


Q. At your office about how many

hours each working day were devoted by you to responsible work? A. About 8, sometimes 10 or 12 hours each day, five days each week. In the protest, other presentations, such as photographs, (e.g., to dramatically portray the condition of storm damaged property), graphs to illustrate (e.g. net earnings of a business over a period of years) and charts in other factual presentations, may be used. If properly handled these techniques can be very effective. Moreover, it makes easier and more stimulating material for the appellate division to read. Substantiate the facts when possible by attachment of pertinent affidavits, documents, etc. Most appellate division conferees are reasonable and if the taxpayer is right and proves he is right there is excellent opportunity for success. In addition to establishing the facts, the protest should reflect pertinent regulations, rulings, court cases, and finally the taxpayer's arguments. Don't be verbose; instead the statements should be concise and entirely relevant. Of course, after all this careful preparation the taxpayer may lose or, at best, secure a compromise settlement with the appellate division. In any event, if satisfactory settlement is not reached, the taxpayer has the choice of paying the deficiency and interest or taking his case to the United States Tax Court. To do the latter would of course necessitate the filing of a petition with the Tax Court. However, after filing of the petition, settlement and/or compromise is still possible before actually going to court. A joint conference may be arranged with a representative from the appellate division and with a representative from the regional counsel's office, who would try the case in the Tax Court. On occasion, the representative from the regional counsel's office, after reviewing the file and reading the taxpayer's well prepared protest will decide that the taxpayer may be right. After further discussion, between the representative from the appellate division and the representative from the regional counsel's office, perhaps in private, the taxpayer may find that the case is to be settled to his advantage without going to court.


PRO'S AND CON'S by Marvin L. Kieffer I have reviewed the manuscript of "Suggested Tactics In Client Representation Before Internal Revenue Service", submitted by Attorney Rupert A. Stuart of Fayetteville, for publication in The Arkansas lawyer. I, like Mr. Stuart, am a former Internal Revenue Agent, and have some twenty years experience in representing taxpayers. I think the article raises some good practical problems and suggested solutions in dealing with the Internal Revenue Service. I am not sure I can agree with Mr. Stewart's conclusion, that "with some exceptions I have found the personnel of Internal Revenue Service excellent." My experience is that the Internal Revenue Service does have some good and well-trained agents. It also has a good number of ambitious and intelligent agents, who are not welltrained; and who, for the most part, cause the taxpayers distress and expense in raising issues for bargaining purposes; such as, Mr. Stuart indicates in situations two and three in his manuscript. From my experience, although there may be some difference in degree, the lack of training is not peculiar to anyone Internal Revenue District or Region. However, maybe, we involved in the tax practice of law should not be emphasiZing this observation, because it is this group of not so welltrained agents who are responsible for and generate a good portion of our tax practice. Mr. Stuart pcints out in his first situation that, in the event you do not agree with an agent who has raised real issues, he might, as a result of being antagonized, continue his audit and pcssibly raise other issues. This is a possibility; but, I think by the time this point is reached, the taxpayer's representative should have familiarized himsell with his client's situation well enough to know his exposure to additional tax and be enough in control of the situation to prevent the agent from continuing his audit as a matter of intimidation, because of his antagonism. I agree, as Mr. Stuart suggests, it would be better to agree in his first situ-

ation. I realize Mr. Stuart, in his situation Two, is presenting possible solutions. While I cannot disagree, I personally would, as he suggests some might, follow a different procedure for the following reasons: I would follow his recommendation of Administrative Procedure for his third solution through the Appellate Conference. Then if the matters were not resolved, perhaps follow his suggested procedure of recommending that my client pay the tax and later file a claim for refund, rather than taking the matter to Tax Court. The procedure is one of strategy in handling such a situation. If I were only going to do it one time, maybe I would follow his suggested procedure. It has been my observation that, generally, when you start agreeing with agents on proposed adjustments, which you firmly believe should not be made, you are paving the way for similar proposals in connection with future audits, and making it too easy for the Internal Revenue agent and the District Office. The Appellate Conferees have more freedom in resolving issues. It has been my experience that the chances are pretty good of their not sustaining the examining agent on questionable issues. Further, it was my feeling some time ago the examining agents had flooded the Appellate Conferees in some regions with so many non-agreed cases, as Mr. Stuart points out in his second situation, that they had such a back log of non-agreed audit cases, they were looking for relief through the District Office Audit Division. I am one to help load them up if that is what it takes to help correct the situation.


January 1981!Arkansas Lawyer!l?

,, OYEZ · OYEZ ••

By: Carol Utley Publications Assistant

Attorney JOHN PATTERSON of Searcy, took first place honors in the 1980 State Match Play Championship last August. The tournament, held at Maumelle, is Arkansas' most prestigious golfing competition. Patterson was an AIIAIC golfer for three years before his graduation from Hendrix College in 1975. FRED M. PICKENS, JR. of the law firm of Pickens, Boyce, McLarty & Watson, Newport, has been elected recently to the American College of Probate Counsel. The College is an international association of lawyers organized for purposes of modernizing and improving probate practices throughout the United States. F. WILSON BYNUM, JR. has announced the opening of a law office at 402 East Fifth Avenue, Ste. 102, Pine Bluff. He is a graduate of the University of Arkansas School of Law in Fayetteville. Formerly, he was house counsel and sales manager for Standard Brake Shoe and Foundry. The law firm of Clark & Miller, LTD., has recently been purchased by Mount Ida attorney BILL McKIMM. McKimm joined the law firm in September of 1979 and has been their representative in Mount Ida. WILSON P. DOUGHERTY has left the firm of Wilson, Dougherty & McNee and is now General Counsel for Savers Federal Savings & Loan Association in Little Rock. KEITH VAUGHAN has joined the firm that is now known as Wilson, McNee & Vaughan, P.A.. DEAN DAVID EPSTEIN of the University of Arkansas School of Law addressed a meeting of the Union County Bar Association on July 10th. The purpose of Dean Epstein's visit was to familiarize the practitioner with the school's effort to combine academics with experience in practice. DAY· TON G. WILEY, of Wiley, Garwood, Hornbuckle, Higdon & Johnson announces the relocation of his office to 201 Highpoint Executive Plaza, 1603 Babcock Road, San Antonio, Texas. JAMES H. McKENZIE of Prescott, has been elected to a two year term on the State Committee of the Association of Trial Lawyers of America. He joins TROY L. HENRY of Jonesboro as one of two Arkansas attorneys representing the state association on the ATLA State Committee. The organization has more than 40,000 members and is the largest in the nation. CHARLES DARWIN DAVIDSON announces that MICHAEL R. RAINWATER and JAMES M. HOLLIS have joined the firm in Little Rock. CHINULA AND WALKER, P.A., announces that the firm name has been changed to WOODSON WALKER ASSOCIATES, P.A., and the association of two new lawyers. ARTHUR J. KERNS, 1980 graduate of the UALR School of Law, and MORRIS W. THOMPSON, 1980 graduate of Creighton University in Omaha. The Saint Francis County Bar Association has elected l8/Arkansas Lawyer/January 1981

BENTLEY STORY president and STEVE ROUTON secretary-treasurer. NICHOLAS PATTON was recently inducted into Fellowship in the American College of Trial Lawyers. Patton is with the firm of Young, Patton & Folsom in Texarkana. Also inducted were PHILLIP CARROLL, President of the Arkansas Bar Association and DAVID SOLOMON of Helena. All three were inducted at a ceremony during the Fellows annual banquet held during the American Bar Association's annual meeting in Honolulu, Hawaii, this summer. JAMES M. GARY, 1980 graduate of the University of Arkansas School of Law at Fayetteville, has joined the firm of Eilbott, Smith, Eilbott, & Humphries in Pine Bluff. TERRY R. KIRKPATRICK, of Fayetteville, announces the opening of her law office at 28 South College for the general practice of law. ROBERT SHULTS and THOMAS RAY formerly practicing law under the name LESTER AND SHULTS, announce the firm name has been changed to SHULTS AND RAY and H. BAKER KURRUS has joined the firm. G. ROSS SMITH announces the opening of his law office at Ste. 1215, Tower Building in Little Rock. DAVIDSON, PLASTIRAS, HORNE, HOLLINGSWORTH & ARNOLD announce that THOMAS S. STONE, MICHAEL O. PARKER and MARK W. GROBMYER have become principals in the firm and also that JUDY P. McNEIL has become associated with the firm. Their office is located in the National Investors Life building in Little Rock. PHIL KAPLAN, Little Rock attorney, was guest speaker at a meeting of the Jacksonville Kiwanis Club on July 15th. Mr. Kaplan spoke to the group about Jewish tradition and ceremony. CATHEY, GOODWIN, HAMILTON & MOORE in Paragould, announce that JOHN L. ALLEN has become associated with the firm. Allen is a graduate of the University of Arkansas School of Law in Little Rock. JAMES L. MOORE, III has become associated with the firm of BRIDGES, YOUNG, MATTHEWS, HOLMES & DRAKE in Pine Bluff. JOHN ACHOR, former public defender for Pulaski and Perry counties, has joined the Little Rock law firm of Haskins and Wilson. CHRISTOPHER B. T. (KIT) WILLIAMS of FayetteVille, has joined the law firm of Bumpass and Brandt. WILLIAM S. MEEKS, has joined the law firm of Arnold, Hamilton, and Streetman of Hamburg and Crossett. Mr. Meeks received his law degree in May from the University of Arkansas School of Law. Dean ROBERT K. WALSH of the University of Arkansas School of Law in Little Rock, announces that DR. MORRIS SHEPPARD (BUZZ) ARNOLD, a native of Texarkana, will be a visiting professor of law for the spring semester at Little


Rock. Dr. Arnold will teach courses in property and legal history. He is the brother of federal Judge RICHARD S. ARNOLD of the United States Eighth Circuit Court of Appeals. . ROBERT GUISE BRIDEWELL recently became licensed with the state Supreme Court. He is a 1980 graduate of the U of A School of Law in Fayetteville. Bridewell is presently associated with the firm of Hollaway and Haddock in Lake Village. MICHAEL MEDLOCK announces the opening of his law office at 110 1/2 South Third Street in Ozark. Medlock is a graduate of the U of A School of Law. MACOM, MOORHEAD & GREEN announce that DAVID G. HENRY has recently become a partner in the firm to be known as MACOM, MOORHEAD, GREEN, AND HENRY in Stuttgart. Little Rock Mayor and lawyer WEBB HUBBELL has announced the resignation of his partnership in the Rose, Nash, Wllhamson, Clay and Giroir law firm. Mayor Hubbell is stili. associated with the firm in an "at counsel" position. He attributes his time-consuming duties as mayor as the reason for his resignation. L. ASHLEY HIGGINS, formerly of Little Rock, has become associated with the law firm of Charles B. Roscopf in Helena. Prior to attending law school, Higgins was a newsman With The Associated Press in New York and Chicago. He has also worked for the Arkansas Democrat and Arkansas Gazette. The law firm of LIGHTLE, BEEBE, RANEY, and BELL in Searcy, held an open house to acquaint guests with their new office facilities. DANNY K. SCHIEFFLER has joined the law firm of Schieffler and Yates in West Helena. He is a 1980 honor graduate of the U of A Law School in Fayetteville. During law school, Schleffler served as Associate Editor for The Arkansas Law Review and also worked as a legal intern for the Washington County Prosecuting Attorney. The Clark County Bar Association met in July and elected HERMAN HANKINS, JR. president and DONALD P. CHANEY, JR., secretary. A library committee, including DONALD CHANEY, WILLIAM G. WRIGHT and STEVE DEMOTT, will supervise and maintain operations of the library. MARK CAMBIANO has returned to his home town of Morrilton to practice law with BILL CREE and JOE CAMBIANO. Cambiano is a graduate of the U of A Law School in Little Rock. He became licensed in February 1980. While in law school, Cambiano worked in the office of John Walker a Little Rock attorney. ' JOHN THOMAS is in private law practice at 114 West Main Street in Gurdon. Thomas was admitted to the Bar on September 8th. Also admitted in September was PAUL DEWITT GORDON of Little. Rock. He is chief law clerk for Judge Ernie Wright, chief Justice of the Court of Appeals in Arkansas. Danville native, JUDGE ROBERT HAYS WILLIAMS will be inducted into the school's Hall of Distinction prior t~ the Homecoming game at Arkansas Tech in October. JUdge Wilhams IS a graduate of George Washington University in Washington. He is a former prosecuting attorney and state senator. JOE MORPHEW, formerly of Little Rock, and PHILLIP G. SMITH of Corning, have established the law firm of Smith and Morphew at 308 South Washington in Corning. continued on page 28

Presidents Report continued from page 2 Texas. Only 25.3% of the voters stated that they had heard of the controversy: and only 14.2"/0 could name Yarbrough as the candidate Involved. 8.9% could identity the Texas Supreme Court as the judicial office he was running for. The Report tells me that the electorate often lacks sufficient information to make an elective judicial selection system function properly. The Bar must share the blame. I favor a poll that will enable lawyers to express themselves meaningfUlly If they have had an opportunity to form a reliable opinion concerning the qualifications of a judicial candidate who appears on any form of ballot. This would be a published poll. The existing poll (the results of which are not made public by the Bar) which is designed to help judges assess the Impressions they are making on lawyers in various areas of activity should continue. LAWYER ADVERTISING As I write this column, the yellow pages of the telephone book are about to go to press. What eye-catching gimmicks Will the lawyers use this time to assure that they will be picked when disaster strikes? Will lawyers be pictured as knights on white horses using law books as shields and hurling words of wisdom at cringing oppressors? Little guidance as to what is ethical is available in the Arkansas version of the Code of Professional Responsibility, 33 Ark. L. Rev. 605 (1980). Neither is there much guidance in the Supreme Court's opinion of November 26, 1979 rejecting the Arkansas Bar Association's specialization designation plan. The court said that the Code "permits lawyers to publish information about the areas in which they practice, with a corresponding implication of expertise." Specifically, DR2101 (B) (2) says that a lawyer may publish "one or more fields of law in which the lawyer or law firm practices or a statement that the lawyer or law firm specializes in a particular field of law practice, to the extent authorized under DR2105." (Emphasis added) The emphasized "or" creates an interesting ambiguity. Do the words, "to the extent authorized under DR2-1 05" modify both clauses on either side of the 'or'? Probably it was intended that the right to publish one or more fields of law in which the lawyer or law firm practices is not limited by DR2-105. But, DR2-105 clearly says that a lawyer "shall not hold himself out publically as a specialist or as limiting his practice." There is an exception that is limited to patent lawyers, at least for the present, since the Supreme Court has not promulgated a rule for the certification of other specialists. One could logically conclude then that it is proper to hst In the yellow pages several fields in which a lawyer practices, but he must not proclaim publically that he limits his practice to those fields. Query: If a lawyer advertises only one field (which he IS expressly authorized to do by DR2101 (B) (2), is he implying that he is a specialist or that he limits his practice to that field? What's wrong with a lawyer stating that he hmlts hiS practice to one or more fields if that happens to be the truth? Why shouldn't a lawyer be allowed to advertise in the yellow pages that he practices only labor law, or domestic relations, or personal injury cases, or all of the above? Surely, the First Amendment ought to have some applicability here. Some lawyers might like to advertise the kinds of cases they don't take! Anyway, a thoughtful and undaunted committee of your Bar Association is working on a solution to the problem. Until then, consult the yellow pages of your phonebook. ' " January 1981/Arkansas Lawyer/19


11" Jlemortam They that deal truly are His delight. Proverbs 12:22 LOUIS TARLOWSKI Louis Tarlowski, 79, of Quapaw Tower, a prominent Arkansas attorney, died Sunday, July 20, 1980. Mr. Tarlowski drafted the first sales tax law in Arkansas, and at one time, served as a judge in the 6th Judicial District. He was named president of the National Motor Carrier Lawyers Association in 1957. The organization was composed of 300 lawyers from 40 states. The association specialized in representing motor carriers before the Interstate Commerce Commission. He was also a member of the State Board of Law Examiners for 20 years and was a member and chairman of the Little Rock Zoning Commission. He was a member of the B'nai Brith Temple and a 32nd degree Mason. He was a member of the American Bar Association, Arkansas Bar Association, Pulaski County Bar Association, International Association of Insurance Counsel, and the Interstate Commerce Commission Practitioners Association. FREDERIC KESSLER SPIES Frederic Kessler Spies, 54, professor at the University of Arkansas School of Law and the U of A Medical Sciences Campus, died Monday, August 4, 1980. A native of Pennsylvania, Mr. Spies had been associated with the two schools since 1976. He was a specialist on issues affecting law and medicine and was the first Arkansan to be named a fellow in the 2,500-member Academy of Forensic Sciences. He also served a two year term on the Academy's Executive Committee. Mr. Spies was formerly a professor of law althe U of A Law School in Fayetteville from 1959-1976. He was an assistant professor of law and law librarian at the Dickinson School of Law at Carlisle, Pa., where he received his law degree in 1952, for four years before moving to Arkansas. He earned his master's of law degree from the New York University School of Law in 1956. Mr. Spies was associated with the private law firm of Speicher and Austin at Reading, Pa., from 1952 to 1956, and as counsel with the Putnam and Bassett firm at Fayetteville from 1961 to 1976. During this time, Mr. Spies received many honors, including the Arkansas Bar Association Special Award for Meritorious Service and the U of A Alumni Association Distinguished Achievement Award for Teaching and Research. He was a member of the Association of American Law Schools, the Association of American Medical Colleges, the Arkansas Bar Association and had served on the Arkansas Supreme Court Committee on Model Jury Instructions, the American Association of University Professors and the American College of Legal Medicine. He was also secretary and chairman of the Jurisprudence Section of the American Academy of Forensic Sciences. 20/Arkansas Lawyer/January 1981

Survivors are his wife, Mrs. Patricia McCoy Spies; two sons, Dr. Frederic Spies, Jr. and Stephen C. Spies of Little Rock, and a daughter, Mrs. Lisa Marie Swinford of Jackson, Missouri. JAMES VICTOR SPENCER, JR. James Victor Spencer, Jr., 50, of 1200 West Seventh Street, EI Dorado, died Monday, August 18, 1980, after a brief illness. He was born February 27, 1920, in Strong, and was a life-long resident of Union County and a member of an early pioneer family. Mr. Spencer graduated from EI Dorado High School in 1937, received a bachelor of arts degree from the University of Arkansas in 1941 and a Juris Doctorate degree in 1946. He served in the U.S. Navy from 1941-46 as a lieutenant in the Pacific theatre and joined his father's law firm in 1946 where he was currently president of Spencer, Spencer and Spencer, P.A. Mr. Spencer served as deputy prosecuting attorney of Union County from 1946-48 and as EI Dorado City Attorney from 1959-70. He was past president of the Junior Chamber of Commerce, EI Dorado Lions Club, and the Union County Bar Association. He served as director of the Salvation Army, EI Dorado Teen Age Club, and the EI Dorado Campfire Girls Board and the EI Dorado Chamber of Commerce. He was a member of the Exchange Bank Board of Directors and the Exchange Petroleum Company board. He was a member of the Union County, Arkansas, and American Bar Associations. Survivors include his wife, Mrs. Mary Strawn Spencer of EI Dorado; two sons, James Victor Spencer III of EI Dorado and Frederick Strawn Spencer of Mountain Home; two daughters, Mrs. Robert L. Deeper, Jr., of Fayetteville and Miss Margaret Spencer of EI Dorado; two sisters, Mrs. Earl A. Riley, Jr. and Mrs. Annie Laurie Spencer, both of EI Dorado. JOHN R. THOMPSON John R. Thompson, 77, former member of the state Public Service Commission and former state welfare commissioner, died Saturday, July 19, 1980. He had been assistant attorney general at Little Rock from 1937-1939. In 1939, he served as welfare commissioner. From 1940 through 1949, he resumed his private law practice until his appointment to the Public Service Commission in 1952. He became general counsel for the Arkansas Highway Department in 1966 and served in that capacity for one year. He founded the law firm ofThompson, O'Bryan and Martin at Cabot and practiced law in all state and federal courts in Arkansas. Mr. Thompson was a member of the Board of Trustees of the Baptist Medical Center and was a former member of the Board of First Baptist Church at Little Rock. He was a member of the Baugh Chapel Baptist Church at Austin, Arkansas, where he was a lay speaker and a deacon in the church. Mr. Thompson was a Mason and a Shriner. Survivors are his wife, Mrs. Marie Beasley Thompson of Cabot; a son, Edgar Ross Thompson of Austin; two brothers, Sam Thompson of Austin and Cecil Thompson of Lonoke, and three grandchildren. CLYDE BROWN Clyde Brown, 70, retired lawyer and former Garland County Circuit Judge, died Monday, August 11, 1980, in a Hot Springs hospital. He was born July 22,1910, in Hawes, Ark., and in 1935 he received his law degree from the University of Arkansas School of Law. He was also graduated from the Command and General Staff School at Fort Leavenworth, Kansas. In

addition to his practice of law, Judge Brown served as Circuit Judge in Arkansas from 1946 to 1950. Mr. Brown was a member of Sigma Alpha Epsilon, Masonic Order, Tri-Eta, Scabbard and Blade, Benevolent and Protective Order of Elks, and also held a membership in the Pershing Rifles, Eagles, Lions, National Rifle Association, Reserve Officers Association, the Garland County, Arkansas, and American Bar Associations. Mr. Brown is survived by a nephew, Mark Palmer of Hot Springs. JOHN STATES Municipal Judge John States, 77, of 1510 South Main, Jonesboro, died August 26, 1980. He was a native of Morrilton and has served as municipal jUdge since January of 1971. He was a graduate of Jonesboro High School and attended Hendrix College and the University of Arkansas before obtaining his law degree from Cumberland College of Tennessee at Lebanon. Mr. States taught school and coached basketball at Biggers, and served as principal at Brookland High School. He began his law practice at Jonesboro in 1933. He represented Craighead County for 10 years in the state legislature and served as deputy prosecutor under the late Bruce Ivy for four years. He served as state grand commander of the Knights Templar of Arkansas in 1955 and was district deputy grand master of the Grand Lodge of Arkansas in 1940 and 1941. Mr. States was on the Board of Directors of the Cottage of Hope in the organization's early years and was a member of the County Board of Education for 15 years. He was a member of SI. Mark's Episcopal Church. Survivors include his wife, Hazel States of the home; one daughter, Mrs. Susan Streeper of Santa Fe, N.M.; one sister, Mrs. Mary Thielman of Jonesboro; and three grandchildren. ROBERT CHEATHAM DOWNIE Robert Cheatham Downie, 63, of Little Rock, died Monday, September 22, 1980. He served on the state Public Service Commission under four govemors and twice as chairman of the Commission. Mr. Downie was a member of a prominent Little Rock family of lawyers, including his father, the late Edward B. Downie, and his late brothers, Edward Blake Downie, Jr. and Thomas B. Downie, a former Pulaski County prosecuting attorney. He attended the Little Rock public schools, Columbia Military Academy, Davidson College at Davidson, N.C., and the University of Arkansas Law SChool at Fayetteville where he received his Juris Doctorate. He served five years in the Army Air Corps dUring World War II with two of those spent as a pilot with the 168th Fighter Bomber Group in North Africa. Mr. Downie was president of the Pulaski County Chapter of the Arkansas Association for the Crippled in 1966. Two years later he became president of the Easter Seals Society for Crippled Children and Adults of Arkansas. He was a member of the Westover Hills Presby1erian Church. Survivors include a son, Robert C. Downie, Jr., and a daughter, Margaret Downie, both of Little Rock; three sisters, Mrs. James Carvell of Little Rock, Mrs. George Talbot of Pine Bluff, and Mrs. James E. Brown of Mobile, Ala. Memorial services were held September 23rd by the Rev. Richard Hardie at the Roselawn cemetary.

WILLIAM H. PATTERSON, JR. William H. Patterson, Jr., aged 41, of Maumelle, a deputy public defender in the Pulaski County public defender's office, died Saturday, June 28, 1980. A native of Searcy, Mr. Patterson graduated from Little Rock Central High School. He received his bachelors degree from Ouachita Baptist University at Arkadelphia and the University of Mississippi. He was a graduate of the University of Arkansas School of Law at Little Rock and was a member of Pi Kappa Alpha. He formerly had served as captain of Army intelligence and had been chief of public relations and advertising for the Arkansas Industrial Development Commission. He was a member of the Arkansas Bar Association, Pulaski County Bar Association, the National Association of Criminal Defense Lawyers and the Grace Presby1erian Church. Mr. Patterson is survived by his parents, Mr. and Mrs. W. H. Patterson, Sr. of Little Rock, and a grandmother, Mrs. Nellie Lyle of Pine Bluff. JOHN F. GIBSON, SR. State Senator John F. (Mutt) Gibson, Sr., aged 64, died Thursday, April 17, 1980, at Dermott-Chicot Memorial Hospital after a lengthy illness. Senator Gibson was a well-known trial and defense attorney who represented the 35th Senatorial District for the past 14 years. He was born January 3, 1916 at Boydell, Arkansas to Charles Clifford Gibson and Maggie Bynum Gibson, and graduated in the early 1930's from Dermott High School. He attended Arkansas State Teachers College in Conway and the University of Michigan at Ann Arbor. He graduated from Cumberland University in Lebanon, Tennessee. Senator Gibson was admitted to practice in 1939 and was later licensed to practice in the Federal District Courts in 1946. Shortly after he was licensed, he became Dermott city attorney and held the position until his death. He was elected Prosecuting Attorney for the 10th Judicial District in 1947 and re-elected in 1949 for a second term. In 1945 during World War II, Senator Gibson was the assistant Judge Advocate for the Eighth Service Command at Dallas, Texas. He was also Post Judge Advocate for Camp Robinson at Little Rock in 1946. Senator Gibson was first elected to the state Senate in 1967. While in the Senate, he was a member of the Legislative Council, vice-chairman of the Senate Standing Committee on State Agencies, and was the ranking member of the Senate Judicial Committee. He ended his service in the legislature as vice chairman of the Senate Judiciary Committee and as a member of the Governmental Affairs Committee. Senator Gibson was a member of the First Baptist Church of Dermott. He is survived by his wife, Juanita Watkins Gibson; two sons, John Frank Gibson, Jr. and Charles Sidney Gibson both of Dermott; two brothers, Charles Clifford Gibson of Jerome and Robert Bynum Gibson of Dermott; and seven grandchildren.


CORRECTION In Memoriam, The Arkansas Lawyer, October 1980, carried an incorrect middle name in the obituary of John Martin Lofton, Jr. The error, picked up from a related notice in a local newspaper, is regretted. January 1981/Arkansas Lawyer/21


Editor's Comment: AEGIS is a feature 0; the Arkansas Bar Association's educational program concerning dock-

et control and other areas of high risk experience in professional

liability cases.


Depend on the rabbit's foot, if you will, but remember, it didn't help the rabbit! the problem

An insured attorney, a specialist in property law, accepted a case involving a negligence suit against a hospital. Realizing his limited experience in this field, he immediately engaged a firm of negligence attorneys as trial counsel. The trial counsel repeatedly attempted to secure records from the hospital to determine if there had been professional medical malpractice. Due to an internal delay at the hospital, these records were not secured within the time limit in which a Notice of Claim must be filed. Thus, any action which the claimants had against the hospital was forever barred. The claimants then retained a new counsel. Subsequent review of the hospital records by a medical expert retained by the new counsel revealed that the hospital personnel had been negligent.

the result

The case was settled with the major portion of settlement contributed by the trial counsel, whose negligence actually resulted in the claim. Additional contribution was also made by the insurance company on behalf of the insured attorney. As the referring attorney, he owed some responsibility to his clients to see that their case was properly handled.


When cases are referred to a trial counsel, make certain that your cases receive proper attention. Keep yourself advised at all times of the status of your cases. Set up your own docket control system for cases you refer to triel counsel.

22/Arkansas Lawyer/January 1981


A type-set 400 page system dealing with absolute divorce, divorce from bed and board, separate maintenance, and ancillary domestic relations actions, annulment, enforcement but also all of the areas of Congressional impingement on state law. This includes tax considerations, military divorces, bankruptcy, social security, federal enforcement procedures and Title IV-D procedures.


• $75.00 2.00 $77.00

• Non members of the Arkansas Bar Association add another $50. NAME ADDRESS




'$75.00 2.00 $77.00

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W. Christopher Barrier

THE LANGUAGE OF THE TONG In the 1980 edition of the Gridiron Show, an Arab sheik threatens to cut off the left hands of all lawyers. Why? To keep them from constantly saying "But on the other hand... '" Lawyers do most of their relating to each other, their clients, and to the world generally through the spoken and written word. Yet, they are continually criticized and caricatured for abuse and misuse of the language, particularly in writing. In an attempt to determine if the caricatures were accurate, I polled experts in the classroom, on the bench and in practice, and also a professional writing consultant. My inquiries focused on six general areas: 1. Are lawyers poor writers? According to Chief Justice John A. Fogleman of the Arkansas Supreme Court, "too many lawyers are poor writers," but most "are average writers and some are excellent." Assistant Dean Ellen Bass Brantley of the UALR Law School (who had a good opportunity to observe lawyers as writers as a law clerk to U.S. District Judge Tom Eisele) thinks lawyers generally write much better than the population as a whole, primarily due to their superior education and their experience in using the written word. However, according to Dean Brantley, they would not rate so well by any objective standard, simply because they are not really taught how to write and write well. She is also inclined to believe the quality of legal writing has declined somewhat, perhaps because lawyers increasingly are using the telephone and other equipment in place of the written word. Lee Clark Johns is a college English teacher who also operates a firm in Tulsa, Oklahoma, called Compendium Writing Consultants. The consulting firm conducts seminars for business and other organizations to teach effective written communication. Ms. Johns notes that "lawyers are notorious for their obfuscation", citing a tendency toward overuse of jargon and the language generally. However, aside from these two major faults, she does not find the writing of lawyers any worse than that of the public generally. 2. Are lawyers actually taught to write poorly? According to Dean Brantley, a lawyer's experience may teach some poor habits, especially overuse of forms, which frequently 24/Arkansas Lawyer/January 1981

may not say just what the lawyer wants them to say. However, the root of the problem, she believes, is that writing simply is not taught to the degree necessary in law school, college, high school, or anywhere else. Judge Fogleman agrees. 3. Does dictation equipment encourage wordiness and sloppy organization? Bankruptcy Judge Charles W. Baker writes his opinions in longhand on a legal pad while standing at a lectern. He says the combination forces him to keep his opinions brief and to the point. Similarly, I know of one successful attorney who was occasionally without steady secretarial help while a solo practitioner. A competent typist, he produced much of his correspondence and pleadings by his own efforts. The pleadings especially were models of clarity and directness! Judge Fogleman points out that proper use of dictating equipment takes discipline and restraint, which may be no more prevalent in lawyers than it is in the population as a whole. Dean Brantley agrees that it is not the use of the equipment itself which contributes to the problem, but the misuse of it. For example, she receives correspondence from lawyers which they obviously have not proofread and in which the punctuation and spelling were obviously not dictated at all. 4. Can secretaries help? Dean Brantley has little hope in this regard, unless the secretary happens to have at least as good a background in English as the lawyer, which Judge Fogleman points out is seldom the case. The Judge also notes that secretaries are seldom encouraged to participate in drafting in this way, and Ms. Johns doubts that many secretaries can fight their way through the jargon much better than clients and other readers. Secretaries can help, but frequently the impulse is in the opposite direction-a secretary who moans when a document is submitted to her for revision is indirectly encouraging the lawyer not to try to polish his writing, but to essentially send his rough drafts. 5. Are lawyers jargon-prone in their writing? To illustrate the problem, Lee Johns relates an incident wherein she asked a lawyer friend to recommend her as an editor of the new Instructions to Civil Juries (the equivalent of our AMI) in

Oklahoma. The lawyer answered in mock horror, "The Tong, the Tong-don't let them know the language of the Tong I" His reference was to a Chinese secret society with its own ceremonies, customs and private language. Whether part of a private language or not, many legal terms are simply the "language of the profession" according to Judge Fogleman, and are symbols for specific ideas, having precise meanings. As a review of the so-called "simple English" documents produced by a number of lending institutions will amply demonstrate, the result of refraining from using specialized language is often a marked increase in the number of words required to express an idea. However, Ms. Johns' point is that, when addressed to a non-legal audience, the terminology becomes "mystifying and confusing." In other words, the lawyer simply fails to communicate. She also believes that, beyond jargon, lawyers simply use too many words, both out of habit and custom. For example, there are repeated redundancies in a number of legal documents, such as conveyances-"does hereby bargain, sell, assign, set over", etc. Unless each word has a different meaning, choosing one of them would probably get the point across. 6. Are these problems which are simply common to all professionals and, for that matter, to everyone who must use the written word on a daily basis? Probably so, says Judge Fogleman. Ms. Clark points out that she finds many of the same problems with anyone who dictates, especially if they dictate to a central pool and never see the finished product. However, others believe lawyers have special problems. As chairman of the Arkansas Bar Foundation, John Gill of Little Rock sponsored a Scrivener's Symposium, to encourage the improvement of legal writing. According to Gill, a large problem is the way lawyers are taught to think. They are taught to thoroughly analyze problems according to their own particular facts. Few legal statements are true in all instances, hence, most of them must be qualified. It is these qualifications which seem to drive non-lawyers (such as the sheik) to distraction. For example, a lawyer's brief may be direct, forceful and clear, despite the use of legal terminology, when he is arguing a particular position. However, this sort of writing is read by judges and other lawyers, not the non-lawyers who are the source of the majority of the criticism of legal writing. Opinions from lawyers, however, are addressed to nonlawyers. The lawyer must cover his subject thoroughly, and be precise. He must use legal terms with specific meanings. Saying "what he means" may mean saying great deal more that the non-lawyer deems necessary and saying it in technicallanguage. According to Gill, the problem then becomes inevitable for the lawyer, as opposed to the sales manager, bureaucrat, or house painter. The lawyer may generalize to some degree, but if there are qualifications or expectations, he must make note of them (with or without his left hand). Light at the end of the paragraph. Despite the problems, Lee Johns sees the legal profes路 sion as one of the few trying to do something about its problems. "The trend in law schools and in journals... is toward new clarity in legal writing ... as evidenced by the wide-spread revision of jury instructions and changes in standard legal documents. . .. If the law schools do not perpetuate the language of 'the Tong', perhaps the habits of older attorneys and ultimately custom will change as well."

As John Gill has noted, there are no simple, overall solutions which are directly available to lawyers. We can or路 ganize before dictating. We can proofread (or at least make sure a secretary who knows how to do it does so). We can reject the recommendations of some of the purveyors of dictation equipment that we use it to dictate random thoughts, which may later be shaped by lawyer and secretary into working documents-too often, the final document looks too much like the original jumble of random thoughts. We cannot directly force colleges and high schools to emphasize further the proper use of the English language, but perhaps they can get the message from the law schools. We can encourage our secretaries to think of the documents we produce as joint projects, as to which each bears a certain responsibility. Additionally, we can use our secretaries to test our clarity of expression-if a secretary, who is used to legal terminology, cannot understand a particular opinion, the lawyer should review his drafting with a critical eye, as it is probable the client will have the same problem. Clear writing, clear thinking. Most of all we can recognize that unclear expression, whether written or spoken, is frequently a symptom of unclear thinking. Organizing your writing and tightening up your expression may well improve the quality of your thought processes. However, you still must continue to think like a lawyer, which will continue to set apart your writing and expression from that of the public generally. One of my most vivid memories from law school is of walking into the student lounge and inquiring of a classmate as to whether a certain class had been cancelled. He started to speak, hesitated, and then gave an answer which only a lawyer can fully appreciate: "Well, there is a note on the bulletin board which says that the class has been cancelled ... ".

f..... .

"The Language Of The Tong" January 1981/Arkansas Lawyer/25

A REVIEW OF THE TAX DUTIES OF PERSONAL REPRESENTATIVES AND ATTORNEYS IN THE PROBATE AND ADMINISTRATION OF A DECEDENT'S ESTATE by Paul J. Nicholson In the probate and administration of a decedent's estate, the personal representative must perform several Federal and State tax duties. The purpose of this article is to give to the practitioner a general review of basic tax duties encountered by a personal representative and his attorney in administering a decedent's estate. It does not attempt an exhausive treatment of the subject matter and does not attempt to explain the details involved in actually performing these duties, or the requirements of the law prior to the 1976 Tax Reform Act. The Arkansas Probate System, published by the Arkansas Bar Association, contains an excellent check list and sample forms in reference to a personal representative's tax duties.'. INITIAL CONSIDERATIONS At the outset the personal representative should prepare a basic balance sheet for the estate and determine the amount of the "gross estate", as defined in the (nternal Revenue Code, and the amount of probable income for the estate during the period of administration. From this the personal representative should be able to determine if it will be necessary to file any tax returns on behalf of the decedent's estate. If it is determined that the personal representative will be filing returns on behalf of the estate, then the personal representative should obtain a tax identification number for the estate and should notify the taxing authorities of his fiduciary relationship. The tax identification number Is obtained by filing a Form SS-4 with the appropriate regional IRS Service Center. It should be filed in plenty of time for the tax identification number to be issued and used upon the estate's returns. The Notice of Fiduciary Relationship, Form 56, should also be filed with the appropriate regional IRS Service Center and with the Department of Finance and 26/Arkansas LawyerlJanuary 1981

Administration. It should be filed with the I.R.S. within thirty (30) days of the appointment of the personal representative.' It should also be filed with the Department of Finance and Administration within two months of the appointment.' The filing of the Form 56 protects the estate from the assertion of a deficiency or penalty without notice to the personal representative. If a notice is not filed, then a notice of a deficiency against the decedent or his estate is effective if mailed to the last known address of the decedent.' DECEDENT'S FINAL INCOME TAX RETURN It is the duty of the personal representative to see that the decedent's final individual income tax return is prepared and filed for the taxable year in which the decedent died.' The decedent's final Form 1040 is due April 15th of the year following the close of the year in which the decedent died. The Form AR-1 ODD, the Arkansas return, is due May 15th of the year following the close of the year in which the decedent died.' The personal representative should always consider the feasibility of filing a joint return with the decedent's surviving spouse if there is one. The Arkansas Probate Code specifically grants him authority to execute joint returns with the surviving spouse' SUBCHAPTER SELECTION 路If the decedent owned stock in a Subchapter S corporation at the date of death, the personal representative should determine whether it is desirable for the corporation to continue to be taxed as a small business corporation. If it is determined that the Subchapter S election should be terminated, then the personal representative must take affirmative action in order to do so.' The affirmative action required is the filing by the personal representative of a Statement of

) Paul Nicholson received his B.A. degree from Hendrix College in 1971, his J. D. from the University of Arkansas in 1974. He is a member of the Arkansas Bar Association Section on Taxation, Trust and Estate Planning, and is presently a sole practitioner in Uttle Rock, Arkansas. This article is another in the current series furnished by the Section on Taxation, Trust and Estate Planning. Termination with the appropriate IRS regional service center within a period of sixty (60) days measured from the day upon which the estate became a shareholder in the corporation.' A similar statement should also be filed with the Arkansas Department of Finance and Administration. 10

WITHHOLDING REPORTS If the decedent was a taxpayer who paid wages to employees, the personal representative is responsible for continuing to file his Employer's Quarterly Return of Tax Withheld, Form 941." The return must be filed quarterly and the tax withheld should be paid on or before the last day of the month following the end of the quarter." An employer, such as a decedent, who goes out of business or otherwise ceases to pay wages, must file a final return marked "Final Return" which must be accompanied by information indicating where the applicable records of the business will be kept, along with the name and address of the new owner, if any." It is the personal representative's duty to file this final return." GIFT TAX RETURNS The personal representative will also be responsible for the filing of a federal

gift tax return, Form 709, on behalf of the decedent where prior to his death, the decedent made gifts of a present interest to anyone person of a value in excess of the $3,000.00 annual exclusion." And, if prior to death the decedent made a gift of a future interest, then a gift tax return is required regardless of the value of the property involved." The due date for the filing of the return is determined on a quarterly basis. Thus, if taxable gifts (those over the annual exclusion) in a calendar quarter exceed $25,000.00, then the return is due to be filed after the end of that particular quarter. If, however, the taxable gifts in a calendar quarter are $25,000.00 or less, the return for the quarter isn't due until the first subsequent quarter in which taxable gifts for the year exceed $25,000.00. And, if the taxable gifts for the year don't exceed $25,000.00 the return is due after the end of the year. " The due date for the calendar quarters of the year are as follows: The first quarter-May 15th, the second quarter-August 15th, the third quarter-November 15th, and the fourth quarter-April 15th of the following year." ESTATE TAX RETURNS One of the most important tax duties of the personal representative is the determination as to whether the estate is required to prepare and to file a Federal and State Estate tax return, IRS Form 706, Arkansas Form AY-321. Under current law, the filing of a Federal Estate tax return is mandated where the decedent's "gross estate" (as defined for tax purposes) exceeds specified amounts set out in IRC Sec. 6018(a). The gross estate of a decedent dying in 1980 would have to exceed $161,000.00 before a Form 706 would be required to be filed. For a decedent dying in 1981, the "gross estate" would have to exceed the sum of $175,000.00 in order for a Federal Estate tax return to be mandated. Before applying these amounts to the gross estate, the code requires that they be reduced (1) by the amount of taxable gifts (those over the annual exclusion) made by the decedent after 1976 which have not been included as part of the decedent's "gross estate" and (2) further reduced by the amount of the specific $30,000.00 gift tax exemption allowed to the decedent for lifetime gifts made after September 8, 1976 and before January 1, 1977. The effect of these reductions is to increase the decedent's "gross estate" by the

amounts of previously made taxable gifts. The federal estate tax return is due nine months after the date of the decedent's death. " An extension of time for filing the return can be granted for up to six months by the Internal Revenue Service. The personal representative can apply for this extension by preparing and filing Form 4768 prior to the due date of the return. Also, an ex1ension of time to pay the tax can be obtained upon a showing of "reasonable cause" ' 0 Special ex1ensions of time to pay the tax are available where the estate includes a reversion or remainder interest," or where the estate consists largely of a closely held business." Again, the personal representative should prepare and file Form 4768 prior to the due date of the return in order to apply for an extension of time to pay the estate tax. In addition to properly preparing and filing the estate tax return, the regulations require the personal representative to submit certain documents and information in addition to the return itself, such as inventories of assets, certified copies of the decedent's Will, and other documents." The Arkansas estate tax return is required to be filed only when a Form 706 is required, unless a request is made for a release of real estate. The Arkansas return is due to be filed at the same time that the Form 706 is filed with the Internal Revenue Service." ESTATE INCOME TAX RETURNS Since the estate of a decedent is a separate taxpayer, it must report income just as any other taxpayer does. The personal representative must file an income tax return, federal and state, for the estate during its administration. This is done on Form 1041 for the federal retum and on Form AR-1002 for the Arkansas return. The federal return must be filed where the gross income of the estate is $600.00 or more during its taxable year, or if any beneficiary of the estate is a non-resident alien." Upon the distribution to a beneficiary or upon the closing and final distribution of the estate, a separate Schedule K-1 must be prepared and attached to the return. This schedule shows the amount of the estate's income which is includable in the beneficiary's gross income. It also shows the beneficiary's share of certain credits and deductions in excess of the estate's taxable income which are passed through for use

by the beneficiary. This points up one of the most interesting features of the income taxation of an estate. The estate is treated as a conduit of income and in its final taxable year, being the year of closing and final distribution, the estate may pass through the excess deductions to the beneficiaries for use upon their individual returns. Thus, the personal representative should carefully consider the feasibility of filing and preparing the Form 1041 even where the gross income of the estate is not expected to exceed $600.00. It should be pointed out that there are certain estate expenses which may be taken both as estate tax deductions on Form 706 and income tax deductions on Form 1041 . The items deductible for estate tax purposes will not be allowed as income tax deductions however, unless the personal representative files "in duplicate" a statement that no estate tax deduction for the item has been allowed and that the estate waives any right to take the estate tax deduction for the items. Also, ancillary personal representatives must file a return called "an ancillary return" showing the name and address of the domiciliary representative, the gross income received by the ancillary representative, the deductions to be claimed against said income, and the amount of any property distributed to the beneficiaries." The Arkansas fiduciary return, Form AR-1002 should be filed where the estate's gross income exceeds $1,500.00, or one of the beneficiaries is a resident of another state. The return is due to be filed under the same filing requirements for the AR-1000 except as regards a fiscal year estate. In that case, the return is due five and one-half months after the close of the taxable year. 27

GENERATION-SKIPPING RETURNS With the institution of the generation-skipping transfer tax by the 1976 Tax Reform Act, additional duties have been imposed upon the personal representatives of decedent's estates. The trustee of a generation skipping trust must file both a generationskipping tax return, Form 706-B, and a generation-skipping information return, Form 706-B(1). The due date and filing requirements for these returns are set out in the new temporary regulations recently published." DUTIES UPON CLOSING Upon the completion of administracontinued on page 28 January 1981jArkansas Lawyerj27

A Review...A Decedent's Estate continued from page 27 tion, the personal representative should file a "Notice of Termination of Fiduciary Relationship" with the same IRS Regional Service Center with which he filed the notice of "Fiduciary Relationship". And, he should also file the notice with the Department of Finance and Administration. Upon the filing of this notice, any tax liability will thereafter be asserted not against the personal representative, but against the person to whom the assets have been distributed. This notice should be accompanied by satisfactory evidence of the closing of the estate and termination of the fiduciary's duties (such as certified copy of the Final Order of

Apportionment And ... Injury Fund continued from page 5 disabilities or impairments is greater than that which would have resulted from the last injury, considered alone and of itself, and if the employee is entitled to receive compensation on the basis of combined disabilities, the employer at the time of the last injury shall be liable only for the degree or percentage of disability which would have resulted from the last injury had there been no preexisting disability or impairment." The Court of Appeals reasoned that the amendment wouid not have been necessary if Section 13(f) (2) (ii) as it now stands applied to preexisting disabilities not occasioned by a work-related injury. It seems safe to presume

Oyez, Oyez..., continued from page 19 In August, DIANE MACKEY, of Little Rock, was sworn in by U.S. District Judge G. Thomas Eisele as a new assistant U.S. attorney for the Eastern District of Arkansas. She has recently completed a two-year position as law clerk for Judge Eisele. KNOX BAIRD KINNEY. JR., of Forrest City, has joined the law firm of Kinney and Easley. 28/Arkansas Lawyer/January 1981

Distribution and Discharge)." This completes a general review of the federal and state tax duties of the personal representative in the prtbate and administration of a decedent's estate. Personal representatives and their attorneys should become familiar with these duties and when necessary obtain the services of a competent tax advisor to assist in performing them.

FOOTNOTES See AC400, Arkansas Probate System. , IRC, Sec. 6903(0); Regs. Sec. 301.69031(0). 3 Ark. Stat. Ann., Sec. 63-119. • Regs., Sec. 301.6903-1 (c). • IRC, Sec. 6012(b)(1); Regs. Sec. 1.60123(b)(1). 1

• Ark. Stat. Ann., Sec. 84-2027. 7 Ark. Stat. Ann., Sec. 62-2131. • I.R.C.. Sec. 1372(e)(1).

that after January 1, 1981, all prior disabilities, whether occasioned by a work-related injury or by a nonwork-related injury, will suffice to invoke the provisions of Section 13(f) (2) (ii). As the key word regarding subsequent injuries is "Symptomatic", the key word involving apportionment is "latent." If, at the time of the subsequent accident the prior disability was latent, then the subsequent employer is responsible for the entire disability, including and embracing both the prior and subsequent disabilities. Conversely, if the subsequent disability was active to a degree, then the rule of apportionment applies. After January 1, 1981, as previously discussed, the Second Injury Fund will be responsible for the payment of that degree of disability which an injured employee has which he would not have had had he not had a prior existing disability. It is pointed out that the Act, as it will be amended, provides that in cases here a recovery is sought against the Second Injury Fund, the State Treasurer shall be named as a

RUSS MEEKS has opened his law office at Suite 1151 First National Building in Little Rock. NEVA B_ TALLEY received two recognition awards this summer at the annual meeting of the American Bar Association. She is also the first woman lawyer in history to serve as chairperson of the Family Law Section of the American Bar Association.


• I.R.C., Sec. 1372(e)(1)(A). Acts, 1979, No. 414. " Regs., Sec. 31.6061-1. " Regs., Sec. 31.6071(0)-1(0). " Regs.. Sec. 31.6011(0)-6(b). .. Regs., Sec. 31.6061-1. " LR.C. Sec. 6019; Regs., Sec. 25.6019-1(e). " I.R.C. Sec. 2503(b), Regs., Sec. 25.2503.2. " I.R.C. Sec. 6075(b) (2) & (b) (4). " LR.C. Sec. 6075(b) (1). " LR.C. Sec. 6075(0); Regs. Sec. 20.6075.1. ~o Regs. Sec. 20.6151-1. 2, l.R.C. Sec. 6163. " I.R.C. Sec. 6166, 6166A. " Regs. Sees. 20.6018-3(0) & (c), 20.6018-4(0). '0


Ark. Stat. Ann., Sec. 63·' 23.

" LR.C. 6012(0) (3) & (5); Regs., Sec. 1.60123(0) (1). a Regs. Sec. 1.6012-3(0) (3). 27 Instructions to Form AR-l002: Ark. Stat. Ann., Sec. 84-2027. " Temp. Regs. Sees. 260.2621-1(e)(1)(i); 260.2621-1 (e)(l )(ii). a Regs. Sec. 301.6903-1 (b).

I.. ...

party and shall be entitled to defend against the claim. The State Treasurer may enter into lump sum or joint petition settlements and may utilize the appellate processes. Where the amendment effective in 1981 will take us is uncertain as a maiden's dream. Nonetheless, it is submitted that if the Second Injury Fund can meet the tests from an actuarial standpoint, then the Act, as it will be amended, will be a giant step forward in providing an adequate remedy for an injured employee based upon a fair consideration for the employer and his carrier. It should encourage rather than dissuade employers to hire persons with an existing handicap.

1-.. .

Bar Foundation, continued from page 3 seminars, or perhaps the Education Committee will try to develop research and original thought on the subject by offering monetary prizes for writing and publications on the subject. I'm sure there are many other good ways to promote the idea of increasing our professionalism and somehow gaining the feeling that we are "once more confident, that ethical behavior is desirable, widely practiced, approved, and admired." If you have any ideas on how this can best be presented to the Bar and to the public, we would love to hear them, Vou can write to Bob Brown or me at the Bar Center or you can write to me at P.O. Box 447, Bentonville, Arkansas 72712. ' "

There may be an angry client on your trail!

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January 1981/Arkansas Lawyer/29

LEGAL ECONOMICS By: Thomas S. Clay ALTMAN & WElL, INC. Management Consultants Ardmore, PA and Orinda, CA

BUY OR LEASE? THE OFFICE SPACE PROBLEM It costs between $4,466 and $6,016 a year to provide office space for the typical lawyer according to The 1979 Survey of Law Firm Economics. This expenditure provides space for the lawyer and support staff and includes expenditures for rent, utilities, janitorial service, real estate taxes and like items. It is a major expense in most law firms. Occupancy costs tend to vary with location. The higher costs are in the first class buildings in large cities. Costs tend to be lower in towns and suburbs. Experts in real estate predict lease rates as high as $40 per square foot in a decade. At present, law firms generally pay from as little as $7.50 to almost $20 per square foot, per year, depending on city and building. Lawyers are generally concerned with the cost of the space they occupy. After all, occupancy may take from four to ten percent of gross receipts. One of the questions often asked by lawyers of their consultants is whether a law firm should continue to lease space or purchase (or build) a building. The answer is never easy to determine and requires significant long range planning and financial analysis. There are a number of factors that must be considered prior to embarking on a construction or purchasing program. Some of the economic and non-economic factors that make office ownership attractive for the law firm are: 1. Flexibility with respect to present and future space needs and office layout if carefully planned. 2. Ability to control many of the factors comprising occupancy costs. 3. A cash return on invested capital to the building owners. 4. Favorable tax treatment of commercial real estate. 5. Appreciation of the real property (an infiation hedge). 3D/Arkansas Lawyer/January 1981

Problems that may arise with ownership if proper planning and management does not occur are: 1. Significant management time is required by owners, diminishing the time available for the practice of law. 2. There is significant financial exposure of the owners if unoccupied space is not leased or not leased at projected rates. 3. Objections by law partners not involved in the real estate ownership to iease rates paid by the firm can occur. Often younger partners perceive that the real estate owners are not equitably setting rates, thus siphoning profits. 4. Younger partners may perceive ownership of the real estate as a "right" acquired with law firm partnership. If policy with respect to admission rights and costs (if in fact there are to be any) are not communicated, serious consequences may arise. Any analysis to determine whether or not the firm should continue to lease space or purchase its own space should include a number of steps. Most law firms should enlist expert services in making these determinations. Growth Law firms should project growth in numbers of lawyers and support personnel based on past experience, expected increases in clients, entry into new areas of law and similar factors. Such long range planning must occur in order to determine the acceptability of present space (and available expansion space) and to determine square footage requirements of space to be purchased or built. Many firms are experiencing the croWding associated with inadequate planning for new personnel. It is generally better to have excess space than to have too little.

Interior Layout Too often lawyers become overly concerned with the aesthetics of a building, in particular the exterior, and do not pay adequate attention to the functional aspects of the interior space. Interior needs should be defined prior to architectural design. The relative length and width affects the utility of interior space. Long narrow buiidings, for example, generally are inefficient as law office space. Inattention to detail in this area often leads to functionally inefficient space. Ownership The partners of a law firm will usually form a separate partnership to hold title to the real estate for tax and liability reasons. If no policies are set for exclusion or addition of new law partners to the real estate partnership, problems will occur. Generally, the partners will build or purchase an existing building and then lease space to the law firm. This arrangement works well until a new law partner is brought in. Often new partners expect to "automatically" obtain an interest in the building. Problems arise if the building owners have no policy with respect to new owners or for determining terms of purchase. In one firm whose founding partners owned the building and would not allow younger law partners to purchase an interest, the younger partners felt that older partners were draining firm funds and threatened to leave. In the crisis which resulted, an appraisal was performed to determine the building value and the younger partners were allowed to buy in. Ironically, most of them declined as the market value of the building was much greater than they had perceived it to be. In fact, the analysis showed that the firm was paying less than market rental rates. Financial Analysis A pro forma financial analysis must

be performed by an expert to determine value. Such an analysis will determine the expected return to building investors, based on market lease rates and expense. Depending on the personal financial requirements of the real estate owners, lease rates can be adjusted downward to a break-even point. However, mortgages often require certain minimum levels of rental rates, thus reducing pricing flexibility for owner occupants. The real price break for the firm can occur three to five years after purchase. Many smaller leases expire in three to five years and may be renewed at a higher level. At this time the building owners/law firm owners can make a decision to keep the firm's lease rates below market, if desired. This is when real occupancy cost benefits can occur. An example of a pro forma operating statement appears in the accompanying table. Such a projection should be prepared whether a new building is contemplated or in considering purchase of existing space. Financing Many sources of permanent financing for small office buildings are available. Traditional lenders, such as savings and loan associations and commercial banks, should be explored. Pension funds, industrial development authorities (backed by tax free bonds), and private investors are becoming a source of funds for permanent financing. Great care should be taken in searching for and selecting financing as rates and terms determine whether or not a project is economically viable and often whether the project is salable in the future. Leasing/Management Leasing and management should usually be done with the aid of specialists. Many law firms try to perform these functions to save on expenses, sometimes utilizing law office managers with varying degrees of success. In most instances the four to six percent of gross revenues paid for these services is cheaper in the long run than expending law firm personnel time. Summary If the proper steps are taken to determine a firm's functional needs and economic viability of the real estate, the purchase of space can be a sound move. A good building can be the cornerstone to a lawyer's image in the community.

PRO FORMA INCOME STATEMENT LAW OFFICE BUILDING Gross Rental Income Total 32,000 Square Feet less: Vacancy allowance @ 5% 1600 Square Feet

Cost per Square Foot

$8.50 8.50

Net Operating Income

$272,000 13,600 258,400

Gross Operating Income Less Operating Expenses Cleaning & Supplies Utilities Real Estate Taxes Insurance Elevator Maintenance General Repairs/Reserves Management Fee (6% of Gross) Miscellaneous Total Expense

Total Cost

.48 1.05 .52 .08 .26 .25

14,592 31,920 15,808 2,432 7,904 7,600

.60 _ _.1_2 $3.36

18,240 3,648 $102,144 $156,256

Less Debt Service路


Net Income


路Oebt Service Calculation $156,256 capitalized at 10% yields an approximate "value" of

$1,500,000. A 75% loan-to-vatue ratio will secure a mortgage of $1,250,000. Debt service on a 30 year loan at 10.5% = $137,250.




January 1981/Arkansas Lawyer/31

AICLE NEWS by Claibourne W. Pally. Jr. Executive Director Arkansas Institute of Continuing Legal Education


DOMESTIC RELATIONS THEME OF 1980 FALL LEGAL INSTITUTE The Fall Legal Institute, held at the Camelot Inn, lillie Rock. September 18-19, 1980, allracted over 300 registrants. The topic of Domestic Relations included both recent developments of Arkansas law including Act 705 of 1979 and the new Arkansas Domestic Relations System published by the Family Law Section of the Arkansas Bar Association. During the morning registration period the sections and committees of the Arkansas Bar Association were able to convene and conduct business for the first time since the annual Bar meeting in June. The Thursday morning session of the program included the following topics: An Explanation of the Arkansas Domestic Relations System itself by Robert M. Cearley, Jr. of lillie Rock, Vice-Chairman of the Family Law Section; Income Tax with Respect to Divorce or Separation in Arkansas by James E. Harris of Lillie Rock; and the Tax consequences of Property Division by Joseph N. DuCanto of Chicago. Phillip Carroll, President of the Arkansas Bar Association, spoke at the Thursday luncheon on the subject of "Arkansas Bar Association's Legislative Program for 1981." He also introduced Messrs. Joe Bell and Jim Rhodes of lillie Rock who will be lobbying and monitoring the legislature during its 1981 session on behalf of the Arkansas Bar Association and its legislative package. The Thursday afternoon portion of the program was devoted to the following topics: The Legislative and Case Law History of Act 705 of 1979, Concerning Division of Property Upon Divorce by Ben D. Rowland, Jr.. Chairman of the Family Law Section; Act 70S-Eight Criteria Used in Property Settlements by Professor Henry H. Foster, Jr. of New York City; Act 32/Arkansas Lawyer/January 1981

705-The Value of the Homemaker by Michael H. Minton of Chicago and the Missouri Experience with its equivalent of Act 705 by Roger Krumm of Fulton, Missouri. The Friday morning portion of the program was devoted to the following topics: A Chancellor Looks at Child Custody, Support and Visitation with a List of Criteria by Chancellor Robert H. Dudley of Pocahontas; Contractual Agreements by Phillip E. Dixon of Little Rock; Garnishment and Post Divorce Relief by William G. Myers of Fayelleville and Bankruptcy and Divorce Decrees by U.S. Bankruptcy Judge Charles E. Baker of lillie Rock. The main speaker at the Friday luncheon was U.S. Senator Dale Bumpers who devoted a large part of his talk to a congressional report of pending legislation which will affect lawyers and their clients as well as a commentary on legislation recently passed and current international affairs affecting the United States. The Friday afternoon portion of the program was devoted to the following topics: Social Security Consideration at the time of Divorce by Administrative Law Judge L. D. Blair of Little Rock; the Military Divorce by C. Larry Carpenter, Jr. of North lillie Rock; Antenuptial Agreements by Virginia Atkinson of little Rock and the Government's Child Support Collection Process-Pulaski County by Mr. R. E. Brians, Arkansas by Scoll E. Dobbs and the IRS Child Support and Alimony Collection Process by Mr. Doyne L. Plummer. This program was so enthusiastically received by those attending that it was the decision of the AICLE Board to offer a videotape one day program of the Thursday portion along with appropriate live commentary by local judges and/or lawyers at at least four locations

in the state. These regional programs will be described more in detail later in the article. TWENTY-FIRST ANNUAL PRACTICE SKILLS COURSE HELD IN LITTLE ROCK The annual Practice Skills Course, jointly sponsored by the Young Lawyers Section of the Arkansas Bar Association and AICLE, is one of the longest running, continuous annual programs in the history of Arkansas continuing legal education. Its seniority is tied with the annual Mineral Law Institute and exceeded only by the Fall Legal Institute. The registrants were made up mostly of recent admittees to the Bar with some lawyers returning for a refresher course plus those only recently becoming active in the practice of law and needing more than just a "refresher" course. The two day course, held at the lillie Rock Convention Center, October 2-3, 1980, provided basic and practical instruction by practicing lawyers along with handout material including checklists and current forms used by these lawyers in their daily practice. Typical subjects covered in this course from a practice oriented rather than a substantive law manner included: Real Property Transactions, Representation of Business Clients, Estate Planning and Probate, Litigation, Ethics and Fees, Criminal Practice, Domestic Relations, Law Office Management, and Representation of Creditors and Debtors. The individual presentations and the handout material were oriented strictly toward gelling the new or recently active lawyer safely in and out of the courthouse and otherwise assist them in starting and building their law practice during an initial three year period. All of the subjects were presented

"live" by at least one and more often teams of two speakers, each giving a different point of view to the particular subject. Some of the speakers were recruited from the ranks of the Young Lawyers Section, whereas others were more senior practitioners who are interested in sharing their experiences with those who have recently joined our professional ranks. This is an annual continuing legal education program which I expect to have a long and healthy existance as long as we have substantial numbers of new admittees joining our Bar Association each year. ARKANSAS-FEDERAL TAX INSTITUTE For the second time AICLE is going to co-sponsor the 19th Arkansas-Federal Tax Institute with the Arkansas Society of Certified Public Accountants. This first rate tax program will be conducted November 13-14, at the Camelot Inn, Little Rock. The faculty, made up jointly of lawyers and CPA's of national prominence, will discuss the following topics: Tax Effects of Partnerships and Professional Associations: Design of Defined Benefit Plans; Tax Planning for Agriculture; Tax Effects of Apartment-Condominium Conversions and Recent Developments in Tax Law. This course was well attended by lawyers last fall who made up approximately one-third of the registration, and I expect an equally good attendance this fall especially from those lawyers who have been attending the spring Tax Awareness Workshops sponsored by the Trusts, Taxation and Estate Planning Section of the Arkansas Bar Association. Even though this particular program is given at an advanced level, I personally encourage those attorneys who consider themselves at least to be at the intermediate level to consider attending this important tax seminar, because the quality of the speakers is such that they can make the most complex tax concepts understandable to the practitioner who does not also happen to be a CPA. Furthermore, I think the practitioner who is at the intermediate level of taxation experience should not hesitate to broaden his or her horizons in this area and should operate under the theory that "one's reach should exceed one's grasp." REMAINDER OF FALL CLE PROGRAM MOST ACTIVE FOR AICLE Other than the Fall Legal Institute, the annual Practice Skills Course, and

the Arkansas-Federal Tax Institute, there will be a number of CLE programs sponsored by AICLE on a variety of subjects. The first of such programs will have already been held by the time you receive your copy of the Arkansas Lawyer which was the conference on Developmental Disabilities and the Law. This program, jointly sponsored with the UALR School of Law, Arkansas Bar Association Committees on the Mentally Disabled and Legal Services for the Deaf and the Governor's Developmental Disabilities Planning Council, will be held at the Camelot Inn, Little Rock, on October 10-11,1980. Topics to be covered will include unresolved issues on handicapped citizens, individual habilitation rights plans, de-institutionalization, rights to developmental disability services, guardianship, and legal representation of deaf clients. This program is both innovative and unique, not only to the United States in the area of CLE programming but also to the state of Arkansas. Another program which will have been held by the time you read this article will be a Banking Law Seminar co-sponsored by AICLE and the Banking Law Committee of the Arkansas Bar Association at the Camelot Inn, little Rock, October 17,1980. The topics will include a usury update, a discussion of current legislation, recent court decisions and proposed constitutional changes in the field of usury; consumer credit regUlation update; a regulatory outlook, a discussion of the regulatory climate, the impact of the Omnibus Bill and the outlook for the banking industry in general; and financial institutions regulatory and interest rates control act update, a discussion of current problems and recent developments under FIRA and its impact on banking practices. A concurrent mailing was made to the members of the Arkansas Bankers Association who were encouraged to bring their lawyers as well as the lawyers being encouraged to bring their banker-clients. A third program which you will have an opportunity to attend is an Appellate Advocacy Seminar jointly sponsored with the Civil Procedure Committee of the Arkansas Bar Association to be conducted at the Camelot Inn, Little Rock, December 5, 1980. This one time program which has been prompted by the recent mailing of the Appellate Advocacy Handbook prepared by Jacqueline Wright, Supreme Court librarian, will include the following to-

pies: courts of appeal-jurisdiction and review; appealable orders; supersedeas and stay on appeal, processing an appeal, and preparation and correction of the record. In addition to the above programs, regional seminars will be conducted at four locations, Fayetteville, Jonesboro, Monticello and Magnolia between the dates of October 24 and December 12, which will include color videotape replay of the Thursday portion of the Fall Legal Institute program on Arkansas domestic relations law with the addition of one or two live commentators, such as local practitioners and local chancellors for the benefit of those members of the Bar Association who were unable to attend the Fall Legal Institute held in Little Rock. This type of videotape replay will be a first for Arkansas, since we have had the capability of videotaping in the past, but we have always been hampered by the availability of facilities suitable for videotape replay other than at the law schools in Fayetteville or Little Rock. Now other state universities have suitable facilities, in Jonesboro and Magnolia, and other provisions have been made for the showing in Monticello. A report on the success of the above programs will be made in a later issue of the Arkansas Lawyer. CREDITORS-DEBTORS LAW SYSTEM TO BE PRESENTED AT MIDYEAR MEETING The Arkansas Creditors-Debtors Law System, authored by Professor Glenn Pasvogel of UALR School of Law, and edited by the Creditors Rights Committee of the Arkansas Bar Association, chaired by Allen Byrd of Little Rock, will be available for the first time to registrants at the annual Midyear Meeting at the Camelot Inn on January 15-16, 1981. This program, cochaired by Allen Bird of Little Rock and Dean David Epstein of the University of Arkansas School of Law in Fayetteville, will include the following topics: sales and secured transactions under the UCC; prosecution and defense of claims under the UCC; collection of judgments and enforcement of liens and applicability of the new federal bankruptcy law. Along with prominent Arkansas attorneys and law professors who have worked on the system itself, the program will feature well-known out-ofstate speakers on debtors and creditors rights and the Uniform Commercial Code


January 1981/Arkansas Lawyer/33

CODE Of PROfESSIONAL RESPONSIBILITY (Editor's Note: The American Bar Association's Commission on Evaluation of Professional Standards-socalled "Kutak Committee"-has prepared proposed MODEL RULES OF PROFESSIONAL CONDUCT to supplant the current CODE OF PROFESSIONAL RESPONSIBILITY, which was developed by the "Wright Committee". The late Edward L. Wright of Arkansas was the Committee Chairman. The "Kutak" Report has had rough sailing not only in ABA circles, but also with most other professional organizations. The Arkansas Bar Association's Board of Governors on September 20, 1980 adopted a resolution against the "Kutak" Report, but for any needed changes in the current Code of Professional Responsibility. The National Organization of Bar Counsel's related Report provides a good background study and evaluation of the "Kutak" Report. Accordingly, parts of the NOBC Report are reproduced here-with permission-for study by all members of the Arkansas Bar.) BACKGROUND The present Model Code of Professional Responsibility was the result of a six-year exhaustive study begun in August, 1964 by an ABA Special Committee on Evaluation of Ethical Standards which was charged to examine the former Canons of Professional Ethics and to make recommendations for changes. That Special Committee concluded that the Canons needed revision in four principal particulars: (1) There were important areas involving the conduct of lawyers that were only partially covered by or totally omitted from the Canons; (2) Most Canons that were sound in substance needed editorial revision; (3) Most of the Canons did not lend themselves to practical sanctions for violations; and (4) Changed and changing conditions in our legal system and urbanized society required new statements of professional principles. As the result of their activities a new Code of Professional Responsibility was initially adopted by the ABA House of Delegates on August 12, 1969 with later amendments adopted on February 24, 1970. The Code contains nine Canons, 130 Ethical Considerations and 39 Disciplinary Rules replacing the previous 32 Canons of Professional Ethics. Paralleling the activities of the ABA Special Committee on Evaluation of Ethical Standards were those of an ABA Special Committee on Evaluation of Disciplinary Enforcement created in February 1967, a bit later than the Ethical Standards Committee. This Special Committee which became 34/Arkansas Lawyer/January 1981

known as the "Clark Committee" developed recommendations for improvement in disciplinary enforcement of ethical standards which were approved for distribution by the ABA House of Delegates in August, 1970. As the result of the work of these two special committees the vital groundwork was laid for a reform movement in lawyer discipline which has swept the nation. The new Code provided meaningful Disciplinary Rules susceptible to application of disciplinary sanctions for their violation;-the improved disciplinary enforcement agencies provided the resources necessary to pursue the sanctions. Three additional developments must be mentioned:-(1) in 1965 an organization of counsel to state bar associations throughout the United States was formed as the National Organization of Bar Counsel (NOBC). In 1977 the Organization was incorporated and declared its membership opened to attorneys active in matters involving lawyer discipline or related to the unauthorized practice of law; (2) in 1972 an ABA Standing Committee on Professional Discipline was created which has served in leading the reform movement in the country improving lawyer discipline; and (3) in 1973 an ABA Center for Professional Discipline was established under the general supervision of the ABA Standing Committee on Professional Discipline to serve as a focal point for developments in attorney discipline (this office was renamed National Center for Professional Responsibility in August 1978). STATEMENT OF OBJECTION TO PROPOSED CHANGE IN FORMAT OF THE MODEL CODE SUbsequent to the developments set forth above, a significant national body of law has developed in lawyer discipline which is directly derived from or related to the present ABA Model Code of Professional Responsibility. The Code's disciplinary rules are continually cited in thousands of court cases, advisory opinions, law review articles and other legal references. Recently (1979) the American Bar Foundation has published a 478 page ANNOTATED CODE OF PROFESSIONAL RESPONSIBILITY replete with extensive case citations which describes and analyzes the development of the changing Code through the years since first adoption by the ABA House of Delegates. Hundreds of attorneys involved with lawyer discipline have become intimately familiar with the disciplinary rules as presented in the Code and the bar in general has increasing familiarity with their existence. One need only pick up at random a recent advance report under the National Reporter System of West Publishing Company and examine the cases keyed under "Attorney and Client" to prove to himself these points. In the 3rd paragraph of the Preface to the Discussion Draft, the Kutak Commission notes that it " ... soon realized

that more than a series of amendments or a general restatement of the Model Code of Professional Responsibility was in order. The Commission determined that a comprehensive reformation was required ..." With no further explanation, the Commission proceeded to propose a completely changed format in the Model Code. The National Organization of Bar Counsel (NOBC) is not aware of any reason, or of any suggestions from other sources of any reason, which suggest, let alone require, a departure from the format and structure of the present Code. The NOBC believes that such a departure, if adopted, would seriously impair the acceptability and effectiveness of a Model Code, and substantially undermine the giant strides which have been achieved since the adoption of the format and construction of the present Code of Professional Responsibility. The NOBC recognizes the substantial time, effort and expertise which has been expended in developing the proposed Model Rules of Professional Conduct and we express our strong objections to the format and construction of the proposed Model Rules only after extensive review and serious debate. The compelling reasons for our position are as follows: 1. Nearly one-half of all practicing attorneys have studied the present Code while in law school (post 1970 graduates) and the remaining one-half have practiced under the present Code for ten years. 2. The absence of any other significant effort to change the format and construction evidences a working satisfaction with the present arrangement, particularly with regard to the Disciplinary Rules. 3. A wealth of case law related to the present Code sections has been developed since adoption of the Code and nearly all sections have been subjected to jUdicial scrutiny and interpretation. 4. Indexing of case reporting systems and legal scholarships has been geared to the present Code sections Le., conflicts, confidentiality, etc. The proposed change in format would necessitate a new selection of indexing topics, Le., Advocate, Advisor, Negotiator, etc., with overlapping traditional subtopics. For those jurisdictions having computer or other record keeping systems based on the present Code numbering system there will be a significant cost associated with changes to a completely different system. 5. The proposed indexing of topic areas creates a false illusion that different ethical standards apply to different areas of practice. The need to specifically address problem areas which relate to specific areas of practice can be accomplished without disruptions to the present format. 6. The Model Draft does not lend itself to ready identification of recognized ethical topic areas; e.g., whereas issues dealing with conflicts of interest were previously found in Canon 5, the proposed Model Rules cover similar issues in sections 1.5, 1.6, 1.8, 1.9, 1.16, 2.1, 3.9, 3.11, 5.1, 5.2, 7.5 and 8.2. The economic aspect of added costs as mentioned in subparagraph 4 above applies here also. 7. Although the present Code has been adopted with some variations in nearly every jurisdiction, the absence of voiced need for change in format along with historical reluctance to depart from acceptable proven form suggests that many jurisdictions would be reluctant to adopt the Model Draft in its present format.

8. There is a strong desirability to seek uniformity in the approach to lawyer discipline for unethical conduct for a number of good reasons many of which support development of uniform state laws in general. Failure to adopt a Model Code which will gain ready acceptance in all jurisdictions will impair national uniformity. The Commission in its pamphlet Dilemmas in Legal Ethics: A Celebration and Critique of the Code of Professional Responsibility states "Largely in that spirit, the Commission has foregone the approach to continued piecemeal amendment of the Code and has begun drafting what it hopes is a coherent, comprehensive, and constitutionai statement of professional responsibility." "That spirit" justifying the Commission's general departure from the style, form and much of the substance of the proposed Code apparently grew from the following seeds listed in the Commission's pamphlet: (a) A number of amendments to the Code have been required "simply to keep the Code abreast of decisions of the Supreme Court of the United States." (b) The profile of the "Typical lawyer" is changing;-there are more government lawyers and in-house corporate counsel. (c) There are significant changes in what clients, the public and government regulators expect of lawyers. (d) A statement in 1934 by Mr. Justice Harlan Fiske Stone that "Our canons of ethics for the most part are generalizations designed for an earlier era". The NOBC submits that all of the above reasons are subject to challenge as adequate justification for the radical departure in form and style represented by the Commission's proposal. Regarding reason (a) above, of course amendments to the Code have been required but they have been relatively few in number and it is believed that only in the case of the advertising rules and those dealing with group legal services were amendments made "simply to keep abreast of decisions of the Supreme Court of the United States. As to reason (b) while statistically there may be "more government lawyers and in-house corporate counsel" there is still a high percentage of sale practitioners or those practicing in small firms. Even accepting as provable for the sake of argument the statement that "the profile of the 'typical lawyer' is changing", such development would not by itself warrant discarding a Code acceptable to near majority of lawyers simply to deal with the problems of a few. It is far better to provide for new problems arising from new professional relationships or duties by revisions of or amendments to the present Code. While reason (c) may be true, again, it provides no good basis for rejecting the present Code in toto. "Consumer protection" for the legal profession means protection of the clients' as well as the general public's interests. The present Code manifests a serious concern to provide such protection throughout its page whether it be in its canons, ethical considerations or disciplinary rules. Certainly reason (d) cannot be accepted as any valid basis now for rejecting out of hand the present Code whose development it actually served to inspire! The present Code has served the profession in admirable manner for the past memorable ten years and with careful revision will continue to so serve in the future. It's form and style are exemplary. Its substance can and should be revised to comport to changing conditions in the practice of the law and in jurisprudence and society in general.


January 1981/Arkansas Lawyer/35

............ ------


JURIS DICTUM by Jim Petty Executive Secretary, Judicial Department

JUDICIAL INFORMATION SYSTEM by Angela Jegley Chief, Analytical Services Division The Arkansas Judicial Department began development of a Statewide Judicial Information System (SJIS) project in October of 1977. The purpose of this article is to provide a broad overview of the history and status of the project, and to acquaint the legal profession with the benefits and services available to the courts as a result thereof. The Judicial Department is charged by statute with administration of the nonjudicial business of the state court system. The office is directed to advise and assist the Chief Justice of the Supreme Court in order to better attend to the business of all state courts. One of the most visible statutory functions of the Judicial Department is to prepare statistical data and reports relating to court activity. However, the Department has other statutory functions as well: -Examine the administrative methods of the courts and make recommendations to the Chief Justice for their improvement. -Examine the state of the dockets of the courts; secure information as to their needs for assistance, if any; prepare statistical data and reports on the business of the courts; and advise the Chief Justice to the end that proper action may be taken where appropriate. -Examine the statistical systems of the courts and make recommendations to the Chief Justice for a uniform system of judicial statistics. -Examine the estimates of the courts of the state concerning appropriations, and develop re36/Arkansas Lawyer/January 1981

commendations for the Chief Justice. In order to more efficiently perform the aforementioned statutory duties, the department initiated the development of the SJIS Mini-Computer Project. The overall goals of the project is to develop and establish a state-wide judicial information system for the purpose of achieving the following list of more specific objectives: 1. To provide data regarding criminal, civil, chancery, and probate cases. 2. To provide managementoriented statistical reports. 3. To develop the most feasible methods of supplying management-oriented statistical reports to rural, non-automated circuit, chancery, and probate courts. 4. To improve both the amount and the quality of judicial information available to the Chief Justice and the Executive Secretary of the Judicial Department. 5. To create a standardized reporting system that allows caseloads to be analyzed in a uniform manner.

SJIS SURVEY During the planning phase of the SJIS Project. a thorough study of the existing manual case-reporting system was made by the Systems Division staff. Results of the survey were used to establish user needs, procedures, and data requirements necessary to implement an automated system of data collection. During the planning phase of the project, procedures for the flow of information were established;

data collection forms were designed; a user manual was completed; and initial programming tasks were completed. Another task completed by the Judicial Department during the project was the acquisition of a Harris 1660 minicomputer along with operating software. The mini-computer is housed in Judicial Department offices, and steps have been taken which insure the security of the equipment. Backup measures have also been taken to insure that data will be retrievable in the event of system failure. Additional equipment acquired includes three remote terminals and printers that have been made available to counties that agreed to bear maintenance and line costs. AUTOMATED SYSTEM DESCRIPTION Collection of case statistics is accomplished by the use of forms designed specifically for civil, criminal chancery, and probate case types. The local clerks fills out forms on a caseby-case basis, reporting both filing and disposition information. The clerk then mails the forms to the Systems Division on a regular schedule as determined by local need. This system is known as a batch reporting system and will be referred to as such hereafter. When a packet of the forms is received by the Systems Division, the information is entered in the computer by a records clerk through Cathode Ray Tube (CRT) terminals. Checks are made during data entry to insure that there are no duplicate or missing docket numbers and that there are no other obvious data errors.

IMPLEMENTATION The automated system using batch reports is currently being implemented on an incremental basis as a replacement to the manual case reporting system. Systems Division personnel are responsible for implementing the automated system. Each impiementation entails an in-depth review of the county's active cases, entry of the necessary data eiements related to each case onto the standard forms, and batch input of the data on these forms into the system. Staff personnel train the local court personnel in the use of the standardized forms. Implementation of the project was begun in February, 1979 and at present 7 counties are participating: Polk, White, Prairie, Lonoke, Independence, Clehurne, and Stone. Implementation is ongoing in Pulaski County, and the project schedule requires that four additional counties participate in the program. It is interesting to note that the original goal called for implementation of the automated system in 6 counties by the end of June, 1980; however, that goal has been surpassed and the project period will end with a total of 12 counties participating. The long range goal is to implement the automated system in all seventy-five counties in the state. PRINTOUTS The system produces two types of outputs: various summary and detailed listings of case data and statistical data for inclusion in the quarterly and annual reports. Summary and detailed listings are produced when requested, but users can have standing requests for specific listings on a periodic basis. The main categories of printout are as follows: -By case type -By circuit -By county -By age of case -By month and year -By litigants Certain of the printouts have been designed at the request of the courts and are disseminated for the benefit of local judges and other local court personnel. These specialized printouts are case management-oriented and have been effectively used for management purposes by court personnel in counties participating in the automated system. For example, the active case printout allows the local judge to identify particular cases that may have been pending longer than necessary

and which require action by the court or by the parties: the judge can thereby form a more accurate picture of the condition of his docket. Further, summary reports are available by request, so the judge has at his disposal information that is more timely than that contained in quarterly or annual reports. The Systems Division can also print case control cards for the benefit of those judges who have case coordinators; case control cards allow the coordinator to keep a record of the status of all cases, pending or terminated. Another of the data elements that appears on some of the printouts is that of the attorney of record: the availability of this information may be a factor in estimating the amount of time necessary to hear a particular case. Due to standardization of reporting procedures, the automated system produces a more accurate reflection of actual caseload, both for Circuit and Chancery judges. For instance, the criminal report form requires that multiple defendants be listed separately, the result being that each defendant represents a separate case for statistical purposes. The civil caseload is better delineated due to the fact that the au-

tomated reporting system produces a more specific breakdown of the types of cases being filed. Chancery case load is better defined because re-opened cases can be accounted for in a timely and accurate manner as a result of the automated system. OVERVIEW In summary, the Judicial Department, in cooperation with judges and clerks, has designed and installed a judicial information system that is capable of generating timely, accurate statistical reports, and case management-related information. The information system has the advantage of being standardized, but the system is flexible as well: this flexibility allows the system to expand to provide innovative services to those judges who wish to avail themselves of such services. In keeping with the accomplishment of its statutory administrative duties and the goals of the SJIS MiniComputer Project, the Judicial Department is proceeding toward establishment of a modern-day management tool which will be available for the benefit of judges and support personnel.I-

The Total Client-Service Ubrary速 System. More than just lawbooks: A Complete Legal Research System. The TCSL System was developed by Lawyers Co-op to fit the way today's Arkansas attorneys practice law. No matter how or where you begin your case research, special TCSL features automatically bring all other facets of the particular legal problem to your attention. For information on "The TCSL System" for Arkansas, contact your neorest LCP Representative: Northeast Arkansas

Jim Teator (501) 378-7038-Service (501) 753-9123 Southwest Arkansas

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January 1981/Arkansas Lawyer/37


Because the law is in fact ever changing and because the rules of practice do evolve, those dealing with the law must constantly be made aware of changes as they occur. One must find those changes within the walls of the law library. For Arkansas attorneys there are two growing law libraries located on the campuses of the state's two law schools, the ROBERT A. AND VIVIAN YOUNG LAW LIBRARY, Fayetteville, and UALR¡PULASKI COUNTY LAW LIBRARY at Little Rock. This article will provide specific information concerning the two libraries.

ROBERT A. & VIVIAN YOUNG LAW LIBRARY UNIVERSITY OF ARKANSAS SCHOOL OF LAW Waterman Hall Fayetteville, Arkansas 72701 PHONE: (501) 575-5604

STAFF: The staff includes: George E. Skinner, Law Librarian and Professor of Law Ruby W. Biddle, Acquisitions and Periodicals Susie Carlton, Cataloging Assistant David G. Cowan, Assistant Librarian (Circulation, Reference and Audio Visual Materials) Gary R. Hartman, Assistant Librarian (Government Documents, Reference and LEXIS Training) Kathleen Luplow, Secretary Terry McKinstry, Circulation Assistant Maurice A. Pope, Associate Law librarian (Cataloging and Classification) HOURS: Fall/Spring/Summer Semesters Monday - Thursday 8:00 a.m. - 12:00 midnight â&#x20AC;˘ Friday 8:00 a.m. - 11 :00 p.m. Saturday 9:00 a.m. - 5:00 p.m. Sunday 1:00 p.m. - 11 :00 p.m. 38/Arkansas Lawyer/January 1981

COLLECTION: As of June 30, 1980, the collection size was reported to be 146,515 volumes. Comprising this collection are 1,622 volumes of government documents, approximately 8,000 volumes of microforms, 18,400 volumes of law reviews and journals, and also numerous treatises, reporters, digests, statutes and other needed research materials.

Interims (Between Semesters) Monday - Friday 8:00 a,m. - 4:30 p.m. Saturday CLOSED Sunday CLOSED During final examination periods, the Law Library will extend its hours to meet the needs of the law students. The Law Library is closed on University Holidays. 'Summer - 5 p.m.

State Legal Research Materials For ease of research in this area the collection includes statutes, court rules and Shepard's citators for all 50 states. The session laws for all states are available on microform for the years 1970 to date. In addition, session laws for most states cover miscellaneous years before 1970. The library contains all early state reports prior to their inclusion in West's National Reporter System. In addition, more comprehensive holdings are maintained for the states of New York, Ohio and Pennsylvania (including all Pennsylvania Side Reports in hard copy). Research can be enhanced through reference to more specific materials such as administrative rules and regulations, jury instructions, state and re-

gional digests and encyclopedias for several states. Photocopying The library photocopies cases, law review articles, statutes or other needed materials. Requests may be made by letter or by telephone. The charge for this service is .10 per page plus postage. Any requests for extensive copying and research should be directed to the Student Research Bureau at the law school. The fee for their services is $6.00 per hour. The library staff is not permitted to do research work for attorneys.

Government Documents The library is congressionally designated as a selective federal depository library and thus receives a selection of U.S. government publications based on a continuing order with the Government Printing Office. This collection particularly focuses on the publications of the Agriculture Department and the Department of Justice. Complete sets of bills and reports from both Houses of Congress, as well as hearings from selected committees, are received on microfiche. Some of the other important research materials available on microfiche are:

Book Loans Textbooks and treatises not on reserve may be borrowed for a two-week period.

United States Code (1925 to Date) Code of Federal Regulations (1938 to Date) Federal Register (1936 to Date)

AT L1TILE ROCK SCHOOL OF LAW LIBRARY PULASKI COUNTY LAW LIBRARY 400 West Markham Little Rock, Arkansas 72201 Phone (501) 371-1071

HOURS: Monday - Friday Saturday Sunday

7:00 - 11 :00 8:00 a.m. - 5:00 1:00 - 11 :00

a.m. p.m. p.m. p.m. p.m.

U.S. Supreme Court Records and Briefs (1938 to Date)

Computerized Research The library has access to LEXIS and WESTLAW, automated legal research systems. LEXIS is available only to faculty and students for educational purposes and cannot be used for profitproducing research. WESTLAW is available for research under the auspices of the Student Bar at a cost of $80 per hour, including student research fees. For further information contact KENT JOLLIFF of the Student Bar or GARY HARTMAN of the library staff.

Due to the unique combined ownership of this library the collection includes a large number of practice-oriented materials not commonly found in University Law Libraries. For example: Form Books, Arkansas Bar Association-Continuing Legal Education Systems, a comprehensive collection of Practicing Law Institute titles, tax titles including looseleaf services and legislative histories, and a large collection of cassette tapes covering nationwide legal seminars and lectures on subjects of current interest. Cassette tapes may be checked out for one week periods.


STAFF: The staff includes: Ruth Brunson, Professor of Law and Director of Law Library Lambert DeCora, Associate Professor of Law and Assistant Director of Law Library Sylvia Dresser, Assistant librarian-Acquisitions and Government Documents Pauline Ghidotti, Assistant to the Director-Acquisitions Melanie Nelson, Assistant Librarian-Catalog Karen Stitsworth, Assistant Librarian-Reference Miriam Watkins, Assistant Catalog Librarian Gail Laster, Secretary

Session Laws for all 50 States (1970 to Date)

The library will be closed only on major holidays. Hours may vary during school vacations and the summer terms.

COLLECTION: As of September 30, 1980, the collection size was reported to be 117,647 volumes 83,111 volumes, UALR; 34,536 volumes, Pulaski) including government documents, microforms, law review and journal titles as well as numerous treatises, reporters, state, regional and federal digests, state and federal statutes and other materials needed in daily research.

State Legal Research Materials This collection includes codes or statutes, court rules and current session laws for the 50 states. Additional state law finding aids such as law locators and Shepard's citators are conveniently located for ease of access. The state court collection not only includes West's National Reporter System, but also the official state court decisions from all states prior to the date of publication of that system. Current holdings of the official reports being maintained include Arkansas Reports, Ohio State Reports, Pennsylvania District and County Reports and Oklahoma Reports (Oklahoma Bar Journal). continued on page 40 January 1981/Arkansas Lawyer/39

路 .. Law School Libraries, continued from page 39 Supplementing the West system are all in-print regional reporter digests. state digests for adjoining states and for states not included in regional digests. In addition, the state law collection includes such specific research aids as administrative rules and regulations and jury instructions.

LIBRARY SERVICES TO THE ARKANSAS BAR Photocopying Cases, articles, statutes and other materials will be photocopied upon request. Both letter and telephone requests are accepted. Cost for this service is 1O垄 per page plus postage. For attorneys' convenience, charge accounts billed on a monthly basis are available. Request for extensive copies and research must be addressed to Pat James or Jackie Gillean. Student Research Pool, at the Law School. The charge for student research service is $6.00 an hour. Time and limited staff do not permit library personnel to engage in research work for attorneys.

Use of the Collection Since the Law Library is currently being operated as a research library, books and materials in the collection must be available for ready reference and use at all times and may not be checked out or removed from the library. Materials not available locally may be ordered from cooperating libraries through the Inter-Library Loan system. Requests should be directed to the Reference Librarian.

Government Documents and Microforms Collections The UALR-Pulaski County Law Library receives federal government publications under the Depository Library Program. In addition to continuing previously held sets of agency decisions and reports. the program has expanded the scope of the collection considerably. New items being received include court and crime statistics from the Department of Justice, 40/Arkansas Lawyer/January 1981

LEAA materials, Census publications. import-export information from the Department of Commerce, and Civil Rights Commission publications. Congressional路 committee hearings are received as well as the reports prepared for use in consideration of specific legislation. and bills and resolutions. Reports and decision from several agencies and courts are included in the collection, such as ICC Reports, Court of Claims Decisions. and FTC Reports. The major federal research tools (current volumes of the Code of Federal Regulations, current issues of the Federal Register, the Congressional Record, the U.S. Code. and the Statutes at Large) are housed in the main library. The balance of the collection is housed in the basement of the Old Federal Building, or on microfiche in the microforms collection. Access to government documents other than specific cases and decisions is obtained primarily through the Monthly Catalog, which indexes publications from all parts of the federal government and the CIS Index which covers all congressional publications from 1970 to date. Both of these indexes are located in the government documents office. which is in the Library Annex at the Old Federal Building. across from the microforms room. The microforms collection is comprised of both microfilm and microfiche (4" x 6" sheets of film). Major collections are the Records and Briefs of the U.S. Supreme Court. Session Laws for all states and territories, the Federal Register from its beginning in 1938 to

the present. To complement the congressional pUblications that are now being received, a collection of pUblications used by the congressional committees in considering legislation since 1970 has also been purchased. thereby greatly expanding legislative history research capabilities. Machines to read and make paper copies of the microfilm and microfiche are housed in the same room. Copies are 10垄 per page. and may be charged to an account in the same manner as photocopies. Computerized Legal Research The WESTLAW computer terminal. conveniently located in an alcove near the fourth-floor entrance to the Law library. is available for attorney. faculty. and student use. Free training sessions are offered on Tuesday and Thursday afternoons from 3:30 - 5:00 p.m. for attorneys and students on a sign up basis by calling the law library. After training. a regular fee of $37.50 up to 1{2 hour and $1.25 per minute thereafter is charged for on-line search time. West Publishing Company bills direct to the customer at the end of each month. As an additional service, members of the Student Research Pool do computer searches for attorneys at the regular WESTLAW rate plus their charge of $6.00 per hour. WESTLAW is presently operational from 8:00 a.m. to 10:00 p.m. Monday through Friday and from 8:00 a.m. to 2:00 p.m. on Saturday. " ....

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EXECUTIVE COUNCIL NOTES by W. Christopher Barrier Secretary-Treasurer


the public on the issues through a speakers bureau.

The Executive Council met on Saturday, August 23, 1980, primarily to complete review of the Association's legislative package. However, more time was spent on other items, ranging from juvenile justice to retired lawyers, from the lofty to the practical. There were a number of contrasts and ironies in the deliberations.

Nuts and Bolts... The Council also considered a number of other issues, including the placing of systems on magnetic media; the "second chair" program for inexperienced trial lawyers; long-range planning; local Bar activities; federal practice in Arkansas; a proposal with reference to the award of attorneys' fees; a possible "political" judicial pell; pending litigation involving alleged and unauthorized practice of law; the new Federal Criminal Code; and social security matters.

F.T.C., A.B.A. and C.L.E... The members were brought up to date on the latest efforts of the Federal Trade Commission to extend its regulation of the learned professions. The Council also grappled with the American Bar Association's "Kutac" Report, dealing with how the profession would govern itself, trying to determine how to give thoughtful consideration to the serious issues raised by the Report in the short time remaining for comment to the ABA. On a lighter note, it was also announced that there would be a continuing legal education program on ethics and malpractice in conjunction with a forthcoming Caribbean cruise.

Constitutional Issues... Georgia Elrod of Siloam Springs gave a thorough review of the propesed Constitution of 1980, concentrating on items of particular interest to lawyers. There seemed to be little outright opposition to the proposed Constitution among the Council members, but some uncertainty as to whether the Association should in fact endorse it or take a position at all. In any event, the Young Lawyers Section, under Bucky Jones of Forrest City, will try to educate

Legislation... Getting to its main business, the Executive Council considered a wide range of legislation, little of which could really be considered as narrow "lawyers' bills" and some of which would actually reduce use of lawyers in some instances. The Council also considered strategic questions on how best to get the package across. In this regard, although the Association's total membership is up, the contributions to Lawpac have been disappointing, giving lobbyist Jim Rhodes and legislative committee chairman Joe Bell a big fire and a small bucket.

MINUTES OF MEETING EXECUTIVE COUNCIL SEPTEMBER 13, 1980 A special meeting of the Executive Council and interested members of the House of Delegates and the Association generally was held on September 13, 1980. The purpose of the meeting

was to do some last-minute work on the legislative package in preparation for the September 20 House of Delegates meeting. However, the major business before the Council was consideration of the proposed "Kutak" revisions of the Code of Professionai Respensibility, a comprehensive re-draft of the existing Code. The draft met with little enthusiasm among the members, for a number of reasons. The draft tends to make mandatory certain activities which are simply advisable as a matter of business practice or of professional responsibility. Specifically, the draft would mandate written fee contracts and a certain minimum level of pro bono work. The draft would also make major changes in client-lawyer relations, without any expressed need for the changes. The most important of these deal with disclosure of client confidences, which appear to have the potential for building in tensions between lawyers and their clients. The draft also deletes, without explanation, several important provisions of the Code of Professional Responsibility. The Council considered line by line five of the ten sections of the proposed draft, in the time it had available to it. However, at this peint, it appears highly unlikely that the draft (in any form) will actually be adopted by the House of Delegates of the American Bar Association. What appears more likely (and more to the liking of the Executive Council) is that work will be done to propose specific amendments rather than a wholesale revision. In this regard, the Executive Council adopted most of the recommendations continued on page 42 January 1981/Arkansas Lawyer/41

... Council Notes, continued from page 41 of Frank Mackey, Jr.'s Professional Ethics and Grievances committee, which had labored long and hard in reviewing and analyzing the draft. We may expect, however, to see the Code of Professional Responsibility as a major focus of attention in Bar activities for the next few years, much as it was during the late 1960's when Arkansas' Ed Wright oversaw a major updating of the Code.

By a substantial margin, the House voted to endorse repeal of the "guest statute", but delayed consideration of the Uniform Comparative Fault Act.

ceived the attention of the Real Estate Law Committee and the Consumer Law Committee. These two committees apparently had arrived at a workable compromise, one which would very likely parallel the efforts of the Attorney General's Office as well.

The Title Protection Act was endorsed and the Marketable Record Title Act will be back in the legislative package.

Replevin legislation was on the agenda again, still another revision being recommended, although presumably not the last one.

Without seeing the final draft, the House voted to endorse the proposed Landlord{Tenant Act, which had re-



MINUTES OF SPECIAL MEETING HOUSE OF DELEGATES SEPTEMBER 20, 1980 The House of Delegates met in a special session on Saturday, September 20, 1980, primarily to consider developments with regard to the "Kutak" revisions for the Code of Professional Responsibility and to review the legislative package. Additionally, the House also considered the proposed Constitution of 1980 and the provisions which would provide the voters with a choice of judicial selection between merit selection and nonpartisan election.







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The proposed Constitution of 1980 was endorsed by an almost unanimous vote. However, the proposed judicial selection article aroused a substantial amount of controversy. In the final vote, the merit selection system was endorsed by a vote of 25 for and 20 against, non-partisan elections having been defeated by a vote of 23 against and 21 for.

Several bills dealt with juvenile justice, underlining the need for revision, both substantively and procedurally. 42/Arkansas Lawyer/January 1981






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ADDENDA by C. E. Ransick Editor


PATRICK H. HAYS Elected Clerk of the Assembly of the ABA's Young Lawyers Division

JOHN C. DEACON Elected to ABA's Board of Governors, representing 11th District

NEVA B. TALLEY Received two ABA Awards for Family Law Contributions

ALSTON JENNINGS Selected President-Elect of the American College of Trial Lawyers

ROBERT L. JONES, JR. Re-elected to Board of Directors of American Judicature Society

E. CHARLES EICHENBAUM Reappointed to chair ABA Standing Committee on Retirement of Lawyers January 1981jArkansas Lawyerj43

MYSTERY OF RISING CLAIMS AGAINST LAWYERS ATTRACTS BAR STUDY Parallel to the medical malpractice and product liability crises, concern has arisen recently about the upward trend in lawyers' professional liability. Thus far the problem has attracted little attention outside the legal profession, whose members have had to pay more for insurance protection and have sometimes had difficulty finding an insurer. The public's interest, however, is aiso at stake, since more claims against lawyers are bound to further erode that confidence in the legal profession that is an essential part of our system of administration of justice. A new article by American Bar Foundation Research Attorney Werner Pfennigstorf, "Types and Causes of Lawyers' Professional Liability Claims: The Search for Facts," published in ABF Research Journal, Vol. 1980, No.2, examines this development and discusses the ways in which increased knowledge of the nature and causes of claims can help reverse the trend. There are indications that the rise in claims is not caused by carelessness or lack of competence on the part of lawyers, but rather by the increasing complexity of our economy and law,

and the general trend toward more vigorous assertion of individual rights and interests. No one knows for sure, however, and both lawyers and the public are laboring under a number of misconceptions. A better understanding of the claims that are made against lawyers is indispensable for any meaningful effort to control the risk. While the liability insurers would seem to be best equipped to collect the needed information, the competitive situation in the insurance market and the relatively limited importance of this line of business have so far discouraged any effort to develop a nationwide system for collecting and reporting claims data on the basis of a uniform classification code. Thus, in 1978, the American Bar Association's Special Committee on Lawyers' Professional Responsibility undertook the task of designing such a system. In cooperation with leading insurers, the Committee has developed a questionnaire (appended to Pfennigstorf's article) that is structured to provide a threedimensional image of each claim: (1) the subject matter or field of law out of which the claim arose; (2) the type of

TWO GREAT OPPORTUNITIES The Comprehensive Sequential Checklist for the Lawyer Opening an Office for the First Time is available upon request, without cost, as long as the supply lasts. This list was prepared by well-known lawyer Jay C. Foonberg, now Chairman, New Lawyers in Practice Committee, Economics of Law Practice Section, American Bar Association. Requests for copies of the checklist should be directed to: Stuart F. Cooper Co. Engravers-PrintersLithographers Los Angeles, California (1-800-421-8703) The above is the best address available. 44/Arkansas Lawyer/January 1981

activity or service the lawyer performed when committing the act or neglect causing the claim, and (3) the type of mistake, error, or misconduct on which the claim is based. Questionnaires are completed by the insurers for each claim, and the accumulated data will then be tabulated and presented in a number of ways and combinations showing interrelationships between any of the elements included in the questionnaire. The Committee hopes that as a result of more meaningful and accurate information individual lawyers will develop not only a basic awareness of the risks of liability but also a more active interest in loss prevention programs. Pfennigstorf cautions, however, that "the collection and dissemination of data is only the first step and can have an effect only if followed by welldesigned and aggressively promoted educational and motivating programs," and reiterates the value of the program as a source of information for those concerned with the delivery of legal services and the administration of justice.

COVER STORY National Car Rental has increased the over-the-counter discount for Arkansas Bar Association members from 25% to 35% on its current regular time and mileage rates in the United States, effective October 1, 1980. E;lsewhere throughout the world, at Europcar and National International locations, a 10% discount off the then current regular time and mileage rates is available. In Canada, the affiliate Tilden Rent-a-car offers a $2.00 per day discount on the then current regular rates at most locations. These discounts are available for business or personal travel. If any member does not have a National Car Rental ID card, and wants one, call the Membership Secretary, Lisa Lewis at the Association's offices.

The cover photograph is the shot for the paper cover of "On the Courthouse Square" by John and Marjem Gill-a book about 107 Arkansas courthouses, complete with photographs and historical data. In The Arkansas Lawyer, October 1980, at page 209, Robert S. McCord's book review of "On the Courthouse Square" is published. Arkansas needs historical books of this nature. Other States literally abound with writings about them, e.g., in Indiana, one library holds some 40,000 historical books on Indiana and its people. The Gills are to be congratulated for their related efforts-and for "On the Courthouse Square." ,., S! ,

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ANNUAL MEETING Arlington Hotel, Hot Springs June 3-6, 1981

JANUARY 1981  
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