UPDATE: CCCA members cast doubt on CBA’s authority to dismiss

The Canadian Bar Association has dissolved the Canadian Corporate Counsel Association’s board of directors and dismissed its executive director in a dispute over funding, a decision at least three former members now say may be invalid.

“The CCCA board was dissolved pursuant to section 33 of the CBA bylaws,” former president Cheryl Foy and fellow dismissed board members Kari Horn and Leanne Andree said in a statement yesterday.

“However, it is not clear that this section of the bylaws or the boarder designation of council powers in certain circumstances authorizes this kind of action.”

Tension had been building at the CBA’s in-house offshoot for at least three years over the level of funding it was providing to the CCCA. Both sides agreed to go into mediation after 26 months of discussion failed to resolve their differences.

In a note to all CCCA members on Jan. 17, CBA president Rod Snow said the CBA acknowledged the CCCA needed more funding but announced mediation had come to an end following another unproductive weekend of talks.

“An impasse was reached, which, as the mediator confirmed, could not be resolved by continuing the mediation,” Snow wrote. “We are now moving forward, and here’s what the future looks like. There will be a new CCCA with a focus on the future and the relevant services for in-house counsel.”

John Hoyles, CEO of the CBA, confirmed that Silvie Kuppek, the CCCA’s executive director, had also been dismissed, along with the 23-person board, and that he has taken over as acting executive director.

He says the CBA board ran out of patience when it became clear an agreement wasn’t possible. “It’s time to look forward. We need to look after in-house counsel and we have to get going.”

Hoyles also aims to establish a “more transparent and accountable governance model,” although Foy says that issue came a distant second to money.

Foy says her dismissal came out of the blue. The general counsel at Carleton University was at a meeting attempting to secure sponsorship for an upcoming CCCA event when she learned the news by e-mail.

“I was in shock on Monday and I just feel very sad. It’s one of the best boards I’ve ever worked with, and I think the treatment was shabby considering the amount of personal time we have given up.”

Foy says she wanted the CBA to divert more of its members’ fees directly to the CCCA. The CBA provides direct funding to the CCCA of about $400,000 this year, according to Foy.

The CCCA has about 4,200 in-house counsel members, plus about 5,500 private bar members, who each pay an average of roughly $650 to the CBA each year. That means the direct funding amounts to about $40 per CCCA member or six per cent of their CBA dues.

“The message the CBA has sent to in-house counsel is that their interests will always be secondary to the greater interests of the CBA,” Foy says.

CBA spokeswoman Hannah Bernstein said it also provides the CCCA with $250,000 in indirect funding in the form of support services. “While we were prepared to consider additional budgets, we were not prepared to jeopardize the financial viability of the CBA,” Bernstein said in a statement.

Andree, another former president of the CCCA, describes the purge as “a very sad turn of events for both the CCCA and the CBA.” She has teamed up with Foy and Horn to condemn what they call the CBA’s “drastic move.”

“The current situation has given rise to an opportunity to begin a new dialogue on how to create an organization that will allow us to realize our values and commitment to the in-house counsel community more effectively and efficiently,” they wrote in a joint statement.

But Foy says she still has no specific plans for her next steps. “I belonged to the CCCA because I care about the in-house counsel community and I’m still committed to helping support corporate counsel in Canada. I just don’t know how exactly.”

Hoyles, however, isn’t worried by the prospect of a new competitor. “It’s open to anyone to set up a new organization, and they’re perfectly entitled to do that, although it’s interesting to note there’s only three out of 23 board members,” he says, adding he expects some members of the old board to return when the new appointments are named.

He has already appointed an interim executive committee and outlined the case for even closer ties between the CBA and CCCA.

“With a close working relationship, there are a lot of support services the CBA can provide that will free up money for the CCCA in program delivery. We’re still committed to providing more money and we’re going to be enhancing the offerings for in-house counsel.”

The person tasked with transitioning the CCCA to its new structure is Robert Patzelt. The former CCCA president who will head up the interim executive committee says he’s honoured to get the job.

“I’m looking, like a good boy scout, to make the campground better than I found it. We’re creating a structure that is consistent with the highly successful different groups we have within the CBA. We’re looking forward to having additional resources and synergies to deliver more and more to in-house counsel.”

But George Bass, general counsel at Wawanesa Mutual Insurance Co., isn’t so sure Patzelt can deliver. He belongs to both the CCCA and its U.S.-based rival, the Association of Corporate Counsel. He says he gets more services for less money from the ACC and notes this move has made him reconsider his membership with the CCCA.

“I was quite prepared to continue in the CCCA because I knew Silvie Kuppek was working hard to get the CCCA adequately resourced,” he says. “My concern is that the CBA does not understand the needs of in-house counsel. I was in the private bar for many years, and we have very different needs. I think we will see a move away from the CBA.”

Sanjeev Dhawan, president of the ACC’s Ontario chapter, says the swiftness and drastic nature of the change at the CCCA caught him by surprise.

“We’re almost going back in time in the evolution of what an in-house organization needs to be, especially in terms of independence. The in-house lawyers have been shut out by the larger organization, and that can’t be good.”

The ACC has been growing in Canada in recent years and is currently looking to add another chapter in Alberta and British Columbia.

“For several years, we’ve been asking people to take a look at us,” Dhawan says. “This might allow them to focus in on us and some of our offerings.”

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