Message from the Chair, Karl J. Ege

The first week in November finds the Nation with a new leader, an economy in recession, and our clients and profession facing a world-wide global economic slowdown. These events will have profound effects on our profession and Section of Business Law is planning programs and services that address these dramatic changes. I mentioned in my last message the creation of a Section Study Group on Financial Services Reform. At the meeting of the ABA Board of Governors last month, upon the recommendation of ABA President Tommy Wells, the Study Group was elevated to an ABA Presidential Task Force. This will enable the group to have the full resources of the American Bar Association at its disposal as it analyzes likely changes to the legal and regulatory governance and oversight structure of the financial marketplace and its participants. I will keep you apprised regularly on the work of the Task Force as it helps to reshape the regulatory landscape in a manner that will be in the best long-term interests of all participants in the financial marketplace.

Many of our Section committees are planning programs during the next two months that focus on the financial crisis and its impact on our members and their clients. Below, you will find a sneak peak at a paper to be presented at the Committee on Commercial Finance Meeting next week in San Francisco. At the Fall Meeting in DC, the ABA Task Force on Financial Markets Regulatory Reform will host a program entitled "Meltdown! Perspectives on the Future of Financial Services Regulation" examining the questions of what caused the current crisis, what are the implications of the government response, how should the system change and will it do so. If you cannot attend this program in person on November 21, I strongly encourage you to take advantage of the live broadcast of the program available through ALI-ABA.

Given the current state of the economy and the stress that it places on all organizations, whether for-profit or non-profit, I thought it would be appropriate to share with you the state of your Section's finances. I am pleased to report that under Charlie McCallum's able leadership and our successful publications and CLE programs, the Section ended its 2007-08 fiscal year with an operating surplus. The Section currently enjoys reserves of over $7.4 million, which represents the cumulative operating surpluses generated over the Section's 70-year history, as well as a prudent and disciplined investment program that has enabled our reserves to grow steadily over the years.

Each year your Section Officers and Council allocate 5% of the Section's reserves to the operating budget; this enables the Section to support its many outreach programs without increasing Section dues. We often allocate an additional portion of our reserves to the operating budget as a cushion against unexpected financial results.

The Section's 2008-09 budget reflects anticipated revenues and expenses of approximately $7,600,000 as follows:

Revenues:
Member Dues	$2,060,000	27.0	%
Publications	1,700,000	22.3
Membership Services	600,000	7.9
Meetings	1,880,000	24.7
Committees	360,000	4.7
Transfer from Reserves	940,000	12.3
Miscellaneous	80,000	1.1
Total Revenues	$7,620,000	100.0	%
Expenses:
Staff	$1,010,000	13.2	%
Leadership Activities	280,000	3.7
Memberhip Services	1,710,000	22.5
Meetings	2,380,000	31.2
Committees	550,000	7.2
Publications	1,160,000	15.2
Outreach, Pro Bono and Special Programs	530,000	7.0
Total Expenses	$7,620,000	100.0	%

As you can see, we have been able to increase the programs and projects supported by our Section without an increase in member dues, primarily through our effective and highly-regarded publications and legal education programs. More than 80% of Section expenses are directed toward supporting you, our 60,000 members. We are committed to adhering to that model for the determinate future.