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JULY 2017

 

Service on a Non-Profit Board of Directors

 

"I don't know what your destiny will be, but one thing I do know: the only ones among you who will be really happy are those who have sought and found how to serve."         -        Albert Schweitzer

 

Service on a non-profit board of directors can be a transformative professional experience.  Although we all have the benefit of a law degree and the educational and experiential benefits that come with practicing law, board service requires us to learn and develop new skills – governance, fundraising, performance measurement and strategic planning among others.   

 

Board service builds strong leaders.  I often say that I got my law degree from UNC Chapel Hill and my PHD in leadership from StepUp Ministry, a non-profit in Raleigh, North Carolina, that helps low income people find employment, where I served as board chair for two years.  That experience changed my life, and I constantly encourage others towards board leadership. 

 

But lawyers who are board leaders must be careful not to take on the role of “board lawyer.”  Naturally, other board members will look to the lawyer on the board for legal advice, just as you would look at the accountant for financial advice and the insurance professional for insurance advice.  The lawyer on the board, however, faces liability exposure if she gives legal advice that the board then relies upon to take board action.

 

What exposure does the lawyer board face?  First, if there is a claim that implicates a directors and officers liability policy, the D&O policy covers may exclude coverage for professional malpractice of the board lawyer.  The board lawyer’s professional liability policy may then be implicated, and, depending on the insurer, the professional malpractice policy may limit coverage for advice that the lawyer has provided to the non-profit board.  Although a lawyer on a non-profit board is rarely compensated for his service, thereby making it difficult to bring a negligence misrepresentation claim against him, a professional malpractice claim could easily lie where it is shown that the lawyer had a fiduciary duty to the organization, provided legal advice and was negligence in doing so.

 

To avoid these risks, a lawyer serving on a non-profit board should do the following:

  1. When recruited for board membership, make it clear that you are not agreeing to serve as the board’s legal counsel, but rather, you intend to serve in the same capacity as all other board members;
  2. If the board asks that you serve as legal counsel, share this information with your law partners and your insurer – ensure that you have sufficient professional liability coverage for the engagement;
  3. Determine what, if any, conflicts may arise with your firm’s current or future clients; run conflicts checks as appropriate; and
  4. Recuse yourself from all board action, and wall yourself off, for any matter that could pose a professional conflict for you and your firm.

Service on a non-profit board is deeply meaningful.  It undoubtedly makes us better people, better citizens and better leaders.  Just approach the role with the understanding that other board members and non-profit staff will instinctively look to you for legal advice, and prepare appropriately.

 

 

APRIL 2017

Don’t Underestimate The Jurors Personal Bias, Or Overestimate Your Ability To Persuade Change

By: Clark Hudson:

 

All of us during jury selection are typically looking for a jury that will hopefully be sympathetic to our client’s defense.  During the voir dire process, we attempt to develop a rapport with the jury, gain some level of credibility, and to some extent pre-condition the jury on issues surrounding the claims and defenses involved in the trial.  If during the voir dire process we identify a juror’s potential bias that may be against our client’s case, the normal response is to strike that juror by either developing a challenge for cause, or using a peremptory challenge.  However, should we ever consider keeping that prospective juror in our panel, and try to persuade them from a stated bias through the evidence presented during trial?  As described more thoroughly below, my answer is NO!

 

Several years ago, I was involved in a jury trial where the defendant was accused of causing an injury to a minor plaintiff as a result of prescribing a therapy device following surgery.  The device was offered to most patients following surgery, but it was by no means mandatory.  The device was rented to the patient for $5 to $10 per day, with the patient being told to use the device as long as they felt it was beneficial.  The physician acknowledged during his deposition that the price point for the rental was intended to cover his costs for the device, the cost for his staff keeping them on hand and maintaining the devices and a profit for his business.  While the profit was not very large, the doctor’s position was that it was a service he was providing to his patients, for a fee. 

 

The minor patient alleged that she was injured as a result of her use of the device.  There were certainly issues of whether the injury was caused by reasonable use of the device.  However, there was no denying the fact the patient’s injury was indeed related to the therapy device.  One of the plaintiff’s counsel’s themes, therefore, was the doctor was placing profit over this patient’s welfare in prescribing the device.

 

The defense position was essentially that nothing in medicine is done for free.  When a doctor is providing services, those services (whether in consultation, in surgery or post-operatively) are performed so the doctor and his staff can make a living.  Similarly, if the doctor is renting equipment to his patients, the money paid for rental is likewise being used to cover the costs of the medical practice, and if there is any excess, it is profit for the medical practice.

 

During voir dire, the jury panel was questioned about whether any of them would have an issue with a doctor renting therapy equipment to his patients, and receiving a profit for that service.  Most of the prospective jurors appeared to have no issue with the circumstances; several indicated they would simply need to have more information. However, one particular juror who was an extremely well-educated and successful business man, stated that he may have an issue with the doctor making a profit when providing a service that was not fully explained to the patient, or to the patient’s parents.

 

The prospective juror’s background in business, and education level, made him extremely attractive for the defense.  In all other respects, he appeared as though he would have a conservative attitude in evaluating the plaintiff’s claims.  The only mark against the prospective juror was the fact the juror acknowledged he may have a problem with the undisclosed profit from the therapy equipment.

 

The decision was made to keep the juror on the panel for trial.  The belief was that the juror would understand after listening to all the evidence that all of the physician services that were billed, including the rental, were done so the physician and his staff can earn a living.  Further, while the rental equipment was a service to the physician’s patients, it was not a huge money maker.  Rather, the amount of the rental was done at a price point which would ensure the doctor was not losing money in providing the service.  In other words, we believed in the course of the trial that we could sway the juror’s mind on whether it was appropriate for the doctor to rent equipment to a patient while not disclosing that he may be making a profit from the rental. 

 

Needless to say, after weeks of trial, the juror’s perspective did not change.  In retrospect, we should never have expected that we could change the juror’s perspective while listening to a contested case in the courtroom.  Assuming the defense witnesses and defense arguments could change a juror’s perspective that had developed over a period of years was simply not a reasonable belief.

 

While the juror appeared to be ideal in every other circumstance, in retrospect, he had an innate bias on a key issue that we had identified in advance.  Rather than presuming your abilities of persuasion will be able to convince jurors that acknowledge a bias, the more prudent course is to challenge the prospective juror in hopes that you will end up with a replacement that does not have a pre-conceived bias on the issues involved in the litigation.

 

 

 


more Calendar

7/24/2017 » 7/29/2017
2017 FDCC Annual Meeting/ Bridging The Gap Insurance Summit

9/17/2017 » 9/19/2017
Corporate Counsel Symposium

10/23/2017 » 10/24/2017
2017 Fall Deposition Boot Camp

11/9/2017 » 11/10/2017
I3 Registration

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Marjorie J. BergerMarjorie is with American Nuclear Insurers in CT
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