Cheryl Foy’s membership renewal to the Canadian Bar Association and its subgroup for in-house lawyers, the Canadian Corporate Counsel Association, is coming up. The general counsel at Carleton University in Ottawa is very aware of this because there is a card on her desk serving as a constant reminder. The CCCA has been an important part of her life since 2005, when Foy started rising through the membership ranks, becoming treasurer, vice president, and eventually president of Canada’s oldest and largest organization serving corporate counsel.
A volunteer working with other volunteers, she spent hours, days, weeks — even a good part of her last Christmas vacation — working on behalf of the organization. It was something that made sense, she says. It felt natural to serve and she was deeply motivated by a tight-knit group of dedicated volunteer board members who aimed to assist the professional lives of the in-house lawyer community.
Things were not any different on Jan. 17. She was heading to a meeting to secure a sponsorship for an upcoming CCCA event. But that day, when the little red light on her BlackBerry flashed, things would change forever. Attached to the e-mail was a letter from CBA president Rod Snow. By the time she got to the third paragraph, she was in shock. “The CBA has dissolved the current CCCA board of directors. You and all members of the current board have been relieved of your duties,” said the letter. “This means that you are no longer a member of the CCCA board and that you are not authorized to act or speak on behalf of CCCA. This is not a personal reflection on any individual, but rather the most effective way for the CBA to move forward in serving its in-house counsel members.” The letter said the dismissal resulted from failed mediated negotiations between the two organizations over funding and direction for the CCCA.
Three months later, as she sits in her office contemplating the future of the CCCA, Foy makes her inclinations clear about her membership. “My card is sitting on my desk, with a line across it. It says ‘please cancel,’” she says.
Surprising as they were, the events of Jan. 17 did not come out of the blue — negotiations had gone on for months between the CCCA and the CBA. The two organizations disagreed over funding and independence, with the in-house counsel group led by Foy demanding more of both. The dismissal of the CCCA board was unprecedented, but the issues that led to it have been there, creating tension since the organization’s founding and its association as a member of the CBA family.
Membership in the CBA and CCCA is joint, so every in-house counsel pays on average about $650 per year to be a member of both organizations. Legally, the CCCA does not have a separate status, other than being one of several bodies within the CBA, so it is the umbrella organization that collects the membership fees and distributes funds. The CCCA has about 10,100 members. Roughly 4,200 are in-house lawyers, and the rest are private bar members. Before the dismissal of the CCCA board, direct funding amounted to about $400,000 in total, or about $40 per member — six per cent of their CBA dues. And that was the CCCA’s main complaint — over the years, only a tiny fraction of dues were channelled back to the in-house counsel association for it to hold events and run programs. When its board started negotiations with the CBA in 2008, the annual allocation was only $200,000. “A significant number were telling us they wanted a larger proportion to go to CCCA — many thought all of the fees should go to CCCA because that’s why they joined,” says Foy.
The CBA says in a message to CCCA members that it acknowledged early in the process that additional funding was necessary for the CCCA. But the two groups could not agree on the amount. Former CCCA board members were told the bar association could not spare the funding, because the nature of the national organization means it needs to have a wide network and offer services across Canada, which doesn’t come cheap. The CBA also pointed out that quoting only what the CCCA members get within the CCCA was unfair, because membership gets in-house counsel all of the support systems and services of the entire CBA organization. About 2,400 of the 4,200 in-house counsel who belong to the CCCA are also involved in two or more substantive law sections of the CBA. In-house lawyers are also involved in task forces and chapter or section activity in branches across the country.
That, the former CCCA board countered, might be true, but in-house counsel have different needs than the private bar. There was also disagreement over how much independence the CCCA should have in terms of governance, sponsorship, and even how to run CCCA’s official magazine.
Even though it is a CBA subgroup, the CCCA has a certain amount of autonomy already. Before the intervention in January installed a transition team, the CCCA had its own independent board and staff. In addition, one seat on the CBA board is reserved for a CCCA representative and a CBA member sits on the CCCA board.
The aftermathFew people know more about the CBA-CCCA dynamics than Kari Horn. The Calgary-based general counsel of the Alberta Securities Commission has been a CBA member for 17 years, serving the CBA and the CCCA in various volunteer positions. She was CCCA treasurer and a CBA board member when she was dismissed from the positions along with the rest of the CCCA board in January. “There has to be a clear understanding of the differences between in-house counsel and the private bar. And that’s the exact battle we were fighting all along. We could never get that point across,” she says.
Horn, who like all in-house lawyers interviewed for this article, points out her opinions in this matter are her own and not those of the organization she works for, says things could and should have been handled differently by the CBA. “I was very angry when it first happened,” she says. “It’s the worst kind of disrespect. You disrespect the people who have put in their volunteer time, who left their families for the weekend to do this, it’s disrespecting their employers who have subsidized their activities on the board."
It’s a sentiment reflected over and over by the volunteers at the former CCCA board interviewed for this article. There was anger over the way they were dismissed, and over the effects the CBA’s actions would have on the CCCA as an organization. “From my perspective, I don’t think it’s possible to justify the CBA’s treatment of that dedicated group of volunteers. Not to mention the dismissal of an executive director who put her heart and soul into the CCCA,” adds Horn. “I think the CBA board did damage to both organizations by taking the course they pursued. I feel particularly bad for Cheryl Foy as the president, and for Silvie [Kuppek], who lost her livelihood for trying to do the best job she could do for in-house counsel in Canada. How can you fault her for that?”
Kuppek was dismissed as executive director of the CCCA as part of the Jan. 17 shakeup, leaving behind a track record of successful events and membership growth for the organization, former board members say. The CCCA’s own four-member staff was essentially decimated as well. Since Kuppek’s dismissal, all the other staff have announced they are moving to other jobs. Paul Ouellette, director of professional development, and Kendra Keaney Finnessy, marketing and communications manager, have left for other jobs. Ouellette has landed at Fraser Milner Casgrain LLP. Executive assistant Alyce O’Brien also left at the end of March. (The CBA says the employees left voluntarily.)
Reached by Canadian Lawyer, Kuppek was reluctant to speak publicly because she is still negotiating her severance package. But she says she sees the last several years as having offered a great opportunity to be part of the developments in the Canadian in-house community. “From a personal perspective, I believe that right now there are great opportunities for the advancement of the corporate counsel community in this country. While I am saddened and disappointed not to be part of this continuing evolution, I do wish the corporate counsel community the very best on its exciting journey,” Kuppek says in a statement to Canadian Lawyer.
Horn says Kuppek’s leadership of the CCCA was driven by a real passion for serving the needs of in-house counsel. “She developed a number of important relationships both nationally and internationally that have been carefully fostered,” says Horn. “She was the person those relationships were with, and she is gone, they dismissed her.”
An ongoing tension
To understand the CBA-CCCA conflict one needs to look back to the mid-1980s, when the CCCA was founded as an independent organization. Its in-house lawyer founders decided it should be under the CBA umbrella. “My understanding is that since they made that decision, there has been an ongoing tension,” says Foy. “The issues were what kind of autonomy does the CCCA have in regards to corporate counsel? The issues we faced as a board didn’t change through the years.”
She adds other problems involved sponsorship agreements, which bring in quite a bit of funding to the CCCA. “We were bound by CBA sponsorship agreements, so, in other words, we were restricted from approaching certain sponsors but did not receive any share of the financial support,” says Foy.
And, she adds, the CBA notion that CCCA wanted to split into an independent organization is not what the former board wanted. “I had, and I think the board too had, a vision that saw the CCCA inside the CBA. Where we differed is the amount of independence,” says Foy. “I spoke to the CBA board, I appealed to them to understand that we are the only organization in the world, as far as we were aware, where the private bar and the in-house bar are part of the same organization.”
In essence, at the governance level, the CBA-CCCA conflict was a question of primary affiliation. The CBA’s perspective is that the primary affiliation was to the CBA, the former board’s was that the CCCA was the primary association. In dismissing the board, the CBA has put that question to rest.
CBA looks forward
Energetic and optimistic, Robert Patzelt is the man the CBA has put in charge of the CCCA in the aftermath of the failed negotiations and the dismissal of the CCCA board. The general counsel at Scotia Investments Ltd. is no stranger to the CCCA, having served as its president back in 2007. He was brought in as president of the transitional executive committee to keep things going until a new board could be constituted, something he says will happen in August.
Patzelt supports the CBA position and is the spokesman for the CBA. He says the association’s actions have acted as a catalyst to implement changes to ensure the CCCA continues to be the most important force for Canadian in-house counsel. Some changes are already in place. After it dismissed the board, the CBA went ahead and gave the CCCA a funding increase. It means there will be $675,000 per year allocated for the CCCA activities and operations, which does not include sponsorship revenue for CCCA events. That’s a 69-per-cent increase over the previous funding level. In addition, in the transition period, the CBA has also taken a strong, supportive role through its own staff to make sure CCCA members are provided all of the services they have come to expect. “We’ve got the biggest budget from the CBA that we’ve ever had in history, so we now have the capital and human resources to deliver out programs throughout the country,” says Patzelt. “The CBA took a very deliberate review of what had transpired and decided that it needed to make some changes to ensure that Canadian in-house continued to enjoy the services that they were going to get.”
Patzelt says the CBA’s main goal is to ensure the CCCA is a strong, independent group within the CBA family, enjoying the benefits and strengths of both organizations. It is now searching for a new executive director, and implementing a new strategic plan, which includes keeping up all events the organization has held in the past. Patzelt says he doesn’t predict any problems with future programming. “I’m more than confident, we have all the resources that the CBA can provide us. This hasn’t slowed us down at all,” he says. “It’s business as usual, plus, plus, plus.”
Those left behind
Even though the corporate counsel association appears to be moving forward, some of its strongest supporters in the past feel left behind. Leanne Andree, another former volunteer board member who was dismissed in January, says she is done with both the CBA and CCCA. The Waterloo, Ont.,-based assistant vice president and senior counsel of Sun Life Assurance Co. of Canada didn’t take the news of the board’s dismissal much better than Foy and Horn. “I was floored. Absolutely floored. My reaction to it was frustration and disappointment,” says Andree, adding that like other volunteers, she felt betrayed for the time away from family they had put into the CCCA. “It comes at a significant personal expense, and I’ve never minded that aspect of volunteerism with the CBA and the CCCA.”
Even though Andree is angry and says she doesn’t plan on committing any more time to the CBA, she says she struggled deeply with that decision. “Conceptually, I think that the Canadian Bar Association plays a very important role for us as lawyers, I do see the value of membership in the CBA, but I’m not interested nor willing to commit any more volunteer time,” she says, adding that like Foy, she won’t renew her CBA-CCCA membership. Horn also says her entire legal team won’t be renewing their memberships either.
Andree is particularly angry about finding out that the decision to dismiss the CCCA board was reached months prior to the actual deadlock in mediation. “It makes me sick,” she says. She was referring to a Nov. 28, 2010 CBA board meeting, held in person over two days. Horn, the CCCA representative, was asked to leave, and though she has no official records of the closed-door meeting, Horn says that is likely when the CBA decided to pull the plug on the CCCA board if the mediation in January failed. Both Horn and Foy say that decision removed the incentive from the CBA to have proper negotiations with the CCCA over funding and independence.
Asked about the dismissed volunteers’ anger, Patzelt says the CBA wanted to move things forward and break the deadlock. As the dismissal letter mentioned, the decision was not a personal reflection on the volunteers and the CBA is grateful for the contribution of the volunteers like Foy, Horn, and Andree. “It was, I can assure you, a very serious, thoughtful, deliberative, well-thought-out process at that level,” he says. “We are a volunteer organization and all of us value volunteers and the work they do. Those people put in a ton of work and effort in the CCCA, and so I admire them for their contribution that they have made, not just on the board but also prior to that, and I thank them for that because they worked very hard. The transition was no doubt a very difficult one, which was taken very seriously, and I’m sympathetic.”
Patzelt also notes that two members of the original board dismissed in January — Antoinette Bozac, general counsel at Canada Lands Co., and Fred Headon, senior counsel at Air Canada — are part of the transitional executive body he now leads. “I think that speaks volumes,” he says.
An in-house CBA president
In Headon’s case the story goes further. If the CBA’s 37,000 members wanted to send a message to the in-house lawyers among them, Headon’s election as CBA second vice president in early April — which in 2013 will make him the first ever in-house lawyer to serve as CBA president — will likely do the trick. As someone who was at the leadership of the CCCA both before and after the board was dismissed, he says he believes the CBA’s actions in the dismissal of the board were done in the best interest of the association. “The CCCA’s primary function is to advance the interests of [and] serve the in-house bar. And we needed to move beyond where we were in the discussion that had consumed far too much time, far too much energy for everybody involved. And I think everybody involved can hold their heads high to say that we tried,” says Headon. “There were some very passionate people who were very committed to what we were trying to achieve all around that table, and it was one of those situations in which lawyers often find themselves — we reached an impasse.”
Headon says his new dual leadership role in the CBA-CCCA is a sign the organization works well with external and in-house counsel under the same umbrella. “We are part of the same family, and this is how we work together. I think there is a lot that can be learned from both organizations. There are significant differences, but at the end of the day, we all practise law. I also think this a recognition of the strategic role that we play managing the relationship with external counsel and the files that we work on with them. And I think it’s exciting that the CBA executive will now have a reflection of that part of the bar.”
Confusion on the outside
Beyond the two groups directly involved in the negotiations, there are people like Jill Schatz, general counsel and vice president of Primus Telecommunications Canada Inc., who is also a former president of the board at the CCCA but hasn’t been involved at the national level in the past decade. Schatz says tension between the private practice lawyers and in-house counsel, who have tried to carve out as much autonomy as they can, has been there historically, but calls the move by the CBA to dismiss the board unprecedented and heavy-handed.
Schatz worries the CBA intervention will mean the CCCA will lose some of the independence it already has. “With the struggle that has gone on for years, it is hard to believe that they would have taken this action to allow a strong independent structure recreated. They really cut the legs off the independent body that was there. I’m pessimistic that strong independent in-house counsel will again emerge within the CBA,” she says. “If there was a duly elected body there, why was there a need for transition? I’ve never heard that they weren’t fulfilling their mandate. I’ve never heard that there was any wrongdoing. To say that we think we can do it, it’s no justification for why they did do it.”
A recent CCCA Toronto chapter meeting raised more questions than it answered, adds Schatz. She felt there was confusion among the membership about the changes, and direct questions were not being answered forthrightly by the CBA. It might lead people to look to alternative organizations like the Association of Corporate Counsel, she adds. “I really think what the CBA has done has alienated the corporate counsel bar by taking this action. And they have made the ACC that much more attractive to in-house counsel. So it struck me as an extremely short-sighted measure,” she says. “It’s basically the CBA demonstrating that it doesn’t respect the independence of the corporate counsel community.”
An opening for the ACC?
As Schatz points out, if confusion continues at the CCCA, the ACC might be the choice for former members. A Washington, D.C.,-based organization with global ambitions, the ACC is vying hard to make inroads with Canada’s in-house counsel community. It has two chapters in Canada — in Ontario and Quebec — and is preparing to launch more in Alberta and British Columbia. It also plans to open a permanent Canadian office to deal with what appears to be an aggressive expansion plan in this country.
At the end of March, the ACC sent 4,200 non-member Canadian in-house counsel a letter, urging them to join the organization. “We appreciate in-house counsel these days can belong to multiple industry groups, and we believe ACC should be top of that list,” wrote those signing the letter, which include some of Canada’s most powerful general counsel. ACC board members David Allgood of Royal Bank of Canada and Martine Turcotte of Bell Canada are joined by 20 other senior chief legal officers or general counsel representing companies in Halifax, Ottawa, Montreal, Regina, Winnipeg, Calgary, Edmonton, and Vancouver. They include counsel like Daniel Desjardins of Bombardier Inc. and Simon Fish of BMO Financial Group.
The letter promises the ACC will provide expanding Canadian services, professional development programs designed by Canadian in-house counsel, and more Canadian advocacy initiatives. At $295 per year, membership in the ACC costs less than half of membership in the CBA-CCCA, and the organization is solely dedicated to in-house counsel, which means that unlike the CBA-CCCA, it does not allow private firm lawyers to become members. In the past, it has also offered some robust programming in large centres like Toronto and Montreal, with sporadic events in other parts of Canada.
Even though the ACC is often not perceived as being as Canadian as the CBA-CCCA, it is making clear inroads in that direction as its Canadian chapters are run by local in-house counsel who know what is needed on the ground. Quebec serves as a good example of how the ACC has adapted to a Canadian membership. Antonietta Marro, president of the ACC chapter in Quebec, says there has been an expansion of the programming in that province, for example, offering both French and English events. She says a couple of recent events done in association with the Barreau du Québec were particularly successful. And interest in the ACC in Quebec keeps increasing, she adds.
But are they going to get more members as a result of the fallout from the CBA-CCCA dust-up? Marro says the increase in membership and participation at ACC events is related to the good work the local chapters are doing, and not necessarily to the CBA-CCCA conflict. “It doesn’t hurt,” she says. “But ACC has been receiving a lot of interest primarily due to the work it has put forward in its programs.”
Sanjeev Dhawan, president of ACC’s Ontario chapter, the first chapter established in Canada, looks at it in similar terms. “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.”
The ACC has had Canadian members since 1987. By 1999, it had more than 60 in Canada, and now that number is more than 800, according to ACC’s head office.
When faced with the ACC threat, the CBA-CCCA points out that the depth, scope of programming, and geographic distribution — together with the bilingual cultural sensibilities — needed for Canadian in-house counsel can be best served by its chapters. Patzelt says the CCCA is the dominant choice for in-house counsel in Canada. “We set the agenda. We know what’s relevant to in-house counsel in Canada and advocate on behalf of them,” he says. “We understand the different regions of Canada, and are willing to serve them too.”
But beyond the ACC-CCCA dynamics, there might also be a third group of people that looks at the situation and decides to pull back from any organization serving in-house counsel, warns Foy. “Media is citing this as a battle between the CCCA and the ACC. I think what’s missing from that perspective is a third group of people who are disaffected and that may go to neither place.”