Attorney disciplinary authorities in New Jersey have held assessment fees steady for the second consecutive year.

The Disciplinary Oversight Committee “believes that the budget’s recommended $135 annual assessment and the funding for IT improvements and other programs promote fiscal responsibility while expanding and improving services to the public and the bar,” chairman Michael Furey wrote in the budget proposal for 2013. [See full text of proposal here.]

The $135 levy would be due from the roughly 67,500 lawyers who’ve been practicing between three and 49 years. Since 1999, attorneys in their second year of practice pay $25, while newly minted lawyers are exempt.

In 2012, lawyers from the larger group paid a total annual assessment of $199, which includes $50 for the Lawyers’ Fund for Client Protection, $10 for the Lawyers Assistance Program, and $4 for mandatory continuing legal education.

The disciplinary fee was reduced from $140 to $135 in 2012 in order to shrink the system’s reserve, which has increased every year since 2009, when the annual assessment was increased from $126.

In 2011, the reserve hit a high of $4.35 million, which equaled 40.2 percent of the budget.

The current reserve — part of which will be used to fill the $1.62 million budget gap — is projected at $2.38 million, 18.6 percent of the total budget.

Officials are trying to pare down the reserve to about 10 percent of the budget, a goal attainable by the end of 2014, according to the committee.

The registration fees will generate $9.19 million in 2013, the committee projects.

Other significant revenue sources include the $135 assessment paid by pro hac vice attorneys, in-house counsel and multijurisdictional practitioners ($769,500, $158,625 and $30,375, respectively), assessments not paid in the prior year ($375,000), the accompanying $40 late fees ($280,000), costs recovered in ethics proceedings ($200,000) and reinstatement fees ($82,500).

From all those sources, the committee projects $11.18 million in total revenue for 2013. That’s about 1.3 percent more than initial 2012 budget projections and about 3 percent more than the projected actual revenue for 2012.

Expenses

The $12.8 million in projected total expenses represents a 6.6 percent increase over initial 2012 budget projections and a 13.4 percent increase over projected actual expenses for 2012.

The committee links the expenditure increases to staff pay and long-awaited improvements in technology.

Employee salaries and benefits will, as usual, account for the most dollars — an estimated $10.1 million, or 79 percent of the budget.

The committee pointed to the rising cost of benefits and full staffing for the Office of Attorney Ethics and Disciplinary Review Board thanks to a falloff in anticipated retirements and resignations.

The budget still accounts for the normal 2 percent vacancy rate for unexpected departures. With many retirements planned for 2012, the committee used a 5 percent vacancy rate during last year’s budget process.

With judiciary employees’ labor contract still in negotiation, the committee planned for some pay hikes but no universal cost-of-living increase for DRB or OAE personnel for 2013. Salaries are expected to total $7.04 million, compared with $6.52 million projected actual salary expenditures for 2012.

While that amounts an 8 percent increase, the 2013 budget includes a projected 28 percent increase for employee benefits — to $3.06 million from $2.39 million.

Information-technology improvements will generate the second-highest expenditure, according to the committee.

A new IT manager — a position long left vacant — should be aboard by early next year and be able to begin implementing new software and making other changes, according to the committee.

The budget accounts for improvements in the DRB’s document-management system, to allow electronic filing, appeals and payments; a new requirement that systems include a disaster recovery plan; and upgrades to the DRB and OAE websites recommended in 2011 by the American Bar Association’s Standing Committee on Professional Discipline.

The website improvements — which account for about 27.5 percent of the $517,619 technology budget — should allow for online access to disciplinary filings, decisions and other documents.

Using Court Recording Technology

The committee also announced plans to begin holding disciplinary hearings in courtrooms, which are equipped with recording software, rather than continue using stenographers.

Typically, hearings before District Ethics Committee panels have been held in neutral conference rooms — at a law office not involved in the ethics matter, says Furey, reached by phone. Because court rules require that those hearings be recorded, stenographers have been used.

Courtrooms already are equipped with CourtSmart software that digitally records proceedings, which would eliminate the need for reporters.

The proposed 2013 budget for court reporting is $7,200, compared with the projected actual expenditure of about $20,000 for 2012.

The money saved on stenographers would be used on the purchase of CourtSmart software for the OAE and to hire a part-time employee to operate the system during disciplinary proceedings, the committee said.

“In future years, it is hoped — I emphasize, hoped — that monies will be saved as a result of that,” says Furey, a partner at Riker, Danzig, Scherer, Hyland & Perretti in Morristown.

Also, the courtroom will provide a more impartial setting, specifically in the grievant’s perception, he says.

Furey adds: “I think our system is very efficient,” partly because of a hybrid system consisting of paid staff and volunteers.

The proportion of volunteers to staff “varies tremendously from state to state,” and “there are states that have an entirely professional staff,” Furey says.

OAE director Charles Centinaro did not return a call.

The period for commenting on the budget will end Nov. 8, after which the Supreme Court will decide whether to approve it.