Starting a New Bar
TCDLA's Local Criminal Bar Association Setup Packet
I. Building the Foundation
A. Identify a core group of leaders to serve as the organizing committee. They will become the association’s first officers and board members.
B. Articulate your purpose. Your purpose may well contain a sense of urgency and it may serve as a rallying point for potential members.
C. How many people are potential members? At least two of the officers/board members should meet with potential members. This will help establish immediate credibility and ensure a greater likelihood of “buy-in.”
D. Does this group of people represent a base large enough to support a new bar association? This will depend on how much the new bar is to accomplish and what its goals are. You may be able to attract sponsors rather than existing solely on member
dues. It all depends on what local businesses exist in the community, how much interactivity there is between those businesses and the legal profession within that community and what the members can afford to pay.
A. You have two important decisions to make regarding the kind of organization you want: (1) whether or not to incorporate and (2) what tax exempt status you will apply for.
B. Incorporation—Most non-profit organizations incorporate. According to the 1991 ABA Bar Activities Inventory: 89 percent of all local bar associations are incorporated. It eliminates the personal liability of members, establishes continuity, creates psychological stature and makes available applicable laws and guidelines concerning the formation and administration of the organization.
C. Some disadvantages of incorporation to consider are: the organization must observe organizational requirements set up by state law and most states require non-profit associations to keep minutes hold an annual meeting etc.
D. To incorporate an entity, you must complete and file the following items:
- Obtain an IRS form titled SS-4 and file it out completely.
- Call the Internal Revenue Service, to obtain an tax exempt number otherwise called an EIN (Employer Identification Number), over the phone. Write this number on the SS-4 form.
- Establish an account with a bank for a non-profit or incorporated association.
- Call the Texas Secretary of State and get the current requirements. After doing this, write and file articles of incorporation, which must comply with all aspects of state law, along with a fee with the Secretary of State. As a general rule, articles are drafted in very general form so as to provide maximum flexibility.
- Write and complete the association’s by-laws. By-laws are more complete rules for the operation of the organization.
E. It is more likely that you will plan for your bar association to be a non-profit and tax exempt. The tax status will be determined by the IRS. To be considered non-profit, it means that your income can exceed expense; however, no profits or portion of the organization’s net earnings can enure to the benefit of any individual.
- Bar Associations are generally 501 c6. A c6 organization is considered a business league and is to engage in activities to promote the common business interests of members and to improve conditions of business.
- 501 c3 organizations are generally bar foundations. A c3 organization is recognized as scientific or educational, such as a charity or a school. Also, c3 organizations may receive the benefit that c6 organizations have as well as being eligible to mail at lower non-profit postal rates, automatically exempt from other local and state taxes; and money given can qualify as a charitable contribution and thus tax-deductible to the donor. C3 organizations may not engage in political activities or lobbying.
III. Consideration of Services to Offer
A. Determine your Financial Status
- Prepare a budget with all initial expenses and revenue projected. Include all phone calls, postage, envelopes as well as the larger items.
- Offer a small number of core services that accrue to members as a benefit of membership. Think of ways to use a newsletter and the web as potential advantages/benefits to all members.
- Consider the product, its price, how it will be promoted and how this product/service will be distributed.
IV. Choosing a Headquarters Site
A. Is It Necessary
- The ABA reports that only 15 percent of all local bars have their own space, 4 percent occupy space which is owned by their bar foundation, 65 percent rent space and 16 percent are located in government buildings or courthouses.
- A significant number of small to medium size bars are located in the “law office” of the current bar president. Some may use their home as the site of the bar office.
V. Filing With the State Bar of Texas
A. The State Bar request that all Local Bars file an update or status report with the Local Bar Services Coordinator, after completing the following items:
- Completing the by-laws
- Filing the articles of incorporation
- Getting approval form the IRS as a non-profit entity.
This information will be given to the public and other attorneys so that they may become aware of such contacts and resources.
B. The State Bar asks that all such local bar associations file an update form with the Local Bar Services Coordinator once per year, updating any and all leadership changes, address changes as well as phone number changes as well as activities perrformed by that local bar association.