ABA will cut $10.7 million from general operations budget, a savings of more than 10 percent
The ABA Board of Governors on Thursday authorized ABA Executive Director Jack Rives to proceed with a plan to cut $10.7 million from the association’s general operations budget for fiscal 2018. The plan, announced in a memo, includes consolidating travel-planning and publishing operations, renegotiating the lease of the Chicago headquarters, and making 10 percent cuts in many areas of staff operations.
The cuts represent more than a 10 percent reduction in the current general operations budget of $99.7 million.
The memo indicates that the Board of Governors is evaluating three other cost-cutting ideas, including whether to continue holding two association-wide meetings each year. The meetings are drawing fewer attendees even though they are “high-cost events,” according to Rives.
Rives said the ABA is comprised of more than 3,500 entities, and “the unfortunate reality” is that the association doesn’t have enough resources to continue everything it is doing. “We have to prioritize; we have to make choices,” he wrote.
About $5.7 million in “bottom-up” cuts were developed during a staff budgeting process in which managers were directed to propose 10 percent reductions in their budgets. The 10 percent reductions generally will not be imposed, however, on the ABA Professional Services Division, which includes ABA entities, forums and certain divisions.
Another $5 million in cuts were developed in a “top-down” process. “These top-down initiatives will require us to do things differently,” Rives wrote. “We simply cannot achieve the required savings and create a sustainable model in a reasoned, strategic manner unless we change some paradigms.”
The top-down cuts include:
• Renegotiating the lease for the Chicago headquarters.
• Consolidating staffers who oversee logistical operations of travel for the ABA and its entities into one unit.
• Reducing funding for general operations travel by 10 percent across the board, except for travel associated with continuing legal education events.
• Creating a new Periodicals Division in ABA Publishing, and moving the ABA Journal into the division. Though the ABA Journal Board of Editors and staff will continue to have complete authority over Journal content, redundant back-office operations can be merged to save money. The plan is intended to preserve monthly publication of the Journal.
“The Board of Governors’ action on these recommendations is historically significant,” Rives wrote. “Many factors have aligned, and we now have an opportunity to right-size general operations expenses in a meaningful way. By taking bold and comprehensive actions for FY 2018, we will have begun the important work needed to assure our association’s future for many years.”
The other efficiencies still under consideration are:
• Should the ABA consolidate or eliminate a variety of special and standing committees?
• Should the funding formula for ABA entities be changed? With few exceptions, general revenues pay for staff costs. The current allocation “has little rhyme or reason,” according to Rives’ memo, and a more objective approach should be developed that is driven by data.