In June, 1981, shortly after Jim Edgar became Illinois Secretary of State in, he decided to review the Illinois business statutes which the Secretary of State administers. His Director of the Corporation Department, Donald Templeman, contacted a number of prominent Illinois attorneys for their assistance and advice:
– Evan Kjellenberg, Coles & Griffen, Chicago as the initial organizer
– John K. Notz, Jr., Gardner, Carton & Douglas, Chicago, then incoming Chair of the CBA Corporation Law Committee
– Phillip Gordon, Altheimer & Gray, Chicago, then outgoing Chair of the ISBA Corporation and Securities Law Council
– James G. Barnes, Baker & McKenzie, Chicago
– George R. Hooper, Chadwell, Kayser, Ruggles, McGee & Hastings, Chicago
Accordingly, Secretary Edgar created a Business Corporations Act Revision Committee on August 19, 1981. Added to the list of members were:
– From the Secretary of State’s staff: Philip S. Howe
– From the Illinois State Bar Association: T. Richard Mager, Carbondale
– From the AICPA: Stanford A. Bank
– From Academia: William H. Painter (Univ. of Illinois, Champaign)
– Charles (Bud) Murdock, Dean, Loyola Law School, Chicago
– Public Member: Linscott Hanson, Park Ridge
– Labor: to be chosen
– IMA: Jack Roadman
– IRMA: Tucker Olson
– CACI: to be chosen
– State Chamber of Commerce: to be chosen
– Illinois General Assembly: Jack Bowers
– William Marovitz
– Harry Leinenweber
– John Beatty
The first meeting was held on October 21, 1981 at the Chicago Bar Association.
The SOS Advisory Committee was asked to review all the business statutes and for each to recommend revisions or complete re-writing in order to modernize the law. The first major project of the Advisory Committee was to appoint a sub-committee to re-write the Illinois Business Corporation Act. With Evan M. Kjellenberg, as Chair and Prof. Charles W. Murdock (then Dean of Loyola Law School) as Reporter, a drafting committee of some 20 attorneys was appointed, adding several new persons to the SOS Advisory Committee:
– Rep. Peg McDonnell Breslin, Ottawa
– Sen. Aldo A. DeAngelis, Chicago Heights
– Sidney J. Firsch, Jr., Frisch & Frisch, Chicago
– Harold T. Halfpenny, Chicago
– Thomas B. Hart, Jr., Chicago
– David M. Webster, Chicago
The drafting sub-committee completely revised and modernized the Illinois Business Corporation Act of 1933. The Illinois General Assembly enacted the new draft as The Business Corporation Act of 1983 and it became effective on July 1, 1984. The sub-committee also prepared Official Comments to The Business Corporation Act of 1983.
The second project was a complete re-write of the Illinois Not For Profit Corporation Act of 1944, with John K. Notz, Jr., as Committee Chair and Prof. Philip Hablutzel as Reporter. It was enacted in 1986. Since 1986, the Advisory Committee has drafted over 500 items of legislation, from the very minor linguistic or technical “fixes” all the way to major statutes including the Limited Liability Company Act, a revised Limited Partnership Act, the revised Partnership Act, the Limited Liability Partnership Act, etc.
Each year, the Secretary of State appointed members for the following year. The roster of Sept. 15, 2004 listed 47 members, of whom about 30 had been very active. The Advisory Committee met approximately ten times per year with 25-30 members attending, plus a half-dozen employees of the Business Services Dept. of the Secretary’s Office. Each meeting was hosted by a different law firm (which often picked up the tab for the lunch). Often, the first meeting of the year was at Chicago-Kent College of Law . The annual budget of the committee was about $5,000 per year, covering mostly meeting expenses (travel and some lunches) and sub-committee conference calls.
The Advisory Committee prided itself on being non-partisan, non-ideological, and in providing technical expertise to the Secretary of State’s operational staff and his Legislative Office. The Advisory Committee did not “propose” legislation in its own name, but only provided drafting services to the Secretary of State and to the General Assembly.
In June, 2005, the Secretary of State decided to discontinue this Advisory Committee as a part of his office.
II. Continuation of the Advisory Comittee
Without the Secretary of State’s sponsorship, the Advisory Committee held its first meeting of the 2005-2006 year, as scheduled, on Sept. 14, 2005, at Chicago-KentLaw School. The members of the former Advisory Committee decided to continue their work in the on-going revisions and modernizations of Illinois business laws, with substantially the same membership as before. Over its 24 years of work, the Advisory Committee had built a reputation for expertise and non-partisanship which was appreciated by many in the Illinois General Assembly. It was decided not to abandon that reputation and good will.
The second meeting of the former Advisory Committee met on Nov. 8, 2005, at theChicago law firm of Arnstein and Lehr and – in addition to substantive discussions on its various drafting projects – began an evaluation of five possible organizational structures for proceeding. A consensus was reached to narrow the choices to two, and the one finally implemented was a proposal to seek the establishment of an “Institute of Illinois Business Law” at Chicago-Kent College of Law.
III. The Institute
The Institute has the following parameters:
1. The Institute is a project of the Chicago-Kent College of Law, Illinois Institute of Technology and has no separate, independent legal status.
2. Membership. The group continues with a limited working membership of some 30 – 40 members. It continues its tradition of including leading attorneys: partners from major firms, general counsels from major domestic Illinois corporations, legislators from both sides of the aisle, etc. All work is volunteer, pro bono. This is a working group.
3. Sponsorship. Replacing the sponsorship of the Illinois Secretary of State, the group now has the sponsorship of Chicago-Kent College of Law, law firms, foundations, other entities, and individuals interested in the development and modernization of business law in Illinois.
4. Protection of §501(c)(3) Status. The group is very mindful of the need to protect IIT’s tax exempt status by not itself “proposing legislation” or otherwise “lobbying.” Using the models of the American Law Institute and the National Conference of Commissioners on Uniform State Laws and other law reform groups, it stays within the IRS guidelines. The Institute has the support of legislators from both parties who may consider sponsoring remedial legislation in business matters.
5. Dissemination of Work Product. For the first 24 years, the work product of the Advisory Committee went directly to the staff of the Secretary of State’s office. Only twice had the Committee prepared a CLE presentation for practicinglawyers: one for each introduction of its first two Acts – the Business Corporation Act and the Not For Profit Corporation Act. The new Institute will explore ways to present a more public face:
- Maintaining a Website available to the public.
- Continuing Legal Education presentations on major new enactments and other major issues under revision (takeover and merger laws, dissolution of smaller, closely-held businesses, organization of limited liability companies, etc.).
- A publication of a quarterly Newsletter of Review, as a vehicle to disseminate the work of the Institute to a broader base of business lawyers.
6. National Coordination. Through its members who are Illinois partners at national law firms, the Advisory Committee had been able to coordinate its work with similar law reform groups in Delaware, New York, Florida and some other states. Now that the Institute is independent of state government, it can become more visible, and this coordination should increase.
7. International Impact. One member, Tom Jersild at Mayer Brown in Chicago, was the Advisory Committee’s Chairman for several years. Now retired from his law firm, he has been working under U.S. State Department auspices to assist in the drafting of corporate and business laws for several developing countries, including Serbia, Macedonia, Dubai and Egypt. He keeps the group informed in the parts of our work which are being adapted to those developing countries and his reports help the Institute group gain a better perspective for its work in Illinois.
8. Director. The at-Kent Director of the Institute is Prof. Philip Hablutzel. The Institute continues to have its rotating Chair, Vice-Chair and Secretary