State Bar needs to be reformed

During the Comment Period for the public’s consideration of the State Bar’s Paraprofessional Task Force’s recommendations, there were 2,014 comments submitted. The State Bar doesn’t say how many of those comments were by attorneys, but it does say that 90% of attorneys opposed the recommendations. Nevertheless, on Wednesday, April 20, 2022, the Task Force voted to recommend the creation of a new category of person who can practice law without a license, called a “paraprofessional.”

If you are an attorney and you see that 90% of attorneys opposed a proposal, but the State Bar went ahead and passed the proposal anyway, you might be confused. You might ask: “Why is my State Bar going against the wishes of its members?”

In saying that you would have made two mistakes. The State Bar is no longer “your State Bar” and you are no longer “a member” of the State Bar of California. Prior to 2018, like many states, California had a unified State Bar. That meant that not only was the State Bar a licensing and disciplinary agency, but it was also a “trade association” that advocated on behalf of the legal profession and its members. In 2018, the State Bar’s functions were broken up. The State Bar remained as a licensing and disciplinary agency, but it shed its “trade association” functions. The California Lawyers Association (CLA) was created to be the new “trade association” for California attorneys, acting separate from the State Bar.

Since 2018, an attorney should no longer say on a resume: “Member: State Bar of California.” Rather, the attorney should say: “Licensed by the State Bar of California.” As an attorney, you no longer pay “dues” to the State Bar. Rather, you pay a “licensing fee.”

Many people believe that most attorneys do not fully understand the change that took place in 2018. The belief is that in order to clear up this lingering confusion the State Bar of California should change its name to something like “The Attorney Regulatory and Disciplinary Commission” and that the CLA’s name should be: “The State Bar Association of California.” This is how it is done in many other states (see, for instance, Illinois).

Over the last several years, about once a year, the State Bar sends out a survey to attorneys confusing many attorneys into believing that it is still a trade association for lawyers, representing their interests.

The State Bar doesn’t send out these surveys because it wants to know what its “members” think. In fact, quite the opposite. In 2018-2019, the State Bar had a “Mandatory Insurance Working Group” (MIWG). Despite close to 2,000 attorney public comments opposing mandatory malpractice insurance, the MIWG voted the idea down by only one vote: 7-6. There is now renewed concern that as soon as the State Bar finishes up with the work on trying to establish “paraprofessionals,” it once again will create a task force to consider adopting mandatory malpractice insurance for all California attorneys.

These issues with the Mandatory Malpractice Insurance Working Group and the Paraprofessionals Task Force are really just the tip of the iceberg. Recently, 260,000 attorney discipline case files and confidential court records were available for review on a public case law search site for over 4 months before the State Bar was alerted. You might think that this was a clear case of Data/Privacy violations for failure to protect confidential materials. And you would be wrong because according to the State Bar, this was not the result of a “malicious hack,” but rather a previously unknown security vulnerability in its case management portal. Despite the State Bar’s “nothing to see here” approach, this caused real harm to the licensed attorneys whose confidential investigations became public.

If you are an attorney and your client records/files are hacked, you could face disciplinary action by the State Bar. Perhaps your defense could be: “The breach wasn’t as a result of a malicious hack; but rather was as a result of a previously unknown security vulnerability.”

In short, the State Bar wastes a lot of time and money creating tasks forces to “study” Mandatory Malpractice Insurance, Paraprofessionals and creating a “Sandbox” to allow Big Tech to practice AI law on the internet. As a result of spending its time doing these things, the State Bar seems to be perpetually in need of money. And because of that, the State Bar wastes even more time concocting ways to get more money.

We can now connect the dots to a host of other actions that the State Bar takes. They all revolve around this self-created need for more money and the State Bar’s disdain for having to go to the State Legislature each year to ask for money.

Here are examples of actions being pursued by the State Bar in the quest for “more money”:

(1) State Bar Fees Hike:

Unlike most State regulatory agencies, the State Bar of California must go hat-in-hand to the Legislature each year to request funding. Many agencies only have to go to the legislature every two years, four years or even five years. Not the State Bar.

The “funding” for the State Bar is through licensing fees paid by attorneys licensed to practice in the State of California. The 2021 fees are $395 (vs. say, NY which is $275). For 2022, the State Bar is requesting a 4.7% fee increase (around $20), and then wants future fees increases to be automatic and pegged to inflation.

The State Bar uses a portion of the fees to pay for lobbying efforts on its behalf. Rather than have to explain to members that anywhere from $200,000 to $500,000 of their regulatory fees goes towards lobbying efforts, the State Bar is pushing legislation (AB 2958) that would allocate $5.00 of the dues to “lobbying.” Assuming for the sake of argument that there are 200,000 fee-paying attorneys, at $5.00 a piece, the State Bar would have $1,000,000 in the till for lobbying efforts.

Of course, this begs the question: Why does the State Bar need $1,000,000 (or any amount) for lobbying the State Legislature? Probably for lobbying unpopular ideas like “paraprofessionals,” which would need legislative approval. The State Bar shouldn’t be allowed to engage, as a government agency, in lobbying with the government. It should focus on the disciplinary backlog.

Bottom line: The State Bar needs more money because of its mismanagement and wants to force it from attorneys privileged to practice in this state.

(2) The State Bar Exam:

The State Bar has been at the forefront of lowering the cut-score (passing score) for the State Bar Exam. The major premise behind this push is that having a higher cut-score discriminates against women and minorities and prevents California from having a more diverse Bar. The State Bar has invested a great deal of time and money into its campaign to lower the cut-score. When the State Bar argued for a lower cut-score on the State Bar exam, on diversity grounds, some critics noted that the State Bar just wanted more attorneys so it could collect more fees. Nevertheless, the State Bar succeeded in its efforts to lower the cut-score from 1440 to 1395.

A Report has now come out that finds that there has been only “negligible bias” in the State Bar Exam over the ten-year period of 2009-2019. Only “slight differentials” exist in “gender balancing” and “cultural references.” While the State Bar should do everything in its power to increase diversity, all the time and money spent by the State Bar on lowering the cut-score was an attempt to make a change it knew would not increase diversity.

During the COVID-19 pandemic, the State Bar held several Bar Exams online. The Online Bar Exam has experienced and continues to experience many technical problems. Because of “technical issues” that arose in the July 2021 Bar Exam, the State Bar has had to refund $1,000,000 to test takers. The total amount refunded to test takers during the COVID-19 pandemic is more than $2,000,000.

Bottom line: The State Bar needs more money because of its mismanagement and wants to license more attorneys and generate more fees.

(3) Sale of the State Bar Building in San Francisco:

Between 2015 and 2020, there was an 87% increase in the backlog of disciplinary cases handled by the State Bar. The State Bar attempts to explain this unacceptable backlog by claiming it is underfunded by the Legislature. When the State Bar asks for a Bar Fees increase, it is, they allege, because they need more money to do their job, i.e. close the backlog of disciplinary cases.

Years ago, the State Bar argued that if it could own a “State Bar Building,” it could save expenses by not having to pay rent in the downtown San Francisco area. Critics argued perhaps the State Bar should instead relocate to Sacramento, where rents were much less. The State Bar, however, prevailed and bought a building in downtown San Francisco.

Now, with a projected $4,000,000 budget shortfall, the State Bar has decided to sell its State Bar Building headquarters. The State Bar claims that this budget shortfall is due mostly to refunds to State Bar exam test takers who experienced technical problems during the online Bar Exams that have occurred during the COVID-19 pandemic.

Critics, including the Chairs of the Assembly and Senate Judiciary Committees, point out that the State Bar has wasted employee time, and money, by spending time creating Task Forces to analyze and promote Paraprofessionals and the Sandbox.

Critics suggest that if the State Bar sells its San Francisco building, it should relocate to Sacramento, where rents are cheaper. The State Bar has rejected such suggestions, stating the move would constitute a hardship for its employees.

Bottom line: The State Bar needs more money because of its mismanagement and wants to sell off its ”money saving” assets to get it.

(4) The “Client Trust Account Protection Plan”:

The State Bar has been subject to scathing amounts of criticism for its failure to investigate attorney Tom Girardi given the many complaints made against him by clients and law firms. The State Bar’s initial response was in essence: “Don’t blame us. That was all under previous management.” That response was not well received.

The State Bar had to come up with something else. Something to show that they are “doing something” to protect the public. The “something” they came up with is The Client Trust Account Protection Plan. The State Bar is now asking for a budget increase of $1,000,000 to implement this Plan.

The Plan will implement new Trust Accounting rules. There will be “enhanced reporting from banks.” Attorneys will be required to have “compliance reviews” performed by Independent CPAs. The State Bar will have the power to order “audits of client trust accounts based on risk assessment and random selection.”

It is currently unknown what the factors are that will go into making the “risk assessment” or determining what percentage of the Bar will be subject to “random selection” for an audit.

Bottom Line: The State Bar needs more money because of its mismanagement and hopes oppressive rules against attorneys and their trust accounts will create more violations and raise more money.

Conclusion:

The above issues negatively affect attorneys. These matters are generally opposed by attorneys. Most attorneys wish that the State Bar would clean up the backlog of disciplinary cases. It is time to reform the State Bar and get it to focus on discipline, and not on peripheral matters that don’t help attorneys or help the public. The CLA, as our trade association, should lead the charge on these efforts.