State Bar facing fiscal crisis

The agency that protects Californians from unethical lawyers faces an uncertain future because of complaints about its ability to do its job.

For the first time ever, the state Assembly and Senate this year were unable to agree on a bill to set the annual dues that lawyers pay to the State Bar of California because of disagreements over the extent of changes needed at the troubled agency.

Among the criticisms: The Bar failed to discipline bad attorneys in a timely manner and to compensate victims.

The 89-year-old State Bar, a quasi-state agency and an administrative arm of the California Supreme Court, licenses lawyers to practice in California. It handles attorney discipline, regulates law schools and makes recommendations on the governor’s judicial appointments, among numerous other functions.

The California State Bar is the largest in the nation with 186,152 active members. This year, it charged annual dues of $315 per active lawyer.

Now the fate of the organization and its 500 employees rests with the state high court, which is expected to decide by December on whether the Bar can collect dues and, if so, how much. Absent a court decision, the Bar would have to wait until next year to get the dues issue resolved in the Legislature – a delay that could cripple the agency.

Bar Executive Director Elizabeth Rindskopf Parker is confident that the Bar will survive and layoffs won’t be necessary as was the case nearly 20 years ago, when then-Gov. Pete Wilson vetoed the Bar dues bill. Then, the state Supreme Court stepped in, ordered dues to be collected and set up a court-ordered monitor.

“Obviously I would have preferred a bill,” she said. “This is obviously very upsetting to employees who worry we may repeat the very difficult 1998 year. But given the strong support we’ve had from the court we should be able to move forward on a steady keel.”

The California State Bar is the largest in the nation with 186,152 active members. This year, it charged annual dues of $315 per active lawyer. The Bar collects about $60 million annually from practicing lawyers’ dues, plus several million dollars more from inactive attorneys. The dues represent the most significant piece of the Bar’s total budget.

“I can’t say what our order will be or the process because I don’t know what the Bar is asking for.” — State Supreme Court Chief Justice Tani G. Cantil-Sakauye

Caught in the crossfire are legal aid societies, which depend on voluntary contributions from lawyers that are usually listed as part of the dues statements. If those voluntary contribution options aren’t included in the Bar dues bill, the aid societies could lose $7 million, said Salena Copeland, executive director of the Legal Aid Association of California.

California Supreme Court Chief Justice Tani G. Cantil-Sakauye voiced her support of the Bar in an interview published Sept. 19 in the legal newspaper The Daily Journal.

“For me, what the State Bar does best and what is unique about what it does aligns with my great passions, and that is access and diversity,” she said. “It is the only state entity that actually seeks to improve and further access to justice for low- and moderate-income people.”

In the interview, she said the court may have a special closed door conference to consider the bar dues question. “I can’t say what our order will be or the process because I don’t know what the Bar is asking for,” she said.

The Bar has taken severe criticism from state auditors reporting a backlog of complaints that allowed some lawyers to continue practicing even though they should have been disciplined or removed from the profession.

A May audit found that the bar had a backlog of 5,500 applications for restitution from victims of attorney misconduct and a shortfall of more than $16 million to pay the claims. Some victims wait as long as five years for payment, which is provided through the attorneys who have been disciplined.

“We’re doing so many different things for so many people we can’t do anything well.” — Joanna Mendoza.

Some 421 California lawyers were disbarred or suspended in 2015, according to the Bar’s annual discipline report, which was completed in April.

A detailed discussion of the State Bar report was provided by the Northern California Record news site, which covers legal issues.

“In 2015, the State Bar received 15,796 new complaints against California lawyers,” the report said. “The office of the chief trial counsel, the State Bar’s prosecutorial arm, filed disciplinary charges or stipulations to discipline in 558 cases. Formal discipline was imposed in 990 cases, resulting in the disbarment or suspension of 421 lawyers.”

Some critics see the cause of ongoing problems as being the Bar’s conflicting functions as a government regulatory agency and a trade association. As a government agency, the Bar is supposed to punish bad lawyers, but as a trade association it advocates for lawyers.

“We’re doing so many different things for so many people we can’t do anything well,” said Joanna Mendoza, a member of the Bar board of trustees who has been frustrated with the slow pace of change. She said  the Bar is distracted by its numerous committees on specialty areas of law, awards that it gives out and programs that have little to do with protecting the public.

Jackson pointed out that the Senate, Assembly and chief justice agreed on 90 percent of the issues in the Bar dues bill.

Mendoza and many others contend the Bar should separate into two organizations, with one handling regulatory responsibilities and one handling trade associations — similar to the situation with the Medical Board of California (regulates doctors) and the California Medical Association (advocacy).

“The Bar is only regulatory agency in the state that has this type of structure,” said Bridget Gramme, assistant director for the Center for Public Interest Law at the University of San Diego.

She said the idea of deunifying the Bar has been discussed for decades to no result.

Sen. Hannah-Beth Jackson, D-Santa Barbara, chair of the Senate Judiciary Committee, is among those who is opposed to the Bar separating into two groups. She and the chief justice say the Bar should have a chance to try reforms agreed to by both the Assembly and Senate first before moving in that direction.

“Political discussions about deunification are not appropriate,” she said. “Any discussions are premature until we initiate these reforms to see if the state Bar can right its ship using these very substantial reforms agreed upon by the two houses.”

Jackson pointed out that the Senate, Assembly and chief justice agreed on 90 percent of the issues in the Bar dues bill.

For instance, they agreed to reduce the size of the board from 19 members to 13 with seven attorneys and six non-attorneys, thus reducing the influence of attorneys. They also agreed to appoint an independent enforcement monitor who would oversee whether the Bar was adequately protecting the public.

“I think that these reforms if we’re able to initiate them would resolve most if not all of the current concerns that we all had and have about the administration of the state bar and the dysfunction,” Jackson said.

She predicted that the court will set the new Bar dues. “The State Bar will get the message sent by the Legislature and the Supreme Court that they have to focus their intention on their responsibilities and do it in a serious, meaningful constructive way,” she said.

Assemblyman Mark Stone, D-Scotts Valley, chair of the Assembly Judiciary Committee, said he is less optimistic. He said the Senate and chief justice are focusing on the Bar’s operational issues rather than looking at the deeper problem of governance structure.

“At some point you’re going to have to realize you won’t solve operational issues until you reform governance and how the Bar looks at what its responsibilities are.”

He predicted that the Bar will run into more hard questions with the Assembly next year. “Until they get a clean audit, I think we will probe into the functioning of the Bar,” he said.

Rindskopf Parker, the executive director of the Bar, said the agency is working on cleaning up its act.

“We’re bringing down the curtain on an era of lavish spending and inattention to public discipline,” she said, adding as one example that the Bar has eliminated alcohol from its events.

“That era in the past of parties, a sense that it was a carnival atmosphere is gone. That is not going to be us anymore. That change is well underway.”