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Report Number: 2017-030

The State Bar of California
It Needs Additional Revisions to Its Expense Policies to Ensure That It Uses Funds Prudently

Figure 1

Figure 1 is a pie chart that shows the State Bar collected a total of $194 million in revenue for 2016. For example, 45 percent of the State Bar's revenue, or $86.2 million, was from membership fees and donations. The next largest revenue source of23 percent, or $44.8 million, was from settlement pass-through grants. In 2014 the U.S. Department of Justice reached a civil settlement with Bank of America to resolve federal and state claims for financial fraud leading up to and during the financial crisis. The State Bar is responsible for allocating Bank of America's grants to legal aid organizations in California that provide legal assistance for foreclosure prevention and community redevelopment. The other 33 percent of State Bar's revenue was from the following: 10 percent, or $19.3 million, was from examination application fees; 9 percent, or $18.0 million, was from other revenue; 7 percent, or $12.8 million, was from grant revenue; 3 percent, or $6.4 million, was from trust account revenue; and 3 percent, or $6.1 million, was from fees from Sections.

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Figure 2

Figure 2 is a pie chart that shows that State Bar spent a total of $148 million on various expense categories for 2016. For example, 35 percent, or $51.6 million of State Bar's expenses were for salaries. Grants accounted for 21 percent, or $30.8 million of total expenses, and benefits accounted for 16 percent, or $24.3 million of expenses. Buildings, equipment, and occupancy accounted for 8 percent, or $11.9 million of expenses. Other outside services, which include expenses for professional services, outside printing, and bank processing fees, were 6 percent, or $8.4 million of expenses. The Client Security fund accounted 4 percent, or $6.0 million, exam costs accounted for 4 percent, or $5.9 million, and travel accounted for 3 percent, or $2.6 million, or expenses. Other expenses, including postage, telephone, and office supplies, among other expenses, accounted for 2 percent, or $2.6 million of expenses. Finally, temporary and outside help accounted for 1 percent, or $2.4 million of expenses.

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Figure 3

Figure 3 is a bar graph that shows the State Bar's expenses by category from 2014 through 2016. In all three years, the largest expense was salaries; State Bar spent just under $50 million in 2014, about $50 million in 2015, and just over $50 million in 2016. The next bars are for expenses on benefits; they were around $20 million in 2014, $17 million in 2015, and $24 million in 2016. Expenses on temporary and outside help were less than $5 million for all three years. Expenses on grants increased significantly; in 2014 State Bar spent about $17 million, and in 2015 and 2016 State Bar spent around $30 million. Buildings, equipment, and occupancy expenses were around $11 million in 2014 and 2016, but they spiked to around $15 million in 2015. Other outside services expenses were around $9 million for all three years. Expenses for the client security fund, exam costs, and travel were all consistently under 10 million each for all three years. Finally, other costs, which include postage, telephone, and office supplies, among other expenses, were around $2.5 million for all three years.

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Figure 4

Figure 4 is a line graph comparing salaries for nonrepresented and represented employees of the State Bar with comparable positions at comparable agencies. The line graph shows salaries for individual comparable positions, and has a marker for the median of those positions' base salaries (median). It also has a marker for the State Bar's base salary for that position (base salary). The median and the base salary for Chief Trial Counsel, a nonrepresented position, are close together around $250 thousand. The base salary for the Director of Information Technology position is about $230 thousand, and is higher than the median by about $30 thousand. State Bar's base salary for the Director of Human resources is about $210 thousand, and is also higher than the median by about $30 thousand. For the represented employees, the base salary of a Senior Attorney is about $160 thousand, and is lower than the median by about $20 thousand. The base salary and median for Investigator lls are both about $100 thousand. Finally, Paralegal's base salaries are about $95 thousand, and are about $20 higher than the median.

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Figure 5

Figure 5 is a bar graph showing the number of new, unresolved, and backlog attorney discipline complaints for 2014 through 2016. New complaints, unresolved cases, and total backlog have decreased slightly from 2014 to 2016. The backlog is generally defined as the number of complaints as of December 31 of the preceding year that were pending beyond six months after receipt without dismissal, admonition, or the filing of a notice of disciplinary action. Unresolved cases are all cases still pending, including backlogged cases. In 2014, there were about 16,100 new complaints, nearly 5,000 unresolved cases at the end of the year, and nearly 2,000 backlogged cases. In 2015, there were about 15,800 new complaints, about 4,600 unresolved cases at the end of the year, and nearly 1,500 backlogged cases. Finally, in 2016, there were about 15,200 new complaints, about 4,200 unresolved cases at the end of the year, and about 1,500 backlogged cases.

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