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California State Bar It Is Not Effectively Managing Its System for Investigating and Disciplining Attorneys Who Abuse the Public Trust Report Number: 2020-030

Introduction

Background

The California Constitution establishes three independent branches of state government: the Executive, Legislative, and Judicial. The Judicial Branch is responsible for interpreting the laws of the State and protecting the rights of individuals. The California Supreme Court (Supreme Court) holds the power to admit, disbar, or suspend attorneys, who are considered officers of the court. Attorneys hold significant responsibility as representatives and advisors of their clients. Clients often seek out an attorney during times of crisis, when they are in a particularly vulnerable position, and attorneys are responsible for providing those clients with an informed understanding of their legal rights. To fulfill their role, attorneys are accorded a great degree of trust, as well as certain privileges and responsibilities—they may legally represent their clients, may hold funds on behalf of their clients, and must maintain the confidentiality of the information that their clients provide them.

With limited exceptions, every person who is admitted and licensed to practice law in California must be a member of the State Bar of California (State Bar), which is a public corporation within the Judicial Branch. As the text box shows, state law establishes public protection as the highest priority of the State Bar. The State Bar does this by licensing attorneys, regulating the profession and practice of law, enforcing rules of professional conduct for attorneys, disciplining attorneys who violate rules and laws, and supporting greater access to and inclusion in the legal system. To prevent attorney misconduct, the State Bar encourages ethical conduct through resources such as education programs and a hotline for attorneys seeking guidance on their professional responsibilities.

The State Bar is governed by the 13 member Board of Trustees of the State Bar (board), seven of whom are attorneys appointed by the Supreme Court or the Legislature. As specified in state law, the Legislature and the Governor appoint the remaining six members, who are not attorneys. The board sets out a strategic plan with goals for meeting the State Bar’s responsibilities, such as ensuring timely, fair, and appropriately resourced admission, discipline, and regulatory systems for the more than 250,000 lawyers licensed in California. To meet its responsibilities, the board has four committees composed of its own members, including a regulation and discipline committee that oversees the State Bar’s management of the attorney discipline process.

The State Bar’s Revenue Sources

Nearly half of the State Bar’s funding comes from mandatory attorney license fees. The Legislature annually passes legislation to set the amount of the State Bar’s attorney license fees (fee bill); this license fee revenue funds a large portion of the State Bar’s operations, including its discipline system. As Figure 1 shows, the State Bar projected that 47 percent of its revenue in 2020 would come from these licensing fees.

Figure 1

Mandatory License Fees Are the State Bar’s Largest Single Source of Revenue

The Attorney Discipline Process

To protect the public from attorneys who fail to fulfill their professional responsibilities competently, the State Bar administers a discipline system to investigate and prosecute claims of professional misconduct. The State Bar receives complaints from the public by mail or through an online submission form. In addition, the State Bar can initiate inquiries into attorney conduct based on information it receives from third‑party sources. The State Bar may also open cases it calls reportable actions based on other information, which includes notifications from banks of insufficient funds related to client trust accounts. The text box identifies some major categories of professional misconduct allegations.

Two of the primary divisions within the State Bar’s attorney discipline system are the Office of Chief Trial Counsel of the State Bar (trial counsel’s office) and the State Bar Court. For 2020 the State Bar budgeted nearly $77 million for these divisions. As Figure 2 indicates, the State Bar’s process for reviewing complaints of alleged attorney misconduct include multiple levels of reviews, and it closes many complaints at the intake level. For those cases that it does not close at the intake phase, the trial counsel’s office investigates and, where appropriate, prosecutes attorneys for violations of the State Bar Act or the State Bar’s Rules of Professional Conduct, which establish professional and ethical standards for attorneys to follow. The State Bar Court adjudicates the matters that the trial counsel’s office files and, if warranted, recommends that the Supreme Court—which has the final authority in attorney discipline—suspend or disbar the attorney in question. The text box identifies some of the possible outcomes of the State Bar’s disciplinary cases.

The State Bar has long struggled to process all of the complaints that it receives each year, which has contributed to its backlog of unresolved cases. State law generally defines the State Bar’s backlog as discipline cases that, as of every December 31, remain pending beyond six months from the date of receipt. The State Bar must report its backlog of cases annually to the Governor, specified legislative members and committees, and the Supreme Court. However, state law also permits the chief trial counsel to designate certain complaints as complicated matters, and it is the goal and policy of the State Bar to resolve those complaints within 12 months. We discuss this distinction later in the audit report.

The Discipline Report

State law requires the State Bar to prepare and issue a discipline report by April 30 each year. It must present this report to the Governor, the chief justice of California, and specified legislative members and committees to enable them—and the general public—to evaluate the attorney discipline system. State law requires that the discipline report include certain statistics describing the performance and condition of the discipline system, and the State Bar must present these statistics in a consistent manner for comparison with the previous three years.

Statutorily Required Audits

State law requires the State Bar to contract with the California State Auditor to audit the State Bar’s operations every two years, but it does not specify topics that the audit should address. We have not conducted an in‑depth review of the State Bar’s attorney discipline system since our 2015 audit, although since that time we have reviewed the State Bar’s financial condition, cost control measures, budgeting practices, and funding needs. Therefore, for this audit, we reviewed the State Bar’s management of its attorney discipline system by assessing its staffing levels, the timeliness of its investigations, the disposition of its cases, and the level of transparency and accuracy provided by its discipline report. We also reviewed the State Bar’s response to the COVID‑19 pandemic and its impact on the bar examination and prospective California attorneys. Finally, we reviewed the State Bar’s efforts to manage its revenue and expenditures.

Figure 2

The State Bar’s Attorney Discipline Process Includes Multiple Levels of Review

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