governance issues at the forefront
Editor’s note: On June 2, after this story was published, the state Assembly approved the State Bar’s fee bill with further amendments.
By Laura Ernde
A State Bar task force will
continue discussions about dividing the
bar into separate regulatory and trade associations, even as the state
Assembly turned down a proposed fee bill that would have eliminated six attorney-elected
seats on the bar’s Board of Trustees.
Members of the assembly rejected AB
2878 on a 8-44 vote late last month. It called for the board to shrink from
19 members to 13 members by October 2019 as the elected trustees’ terms expire.
Assembly members said they rejected the measure because they wanted to see more
changes at the State Bar, but they were not specific.
AB 2878 did not include a
proposal to split up the agency's regulatory functions from its trade
If passed, the bill would have
called for the board to be made up of seven attorneys and six non-attorneys
appointed by the governor, the Legislature and the Supreme Court. New
appointees would be required to have expertise in government regulatory
functions or fiscal management.
Other proposed changes would have
required the State Bar to study a deficit in the Client
Security Fund – which reimburses victims of attorney fraud – and repeal the
authority of the State Bar to create nonprofit foundations. As it stands, the
annual licensing fee for attorneys would remain the same as
The vote took place against a
backdrop of a California
State Auditor’s report and a series
of legislative reports that suggested additional operational changes.
Some of the fee bill amendments
arose from the California State Auditor’s report last month.
Although the audit took a
critical tone, it also noted that the State Bar has undergone significant
turnover of its management team. Elizabeth Rindskopf Parker, former dean of
McGeorge School of Law, joined the
bar in the fall, along with Chief
Operating Officer Leah Wilson and General Counsel Vanessa Holton.
“Given the magnitude of those
changes, we are optimistic that the State Bar may improve the clarity of its
financial communications and that its financial decisions may reflect better
judgment,” Auditor Elaine Howle said in the report.
The audit touched on a number of
steps that the bar’s new leadership team has undertaken to address past lack of
transparency and improve the organization going forward. The State Bar has:
- Employed a better process for
preparing its financial statements.
- Implemented new reporting
requirements of the Governmental Accounting Standards Board.
- Addressed a backlog of judgment
filings to attempt
to recover money owed by disciplined attorneys.
- Included state government
executive branch salaries and benefits for comparison in a comprehensive
salary and benefits study to be completed by October 2016.
- Dismantled a nonprofit
organization that had been created by previous leadership without Board of
- Adopted a reasonable reserve
policy as recommended by the State Auditor in June 2015.
“As an agency committed to
transparency, accountability, excellence and financial responsibility, we thank
the State Auditor for its recommendations,” Parker said. “We believe a close
look at the audit findings shows we have made significant progress.”
The four legislative reports the
State Bar filed last month were required by last year’s annual
fee bill as a result of the auditor’s 2015
findings. Parker said the reports provide a roadmap for ensuring that the
bar effectively and efficiently uses its revenues and is committed to
A workforce planning report
recommended operation changes to make the Office of Chief Trial Counsel work
more efficiently, including the creation of combined intake and enforcement
teams to investigate and prosecute attorney misconduct. The recommendations are
to be implemented by the end of the year.
A compensation and benefits study
for the trial counsel’s office found that attorney salaries were below the
labor market median, and non-lawyer positions were above market median. Parker
and Wilson said they want to avoid salary reductions for current employees. A
bar-wide compensation and benefits study is underway and current labor
agreements expire at the end of the year.
A backlog report outlined the
resources needed to fulfill the bar’s statutory requirement to review all
complaints against attorneys within 180 days, which has been the subject of
previous audits. The report found that meeting the current standard would
require 81 additional full-time positions.
Finally, a spending plan
estimates that the cost of implementing the various recommendations in the
reports ranges from $1.5 million to $10.4 million. It notes that more than 80
percent of membership fee revenue goes to the bar’s discipline functions.
The State Bar’s Governance
in the Public Interest Task Force will complete its report in July. That report
will provide additional guidance for the bar and its oversight bodies, Parker
The task force is scheduled to
meet June 14. Two trustees on the task force have proposed separating the bar
into two organizations – one to handle regulatory matters and one to house
unspecified “trade association” functions.
Trustees Dennis Mangers and
Joanna Mendoza want the bar’s regulatory functions – including attorney
admissions and discipline – to be overseen by a 13-member board made up of
seven non-lawyers and six lawyers. A private nonprofit would take on the bar’s
unspecified “trade association” functions. The proposal called for the State
Bar to work out the details and implement the de-unification plan by January
Chief Justice Tani Cantil-Sakauye
has cautioned against any rushed decisions for the agency, which is an arm of
the California Supreme Court.