One Reporter’s Opinion, Part Two: A Sea Change is Needed

The Integrated State Bar Will Never Be Trusted on Discipline

The reaction to the State Auditor’s report points to the most serious problem: a lack of confidence in the discipline process because it is administered by an ostensibly self-governing profession. After more than thirty years of newspaper exposes, reorganizations, studies, task forces, consultants and occasional scandals, the public still does not have confidence in the discipline system.

The truth is that the disciplinary system never will be trusted as long the system is perceived as one run by lawyers, the current system we have now, the integrated State Bar, which, alone among professional regulators, combines elements of a trade association and a regulatory agency. This is true whether or not the system does a good job at protecting the public. It will never be seen as doing a good job, no matter how much the mechanisms are tinkered with.

The thread of distrust is woven into the history of the State Bar over the last thirty years and more. The Complainants Grievance Panel was created because the Legislature did not trust the State Bar not to dump complaints in the wake of the revelations published in the San Francisco Examiner in 1985 about the 4,000 complaint backlog. I argued as amicus to the Supreme Court in 1998 that a special master be appointed to assure that any special assessment ordered by the Supreme Court be spent only on discipline. One of the reasons a fee bill could not be passed in 1998 was that it had been was revealed that the State Bar had left employment positions in the OCTC unfilled in order to use the salary savings for non-disciplinary purposes. No one in the Legislature trusted the State Bar leadership. In 2010, the Legislature created a mechanism to reform the governance structure of the State Bar (SB 163) because it did not believe that the Board was placing public protection at the top of the State Bar’s agenda.


Trust street

Many more data points could be added to this history. The rather damning language appearing on the cover the State Auditor’s report is only the latest example of thread. Although the governance reforms have created some meaningful changes. The Business and Professions Code still speaks about “members” of the State Bar long past the time when it should be clear that the State Bar of California is not a bar association, but a government consumer protection agency.  Most California lawyers and the general public continue to believe that it is a bar association.  Many lawyers are under the apprehension that the State Bar is still their trade association. To the extent that it is, it cannot discharge that function consistent with the role as a government agency; in fact, California lawyers as a group do not have a consistent voice advocating their interests, as California physicians have in the California Medical Association.

Bold Action is Required to Invent the Future

California historian Kevin Starr has said that California is the place where the future is invented. The quote is apt for this subject because the future of lawyer regulation in California needs to be reinvented.

Our current “integrated bar” system, created in 1927, which relies on at least nominal self-regulation by lawyers is not working as well as it needs to work, either for public or for the legal profession. Moreover, the legal profession, as part of the justice system, is not able to deliver affordable access to justice.
Both of these problems are related to the deep history of the legal profession that has sometimes been referred to as the “guild” mentality, the traditional monopoly that lawyers have had to provide legal services. An interesting historical example of the guild can be found in the fact that the Daily Journal, a legal newspaper, published a scheduled of standard fees to be charged for services for several decades in the 20th century. Another example is that the disciplinary process of the State Bar was originally administered by local committees of practicing attorneys with review by the Board of Governors for more than four decades after the creation of the integrated State Bar of California.


guild 2

A number of factors are now in play that are opening up the guild.

These have reached their fullest expression in Great Britain, where our legal system originated, and in Australia. These include so-called Alternative Business Structures, which relax the traditional investment in law firms by non-lawyers and Active Management Systems, being pioneered in New South Wales, prophylactic regulation that assists lawyers in delivering legal services before problems arise. Here in the United States, the State of Washington has pioneered Limited License Legal Technicians, legal professionals that fill the gap between lawyers and paralegal. The experience of these jurisdictions offers guidance as to how California, the leading state in the United States, can lead again in reforming legal service regulation to better deliver justice.

Over 26 years of closely observing the State Bar, from the inside as well as the outside, has convinced me that incremental tinkering with system as its exists will not fix the fundamental problems with the State Bar as an institution. We have had 30 years of studies, task forces, reorganizations, reforms and scandals. There are many smart, good people working at the State Bar and yet there is a pervasive culture of dysfunction that stems directly from the nature of the integrated bar and the unique place that our integrated bar has in our political system.


An Immodest Proposal: The Legal Services Regulation Authority (LSRA)

The State Bar, as an agency within the judicial branch of government under the California Constitution, needs to be transformed into Legal Services Regulation Authority (LSRA), and entity that will license and credential all providers of legal services, lawyers, limited license legal technicians, paralegal, document providers and immigration consultants, and other legal service providers that might be authorized.

This agency should remain in the judicial branch, under the ultimate guidance of the California Supreme Court. The provision of legal services is ultimately about assuring justice, which makes this area of economic activity unique among the professions, which are mostly, and appropriately, regulated by the Executive Branch. The Judicial Branch should principally be in charge to avoid the confusion engendered by multiple stakeholders
It should unambiguously be a government agency and should not discharge any trade association functions. Attorneys would not be “members” as they are currently designated in the Business & Professions Code. The acting Executive Director has acknowledged that the use of the term “members” is an anachronism that is no longer apt after the enactment of the governance reform.

Creating the LRSA would mean major legislative changes as well as amending the California Constitution, as it was amended by initiative in 1962 to provide for the State Bar’s status as judicial branch agency. The scope of this endeavor is ambitious. But it is worth doing to bring this important component of our justice system into the 21st century and to expand the availability of legal services.


big wave 2

The most important point is that incremental change is not going to solve the problem. Just as we did in 1927, we need to work a sea change in way we regulate the legal professions. The integrated bar was a well-intentioned attempt to improve the quality of the legal profession and the quality of justice, and it may have worked reasonably well for the first forty years of its existence.  It has not worked well for many decades.

One Reporter’s Opinion, Part One: The State Auditor’s Report

The State Auditor’s Report

Much current discussion has resulted from the State Auditor’s report issued on June 15, 2015. It obviously raises a number of issues that should concern anyone who cares about the administration of justice in California. For the most part, its analysis and conclusions regarding the consistent and long term management failures by the State Bar are spot on.  But the State Auditor’s conclusion the State Bar endangered the public by settling discipline cases for less discipline than was necessary to protect the public must be taken with a very large grain of salt. Of course, this is the finding that is drawing the most press attention. The reason is the profound lack of trust in the State Bar’s discipline system, reflected in the fact that the auditor reached this conclusion without the tools or analysis to support it.

The State Auditor Does Not Have the Expertise to Determine the Adequacy of Discipline

While the State Auditor’s expertise in auditing and financial matters, is the without question, they are not knowledgeable on jurisprudence of attorney discipline. The California Supreme Court has held that the determination of the proper discipline in a given case rests on a balanced consideration of the unique factors in each case (In the Matter of Oheb (Review Dept. 2006) 4 Cal. State Bar Ct. Rptr. 92, citing Connor v. State Bar (1990) 50 Cal.3d 1047, 1059, Schneider v. State Bar (1987) 43 Cal.3d 784, 798.) The State Bar’s Standards for Attorney Sanctions for Professional Misconduct (SASPM), recently revised, are intended to bring a measure of consistency to the process but are not binding on the Supreme Court and prescribe broad ranges of discipline, subject to consideration of factors in mitigation and aggravation. Moreover, settlements in discipline matters are subject to the same types of pragmatic factors as settlements in any other context, such as the strength and availability of evidence.

Ultimately, the appropriate discipline is what the Supreme Court says it is. And while the Supreme Court did identify 27 cases that it returned for reconsideration, during the same time period it approved the recommended discipline in hundreds of others. Moreover, since the finality rules (Cal Rule of Ct 9.10) were approved, the Supreme Court has approved thousands of discipline recommendations, and rejected very few.

The statistics cited the auditor regarding the relative proportions of reprovals and disbarments are interesting but don’t prove the lack of public protection. Measuring public protection is difficult, so many tend to fall back on the intuitive ideas that harsher discipline equals more public protection. This isn’t like the criminal system where sentencing is larger dictated by statute; this isn’t like the civil litigation system where damages are typically measured in dollars. An analysis of whether the discipline system is protecting the public can only be made by individuals with an understanding of the complexities of disciplinary jurisprudence and the functioning of the discipline system.



Who is this guy?

A Short Relevant History

That the Office of Chief Trial Counsel (OCTC) has exercised flexibility in settlement policy to deal with case inventory is hardly new or confined to the 2011. After the State Bar shutdown in 1998, a rule was adopted creating an Early Neutral Evaluation Conference, essentially a pre-filing settlement conference in State Bar Court for the express purpose fo expediting settlement of the huge case backlog that had occurred under the shutdown. This was done at the direction of Justice Elwood Lui, acting as special master overseeing the expenditure the special assessment ordered by the Supreme Court (In Re Attorney Discipline System (1998) 19 Cal.4th 582).

In 1999-2001, I worked as a manager in OCTC, managing a unit of ten trial attorneys. The policy of the office in that time was to accept the hearing judge’s recommendation resulting from the ENEC to expedite settlement. Michael Nisperos, Chief Trial Counsel between 2001-2005, had a stated policy goal of bringing the settlement rate in State Bar Court closer to the settlement rate in civil or criminal court. During his tenure, Senator John Burton played a major role in setting direction for the State Bar (see Obrien v. Jones (2000) 23 Cal.4th 40; see also Bus. & Prof. Code section 6230.) Senator Burton’s influence and personal interest in the subject of attorneys impaired by substance abuse is also evident in the selection of Mr. Nisperos, a recovering drug addict, as Chief Trial Counsel in 2001.

Mr. Nisperos declined to apply for a second term as Chief Trial Counsel. Scott Drexel, his successor, moved in the other direction, especially following the Supreme Court’s decision In Re Silverton (2005) 36 Cal.4th 81, which criticized OCTC and the State Bar Court for pursuing inadequate discipline. Mr. Drexel’s policy was to interpret the SASPM rigidly, which made it difficult to settle filed disciplinary cases. This, along with other management failures, resulted in a growth in the backlog of discipline cases (see State Auditor’s report at page 22.) OCTC’s rigid interpretation of SASPM was ultimately rejected by the State Bar Court in a decision that the Supreme Court declined to take up on review, despite its decision in Silverton and its earlier remand of the same case for reconsideration (In the Matter of Van Sickle (Review Dept. 2006) 4 Cal. State Bar Ct. Rptr. 980; Chief Trial Counsel’s petition for review denied.)

Mr. Drexel’s bid for the second term as Chief Trial Counsel was rejected by the Board of Trustees in 2009. At the time, there was much speculation that Mr. Drexel did not a get a second term because he was too tough a prosecutor. While the reasons that Mr. Drexel was not reappointed have never been made public, they had nothing to do with his toughness as a prosecutor.

Mr. Dunn assumed his former post as Executive Director in late 2010. Although Bus. & Prof. Code section 6079.5(a) clearly removes the Executive Director from operational responsibility for OCTC, Mr. Dunn moved quickly to remove the senior management of the office and set his goal of zero backlog by the end of 2011. Mr. Dunn was widely perceived as the Legislature’s man in Sacramento, the “right man at the time” as former State Bar President William Hebert stated, a time when the State Bar was going through the reform in its governance process prompted by SB 163 (see Bus. & Prof. Code section 6001.1.) It was assumed that the zero backlog goal was the direction of the Legislature. At the time, most people connected with the discipline system thought that it was an unrealistic goal. The Chief Trial Counsel now says she held the view that this was an “arguably unrealistic goal” in late 2011;  it is not clear that she reported this to the Board, or resisted Mr. Dunn’s direction, consistent with her responsibilities under section 6079.5. While the Chief Trial Counsel appeared to be Mr. Dunn’s protege in 2011, they are now at odds in the litigation Mr. Dunn has filed.  There is nothing in the State Auditor’s report that supports Mr. Dunn’s allegations that the Chief Trial Counsel intentionally omitted cases from the backlog numbers.  The cases that were omitted were so-called “State Bar Investigations” that are inititated by the State Bar itself, not the product of a complaint to the State Bar, cases that don’t fit within the statutory definition of the “backlog” contained in Bus. & Prof. Code section 6094.5.

My view is that it was grandstanding by Mr. Dunn, meant to convey the impression that something dramatic was being done to fix the discipline system, which, by historical standards was no more broken than usual when he assumed his position. Unfortunately, Mr. Dunn’s appointment as Executive Director appears to have been motivated by a desire to kowtow to an important “stakeholder” just as Mr. Nisperos appointment as Chief Trial Counsel was in 2001.

An important point needs to be made here. Much of the confusion, inconsistency and management incompetence that the State Bar has exhibited for the last three decades is rooted in the idea that the State Bar as an institution is beholden to multiple “stakeholders”: the Supreme Court, the Legislature, the Governor, the lawyers of California. Trying to please multiple stakeholders means that you will please none of them. This idea needs to be discarded and replaced with the idea that there is only one stakeholder: the people of the California.

The State Auditor’s Criticism of the Lack of Workforce Standards and Written Procedures is Trenchant

As the State Auditor acknowledges, there is an interplay between staffing levels, case processing times and the level of discipline. It is possible to build a discipline system where every case is tried and none is settled; the effect is to move the case backlog to the State Bar Court, perhaps the most labor intensive part of the process. More State Bar Court judges and prosecutors can be hired.

The auditor’s criticism of the lack of workforce planning (pg. 35-36) is relevant here. One complicating factor may be the unionized nature of the State Bar’s work force. I was very active in the attorney bargaining unit of the State Bar’s unionized work force (Service Employees International Union, local 535) from 1989 to 1999, including serving as President of the attorney unit, union steward and brief service on the contract negotiating team in 1994. Workload standards were discussed by State Bar management during the 1992 and 1995 contract year negotiations and opposed by the union. To my knowledge, they were never enacted.

Also highly relevant is the State Auditor’s  criticism of the lack of written policies and procedures in OCTC (p. 39.) Bluntly, OCTC has never been interested in written policy and procedures because it has always been afraid that it might be held to them. Before the shutdown of the discipline system in 1998, much effort was put into a comprehensive prosecution manual by senior OCTC attorneys but the work was interrupted by the shutdown.  After the shutdown, the acting Chief Trial Counsel, the late Fran Bassios, was not interested in pursuing the project.

Part of the difficulty in adopting long term quality control mechanisms like workforce planning and comprehensive written policies and procedures has been the State Bar’s tendency to lurch from crisis to crisis over the last three decades, with senior management focused on dealing with the crisis de jour.

The structure of the Board of Trustees, with its limited annual meetings, and turnover from year to year, ensures that top level management and oversight is limited. The State Bar President typically sets the agenda; after his or her election in October, little happens until the Board planning meeting early in the next January. After April, Trustees are usually preoccupied with the election of the next State Bar president in July. There is a precious window of three or four months to accomplish anything meaningful.

Among the Trustees, there is typically little interest in the discipline system, although it is the main activity of the State Bar. Meetings of Trustees’ Regulation and Discipline Committee are typically the last meetings scheduled on a Board Committee day agenda and they start late, often with insufficient time to fully discuss the issues. When the State Bar holds its annual “discipline day” in the fall to introduce new Trustees to the workings of the discipline system, attendance is always light.

An Independent Audit and Review Unit Should Be Created

All of the State Auditor’s recommendations should be adopted.

The scope of one of the auditor’s recommendations, the creation of an Audit and Review Unit independent of OCTC, should be expanded. Such a unit, similar to the Complainants’ Grievance Panel that I worked for from 1989 to 1992, should not only evaluate requests for review from complainants who have had their cases closed but should also audit the performance of OCTC in matters that have gone forward to disciplinary prosecution. The existence of an independent watchdog would bolster confidence in the discipline system and help to answer the question of whether it is really protected the public.


The Two Deweys

When I took legal writing my first year of law school, our instructor would use exemplars from the fictional firm and comic trope  “Dewey Cheatam and Howe” to teach how to write legal papers.   Everybody seemed to think that this was mildly amusing.

Lawyers from a different Dewey firm went on trial last week, accused of cheating ’em and how!  Nobody thinks this is funny.

Even in law school, the use of the Dewey Cheatam name made me a feel a little uncomfortable.  Up until that time, I had not really thought of the profession as a whole as being seen in bad light by anybody.  Having no life experience of lawyers, my image of lawyers had been shaped by media, not so much Perry Mason but The Defenders.


E.G. Marshall, Lawrence Preston in "The Defenders"

E.G. Marshall, Lawrence Preston in “The Defenders”


Maybe it made us all a little uncomfortable, which is why we proto-lawyers laughed at it.  Lawyers, after all, are supposed to be smart people that you could trust.  The idea that we might be cheating people while pretending to be trustworthy, reduced to the very name of the law firm used to teach law students, even then suggested an unstudied, perhaps an almost unconscious, cynicism about the profession.  Of course, that was only a first taste.   The prevailing feeling among most of my law school peers was that you either had to be in top 10% of the class and obtain a position with a large law firm, make partner in seven years and  relax, or that you were doomed to lifetime of drudgery.

My introduction to Dewey Cheatam in 1982 was about the time that Findley Kumble was on its way to becoming the first mega firm, a process of accretion based on a number of mergers and acquisitions that would eventually unravel as partners and clients moved on to greener pastures.  At the time it seemed an outlier, a situation largely wrought by the egos of the lawyers involved.  The rising tide of Golden Age revenue was lifting all boats.  But later, other firms, many other firms followed the same route as the tide began to go out.  Part of the reason the tide went out is that the value proposition presented by large law firms and the lawyers in general  increasingly had less appeal, first to consumer clients and then to corporate clients.

It is common to feel cheated when you realize you are paying for something you can get more cheaply.   The Golden Age was extremely lucrative for lawyers, not so much for clients.   Part of the cost of all that lucre for the profession was the acid bath of cynicism that it seemed to spawn.  Lawyers are known for their pessimism; indeed, we are well paid for telling others exactly why the glass is only have full.  We can see too clearly the ways much lawyering in the Golden Age was about acquiring that lucre and little else.


The link between the two Deweys should be largely of historical interest now.   Dewey & LeBoeuf  is a marker, an end of an epoch signpost, as the profession reinvents itself, as it reforms its value proposition.  It’s value proposition not only its clients, but its value proposition to itself.   The end of the Lawyer Bubble, the end of the Golden Age should mean the end of the idea that lawyering is the path to great wealth,  affords us an opportunity to re-discover the true worth of our profession and leave cynicism behind.  Let’s take it.



New Discipline Standards Appear, Startling Nearly Everybody

On May 7, the State Bar’s Regulation and Discipline Committee (RAND) approved the first substantive revision to the Standards for Attorney Sanctions for Professional Misconduct (SASPM, otherwise known as Title IV of the State Bar Rules of Procedure) since 1986. A day later, the full Board of Trustees voted to approve the new SASPM, ushering in a new era of greater public protection. Or not.

“Huh?”, you might say.  SASPM?  What the hell are you talking about?

If you did say “huh”, you are not alone, for knowledge of the SASPM is largely confined to the practitioners of attorney discipline, prosecution and defense, and the Courts in which they appear, State Bar Court and the California Supreme Court.

Outsiders might encounter the SASPM through the occasional Supreme Court opinion (last discussed in In Re Silverton (2005) 36 Cal.4th 81) or in most Review Dept. opinions, but there is scant evidence that anyone outside really cares.  Literally, scant evidence.   Despite being the first substantive revision since 1986, it garnered only a handful of public comments, even with two public comment periods.  Not even lawyers within whose wheelhouse the Standards reside worked up much interest in saying anything about the new and presumably improved SASPM.  Only the Chief Trial Counsel expressed support for the new SASPM.

The project got off to a grandiose start with a press release by the State Bar in on January 29, 2014, and two months later it announced that the initial meeting of the Discipline Standards Task Force would be on May 12, 2014.  The initial meeting featured opening remarks by the then Executive Director, who reminded everyone about the open meeting laws. The then Assistant Executive Director (now acting Executive Director) also spoke and provided the Task Force members with a broad overview of the purposes of attorney discipline, including a discussion of a law review article by the late Prof. Fred Zacarias entitled, forthrightly, The Purposes of Discipline.  Among the ideas advanced in the article is that deterrence is a permissible purpose of professional discipline and that deterrence of other lawyers’ misconduct would justify a harsher level of discipline than would otherwise by the traditional analysis of discipline as an individualized inquiry into the fitness of that particular practitioner to practice law. (See Zacharias, at pages 65-66.)

Dr. Stangelove reminded us that deterrence only works if the deterrent is known to the actor.   While lawyers do read the discipline decisions, almost no one outside the arcane little world of discipline is aware of the SASPM.  Even if you buy the deterrence theory, this is not the vehicle for it.

Dr Strangelove

The bigger problem is that emphasizing deterrence would be departure from California Supreme Court’s long standing approach to discipline as an inquiry into the fitness of the practitioner. As succinctly stated in Read v. State Bar (1991) 53 Cal.3d 394, 422 : “In arriving at an appropriate discipline, we balance all relevant factors, including mitigating circumstances, on a case-by-case basis.”

At that first meeting, the Discipline Standards Task Force declined to embrace this path to punishment, correctly concluding that it was circumscribed by the Supreme Court’s case law and, to a much lesser degree, by the statutory mandates of the Business and Profession Code.  But the idea that the SASPM serves a deterrent function survived in the Task Force’s decision that there should be a separate Standard for each type of violation.

Thus, the Task Force adopted new Standard 2.5, which applies to violations of Rule of Professional Conduct 3-310. (“Avoiding the Representation of Adverse Interests”). Presently, such violations are governed by the “catch all” provisions of soon to be former Standard 2.15, “Violation of Rules In General”, which unhelpfully provides a range of discipline from reproval to three years of actual suspension. New Standard 2.5 very helpfully specifies that a violation of Rule 3-310(C) or (E) will result in actual suspension if informed written consent is not obtained and there is actual harm to the client, and, in a successive representation conflict, when the attorney fails to protect material confidential information.

The problem with Standard 2.5 is twofold.  First, as pointed out by Task Force member Steven Lewis, there is no meaningful case law supporting such a level of discipline for a “stand alone” violation of the rule.  Second, and this is related to the first, violations of Rule 3-310 are seldom prosecuted by the State Bar.  Why?  These violations are typically addressed through motions to disqualify counsel.  The standards for a disqualification motion are different than for a discipline proceeding.  And this type of misconduct is often committed by larger law firms who are not typically targeted as “public protection” problems.

High profile disqualification motions, some involving large law firms, appear to be increasing and this was perceived by the Task Force Chair as a problem that should be addressed.  As well it may be, but it has not, heretofore, been a problem that the California Supreme Court or the State Bar has recognized as something to be addressed by the discipline system.  So deterrence as a public policy choice creeps in, subtly or perhaps not subtly, resulting in a Standard that seems a lot more like a statement of what we want to the law to be rather than a guideline telling us what the law is.  Only the Supeme Court, and Review Dept., under the guidance of the Supreme Court, can make law or set policy in this area.

Not everyone is offended by this.  The Chief Trial Counsel’s only problem with Standard 2.5 is that it did not go far enough, leaving out the notice requirements of Rule 3-310(B) and everyone’s favorite trap for the unwary, Rule 3-310(F).  The Office of Chief Trial Counsel has long sought to place the SASPM on the same lofty plateau as other substantive discipline law, in the name of consistency and, for goodness’ sake, just to make the whole process of figuring out the appropriate discipline simple. Why wade through all that nasty old case law when SASPM has the answer?

No new era of public protection will be ushered in by the new and improved SASPM. Even the press announcement of their approval carefully described them as guidelines. Guidelines do not a revolution make, but it will be interesting to see if the Task Force’s foray into discipline policymaking results in more standalone prosecutions of Rule 3-310.  If someone runs a flag up the flagpole, are we not supposed to salute it?  And it will be interesting to see, if and when the California Supreme Court gets its shot at Standard 2.5, whether it decries it as “not faithful” to its teachings, as it did with old Standard 2.2(a) in Edwards v. State Bar (1990) 52 Cal.3d 28.

In the meantime, those of us in the arcane world of attorney discipline can ponder the place SASPM holds in our universe.  Everyone else can relax.


Carrots, Not Sticks: Building an Attorney Integrity System



Throughout its existence attorney discipline has been a punitive system.   While couched in the rubric of public protection, attorney discipline systems have always operated by imposing sanctions for proven misconduct, sanctions that hurt, including the ultimate sanction, removal from the profession.  Older cases refer to attorney discipline as “quasi criminal”  (see In Re Ruffalo (1968) 390 U.S. 544, 551.)  While attorney discipline almost always contains educational and remedial elements these days, it is still a fire department that almost always arrives after the house has burned down.

But what is we could prevent those fires before they breakout?  Prof. Susan Fortney writes of the recent approaches that have been adopted in Australia in her paper Promoting Public Protection through an “Attorney Integrity” System: Lessons from the Australian Experience with Proactive Regulation of Lawyers in the most recent issue of The Professional Lawyer, the scholarly publication of the ABA Center for Professional Responsibility.

As part of the reforms that legalized the alternative business structures the provide for some degree of non-attorney ownership of legal service providers, regulators in Australia required those entities to engage in an active management approach; in Prof. Fortney’s words:

To address questions related to the effect of non-lawyer ownership and limited liability, the statute imposes a number of management safeguards. First, the incorporated legal practice (ILP) must appoint a legal practitioner director to be generally responsible for the management of legal services provided by the firm.  Second, the statute provides that the legal practitioner director must ensure that “appropriate management systems” are implemented and maintained to enable the provision of legal services in accordance with obligations imposed by law.  The failure to implement and maintain appropriate management systems may constitute professional misconduct and can result in legal practitioner directors losing their practicing certificates and liquidation of the legal practice.  Regardless of whether there are any non-lawyer owners, all incorporated legal practices must meet these requirements.

Ethics lawyers have long preached pro-active risk management approaches to lawyers to help them understand how to stay out of trouble.  Australia has gone a significant step beyond, requiring that lawyers and law firms designate a responsible risk manager, requiring that risk management assessment take place and requiring that appropriate risk management be put in place.  Moreover, the regulating authority helps practitioners and law firms to become compliant.

Punitive discipline would, of course, still be available to address misconduct like dishonesty but moving toward a Attorney Integrity System approach will discourage those types of practitioners as well.  In my experience, they don’t have a keen interest in practice management.  Those seeking an easy graft won’t go through the effort.   Similarly, those with psychological or health problems would probably have trouble maintaining those certifications before they could harm clients;  moreover, moving away from a punishment based system would encourage them to seek help early.

The State Bar of California is taking its first small steps in the direction of creating an Attorney Integrity System with its project to create a voluntary online Client Trust Account survey of members, an instrument designed to both gather information for the State Bar and to educate survey takers about client trust accounts.   The Board of Trustees considered the expensive approach of a creating a full bore client trust account auditing programs along the lines of those in several states, all much smaller than California but chose to follow the educational path as an inexpensive way to address one of biggest causes of client trust account misconduct, sheer ignorance of the requirements.

Implementing an Attorney Integrity System in the Bear Republic won’t be cheap but the cost of discipline system is already amazingly expensive, more than  $64 million in 2014, according a year to the State Bar’s Annual Discipline Report at page 56.  And there is every prospect that it will be more effective at protecting the public, promoting confidence in the legal system, and even helping lawyers be better, happier, more successful practitioners.   While Australia’s reforms occurred in the course of their adoption of alternative business structures, those aren’t necessary to begin moving toward an Attorney Integrity System, as Prof. Fortney observes.  It is a positive step that regulators and practitioners can begin moving toward now.


donkey gets carrot