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.

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