State Bar Money Games Continue

History repeats itself, first as tragedy, second as farce–   Karl Marx

On October 17, 2016, the California Supreme Court appointed Justice Elwood Lui to serve as Special Master in evaluating the request filed by the State Bar of California for an order assessing fees against the members of the State Bar to fund the operations of the State Bar disciplinary system.  Justice Lui is well-qualified for the job, having previously served as Special Master when the Supreme Court ordered the first, and so far, only special assessment,by the Supreme Court, in its 1998 decision In Re Attorney Discipline System.   His appointment does not bode well for the expansive request filed by the State Bar on September 30, 2016.

In that request, the State Bar sought an order funding not only the essential components of the discipline system that were funded in 1998 — the disciplinary prosecutor (the Office of Chief Trial Counsel), the adjudication arm (the State Bar Court) and the office supporting professional competence.  Instead, it sought an order funding all that and more,  State Bar organs that have little or no direct relationship with the discipline system, such as the California Young Lawyers Association, the Center on Access to Justice, the California Commission on Access to Justice, and the Office of Communication.  Moreover, hidden in depths of the 300 pages of appendices supporting the request (but not made public on the State Bar’s website) were a number of questionable expenditures.

Most of us might not have known about these questionable expenditures but for the response filed by Prof.  Robert Fellmeth and the Center for Public Interest Law (CPIL)on October 11, 2016.  More deja vu: Prof.  Fellmeth served as the appointed discipline monitor between 1987 and 1991, when the current discipline system was created.  A brief excerpt from CPIL’s response illuminates the sloppiness of the State Bar’s request:

Even a rudimentary attempt to trace the sources of the Bar’s figures raises some serious red flags. In Table 3 of Appendix F, for example, the Bar states that the total cost of the above-described core disciplinary offices in 2016 was $64,438,000 – but that figure includes $20,779,700 in “Indirect Costs” (32% of the total cost) that are nowhere itemized so the reader can be assured that those indirect costs were properly attributable to those disciplinary units.

Most disturbingly, a portion of these indirect costs – which have been allocated to the core discipline functions and are presumably a part of the Bar’s current Request before the Court – includes $56,300 in expenses for Board of Trustees elections! See Appendix F at page 6, footnote 10; Appendix C- expenditure detail at Cost Center 10005.

Moreover, the Executive Director / Board of Trustees budgets – which are also allocated proportionately to the disciplinary functions under the Bar’s “cost allocation plan” even though they have little impact on the discipline system outside of nominating and appointing the Chief Trial Counsel – include significant and completely unnecessary costs such as an annual $44,500 catering budget for the Board of Trustees, and a $7,400 catering budget for the Executive Director alone. See Appendix F at pages 5-6; and Appendix C (expenditure detail for Cost Centers 10001, 10003)

CPIL’s Amicus Curiae letter dated October 11, 2016, page 6.  The letter goes on to note that no other government agency pays for catering, not even coffee.  Instead, employees are reimbursed for meals taken on duty according to established schedule.  And, of  course, they don’t have elections.

But it is more than sloppiness.  The corporate culture of the State Bar still hasn’t wrapped its head around the fact that it is not a bar association but a government consumer protection agency.   Thus, the rather sudden, transparent  and entirely unconvincing  effort to re-define “public protection” so broadly as to include everything the State Bar does (“Jeepers Creepers.“)

And it never will.   That is why disunification, total or limited by moving the discipline function to a new agency, is absolutely essential.

I finally caught up with Professor Richard Abel’s excellent book “Lawyers On Trial: Understanding Ethical Misconduct.”  Chapter 1 provides a very comprehensive look at lawyer regulation over the last century and its peculiar history in California.  The roots of the dysfunction go far back, much farther back than the 30 years that I am personally familiar with, even to the turn of the last century.   Everything that we are debating now has  been debated before, many, many times.  It won’t be changed by a change in management or even a change in governing structure.

In 1998, California experienced a tragedy when the discipline system shut down after Gov. Wilson’s veto of  the dues bill.   A vital part of the justice system simply ceased operating for six months despite the valiant efforts of State Bar President Marc Adelman and others.  It ceased functioning because the State Legislature was tired of the money games played by the State Bar, including the diversion of funds dedicated to hiring discipline personnel  for purposes having nothing to do with discipline.   There was no trust in the State Bar as an institution.  Now 18 years later, we find ourselves repeating history.  This time the tragedy has become farce as the State Bar struggles to  hold on to its schizophrenic nature,  struggles to placate all of its many “stakeholders” even as the real work of public protection embodied in the Office of Chief Trial Counsel and the State Bar Court drifts while funds for elections and catering are earnestly sought.   As Professor Fellmeth notes, if public protection is defined to include everything, then public protection is not prioritized.

The Supreme Court will undoubtedly fund the essential functions of the discipline system with Justice Lui’s very able assistance.  Once that is done, it will be time to move toward giving the discipline system the true priority and focus that it deserves.  That means separating it from the current structure.

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