Discipline Theatre Enjoys a Revival

Revivals are a time-honored show business tradition. Stephen Spielberg is in the spotlight with his remake of “West Side Story.” Another Sondheim creation, “Company,” has returned to Broadway to positive reviews. And Hugh Jackman is stirring anticipation with his return this year in “The Music Man.”

Not to be outdone, the State Bar of California is reviving Discipline Theatre. It’s not exactly a new production of a classic property but a return to tradition nonetheless: appearing to aggressively address the elusive goal of public protection with proposals that are more aligned with rehabilitating the State Bar’s public image than any demonstrated need.

The genesis is the worst public relations disaster in the State Bar’s history, the Tom Girardi scandal. It follows from the incendiary series of stories in the Los Angeles Times which implied that the well-connected Girardi had managed to influence the State Bar’s discipline process and allow him to steal millions from his clients. The Times never really connected the dots, but it did shed light on the curious career of former State Bar investigator Tom Layton, a Girardi confidente who also enjoyed a close relationship with the last great impresario of discipline theatre, former executive director Joe Dunn.

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Dunn, in his time, provided much grist for the Kafkaeq mill, including this nugget from June 2012: “When we brought Jayne [Kim] back to the bar last year, we said there was a new discipline sheriff in town. As everyone can now clearly see, it wasn’t just hyperbole.” Slightly more than two years later, Dunn was fired by the State Bar; his protege Kim, who later turned on him, resigned in April 2016.

Ancient history now. But what the State Bar is going through may make it seem like good times.

Following the Los Angeles Times stories, the Office of Chief Trial Counsel (OCTC) conducted an audit of the closed Girardi investigation files. That audit resulted in the unprecedented admission in June 2021 that the State Bar had “made mistakes” in its investigations of complaints against Girardi going back decades. Beyond this cryptic commentary, the results of the case audit are not public. Digging deeper, the Board of Trustees “established a special committee of the Board, the Committee on Special Discipline Case Audit, to further analyze the audit report on closed discipline cases against Thomas Girardi and to develop a proposed corrective action plan to be approved by the Regulation and Discipline Committee (RAD) or the Board of Trustees.”

The Board Committee has now made their first public report recommending “corrective action.” As you would expect, it doesn’t comment on the explosive innuendo that Girardi was able to exercise influence over the State Bar’s discipline process. It also doesn’t discuss the “mistakes” made by the State Bar. Instead it offers a grab bag of various proposals under the label Client Trust Account Protection Program, described as “an interrelated set of steps that build accountability and oversight.” Specifically, it proposes:

The recommended program begins with requiring registration of trust accounts, annual certifications of compliance as well as self-assessment and compliance review. Self-assessment and compliance review will allow the State Bar to conduct risk assessment and management through a graduated set of corrective actions, including audits and formal discipline. Each element in combination results in a comprehensive program of education, deterrence, detection, and enforcement. These proposed changes are designed both to improve trust accounting practices in general and help avoid and detect negligence in that respect and also, particularly through risk assessment and audit, better detect those attorneys who engage in intentional misconduct regarding entrusted funds.

The report also contains this rather wishy-washy mea culpa:

Up to now, the State Bar has not had a comprehensive and proactive program for education about and enforcement of the provisions of rule 1.15. While the Handbook is an effective tool when it is used, more is needed to ensure that attorneys are fully educated in how to manage their trust accounts and are deterred from engaging in misconduct regarding entrusted property. Rather than leading in this area of regulation, California has allowed itself to fall behind. The program proposed by the Committee is designed to correct this failure.

Standing alone, it is hard to fault these steps. More than ten years ago, I appeared before the Board of Governors (as they were then known) in my capacity as President of the Association of Discipline Defense Counsel and urged similar steps when the Board was considering a proposal from ED Dunn for random trust accounts. I pointed out that most client trust account misconduct was a result of ignorance of the client trust accounting rules and that education would be a lot cheaper than expensive random client trust accounts auditing. I suggested that attending the State Bar’s excellent Client Trust Account School be made a requirement before an attorney was even allowed to open a client trust account. The Board made positive noises, shelved the random client trust account proposal, and did nothing.

Unfortunately, the first step in the new CTAPP program is some poorly thought out changes to Rule 1.15 that would remove the requirement that the client direct the payment of funds from the trust account and would impose an artificial deadline of 60 days for paying money out of the client trust account. These proposed rule changes would enormously complicate the attorney’s ability to compromise statutory and contractual liens for the benefit of the client.

But the bigger picture is that we know very little except the murky picture painted in the press about exactly what Girardi did to evade State Bar scrutiny. We don’t know anything at all about what the “mistakes” were that were made by the State Bar in investigating the complaints. The Committee’s report suggests that it simply lacks adequate tools, that California merely “fell behind” in its cutting edge approach to discipline. Without a public airing of what those mistakes were, we don’t know if CTAPP is just a well-intentioned band-aid covering up a more severe wound. Such an airing is necessary to restore confidence in the discipline system. CTAPP appears intended to distract us from that necessity.

But we know this about CTAPP: it is proof the State Bar is Doing Something, and that is what Discipline Theatre is all about. Now sit back and enjoy the show!

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