The State Bar’s Governance in the Public Interest Task Force (GITPITF, according to State Bar President Holden) is meeting now and an interesting dialog is occuring between Ed Howard, an attoney with the Center for Public Interest Law (CPIL) and the Task Force members, chiefly public member Dennis Mangers.   Mr. Howard’s comments are unequivocal that it is the structure of the unified bar that consumer advocates consider offensive, not any slackness in the disciplinary system.  Indeed, Mr. Howard could point to no specific evidence that the current discipline system is slack because it is operated by an unified bar.   In response to Deputy Executive Director Roberg Hawley’s direct question as to the whether the unified bar was a fatally flawed structure,  Mr.  Howard argued that we must start the “state of nature” which simply can’t abide the mixing of  the regulated and the regulators, something as apparently unnatural as a the lamb lying down with the lion.   His metaphor is the Public Utilities Commission;  we wouldn’t allow the executives of the largest utility companies to sit on that board, would we?  Disconnection between the trade association side and the government regulation side is absolutely necessary.  Then we can talk about what bridges (or “tunnels” as Mr. Howard to them, an interesting metaphor) for cooperation between the two sides.

Mr. Howard’s comments support this Big Truth:  the lawyer regulation system  bar is never going to be trusted as as long as it is perceived as a system where the regulated regulate the regulated, a point seemingly echoed in new Executive Director Elizabeth Parker’s comment about public perception.   This is very difficult for lawyers to understand, because, in fact, as noted by public board member Dennis Mangers, some of the most ardent public protection zealots are the lawyers on the Board of Trustees!  The irony is that the unified bar tilts the scale toward overzealous prosecution of lawyers, not toward leniency, a fact that might be ideologically difficult for the consumer advocacy side to accept, historically invested as they are in the “fox guarding  the henhouse theory.”

 

 

 

 

 

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Senate Bill 387, the dues bill which gives the State Bar the ability to collect the money it operates on, has been amended to subject to the State Bar to the Bagley-Keene Open Meeting Act and to the California Public Records Act.   Among other changes, Government Code section 6254 would be amended to read:  ” (1)  “State agency” means every state office, officer, department, division, bureau, board, and commission or other state  body or agency, except those agencies provided for in Article IV  (except Section 20 thereof) or Article VI of the California Constitution. (2)  Notwithstanding paragraph (1) or any other law, “state lagency” shall also mean the State Bar of California, as described in Section 6001 of the Business and Professions Code.”  Emphasis added.

The State Bar is an agency provided for in Article VI of the California Constitution, but it is now literally definied as a “state agency” for the purposes of public disclosure under the California Public Records Act but the California Supreme Court, which is explicitly exempt from the CPRA, has described the State Bar as its “administrative arm” for discipline and admissions purposes.  Assuming these changes go forward, what must the State Bar disclose about the direction it receives from the Supreme Court in the discharge of its duties as the Court’s administrative arm?

Among the more intriguing allegations made in the Dunn Fiasco was the allegation that Senator Dunn misrepresented information from the Chief Justice regarding the Supreme Court’s position on moving the State Bar to Sacramento and, that Beth Jay, former principal attorney to the Chief Justice, played in a role in the decision by the Board of Trustees to fire Senator Dunn.  Beth Jay is a defendant in Senator Dunn’s lawsuit.

It is to be expected that the Supreme Court will give direction to its administrative arm.  But the extent of that direction, who gives it, who it is given to, and exactly how it is communicated has always been shrouded from public view.   In the 1990s that direction was minimal; there is the oft told tale of State Bar communications addressed to the Supreme Court that went unanswered for years, such as the recommendation of the Alarcon Commission in 1994 on permanent disbarment. Since the Supreme Court rode to the rescue in late 1998 by ordering a fee assessment on lawyers to revive the discipline system, it has played a much greater role.  We just don’t know how much greater.

Participation in public policy making is not what they want to do.  When Beth Jay was appointed as the Supreme Court’s liaison to the recent Committee that revised the Standards for Attorney Sanctions for Professional Misconduct (SASPM), she did not appear at the first two (public) meetings.  At the third meeting that she did attend, her most trenchant comment was that the revised SASPM not contain too many comments. Understandable that the Court would not want to help make policy that it might later be called upon to adjudicate on.  That is one of reasons for having the State Bar as an administrative arm in the first place.  But there must be some kind of communication and we don’t know what it is, with limited exceptions, the most notable being the Supreme Court’s extrordinary letter to another State Bar commission re-writing the Rules of Professional Conduct asking the Commission to look at a revised rule on prosecutorial misconduct. 

One of the significant reforms in the governance crisis was the appointment of attorney members to the Board of Trustees by the Supreme Court. These appointees appear to be becoming very powerful in State Bar policy making.  One of the first of these appointees, David Pasternak, was elected President of the State Bar in July 2015, defeating Heather Rosing, one of Trustees elected by the members of the State Bar.  It might not be surprising if the next incremental step in the ongoing Governance reform, which was on hiatus during the later part of the Dunn era, will be the elimination of elected attorney representatives.

The State Bar is a lonely planet orbiting two suns, dancing in the ebb and flow from the gravity of each one.  In recent years, the Supreme Court may have had the greater influence but the new open meeting and public records  requirements may push the State Bar more firmly into the Legislature’s orbit.  In the meantime, we will get to see how much trust the latest haunting by Transparency Ghost earns the ever-changing State Bar in the hearts of Sacramento.  And whether the Supreme Court’s fingerprints show up on the new more-transparent-than-ever State Bar.

Update:  The Recorder reported that the Chief Justice contacted a legislator after the amendment  “to commit to transparency—like she has for the branch—and about the best fit for transparency rules for the bar” according to her spokesperson.  The State Bar’s lobbyist had offered amendments to allow the State Bar to draft its own transparency rules for Supreme Court approval but they were not adopted.  Instead amendments to SB 387 were offered to exempt  “(j)oint meetings with agencies provided in Article VI of the California Constitution” e.g. the California Supreme Court.  The Supreme Court, it seems, has skirted the transparency ghost.  On October 8, 2015, Governor Brown signed SB 387.

With the end of the Great Recession, the Loan Mod Wars of 2008-2013 are gradually fading from view.  The numbers of complaints to the State Bar of California have returned to pre-recession levels, even as the Client Security Fund still struggles to pay off a large number of “legacy” claims deriving from the bad old days when lawyers were, according to the official story,  running amuck ripping off desperate homeowners by the millions.  You might think that attorneys would have gotten the message a long time ago but a few are still being hoisted on the twin petards of SB 94 and  extra jurisdictional practice, some years after their transgressions.

It is ancient history how, but its worth recalling that SB 94, the 2009 law that kicked the off the Loan Mod Wars was bottomed on the idea that consumers did not need an expensive lawyer to deal with the banks, so that destroying the ability of lawyers to provide those services by banning advanced fees would work no hardship.   California Civil Code section 2944.6, enacted as part of SB 94 required attorneys entering into such engagements to tell clients exactly that:

   It is not necessary to pay a third party to arrange for a loan
modification or other form of forbearance from your mortgage lender
or servicer. You may call your lender directly to ask for a change in
your loan terms. Nonprofit housing counseling agencies also offer
these and other forms of borrower assistance free of charge. A list
of nonprofit housing counseling agencies approved by the United
States Department of Housing and Urban Development (HUD) is available
from your local HUD office or by visiting www.hud.gov.

But the New York Times tells us (“A Slack Lifeline for Drowning Homeowners“) that a recent report from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) on the Federal Government’s HAMP program tells a much different story.   At the program’s inception, it was estimated that HAMP would “enable as many as 3 to 4 million at-risk homeowners to modify the terms of their mortgage to avoid foreclosure.”   We, the taxpayers of the United States, agree to pay the mortgage servicers  $29.8 billion as an incentive to modify the loans of homeowners facing foreclosure (SIGTARP report, page 96.) “Although participation in HAMP is voluntary, servicers who agree to participate are required to offer HAMP modifications to all eligible homeowners. The actual execution of HAMP lies in large part with participating mortgage servicers, whose employees are responsible for reviewing homeowner HAMP applications and deciding whether a homeowner gets into HAMP or not.”

The results?  “According to Treasury’s official HAMP database, of the 5.7 million homeowners who applied for HAMP between December 2009 and April 2015, servicers turned down 4 million.  That means that, according to Treasury’s HAMP database, servicers turned down more than 7 out of every 10 homeowners (72%) who applied for HAMP.” (SIGTARP report, at page 100.)  But wait, that’s not all: “The problem may be far worse than that. In a separate survey, participating servicers report that they have denied far more than 4 million homeowners for HAMP. In those surveys, HAMP servicers report denying 5.8 million homeowners for the HAMP program, an additional 1.8 million not captured in the HAMP database during the height of the foreclosure crisis.”

“HAMP’s program guidelines require that servicers report to Treasury the reason the servicer denied each homeowner for HAMP by selecting one of the Treasury-defined denial reasons set out in the HAMP guidelines. The top three reasons servicers report for denying homeowners’ HAMP applications attribute the denial to the fault of the homeowner or to the homeowner falling outside of eligibility standards. These include denials because: the homeowner’s application was “incomplete;” the homeowner withdrew the HAMP application or “failed to accept” an offered HAMP trial; or the homeowner’s income fell outside of HAMP eligibility. While these denials may be appropriate in particular cases, the fact that servicers have reported the same reasons so frequently—in light of known problems at the largest HAMP servicers—raises concerns over whether Treasury is doing enough to ensure that denials of homeowner HAMP applications are accurate and based on the actual conduct and status of the homeowners, rather than on the misconduct of the mortgage servicers.”

As reported by SIGTARP, by the Consumer Finance Protection Bureau, by Treasury in its reviews of the top HAMP servicers, and by homeowners who have filed complaints with Treasury, there are many problems with servicers themselves that can affect each of these three denial reasons.  Persistent problems and errors in the application and income calculation process (servicers calculate a homeowner’s income) have historically plagued homeowners seeking HAMP assistance, and continue to do so.  As a result, eligible homeowners may have been, and may continue to be, denied a chance to get into HAMP through no fault of their own.

While these denials may be appropriate in particular cases, the fact that servicers have reported the same reasons so frequently—in light of known problems at the largest HAMP servicers—raises concerns over whether Treasury is doing enough to ensure that denials of homeowner HAMP applications are accurate and based on the actual conduct and status of the homeowners, rather than on the misconduct of the mortgage servicers….. Persistent problems and errors in the application and income calculation process (servicers calculate a homeowner’s income) have historically plagued homeowners seeking HAMP assistance, and continue to do so. As a result, eligible homeowners may have been, and may continue to be, denied a chance to get into HAMP through no fault of their own.

This is hardly news to we battle hardened veterans of the Loan Mod Wars, those of us who dealt with thousands of State Bar complaints against attorneys seeking to help distressed homeowners.  The Times’s Gretchen Morgenson details a few anecdotes that seem so familiar to us.  The loan servicers were happy to take that sweet TARP cash, but not so eager to follow through on relief for troubled homeowners.  The reason, as related by Jacob Inwald, director of foreclosure prevention at Legal Services NYC, seems pretty obvious: delaying a modification or even wrongfully denying it, means more interest and fees that can be charged to the borrower, increasing the amount of the mortgage.  As quoted in the Times story, Mr. Inwald states that obtaining a modification requires “constant pushback and challenging wrongful denials.”  In other words, a lawyer.

Some of the loan modification attorneys were involved in outright scams; some of them were victims of scammers themselves.  Others were actually achieving good results for their clients while trying to find a way to stay in business in the face of SB 94’s prohibition on upfront fees.  But the indiscriminate scythe of Civil Code section 2944.7, wielded by the State Bar with a special fury after the ascension of our Chief Trial Counsel in 2011, showed no mercy.

The Loan Mod Wars are fading to a close, not with a bang but with a wimper.    Some may deserve medals for their participation.  Others would really, really like to forget that the whole thing ever happened.

 

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.

 

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.

 

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.

 

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.

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.

 

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.

 

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.

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.