The SBI Mystery

There are State Bar investigations. And there are State Bar Investigations. A capital letter can make a big difference. And so it does in this case.

Complainants Are Special

Most State Bar investigations (small “i”) result from a complaint that the State Bar of California receives from a person who is referred to as the “complainant” or the “complaining witness.” That status comes within certain rights. State Bar Rule of Procedure 2403 describes them:

Rule 2403. COMPLAINT
The Complainant is entitled to receive relevant information pursuant to the provisions of the State Bar Act or the Rules of Procedure of the State Bar of California. In matters where communications from more than one person concern the same or substantially the same underlying conduct of the attorney, there may be more than one complainant. The complainant may be, but is not limited to:
(a) a current or former client;
(b) one complaining on behalf of a current or former client;
(c) one owed or was owed a fiduciary duty and an alleged breach of the fiduciary duty is or should be a subject of the investigation;
(d) member of the judiciary or legal professions who alleged misconduct by the attorney which is or should be the subject of an investigation;
(e) a person who has significant new information about an alleged ethical violation committed by the attorney affecting the professions, the administration of justice, or the public.
Eff. January 1, 1996. Revised: January 25, 2019. Source: New.

As the Rule indicates, the State Bar Act requires that a complainant receive relevant information. Business and Professions Code section 6092.5 provides that the State Bar must “[p]romptly notify the complainant of the disposition of each matter.” It also provides that the State Bar must [p]rovide information to prospective complainants regarding the nature and procedures of the disciplinary system, the criteria for prosecution of disciplinary complaints, the client security fund, and fee arbitration procedures.” Emphasis added. Business and Professions Code section 6093.5 further provides that “Upon request, the State Bar shall notify a complainant of the status of his or her complaint and shall provide him or her with a written summary of any response by the attorney to his or her complaint if the response was the basis for dismissal of the complaint. A complainant shall be notified in writing of the disposition of his or her complaint, and of the reasons for the disposition.” Emphasis added.

Sections 6092.5 and 6093.5 were added in 1986, part of the great wave of reform spearheaded by State Senator Robert Presley and largely designed by Robert Fellmeth. This reform followed in the wake of the extensive negative publicity concerning the state of the discipline system that resulted from a series of newspaper stories in the San Francisco Chronicle. Among other things, those stories described a backlog of about 4400 discipline complaints that had been languishing, some for years, memorably captured by the description of “the TNT Room” so-called because it was stuffed so full of files that it was about to explode.

Another significant reform was creating a statutory right to have investigation closing decisions reviewed by a seven-member panel known as the Complainants’ Grievance Panel (CGP), composed of four attorneys and three non-attorneys. My first job at the State Bar was serving as a staff attorney for the CGP. The CGP statute “sunsetted” in 2000, but the “second look” function continues to be performed by the Office of General Counsel. The intent of the legislation was to impose a degree of accountability on the State Bar’s Office of Chief Trial Counsel (OCTC) in the exercise of its broad discretion to pick and choose what cases to prosecute. In more concrete terms, to prevent OCTC from dealing with the backlog by just dumping cases.

The status of complainant also comes with certain costs, most prominent being that the complainant waives the attorney-client privilege and any other applicable privilege to the extent necessary to investigate the complaint (Rule of Procedure 2406.)

State Bar Investigations (SBI) Are Different

But within the set of State Bar investigations, there is a subset called State Bar Investigations (SBI). They are specifically authorized by State Bar Rule of Procedure 2402:

The State Bar may open an inquiry or investigation on its own accord or upon receipt of a communication concerning the conduct of an attorney of the State Bar.
Eff. January 1, 1996. Revised: January 25, 2019.

An SBI is not subject to the duties that come with investigations triggered by a complaint. They are also not subject to the five-year Rule of limitation set forth in State Bar Rule of Procedure 5.21. SBIs are separated tallied in the statistics contained in the State Bar’s Annual Discipline Report. In 2020:

The numbers of SBIs, like many other types of discipline cases, have declined over the last few years.

An SBI is often opened in response to information the State Bar receives through public sources, such as media accounts or judicial decisions. Judges who complain to the State Bar are sometimes given the option not to choose the status of “complainant” but have their complaint closed with the option of it being reincarnated as an SBI. Cases involving allegations or findings of prosecutor misconduct are often opened as SBIs (see 2020 Annual Discipline Report, footnote 33 at page SR-7.)

SBIs, like all State Bar investigations, are confidential. But when an SBI is closed, there is no reporting to anyone (that we know of) as to the closure of the matter and reasons for the disposition. SBIs are purely within the zone of OCTC’s prosecutorial discretion. They are born, live and die within that zone, unless the decision is taken to pursue formal discipline charges. Only in that event is there accountability to the wider world.

Much ink has been spilled on the disconnect between court findings of prosecutorial misconduct and ultimate State Bar discipline. I won’t add to it but to ask the question: does the fact the disciplinary process typically addresses prosecution misconduct in the accountability-free SBI zone contribute to that disconnect?

The potential for abuse of discretion arises when the State Bar closes a complaint and then opens an SBI based on the same facts. I don’t know how often that happens but I know that it has happened. That action removes the “matter” from the accountability-rich zone of “complaint” to the murky realm of SBI. It is no longer subject to five-year limitation of Rule 5.21, the necessity of explaining the closing decision or the availability of “second look” review by the Office of General Counsel.

This has implications for recent complaints made against lawyers arising from activities connected with the 2020 Presidential election. Recently some complainants who had lodged complaints against such an attorney who had been the subject of extensive news coverage received a closing letter that told them their complaints were being closed because they did not claim to have “personal knowledge” of the conduct complained of or to represent any “party directly involved” with that conduct. This seems at odds with Rule 2403 which broadly defines complainant to exclude an explicit standing requirement and to include a “member of the judiciary or legal professions who alleged misconduct by the attorney which is or should be the subject of an investigation.” Is part of the reason these complaints were closed because an SBI exists, based on the same facts, opened in response to media coverage? If so, shouldn’t that be explained as a basis for closure? Shouldn’t the complainant and maybe the public at large know that the State Bar is looking into this conduct? Many people are looking to the discipline system to hold these lawyers accountable. The “secret investigation” of an SBI makes it possible that these concerns may never be addressed for reasons that we may never know.

Rule 2302 allows the Chief Trial Counsel to waive confidentiality after notice to the lawyer “for the protection of the public when the necessity for disclosing information outweighs the necessity for preserving confidentiality, including but not limited to the following circumstances: (A) An attorney has caused, or is likely to cause, harm to client(s), the public, or to the administration of justice, such that the public or specific individuals should be advised of the nature of the allegations. The following additional factors shall be considered in making this determination: (i) The maintenance of public confidence in the discipline system’s exercise of self-regulation” (emphasis added.) When the allegations include conduct intended to subvert our democratic system of government, it seems that the maintenance of public confidence requires disclosure that the State Bar is at least looking into it.

The problem of course is that if the State Bar announces that it is looking into it and does nothing, explanations will be demanded. SBIs are a convenient mechanism to examine “hot potato” allegations without accountability.

Maybe it is time to build some accountability into the SBI, perhaps through a CGP like panel charged with auditing SBIs and making those findings known to the public and legislature. As with prosecutorial misconduct, public confidence in the discipline system may require it.

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.


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!

The Guild Strikes Back

The Story So Far….

The current monopoly on the provision of legal services held by lawyers has sometimes been analogized to the guilds of the middle ages. Like those organizations, the legal profession consists of skilled craftsmen who were given a monopoly by the state to practice their particular craft under the supervision and control of their fellow tradesmen. A member of the guild who was found to have cheated a customer faced banishment from the guild and the resulting loss of livelihood. The guild members chose who could be members of the guild and guild rules typically excluded women, immigrants, and non-Christians from being members of the guild. In the words of Wikipedia, the guild’s monopoly on the provision of services “reduced competition but sometimes resulted in good quality of work.”

The guild model for the provision of legal services has been under a sustained attack for several years from reformers who blame it for the high cost of legal services and “the justice gap,” the unmet need for legal services that the reformers ascribe to that high cost. The solution, according to these reformers, is the open up the traditional rules that preserve the monopoly enjoyed by lawyers, including rules that limit the ability of non-lawyers to provide those services or to have ownership interests in entities that provide those services.

The response from the lawyers is these rules are necessary to implement “core values” of the lawyer profession, including the independence of lawyers from the baleful influence of non-lawyers who might be only interested in making money and not interested in what is in the best interest of the clients. Lawyers, this argument goes, are not just providers of legal service but agents of justice itself, officers of the justice system who are are ultimately responsible to the courts, despite intervening layers of guild-like organization. In California, this view was supported by the “dis-unification of” the State Bar of California in 2018, when the guild-ish “trade association” functions were spun off from the regulatory functions into the new California Lawyer Association.

As has often happened in the history of the State Bar of California, proposed reforms followed in the wake of de-unification. Liberated from the “trade association” functions that were seen as too beneficial to lawyers for a regulatory agency, the State Bar looked for ways to expand its mission beyond mere regulation, ways consistent with new Business and Professions Code section 6001.1, effective January 1, 2019. which prioritized the State Bar’s mission:

Protection of the public, which includes support for greater access to, and inclusion in, the legal system, shall be the highest priority for the State Bar of California and the board of trustees in exercising their licensing, regulatory, and disciplinary functions. Whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount.

Emphasis added. Discipline is, after all, tedious law enforcement work, scut work best left to staff. The old pre-disunifcation State Bar was not particularly interested in it, except when it was criticized for being too lenient. For 30 and more years, the old State Bar Board of Governors was more interested in a succession of brighter and shinier objects, interest fueled by the annual ritual of electing a President from among the Governors, a President who would usually propose some sort of initiative to memorialize the glory of the tenure. These initiatives were typically forgotten by the time the next State Bar President was elected. One of the best parts of the recent wave of reform was replacing the elected Board members with appointed Board members, replacing the President with a Chair, and replacing the silly annual Board elections, including the election of the President.

But the wording of section 6001.1 opened the door to what might have been the brightest and shiniest object of them all: addressing the justice gap by deconstructing the guild.

Even before the section was enshrined in State Bar Act, the Board of Trustees had commissioned the Legal Market Landscape Report from Professor William Henderson of the Indiana University School of Law. His July 2018 report summarized the case for deconstructing the guild that many academics had been advocating for years:

From the report:

  • “Ethics rules and the unauthorized practice of law are the primary determinants of how the current legal market is structured. Under ethics rules, any business engaged in the practice of law must be owned and controlled by lawyers. This prohibition limits both the opportunity and incentive for nonlegal entrepreneurs to enter the legal market.” 
  • “By modifying the ethics rules to facilitate this close collaboration [of lawyers and nonlawyers], the legal profession will accelerate the development of one-to-many productized legal solutions that will drive down overall costs; improve access for the poor, working and middle class; improve the predictability and transparency of legal services; aid the growth of new businesses; and elevate the stature and reputation of the legal profession as one serving the broader needs of society.” 

Fired up with revolutionary zeal and unfettered by the need to continue to pretend to be a “bar association”, the Trustee created the Task Force on Access Through Innovation of Legal Services (ATILS) in July 2018.

Delacroix Liberty Leading the People By Eugène Delacroix (1830) Erich Lessing Culture and Fine Arts Archives via, Public Domain,

In due course, ATILS produced its final series of recommendations in March 2020, including:

4. Direct the anticipated State Bar Paraprofessional Working Group to consider the key
principles of a licensing program that authorizes eligible nonlawyers to provide limited
legal services developed by the Task Force.

5. Form and appoint a new working group to explore the development of a regulatory
sandbox that can provide data on any potential benefits to access to legal services as well
as the potential for consumer harm if prohibitions on unauthorized practice of law, fee
sharing, nonlawyer ownership, and other legal restrictions are modified or completely
suspended for authorized sandbox participants.

“Sandbox” is computer programing jargon for a security protocol for testing unproven or untrusted software code. The use of the word emphasizes the tech-heavy orientation of ATILS. It also emphasizes the lack of empirical data showing that non-lawyer ownership would have any significant impact on the “justice gap.” It confirmed the fears of ATILS critics that the tech entrepreneurs were more interested in applying their disruptive business models to the legal services marketplace to make a lot of money, not to advance the cause of justice.

The ATILS recommendations were relatively cautious compared to some other states. Utah, not known for revolutionary zeal, forged ahead with its own regulatory “sandbox” in August 2020. That same month, Arizona eschewed the “sandbox” approach entirely, making radical changes endorsing non-attorney ownership of law firms through the “Alternative Business Structure” (ABS) model. Utah and Arizona are relatively “small lawyer” states with only 8,468 and 15,926 respectively (California has about 170,000 active lawyers.) These changes were adopted by the Supreme Courts in their respective states with no involvement by the Legislatures in either state.

To further study the ATILS recommendations, the Board of Trustees established the Closing the Justice Gap Working Group (CJGWP) in March 2020 with a long timeline: the final report not due until September 2022. At the same time, the Board charged its already existing Paraprofessional Program Working Group (PPWG) to come with a plan to license new classes of non-lawyer legal service providers by September 2021.

In light of events in Utah and Arizona, momentum seemed on the side of the reformers. PPWG reported to the Board in September 2021 and its plan was put out for an unusually long public comment period, until January 12, 2022. CJGWG continued to meet and work on its proposals in the fall of 2021. And then, abruptly, in December 2021, the wheels came off.

The Girardi Effect

On December 7, 2021, the Chairs of California Senate and California Assembly Judiciary Committees sent a letter to the Chair of the Board of Trustees Ruben Duran expressing “legislative concerns over regarding the Closing the Gap Justice Working Group.” The letter must be read in full to be truly appreciated.

Not mentioned in the letter but certainly lurking in the background is the State Bar’s unprecedented admission that it made “mistakes” in its handling of the many complaints against Tom Girardi going back 40 years.

Specifically mentioned is a critical State Auditor’s report issued in April 2021 that found the number of cases in the discipline backlog, defined as cases that have been pending more than six months. The same auditor’s report noted that the State Bar, while employing more staff than anytime in its history, is actually disciplining fewer lawyers than ever before. While the reasons for this are not known, it seems unlikely that lawyers are becoming less likely to commit misconduct.

Especially telling in the Stone/Umberg letter is the statement that any proposal that would alter “sacrosanct” principles of the attorney-client relationship would be closely scrutinized and the suggestion that the State Bar would do better to examine “proven” approaches to improving access to justice. The guild’s “core values” argument in a nutshell, now repeated through the most powerful megaphone around.

Some guy once those “who cannot remember the past are condemned to repeat it.” This latest fiasco shows that the State Bar, perhaps because cannot remember its own history, including the fundamental fact that the State Legislature created it in the first place. We are not Utah or Arizona, where the lawyers are scarce and the Supreme Court calls the shots. Any path to reform must go through the Legislature.

In the wake of the Stone/Umberg letter, all work on the CJGWP has come to halt while the State Bar re-assesses. The PPWG proposal remains out for public comment but its future doesn’t look bright. The cause wasn’t helped by comments from State Bar Executive Director Leah Wilson blatantly lobbying for the proposal. The PPWG proposal would impose new responsibilities on the State Bar’s discipline prosecutor, the Office of Chief Trial Counsel (OCTC) to regulate the non-lawyer providers, at a time when the Girardi fiasco and low discipline numbers have some critics questioning whether OCTC can do the job it already has.

Now comes word that the Florida Bar Board of Governors has halted work on its version of the sandbox, {mercifully referred to as a “legal lab”, instead of a sandbox) citing ethics concerns about lawyer independence, as well as disparate treatment of lawyers participating in the “lab”. Florida, like California, is a “big lawyer” state with about 72,000 lawyers.

The reformers are not going to go away. But the current disenchantment with the tech entrepreneurs is going to make it tougher for them. Organized opposition from lawyers in the “big lawyer” states is not going to go away either. It may be that the deconstruction of guild will have to await another day, long hence, to go forward.

2020: the Bottom Ten

Many years ago, Los Angeles Times sportswriter Steve Harvey originated “The Bottom Ten” a weekly column humorously documenting the worst in college football. The Bottom Ten mantle that has since been assumed by and Ryan McGee but the Rankman continues to inspire even as college football, like so many things, went off the rails in 2020. Things going off the rails is nothing new in our world, indeed it is “situation normal, etc.” Was 2020 worse than any other year? You be the judge as you peruse Kafkaeq’s 2020 Bottom Ten.

  1. The Discipline System Embraces Punishment.

The State Bar of California continued to implement Business and Professions Code section 6068.13, a 1994 statute that authorized the California Supreme Court to impose monetary sanctions in attorney discipline orders. The statute and the implementing rules enacted by the State Bar Board of Trustees do violence to the bedrock principle that the purpose of discipline is not punishment, but public protection, not only in principle but in practice as the sanctions issue will slow down the work of the State Bar Court, lead to more trials and fewer settlements. For more directly from my spleen see State Bar Gets Into Punishment Business

2. Tom Girardi.

This one is a little personal as Mr. Girardi was my medical malpractice instructor at Loyola. Long before the bright lights of celebrity in the wider world blinded him, he was already a legal superstar, in 1983 a fat guy in a poorly fitting suit, folksy and enormously entertaining, not a trace of Beverly Hills glitz. I don’t know what happened between 1983 and 2020. The plot sounds like something from film noir: was it the money, was it the dame or was it both? No matter, watching the downfall of a once-great lawyer is painful.

3. The President’s Lawyers.

I don’t think I need to elaborate. This could easily be the whole list. I won’t, except for this: one question is whether the ingrained reluctance of attorney regulators to get involved in “political” matters will bend or break now that litigation is the vehicle for advocating crackpot ideas.

4. Washington State Kills LLLT.

Not Washington State University, football’s favorite son of the Palouse, but the Washington Supreme Court. The wet northwest was a pioneer in the concept of creating a new class of legal professionals, Limited License Legal Technicians. Opponents claim it was a natural death, but all the evidence points to murder. Just as other states are pioneering measures to fill the justice gap, including California’s renewed interest in the LLLT concept, Washington takes a step back.

5. A Great Leap Forward (Into the Abyss?)

Utah and Arizona pioneer non-attorney ownership of law firms. This one is a Rorschach test. Depending on your point of view, it might be the key to plugging the justice gap or the death of the legal profession. I feel strongly about it both ways. The Guild cannot survive the social and economic forces behind these changes. Yet the proponents have greatly oversold the likelihood that enabling non-lawyers to own legal service providers will significantly lower the costs of delivering justice. The most likely result is that non-lawyer investors will make a lot of money in lucrative practice areas like personal injury mass torts and practice areas like martial dissolution will continue to suffer huge numbers of unrepresented poor litigants.

6. State Bar Goes Chapter 6

State Bar of California issues 3,000 chapter 6 notices to participants in the October 2020 online bar examination. Chapter 6 is the part of the California Admissions Rules that deal with bar examination misconduct. The State Bar issued about 3,000 of these notices (more than one-third of the applicants) regarding the October 2020 on-line bar examination. Violations included “looking away from the screen”. Panic ensued among a group of people already highly stressed about gaining admission to the bar and some hope of paying their student loans someday. A pending chapter 6 matter means they can’t register for the February 6 exam. To be fair, online bar examinations face a huge proctoring challenge and similar events have happened in other states but couldn’t this have been handled in a more sensitive way? (And a thank you to Lyle Moran and his colleagues at the ABA Journal for more great reporting.)

7. Pride Comes Before a Fall

Disciplinary counsel resigns after tweeting that he is “proud anti-Muslim bigot.” Again, from the ABA Journal: “Disciplinary counsel Jerry Morgan of the Tennessee Board of Professional Responsibility resigned after the state’s Administrative Office of the Courts investigated his social media posts, the Tennessean reports.” “Lawyer does bad thing” stories are a dime-a-dozen and I have mostly tried to stay away from them. But this one makes the list because Mr. Morgan was employed prosecuting lawyers for violating the ethics rules. One expects more from those ostensibly upholding our professional norms. Maybe that is a mistake.

8. Disco Revival

This a true story. No names are stated to protect the innocent and the guilty. In 1978, a lawyer is convicted of a felony crime involving moral turpitude. The lawyer is placed on interim suspension (Bus. & Prof. Code section 6102(a)) and, because summary disbarment is unavailable under the statute as it existed in 1978, ultimately stipulates to three-year actual suspension, retroactive to date of interim suspension.

Forty years and a spotless career later, the lawyer submits his fingerprints to the State Bar, as required by Cal. Rule Ct. 9.9.5. The Office of Chief Trial Counsel (OCTC) cross-checks the fingerprints against Dept. of Justice records and finds the criminal conviction. But OCTC’s Odyssey case management system can’t access the older records, even though the 1978 conviction appears on the lawyer’s membership records page.

In its zeal to impose discpline, no matter how old the misconduct, OCTC somehow manages the acquire a certified (and largely illegible) copy of the record of conviction and files that in 2020, initiating a second criminal conviction proceeding, leading to an order for interim suspension. The lawyer attempts to telephone the OCTC lawyer assigned to the case without response. Finally, desperate lawyer hires high-priced discipline defense counsel who resolves the matter within one day.

Perhaps this is trivial but it perfectly the illustrates the mechanical way the discipline system operates, moving forward like juggernaut, crushing lawyers beneath its wheels, without much thought.

9. Law Firms Bank Paycheck Protection Money

Rahn Emmanuel famously said never let a crisis go to waste. Many people, including more than a few lawyers, applied this principal to the current pandemic. “Why shouldn’t I, everyone else is doing it?” one of them said to me.

10. Life During Wartime

Hovering above everything, the pandemic. Lawyers, like Horatius, are at the bridge; when bad things happen, are among the first to know.

Unlike Horatius, our responses are not always positive. Our legal system is designed for conflict and increased conflict means more work for lawyers. This macabre aspect does not endear us to other people, however much we try to compensate with good works. I don’t know if it is just that I am watching more television but it sure seems like I am seeing many more lawyer and pseudo-lawyer ads, including many telling us that justice is a commodity that can be obtained if you pick up the telephone NOW! My favorite is the phony “boiler room” with lots of actors pretending to answer the calls that are just pouring in.

The necessity of social distancing has already had a dramatic impact on the profession; see item 6 above, and the recent ABA ethics opinion on lawyers working remotely that many (including me) hope will push us toward some type of national licensing to replace the obsolete patchwork approach to licensing based on geography. We can’t know all the ways the pandemic will permanently alter our profession but it is already accelerating the ongoing commodification of the law business and will undoubtedly accelerate the application of technology. That is good news for some; bad news for others (see item 5, above.)

The Important State Bar Report You Haven’t Heard About

The hallmark of that peculiar institution known as The State Bar of California* is perpetual change.

We now have the “Sandbox” which is going to experiment in new ways to deliver legal services at lower cost, sheltered from the impact of traditional rules about who gets to do that.

We also have the “Blue Ribbon” Commission that is looking at how to change the bar examination to make a better test of what we need in the lawyers of the 21st Century.

But there is one State Bar initiative that hasn’t garnered much attention whose impact may be just as dramatic. On May 15, 2020, the State Bar Governance in the Public Interest Task Force (affectionately known as GITPIT) issued its final report.

GITPIT was a driving force behind the legislative reforms that “de-unified” the State Bar of California in 2017, spinning off the trade association functions, including the State Bar sections, into the new California Lawyers Association, and leaving behind a (now mis-named) State Bar as a purely regulatory agency. GITPIT has now sunsetted but its final report moves beyond the relatively narrow issue of the organizational structure of the State Bar into the broader field of how the profession itself is regulated. Its subject is revolutionary; risk-based regulation.

The essence of risk-based regulation is moving beyond a regulation system, such as the current California discipline system, that reacts after problems arise to a system that actively works to prevent problems before they happen. In the words of the final report (at page 5):

For the State Bar of California, a risk-based regulatory approach may be usefully contrasted with the most common source of work for the attorney discipline system: the client-based complaint. The vast majority of the work of California’s attorney discipline system is driven by responding to complaints of attorney misconduct filed by clients. As a result, by definition, the discipline system is typically reactive, seeking to address misconduct—whether through discipline or, in the work of the Client Security Fund, through compensation of clients—only after harm has been done.6 A risk-based approach, however, focuses on the prevention and mitigation of harm. More specifically, and for purposes of this report, risk-based regulation may be distinguished by the following features:

•Using data to inform regulatory decision making;

•Focusing on caseloads in addition to cases; and

•Prioritizing regulation and enforcement based on risk.”

As part of its work, GITPIT looked at risk-based regulation in the Australian legal system.  Australia, also a leader in reforming rules related to the ownership of legal service providers, conducted qualitative research on lawyers who were discipline in Australia.  The results won’t be a surprise to anyone who has worked in the California discipline system:

The qualitative research also revealed patterns that had not been uncovered in the quantitative analysis. The complaint-prone lawyers appeared to be “ill-equipped generalists” whose efforts to be a “Jack or Jill of all trades” led to difficulties for one quarter of this group. The complaint-prone lawyers also appeared frequently to have both personal and professional relationships with clients resulting in “blurred professional boundaries.” Finally, they were professionally isolated. Although they insisted on the quality of their work and their character in their defense, they were unable to provide references to support those assertions.  What emerges from the qualitative portion of the research is a profile of attorneys who work on the edge. Personal and professional problems contribute to one another and multiply. Over half of the sample of 32 complaint-prone attorneys had some form of health impairment (mostly depression). [footnote 18: Surprisingly, substance abuse was rare, with only one of the 32 attorneys exhibiting it.] Half of the lawyers in the sample were in financial distress, and one third had recently experienced either a death or serious illness in the family. When a complaint is lodged against a lawyer, it appears to compound the stress already weighing on the subject attorney. Citing a discipline case from 2013, one Legal Services Commissioner noted: It is all too common for misconduct to arise from a failure to deal effectively with the disciplinary complaint and the investigation process, rather than the subject matter of the complaint itself……

Emphasis added. Part of the stigma of discipline is the moral judgment that accompanies it:  it is something that only happens to  “bad lawyers” who by extension are “bad people.”  The over-reliance in the California discipline system on the  “moral turpitude” (see, e.g., Bus. & Prof. Code section 6106) concept, a concept rejected as too vague by the drafters the ABA Model Rules, is part of the problem.  (Now that California has a robust Rules of Professional  Conduct,  based on the ABA Model Rules, including Rule 8.4, we should eliminate the 19th century Field Code junk that litters the Business & Professions Code.)  Ir is true that are there are evil lawyers and that they are sometimes disciplined.  But the vast majority of disciplined lawyers are troubled human beings, with depression being a major problem.

The essence of risk-based regulation is regulating legal practice before it is necessary to sanction behavior.  This is a controversial point, as GITPIT points out at page 14 in a reference to Philip K. Dick’s 1956 science fiction story “Minority Report”, later made into a pretty good movie.  For those unfamiliar with either, the premise is a future police force utilizing psychics to apprehend criminals before they commit their crimes.  Interventions based on predictive models are a more intrusive form of regulation than discipline after the fact.  But we are spending $80 million a year such a system and it isn’t at all clear how imposing this punishment (yes, punishment) is really helping to protect the public.

Traditional lawyer independence is a very attractive part of the legal profession. It is already under assault by market forces, including private investors who now have their Sandbox to play in.   Effective risk-based regulation might require the lawyers of the future to do much more than just hang up their shingle if they want to practice law.   What if every lawyer was wanted to open a client trust account was required to be educated on the client trust accounting rules and procedures before a bank could open the account? What if every lawyer or group of lawyers were to file a comprehensive written risk management protocol before they began to operate at all, including protocols for dealing with impairment?  What is every lawyer, even ostensible solo practitioners, were required to establish some kind of association with other lawyers to deal with professional isolation and lack of support?   Some of these ideas look a lot like what the early 20th-century idea called the “integrated bar” was supposed to accomplish and perhaps did successfully until the bar became too big and too specialized (and the conflict of interest too apparent) to support the quasi-public, quasi-private nature of the model.  The idea that helping lawyers helps to protect the public is still a good idea, but a little ironic given the State Bar’s recent transformation into a pure police agency.  Perhaps there was a baby in that bathwater after all.

For now, GITPIT recommends more study and some modest moves toward increased use of warning letters by the Office of Chief  Trial Counsel. 

For all it’s hazards, risk-based regulation deserves further study.  Let us hope that GITPIT’s final report doesn’t join the legions of studies and reports that have been gathering dust for decades on the shelves of the State Bar’s library.

* isn’t it about time we changed the name?

A Rainy Night in Georgia Legal Ethics

A black man is murdered. Two white suspects tell the police that the killing was self-defense. The police do not pursue the investigation.  Later, video is leaked to the news media that appears to show that the murder was not self-defense, that the murdered man was defending himself against one of the shotgun-wielding suspects.  The video provokes outrage.  The suspects are arrested and charged with murder, assault and assisting a felony.

And the source of the leaked video – a lawyer that the suspects had consulted with.

It sounds like a law school hypothetical but it isn’t.  It is the Ahmaud Arbery case. It presents one of the most difficult and disturbing problems in legal ethics.

Lawyers owe a duty of loyalty to their clients, including a duty to not to disclose confidential information that would be harmful to the client’s interests or embarrassing to the client.  That duty is also owed to prospective clients, even those who never ultimately employ the lawyers, on the theory that it encourages prospective clients to be candid with their prospective lawyer, to give the prospective lawyer all the information the lawyer needs to evaluate the case.  American Bar Association (ABA) Model Rule 1.18 reflects this tenet of legal ethics:

(a) A person who consults with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client.

(b) Even when no client-lawyer relationship ensues, a lawyer who has learned information from a prospective client shall not use or reveal that information, except as Rule 1.9 would permit with respect to information of a former client.

Every state has now adopted some version of the Model Rules, including Model Rule 1.18, with every state making its own changes.  Even California, the last holdout, has now adopted its own California customized version of the Model Rules, including its own Rule 1.18.  Georgia has not adopted Rule 1.18 but does have a comment to its confidentiality rule 1.6 that covers the same ground:

[4A] Information gained in the professional relationship includes information gained from a person (prospective client) who discusses the possibility of forming a client-lawyer relationship with respect to a matter. Even when no client-lawyer relationship ensues, the restrictions and exceptions of these rules as to use or revelation of the information apply, e.g. Rules 1.9 and 1.10

According to the New York Times:

The lawyer, Alan Tucker, said in an interview on Friday that the video had come from the cellphone of a man who had filmed the episode and that he later gave the footage to the radio station. Mr. Tucker’s role was confirmed by Scott Ryfun, who oversees the station’s programming.

Asked why he had leaked the video, Mr. Tucker said he had wanted to dispel rumors that he said had fueled tension in the community. “It wasn’t two men with a Confederate flag in the back of a truck going down the road and shooting a jogger in the back,” Mr. Tucker said.

“It got the truth out there as to what you could see,” he added. “My purpose was not to exonerate them or convict them.”

But for the consultation with suspects, Tucker would not have obtained the video. If Tucker had not leaked the video, murderers might have gotten away their crime.  But it looks like Tucker violated important principles of legal ethics, loyalty and the preservation of confidentiality.  Does loyalty to the community trump loyalty to the client?  Should the fact that he might have prevented a miscarriage of justice mitigate any violation?

Abbe Smith, in her law review article Telling Stories and Keeping Secrets  8 UDC/DCSL L. Rev. 255-268 (2005), came to this conclusion:

It could be that, in the end, I don’t have much faith in lawyers. I don’t want them to exercise their own moral discretion about whether to disclose client confidences. I don’t want to give lawyers the authority to determine when it is in the public interest to divulge confidences, even if they were allowed to do so only under limited circumstances, such as “where necessary to avoid ‘substantial injustice.'” I worry about lawyers acting as a “self-appointed moral elite,”‘ over-looking or overriding long-standing ethical standards in order to advance their own views of justice.

When a lawyer is confronted with the hardest legal ethics questions in concrete terms, they churn in the lawyer’s conscience, like a dark night in a Georgia thunderstorm. As they should.  But in the end, I agree with Smith. I can admire the “cause” lawyer, who thinks the cause trumps everything else, but only to a degree. In the end, we are have taken an oath to support the law and the ethical rules, and we have to pay the price for our choice.