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The California State Bar's dismal history shows why it should be broken up

Let’s put this in terms that even an attorney with peerless loophole-seeking skills would consider straightforward: the California State Bar is a mess. 

In recent years, the organization has been the target of withering state audits documenting misspent fees by the millions, overpaid executives, and inept management of its all-important duty of licensing lawyers and managing professional discipline. Its reputation is at a low ebb among state legislators, who last month placed on hold the organization’s yearly authorization to collect annual fees because the measure didn’t go far enough to achieve reform.

The Bar’s dual role as licenser and ethics enforcer as well as trade organization pushing policy changes,  critics say, leaves it hopelessly mired in a conflict of interest. 

“You don’t delegate regulatory power to a special interest group,” says Robert Fellmeth, executive director of the University of San Diego’s Center for Public Interest Law and a frequent critic of the Bar. “To let them be the decision-makers is obscene.”

These issues seem to crop up every few years, but seldom with as much urgency as now. That’s because a 2015 decision by the U.S. Supreme Court has put professional licensing bodies on notice that they could be guilty of antitrust violations if a majority of their members are participants in the business they regulate.

The California State Bar is governed by a 19-member board of trustees, 13 of whom are lawyers. You do the math.

The Court decision isn’t the only driver of potential change. “People can suffer irreparable harm from attorneys,” says Fellmeth, a lawyer. They can be deprived of their liberty by inadequate representation in criminal court or immigration cases.

But the Supreme Court ruling sharpens the argument for splitting the Bar in two — into a trade association with voluntary membership, and a government body controlled by non-lawyers and responsible for professional licensing and discipline, much as medical professional standards are overseen by the Medical Board of California and political advocacy is left to the independent California Medical Association.

measure passed by the State Assembly in June 2 would place the “deunification”  of the Bar firmly on the front burner. The bill would create a commission to reconsider the Bar’s governing structure and report back to the legislature by April. The bill also would restructure the Bar board as a 13-member body with at least seven non-lawyer members — an effort to comply with the Supreme Court’s 2015 ruling.

Deunification is “the only real solution to the state bar’s chronic dysfunction,” says Dennis H. Mangers, a non-attorney Bar trustee who has submitted just such a proposal to the legislature. “The Bar should have only one purpose — to rid the profession of bad apples.”

That function often takes a back seat to the policy and social purposes that make the Bar resemble more a professional club than a regulator, according to critics. In legislative testimony last April, Fellmeth observed that the Bar sponsors 30 different programs offering professional services to its members, often at a group discount, including financial advice, insurance, consumer products and software. “No other occupational licensing agency offers any of these goods and services to its licensees,” he said.

The Bar tends to hold itself exempt from state rules applied to other state agencies on grounds that it’s an arm of the State Supreme Court; critics say it still regularly violates the Bagley-Keene Open Meeting Act, which requires at least 10 days public notice of any meetings and forbids members to discuss business with each other except in an open forum, despite a measure passed last year bringing it under Bagley-Keene’s jurisdiction. 

Elizabeth Rindskopf Parker, the former dean of McGeorge School of Law who took over as executive director of the Bar last September,  T described herself as “agnostic” on deunification. The organization hasn’t taken a formal position. 

But Parker argues that “as officers of the court, lawyers have responsibility for the good features of our rule-of-law system.” Their duties include “making sure the legal system is functioning well” along with “educating and informing the public and the legislature on technical issues in the law.”

Breaking up the Bar, she says, could hamper programs to improve access to the courts for underprivileged clients, since these are funded from mandatory fee revenue that might not flow from a voluntary organization with a smaller membership. Still, she acknowledged that all these functions might be accomplished via “a different set of structural arrangements” than the present. 

In the mid-1980s, the legislature imposed an enforcement monitor for the organization. Fellmeth, who served in that role for five years, found that clients were systematically discouraged from pursuing complaints. For example, the Bar had established a toll-free hotline, but hadn’t listed the number anywhere “a consumer might logically look to find it.”

State Auditor Elaine M. Howle has been turning up the heat. In a report last year, she ripped into the disciplinary system, especially the Bar’s ham-handed management of a crippling backlog of nearly 5,200 cases in 2010: it reduced the backlog by two-thirds the following year mostly by settling cases hastily with light penalties. (Backlogged cases are those in which no action has been taken for six months or more.)

Some had to be reexamined; of 27 settlements rejected by the State Supreme Court, the ultimate arbiter of lawyer discipline, 21 had to be renegotiated with harsher punishments, including five disbarments. About 10% of the attorneys who were allowed to continue practicing after the settlements faced new complaints subsequently, and 28 were eventually disbarred.

Howle found that the Bar was squandering resources that should have been spent on hiring more enforcement staff. In 2012, the organization spent $76.6 million to buy and refurbish a Los Angeles office building to supplement its San Francisco headquarters — about twice what it spent on discipline that year.

Meanwhile, the case backlog was creeping back up — from 1,742 in 2011 to 2,174 in 2014. Bar officials say the backlog was reduced by about 24% last year, but they warn that further reductions will require as many as 48 more lawyers and investigators, in addition to the 118 employed at the end of last year.

The Bar’s structure as a combined trade association and enforcement body dates from 1927 and isn’t unique.  But their day may be passing, says Ted Schnayer, an expert on Bar governance at the University of Arizona.

“I want to clear up any perception of a profession being permitted to regulate itself,” says Mangers, a former state legislator who will be leaving the board this summer. “Most attorneys never have a blemish, but the bad ones are beyond your imagination.”

Keep up to date with Michael Hiltzik. Follow @hiltzikm on Twitter, see his Facebook page, or email michael.hiltzik@latimes.com.

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