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State bar let discipline slide while scrambling to fund $76 million building

The California State Bar improperly shrank its attorney discipline efforts while it spent $76.6 million for a new building in downtown Los Angeles, said the state auditor in a highly critical review issued in July.

The state bar, the largest one in the country, has a pattern of pursuing lenient settlements and allowing attorneys—who either should have been disciplined more severely or disbarred—to continue to practice, according to the review by state auditor Elaine Howle.

The audit found that in 2010 and 2011, the state bar cut corners in resolving complaints, settling hundreds of cases against attorneys without properly disciplining them.

Howle pointed out in the audit that the state bar has “struggled historically” to resolve complaints promptly. During the years 2010 and 2011, the State Bar settled a total of 1,569 cases, which was “more cases… settled in each of those years than in any of the other four years in our audit period.” However, Howle deemed the discipline in some of the cases “inadequate.”

For instance, more than 30 of the attorneys who weren’t disciplined properly were later disbarred from new, separate complaints being filed, or due to the Supreme Court finding that disbarment was the proper course of action in the first place.

One reason for the state bar’s reluctance to adequately punish attorneys was its effort to decrease a discipline backlog, which had grown sizable by 2010, Howle stated.

“A key statistic to measure the effectiveness of the State Bar’s attorney discipline system is its backlog of disciplinary cases—that is, those cases that it failed to process within six months,”

“Although the State Bar succeeded in decreasing the backlog by 66 percent within a year, it may have compromised the severity of the discipline imposed on attorneys in favor of speedier types of resolutions. In particular, in 2010 and 2011, the years the State Bar focused on decreasing the backlog, the State Bar settled a total of 1,569 cases; more cases were settled in each of those years than in any of the other four years in our audit period. ”

“The level of discipline that the State Bar recommended as part of these settlements was, in some cases, inadequate .”

The audit also found that the state bar was not transparent in reporting the performance of its discipline system to its stakeholders, and that one of the ways to fix this would be to work with the legislature to determine which cases should be reported in the backlog.

The bar’s scramble to fund its new building made discipline take a back seat. Members paid an annual $10 special assessment between 2009 and 2013 as a means to partially finance the building for the State Bar in Southern California, which generated $10.3 million—but that was $66 million short of the final cost, the auditor said.

To finance the remaining cost, the State Bar secured a $25.5 million loan, sold a parking lot in Los Angeles for $29 million, and transferred $12 million between its various funds, some of which the State Bar’s Board of Trustees (board) had set aside for other purposes.”

Instead of focusing its resources on improving its discipline system—such as engaging in workforce planning to ensure it had sufficient staffing—”the state bar allowed some attorneys whom it otherwise might have disciplined more severely— or even disbarred—to continue practicing law, placing the public at risk,” Howle asserted.

“The state bar might have been able to justify the purchase of its Los Angeles building by performing a thorough cost‑benefit analysis. … However, it did not perform a cost‑benefit analysis before receiving board approval to purchase the building, ” Howle said.

The state bar made a few comments in response to the audit but agreed with most of the auditor’s recommendations for improving its disciplinary program and monitoring it, as well as conducting better cost-benefit analysis.