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Monday, May 13, 2024 | Back issues
Courthouse News Service Courthouse News Service

State bar’s attorney discipline process lambasted by California auditor

The report found California attorneys could repeatedly violate professional standards without public consequences from the state bar.

(CN) — The California state auditor on Thursday blasted the State Bar of California for allowing poor professional behavior by attorneys to go unchecked.

The report describes patterns of the state bar prematurely closing cases without sufficient investigation and allowing attorneys who repeatedly violated professional standards to evade discipline. Also included in the report are recommendations to the California Legislature and the state bar on how to rectify the issues identified in the report.

The State Bar of California has experienced tremendous scrutiny in recent years, in part due to revelations about now-disgraced Los Angeles lawyer Tom Girardi, husband of “Real Housewives of Beverly Hills” star Erika Jayne. The complaints against Girardi for withholding settlement funds from clients began in the 1990s, but Girardi continued to work for over 25 years thanks in part to the lavish relationship he maintained with the agency tasked with regulating his profession. The public outcry over Girardi’s long history of complaints prompted the State Bar to conduct its own special disciplinary audit in June 2021.

Though the state auditor’s report includes references to an attorney “who failed to pay clients their settlement funds” as an example of the state bar's inadequate investigation of attorneys with lengthy patterns of complaints, the report goes beyond accusations against Girardi to outline a broken disciplinary process.

“Our audit of the state bar found that it failed to effectively deter or prevent some attorneys from repeatedly violating professional standards,” said acting State Auditor Michael Tilden in the report.

In addition to premature closing of cases and truncated investigations into complaints of some attorneys’ patterns of misconduct, the report found the state bar has unclear policies about nonpublic disciplinary actions.

According to the report, more than 64% of complaints brought to the state bar are closed at the initial intake stage when the complaint is screened to determine if the allegations could warrant disciplinary action. Just over 5% of cases end with some formal discipline, which could include disbarment, suspension or reproval.

The state bar uses some nonpublic measures, such as private letters advising attorneys of ethics training or warning letters when there is “substantial evidence” that the attorney committed a violation. Attorneys can also make a written agreement to modify their practice or undergo further legal education in lieu of discipline. The state bar does not consider these measures to be discipline.

“The state bar’s data indicate that the use of nonpublic measures is not providing a reasonable protection against future misconduct, as its policy requires,” Tilden wrote in the report.

Tilden found nearly 26% of attorneys in 2019 whose cases were closed with a warning letter received a new professional conduct complaint within two years of the original case’s closure. The findings also indicate that these nonpublic measures are “overused,” closing 10% of all cases from 2010 to 2021.

Among the cases the auditor’s report highlighted is an attorney who accumulated 165 complaints from 2014 to 2021 and has never been disciplined. In another case, the state bar did not analyze the attorney’s bank records until the agency received more than 10 complaints in two years. Bank records then showed the attorney misappropriated $41,000 from several clients.

The state bar closed 87 complaints against an attorney later convicted in federal court for money laundering through client trust accounts, closing some of these cases through nonpublic measures. Others, called de minimis closings, were done without ever contacting attorney because the agency considered the amount of money involved relatively small.

Other foibles found by the report include weak processes that allowed attorneys who committed misconduct outside of California to continue practicing in the Golden State. The state bar also does not accurately track or document its consideration of staff members’ potential conflicts of interest.

State bar employees are tasked with identifying potential conflicts of interest during a case’s early stages. Despite this, the report reviewed 30 cases where the attorney was on the conflicts list, 11 of which the state bar had no documentation to indicate it considered those conflicts of interest.

“The state bar is not appropriately assessing how conflicts of interest pose a risk that staff will close cases inappropriately,” the report says.

In its recommendations, Tilden suggests that before December 2023 the California Legislature pass laws requiring the state bar to regularly change its external reviewer and requiring that external reviewer to present findings and recommendations directly to the bar’s board of trustees. The state bar would have to periodically report to the board on its efforts to address the external reviewer’s recommendations.

Tilden advises the state bar to implement new policies throughout 2022, including limiting its use of nonpublic measures to close complaints. The state bar is advised to monitor compliance with their new policy to continue certain investigations even after a complainant withdraws their complaint. They must also notify the public on their website when another jurisdiction finds a licensed California attorney presents a threat to the public.

The auditor also recommends the state bar improve its conflict-of-interest policies and procedures and disallow de minimis case closures if the attorney has prior similar complaints.

In a written response to the auditor's report, Ruben Duran, chair of the state bar's board of trustees, said, "Our failure to promulgate clear and comprehensive policies in the areas identified, and to develop corresponding accountability measures to ensure compliance with those policies, are unacceptable.

The state bar indicated it is willing to adopt all of the auditor's recommendations, with the exception of disallowing the de minimis case closures without investigation, which it said would be a waste of resources. According to the state bar, 22% of those cases are simply the result of a check deposit hold and Black male attorneys would be burdened by the added investigation as they are 10 times more likely to receive those complaints.

"We are committed to doing the internal work needed to ensure that our attorney discipline system is effective, efficient, transparent and fair," Duran said. "Although we cannot fully implement the state auditor’s recommendations absent additional funding, we will advance the majority of them to the full extent possible given the resource constraints we face.

Duran estimated the state bar will require an additional $200,000 in annual funding to address the conflict of interest recommendations, along with $1 million in one-time funding.

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