The state auditor has woodshedded the State Bar of California once again, based on its most recent audit spurred by the Tom Girardi fiasco. Reporters for the Los Angeles Times exposed the sordid details of how Girardi had avoided disciplinary scrutiny for years while snarfing his clients’ settlement funds. It was a story that not only drove the nail into Girardi’s disciplinary coffin, but also drove a well-deserved stake into the California State Bar’s current discipline processes.
After publication of the LA Times article, howls of outrage ensued. Legislators, who control the state bar’s purse strings, clamored for an audit in the light of the Girardi shenanigans. As of January 1, 2022, the Legislature delegated to the state auditor the responsibility for auditing the state bar since it has been unable to get its disciplinary house in order.
The state auditor has delivered a doozy of a report. How to count the ways in which the California State Bar has screwed up? The list, which includes examples of how they mismanaged cases, is way longer than my permitted word space.
The audit’s key findings reveal that the California State Bar closed many cases of potential misconduct through confidential procedures not available to the public. As much as 10 percent of the investigations conducted were resolved through private reproval, several types of warning letters, and agreements in lieu of discipline, all of which are not reported on the attorney’s state bar website. “From 2010 to 2021, the State Bar closed more cases through nonpublic measures — a total of 22,600, or 10 percent of all case closures — than it did through public discipline, which totaled 11,200, or 5 percent of all case closures. During the same period, more than 700 attorneys each had four or more cases that the State Bar closed through nonpublic measures.”
A biggie, at least in my mind, and for everyone else who frets about trust account compliance: the audit found that the bar closed multiple complaints related to trust accounts. The audit found that the bar did not consistently follow its own formal guidance for reviewing complaints about trust accounts and that the bar’s own “weak procedures hindered its ability to deter repeated violations.”
The audit found that the bar did not adequately investigate some attorneys with lengthy patterns of complaints. One attorney had 28 complaints over a five-year period. Ten of the 28 complaints were trust account violations. The attorney’s bank had reported a trust account violation as the law required, but the bar closed the complaint, saying it was “de minimis.” The attorney had other open complaints.
“Additionally, it closed multiple complaints alleging that an attorney failed to pay clients their settlement funds because the clients withdrew their complaints, which allowed the attorney to continue misappropriating client funds.” Another example: after closing 87 (not a typo) complaints over 20 years, the California State Bar finally sought disbarment based upon the attorney’s conviction in federal court for using trust account funds for money laundering. Another example of closing the barn door after the horse has left? Cold comfort for all attorneys who have been nailed for trust account violations.
But wait, there’s more! Hewing closer to the Girardi fiasco the audit found that the California State Bar failed to consistently consider conflicts of interest between bar staff and attorneys under investigation. In more than one-third of the cases, there was no documentation to show how potential conflicts were resolved before case closure. Moreover, state bar staff could review and close complaints even though staff knew that someone on staff had a conflict of interest with that attorney.
Now to the auditor’s recommendations, which are nothing new, but which have taken on greater urgency considering the recent sh-tstorms. First, the bar needs to get its act together by improving discipline procedures. No surprise there. It’s been a consistent theme for the past 40 years through various backlog scandals and other problems.
Further, the auditor states the bar should start categorizing cases according to complaint types to discern potential misconduct patterns. Moreover, the audit said that should be a formal process to determine whether staff can effectively evaluate cases and document how conflicts are resolved.
You would think that is all simple and straightforward. We all have various conflicts checking system to avoid conflicts. But it’s amazing to me, and I am sure to many others, that the California State Bar has the chutzpah to discipline lawyers for conflicts of interest when it doesn’t seem to be able to do it for itself.
Another recommendation is the creation of an independent ombudsman for attorney discipline. The role could, among other things, include educating the public about the complaint process. Texas has an ombudsman for its attorney discipline process. Given the volume of complaints the state bar receives, using an ombudsman to manage minor matters would allow the Office of Chief Trial Counsel to concentrate on the more egregious cases.
Something else I learned from the audit: the state bar has a single external reviewer who reviews discipline files, but the bar selects the files for review. Fox guarding the henhouse? The audit rightly recommends that that this external review be independent, but how independent has this review process been with when the bar selects the files for review? Any conflict there?
So, do you think the California State Bar can finally get its own house in order? Just asking.
Jill Switzer has been an active member of the State Bar of California for over 40 years. She remembers practicing law in a kinder, gentler time. She’s had a diverse legal career, including stints as a deputy district attorney, a solo practice, and several senior in-house gigs. She now mediates full-time, which gives her the opportunity to see dinosaurs, millennials, and those in-between interact — it’s not always civil. You can reach her by email at [email protected].