California Bar Discipline Audit Suggests Serious Flaws

The San Jose Mercury News has a report on a recent audit of the troubled California State Bar disciplinary system

The nation’s largest state bar failed to consistently protect the public from bad lawyers by settling hundreds of complaints, many without adequate discipline for botched cases or ethical violations, according to a scathing audit released Thursday that also found the organization has spent money with little financial accountability.

The audit is the latest blow to the California State Bar, an organization plagued by years of infighting and allegations that mismanagement and dysfunction allowed bad attorneys to continue practicing law.

As the state bar scurried to settle more than 5,100 backlogged complaints in 2010 and 2011, the severity of discipline imposed against attorneys decreased, according to the California State Auditor’s report.

In 2012, the California Supreme Court rejected settlements reached with 27 attorneys because of insufficient discipline; 21 of those attorneys later got harsher punishments, including five who were disbarred, the audit said. Additionally, 131 attorneys whose complaints were settled in 2010 and 2011 later were disciplined after new complaints were filed, including 28 disbarments.

 “To reduce its backlog, 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,” State Auditor Elaine Howle wrote to the governor and legislative leaders Thursday.

 The bar also lacks financial accountability, Howle wrote.

She pointed to $76.6 million the bar spent in 2012 to buy and renovate a building in downtown Los Angeles, more than triple the $25 million the bar told the Legislature it would cost just four months before the purchase. Additionally, the bar partially paid for the building with funds that were supposed to be saved for specific programs, including one aimed at eliminating bias in the justice system.

 To practice law, attorneys must be members of the bar, a public corporation created by the state Legislature. The bar has more than 249,000 members and collects yearly dues that largely fund its operations.

The bar said in a statement that it has formally accepted each of the audit’s findings and has agreed to address recommendations that include increasing financial oversight and transparency and better allocating resources to address the complaint backlog.

“We embrace the recommendations, many of which we began addressing late last year, before the audit began,” bar President Craig Holden said in a statement. “We appreciate the assistance of an independent expert in this effort.”

Holden declined to comment further, citing ongoing litigation between the bar and its former executive director, Joseph Dunn, also a former Democratic state senator from Orange County.

The bar fired Dunn last year for “serious, wide-ranging allegations.” Within days, Dunn sued, alleging “glaring injustices, unethical conduct and massive cover-up that has crippled the state bar’s ability to function.”

The bar said in a statement at the time that Dunn’s lawsuit was baseless.

The audit said the rash of settlements in 2010 and 2011 were the result of Dunn’s order that staff completely eliminate the huge backlog of complaints.

Dunn did not return a call for comment Thursday. A trial in the matter is set for the spring, which is expected to cost the bar hundreds of thousands of dollars.

The bar is holding a meeting Monday to discuss how to further respond to the state audit.

Perhaps it is time to have a discussion on a national level about the ability of the legal profession to self-regulate.

On a more local level in the District of Columbia, this story serves as a warning against an idea that I strongly oppose – the Bar’s entirely unwarranted purchase of a building for its operations.

As Bar Board of Governors member Gregory Smith aptly argued

This is not an investment in our profession. It’s an investment in real estate. As noted, separate contingency funds exist to cover emergencies. This is a pure building-fund line item, with more than half a million bucks a year being socked away annually, with your money. At a time when members are facing financial insecurity, and the D.C. Bar is running a significant surplus, I did not think this could fairly be justified. Even if the D.C. Bar should consider buying a building in 2021, must it do so in cash? 

A serious independent audit of the D.C. Bar’s operation would, I think, yield findings similar to those in California.

While it might not reveal fraud, such a audit would show profligate and wasteful spending on staff travel. I am personally aware of the fact that every ABA conference features literally boatloads of D. C. attendees who party on bar dues like it’s 1999.

That’s why an independent audit will never happen. (Mike Frisch)