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California Lawmakers OK Bill to Keep Bar from Expanding Access

Aug. 22, 2022, 10:26 PM

California lawmakers again smacked down the state bar under a bill that would restrict the attorney regulatory agency from advancing any initiative to increase scope of practice for paralegals or explore corporate ownership of law firms.

The California Assembly voted 59-0 to concur in Senate amendments to the bill (A.B. 2958) to prohibit the State Bar of California from spending any funds on the so-called regulatory sandbox initiative without the Legislature’s approval.

It also would require the bar to report to lawmakers by next Jan. 15 the total spent since 2018 to study creating a sandbox or the licensing of nonattorneys as paraprofessionals. The report must include source of funding and use of the money, including salaries, travel, food and beverage, and lobbying.

Amendments “clarify the role of the bar and pushing to ensure that they meet their obligation for public protection, especially around discipline of attorneys,” Assemblymember Mark Stone (D), Assembly Judiciary Committee chairman, said during the floor vote. The original bill passed the lower house on a 65-0 vote before returning for a re-vote following the Senate’s amendments.

The Senate added an urgency statute so the legislation goes into effect immediately. The bill now heads to Gov. Gavin Newsom (D), who has until Sept. 30 to sign or veto the measure.

The measure is the latest in the forever fight between the bar and lawmakers, who also regulate the profession under the state Business & Professions Code. Lawmakers want to ensure the bar doesn’t spend any money or effort on exploring new ways of expanding access including licensing nonlawyers unless protecting public is the priority.

It comes at a time when the agency is defending itself from accusations that lax oversight allowed attorney Thomas Girardi to steal millions from clients and co-counsel before ultimately being disbarred. The state bar is also under fire in federal lawsuit over a security gap that allowed a third party website to capture confidential client complaint and attorney disciplinary record data.

First Things First

The bar “has endured some challenges over the past year that are reflective of the challenges that they have had over the last four decades with respect to attorney discipline and oversight. The Tom Girardi fiasco has exposed some of that lapses that have gone on for years, sadly, with the state bar,” Sen. Tom Umberg (D), chairman of the Senate Judiciary Committee, said when the bill passed the Senate on Aug. 17.

Instead, the legislation tells the bar “’Hey, you really need to focus on first things first. First things first are getting the discipline system in order before we create a separate paraprofessional category, certified category, for you to oversee and before we allow corporations to begin practicing law,’” Umberg said during floor debate.

The bill leaves the licensing fees essentially unchanged from this year at $390 and directs another state audit to review the bar’s financial condition.

The State Bar of California licenses more than 250,000 lawyers. Lawmakers and law watchers have criticized the organization for decades alleging inaction and deficient oversight of attorneys, climaxing with the downfall of the nationally known Girardi. Edelson PC alleged his defunct Girardi Keese law firm operated a long-running Ponzi scheme, stealing funds from clients to prop up a lavish lifestyle for Girardi and his celebrity wife, Erika Girardi.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com