Disclosure Rules OK’d for Confidential California Lawyer Probes

Confidential attorney investigations may be revealed sooner with California State Bar rules adopted Friday under the so-called “snitch rule.”

The rule, approved last year by the state supreme court and lawmakers, requires lawyers to report other attorneys for misconduct.

The fallout from cases involving Tom Girardi and other alleged bad actors led the California Legislature to pass and Gov. Gavin Newsom (D) to sign SB 40, which proscribes waiving confidentiality of attorney investigations, and the California Supreme Court to adopt the new Rule of Professional Conduct 8.3, which likewise requires disclosing attorney misconduct.

The Board of Trustees without much discussion approved implementing provisions of SB 40 about when public protection compels disclosure of investigations that normally are confidential under the California Bus. & Profs. Code Section 6086.1(b).

Separately, the board approved directing staff to work up a proposal to lawmakers for an annual license fee increase of $150 with an inflation adjustment and options for tiered payments. The California Legislature sets the annual fees, which fund bar operations. The bar gets no money from the state’s general fund. Trustees will review the final fee proposal later this month.

Confidentiality Considered

The amendments adopted under SB 40 for waiving confidentiality:

• Clarify that both the fact of an investigation and information concerning the probe are confidential;
• The chief trial counsel, with board chair’s written concurrence, may waive confidentiality, “but only if disclosure is warranted for public protection, disclosure necessary to prevent an immediate public harm, and the alternative disclosure provisions of new section 6086.1(c) are inadequate for the protection of the public;”
• Establish procedures for the attorney to contest confidentiality waiver in State Bar Court;
• Require considering factors such as the extent to which the allegations or issues are generally known to the public and the potential for continued public harm before a decision is made to waive confidentiality;
• Specify the limited information that may be disclosed once the waiver decision is final; and
• Clarify, consistent with the position taken by the State Bar in litigation before the Supreme Court, that confidentiality may be waived with respect to both pending and closed investigations.

California was the last state to adopt some form of reporting to notify authorities as soon as the lawyer reasonably believes it won’t cause material prejudice or damage to the interests of a client of the lawyer’s firm. Lawyers under the rule since Aug. 1 were required to report other attorneys for misconduct as soon as the lawyer reasonably believes it won’t cause material prejudice or damage to the interests of a client of the lawyer’s firm. SB 40 went into effect Jan. 1.

$608 Annual Fee?

The bar is working toward an April 1 deadline to file a report to lawmakers to justify fee increases the agency seeks. The Legislature doesn’t approve the bar’s budget but does have say over how much can be charged for active licenses. The bar has proposed increasing various other fees, such as sitting for the exam.

The current mandatory base fee is $404, and asking for an increase of $150 would bring the base to $554. With other mandatory add-ons such as the client security fee, that base rises to $468, meaning if the Legislature approves, an active attorney license for next year would be $608, according to materials the board discussed.

Options for structuring fees could include raising licensee amounts based on where the attorney works, with corporate attorneys and those working in large law firms with more than 100 lawyer paying $300 more and sole practitioners and nonprofit attorneys paying $75 more; assessing fees based on years in practice, with those in practice less than five years getting a $75 increase and those in practice for more than 30 years paying $250 more; or charging fees based on income, so those earning $100,000 or less getting a $75 increase while those earning above $500,000 paying an additional $300.

The bar has received one fee increase in 25 years, said bar Executive Director Leah Wilson.

This year’s fee bill (AB 3279) introduced Thursday didn’t specify the amount to be charged starting in 2025.

“I certainly share in the sticker shock-type concern where if we ask for a number too high, then my fear is that it’s going to turn what is already a delicate situation and make it incredibly, incredibly toxic,” board Chair Brandon Stallings said.