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California Bar’s Policies Don’t Protect Public, Audit Finds (1)

April 14, 2022, 8:55 PMUpdated: April 14, 2022, 9:41 PM

California’s system for overseeing the legal profession failed to adequately investigate attorneys “despite lengthy patterns of complaints against them,” the state auditor said in a report released Thursday.

“We found that the State Bar prematurely closed some cases that warranted further investigation and potential discipline,” Michael S. Tilden, acting California State Auditor, said in a letter to lawmakers. “We reviewed files for one attorney who was the subject of 165 complaints over seven years, many of which the State Bar dismissed outright or closed after sending private letters to the attorney.”

The California Bar, which oversees more than 250,000 licensed attorneys, lacks clear policies on use of nonpublic measures, such as private warning letters to attorneys, for closing complaints, the report said.

“Cases that are confidential and not made public may not deter attorney misconduct because current and potential clients cannot find out about the behavior,” the audit said.

The agency in the case of one attorney closed 87 complaints spanning 20 years, some through nonpublic measures and some through a policy that allowed it to close certain cases without contacting the attorney for additional information, because the monetary amounts involved were relatively low, the auditor said.

Lawmakers last summer required the bar, as a condition of the fee bill, to undergo another audit. It followed bar admissions that decades of missteps provided cover for Thomas Girardi, the famed lawyer accused of misappropriating millions of dollars in client funds.

Girardi failed to fight the State Bar Court charges of stealing from clients and was ordered disbarred.

The California Legislature oversees lawyers under the state Business and Professions Code and annually votes on licensing fees that attorneys must pay to practice in a yearly ritual fight between lawmakers and the state agency.

State Senate Judiciary Committee Chairman Tom Umberg (D), who carried last year’s fee bill, insisted on the audit.

“The audit calls out unacceptable practices by the State Bar that led to the Girardi situation,” Umberg said in an emailed statement. “I am also closely reviewing the audit and it will guide me as I work with Assembly Judiciary Chair Mark Stone on the Bar fee bill this year.”

Fully implementing the auditor’s recommendations would require 30 additional staff and an additional $1 million in one-time funds and $200,000 ongoing annual funding, the bar said.

Those recommendations include requiring the agency to regularly change its external reviewer, have its external reviewer present its findings and recommendations—with all confidential information redacted—directly to the Board of Trustees, and require the bar to report periodically to the board on the actions taken to address the external reviewer’s recommendations.

Trustee Chairman Ruben Duran in a statement said the board found some of the audit findings “profoundly troubling.”

“The Board and leadership team have been working diligently to improve the discipline system, but after years of critical audits, it is clear that some of our challenges are structural and have been decades in the making. They reflect a complex and unproductive cycle of insufficient funding, poor outcomes, and low morale,” Duran said.

(Added comments from Sen. Tom Umberg beginning in ninth paragraph.)

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: Tom P. Taylor at ttaylor@bloomberglaw.com; Rob Tricchinelli at rtricchinelli@bloomberglaw.com

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