BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
SB 163 (Evans)
As Amended May 27, 2011
Hearing Date: June 1, 2011
Fiscal: No
Urgency: No
SK
PURSUANT TO SENATE RULE 29.10
SUBJECT
State Bar Act
DESCRIPTION
This bill would rename the State Bar of California's board of
governors as the board of trustees and would revise the
composition and size of that board to be made up of six public
members appointed by the Governor and the Legislature, as
provided under existing law, and 13 attorney members, as
specified. By making these changes, this bill would reduce the
size of the board from 23 to 19 members and would phase in this
transition over a three-year period. This bill would make
related changes and would also specify that the protection of
the public shall be the highest priority for the State Bar and
the board of trustees.
This bill would authorize the State Bar to collect active
membership dues of up to $410 for the year 2012, which would
continue the current active dues amount of $410.
BACKGROUND
The State Bar of California is a public corporation. Attorneys
who wish to practice law in California generally must be
admitted and licensed in this state and must be a member of the
State Bar. (Cal. Const. art. VI, Sec. 9.) The State Bar of
California is the largest state bar in the country. As of
February 2011, the State Bar had 170,986 active members and
49,034 inactive members. The Bar's programs are financed mostly
by annual membership dues paid by attorneys as well as other
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fees paid by applicants seeking to practice law. At the end of
2010, the State Bar had a fund balance of $11.9 million in its
General Fund; the Bar is projecting a continued surplus through
at least 2013 of $10.7 million (projected 2012) and $9.3 million
(projected 2013).
Last year, AB 2764 (Committee on Judiciary, Chapter 476,
Statutes of 2010) created within the State Bar the Governance in
the Public Interest Task Force to be made up of 11 members
appointed by the President of the State Bar as follows: seven
attorney members; three public members; and the president. AB
2764 required the Task Force, on or before May 15, 2011, and
every three years thereafter, to submit a report to the Supreme
Court, the Governor, and the Senate and Assembly Judiciary
Committees containing recommendations for enhancing the
protection of the public and ensuring that protection of the
public is the highest priority in the licensing, regulation, and
discipline of attorneys. This report is to be reviewed by the
Senate and Assembly Judiciary Committees in their regular
consideration of the annual bar dues bill.
The Task Force was created in response to concerns that actions
by the State Bar Board of Governors did not sufficiently take
into account the protection of the public. Several examples
demonstrating the concern were included in this committee's
analysis of AB 2764, including the board's action to approve a
scaled-back online "Find a Lawyer" program that critics argued
left out important helpful consumer information in response to
opposition from local bar associations. The board decision not
to reappoint Scott Drexel as Chief Trial Counsel was also
highlighted in the analysis which noted legal press at the time
that described allegations that Drexel was not reappointed
because he aggressively pursued attorney misconduct and
suggested that the board's decision was based on internal
profession-protection politics and not public interest issues.
The board also nearly voted to oppose two important consumer
protection measures (SB 94 (Calderon, Ch. 630, Stats. 2009) and
AB 764 (Nava, 2009)) which addressed attorney participation in
foreclosure-related scams. Finally, the malpractice insurance
disclosure rules ultimately approved by the board were felt by
many to be considerably scaled back.
The Task Force began meeting in September 2010 and, after
regularly and diligently holding a number of meetings around the
state, the Task Force voted on May 5, 2011 to submit its reports
and recommendations to the Supreme Court, Governor, and
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Legislature. AB 2764 provided that, if the task force does not
reach a consensus on all recommendations, the dissenting members
may prepare and submit a dissenting report. As a result, on May
11, 2011, the Task Force presented its work product to the
Supreme Court, Governor, and Legislature in the form of a
majority report and a minority report (See Comment 2 for
discussion of these reports).
Drawing from both the majority and minority reports, this bill
was amended on May 27, 2011 to include provisions renaming the
board of governors as the board of trustees, revising the
composition and size of that board, and specifying the
transition to a smaller board. The amendments also make
revisions to the Governance in the Public Interest Task Force,
add a public protection charge, and contain provisions relating
to a strategic plan and the Bagley-Keene Open Meeting Act. The
remaining provisions of this bill regarding 2012 membership dues
were heard and approved by this Committee on May 10, 2011.
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CHANGES TO EXISTING LAW
Existing law requires all attorneys who practice law in
California to be members of the State Bar and establishes the
State Bar for the purpose of regulating the legal profession.
Pursuant to the State Bar Act, the annual mandatory membership
fee set by the State Bar's Board of Governors to pay for
discipline and other functions must be ratified by the
Legislature. (Bus. & Prof. Code Sec. 6000 et seq.)
Existing law provides that the State Bar shall be governed by a
23-member Board of Governors (the Board), comprised of 16
lawyers elected by members of the Bar from nine specified
districts for three-year staggered terms, and six public
non-lawyer members, four of whom are appointed by the governor,
one who is appointed by the Senate Rules Committee, and one who
is appointed by the Speaker of the Assembly. The 23rd member of
the Bar Board is its president, who is elected by the other
board members to serve a fourth single year. (Bus. & Prof. Code
Sec. 6010 et seq.)
Existing law provides for the Governance in the Public Interest
Task Force in the State Bar and requires that task force to
submit a report by May 15, 2011, and every three years
thereafter, to the Supreme Court, the Governor, and the Senate
and Assembly Judiciary Committees containing recommendations for
enhancing the protection of the public, as specified. (Bus. &
Prof. Code Sec. 6001.2.)
Existing law authorizes the State Bar to collect $315 in annual
membership fees from active members for a total annual dues bill
of $410 for the year 2011. (Bus. & Prof. Code Sec. 6140.) The
other $95 is pursuant to statutory authorization to assess
annually the following fees: $40 for the Client Security Fund
(Bus. & Prof. Code Sec. 6140.55); $25 for disciplinary
activities (Bus. & Prof. Code Sec. 6140.6); $10 to fund the
Lawyer Assistance Program (Bus. & Prof. Code Sec. 6140.9); $10
special assessment to fund information technology upgrades
(expires January 1, 2014) (Bus. & Prof. Code Sec. 6140.35); and
$10 for the Building Fund (expires January 1, 2014) (Bus. &
Prof. Code Sec. 6140.3).
Existing law authorizes the State Bar to collect $75 in annual
membership fees from inactive members for a total annual dues
bill of $125. (Bus. & Prof. Code Sec. 6141.) The other $50 is
pursuant to statutory authorization to assess annually the
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following fees: $10 for the Client Security Fund (Bus. & Prof.
Code Sec. 6140.55); $25 for disciplinary activities (Bus. &
Prof. Code Sec. 6140.6); $5 to fund the Lawyer Assistance
Program (Bus. & Prof. Code Sec. 6140.9); and $10 for the
Building Fund (expires January 1, 2014) (Bus. & Prof. Code Sec.
6140.3).
Existing case law , Keller v. State Bar of California (1990) 496
U.S. 1, prohibits the use by the State Bar of mandatory dues to
fund political and ideological activities, as a violation of a
member's First Amendment freedom of speech rights, where such
expenditures were not necessarily or reasonably incurred for the
purpose of regulating the legal profession or improving the
quality of the legal services available to the people of the
state. Existing law allows members to deduct up to $10 from the
mandatory dues if the member does not wish to fund legislative
activities and non-Keller lobbying and activities with his or
her dues. (Bus. & Prof. Code Sec. 6140.05, Keller v. State Bar
of California (1990) 496 U.S. 1.)
This bill would provide that protection of the public shall be
the highest priority for the State Bar and the board of trustees
in exercising their licensing, regulatory, and disciplinary
functions. This bill would specify that whenever the protection
of the public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.
This bill would rename the State Bar's board of governors as the
board of trustees and would revise the composition and size of
that board to be made up of six public members appointed by the
Governor and the Legislature, as provided under existing law,
and 13 attorney members consisting of the following: six
attorney members elected from State Bar districts based on the
six court of appeal districts, five attorney members appointed
by the California Supreme Court, and two attorney members
appointed by the Senate Rules Committee and the Speaker of the
Assembly for a total number of 19 members.
This bill would phase in the transition to a smaller board,
requiring the State Bar to determine how to reduce the size of
the board from 23 members to 19 members by October 31, 2014.
This bill would require the State Bar to develop a plan for
implementing that transition by January 31, 2012 and to submit a
written report detailing that plan to the Senate and Assembly
Judiciary Committees. This bill would require the State Bar to
report annually to those committees on its progress toward
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implementing this transition.
This bill would prohibit the State Bar from changing, reducing,
shortening, lengthening, or abolishing a board member's term, or
forcing any board member to resign, in order to institute a
19-member board.
This bill would specify criteria that the Supreme Court should
consider when making appointments to the board, as specified,
and would provide that the State Bar is responsible for carrying
out the administrative responsibilities related to the
appointment process.
This bill would provide that attorney members elected or
appointed by the Supreme Court may be reelected or reappointed
for one additional term only.
This bill would provide that the board elect a president, vice
president, and treasurer for the following year within 90 days,
rather than 270 days, preceding the next annual meeting. This
bill would specify that the president, vice president, and
treasurer may be elected from among all members of the board.
This bill would provide that the term of the president shall be
one year, but he or she may be reelected to a second one-year
term.
This bill would require the board to ensure that its open
meeting requirements are consistent with, and conform to, the
Bagley-Keene Open Meeting Act.
This bill would require the board to complete and implement a
five-year strategic plan to be updated every two years and would
require the board president to report annually to the Supreme
Court, Governor, and Senate and Assembly Judiciary Committees on
the steps that the board has taken to implement that strategic
plan and indicate any measures that the board will need to take
in the upcoming years to address the projected needs contained
in the plan.
This bill would revise the make-up of the Governance in the
Public Interest Task Force to be made up of six members of the
board and the president. This bill would specify that the six
members be made up of two elected attorneys who are selected by
the elected attorney members, two attorneys appointed by the
Supreme Court who are selected by the Supreme Court appointees,
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and two public members selected by the public members.
This bill would authorize the State Bar to collect active
membership dues of up to $410 for the year 2012.
COMMENT
1.Stated need for the bill
The author writes in support of the bill:
Over the last nine months, the State Bar's Governance in the
Public Interest Task Force spent considerable time and effort
discussing its charge to make recommendations to enhance the
protection of the public. These efforts are well reflected in
the majority and minority reports issued by the Task Force
just a few weeks ago. SB 163 is a well-thought out compromise
proposal that draws from both of these reports.
The bill will help to address the issues identified by the
Legislature in creating the Task Force while at the same time
implementing changes in a gradual phased-in manner. In
transitioning to a smaller board, no sitting board member
(including those elected this year) will be forced to resign
or have their term reduced or shortened. At the same time,
the changes proposed by this bill will sufficiently revise the
make-up of the board to allow for appointments-in addition to
elections-of lawyer members.
As a result, attorneys will have three different ways to
become members of the State Bar's board of trustees: they can
be elected, appointed by the Supreme Court, or appointed by
the Legislature. At the same time, the bill ensures that the
ratio of professional to public members is more reasonable and
includes a public protection charge ensuring that protection
of the public is the highest priority for the State Bar.
The bill also ensures that the diversity of the board is
maintained by specifying criteria that the Supreme Court
should consider when making appointments to the board. This
includes important criteria such as attorneys who represent
various categories, including legal services, small firm or
solo practitioners, and historically underrepresented groups.
In support of the bill's provisions regarding membership dues,
the sponsor, State Bar of California, writes that "Existing law
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requires the Board of Governors to charge annual membership dues
for members. SB 163 will extend for one year (2012) the State
Bar's authority to collect the dues needed to keep it operating
in order to ensure public protection and the proper regulation
of attorneys. The bill ? extends this authority and the amount
is not increased by this legislation."
2.May 27th Amendments
As noted above, this bill was amended on May 27, 2011 to draw
from both the majority and minority reports submitted by the
Governance in the Public Interest Task Force.
a. Public protection charge and renaming the board
For example, both the majority and minority reports suggested
including a public protection charge in the State Bar Act.
This bill would accordingly provide that protection of the
public shall be the highest priority for the State Bar and the
board of trustees in exercising their licensing, regulatory,
and disciplinary functions. Consistent with the public
protection charge contained in other licensing statutes, this
bill would specify that whenever the protection of the public
is inconsistent with other interests sought to be promoted, the
protection of the public shall be paramount. In addition, as
recommended by both the majority and minority reports, this
bill would rename the board of governors as the board of
trustees.
b. Composition and size of the board
With respect to the composition and size of the board, this
bill draws from both the majority and minority reports and
provides for a compromise approach. This bill would reduce the
size of the board from 23 members to 19 members by providing
that the board would be made up of six public members appointed
by the Governor and the Legislature-as provided under existing
law-and 13 attorney members consisting of the following: six
attorney members elected from State Bar districts based on the
six court of appeal districts, five attorney members appointed
by the California Supreme Court, and two attorney members
appointed by the Senate Rules Committee and the Speaker of the
Assembly.
In contrast, the minority report suggested eliminating
elections of attorneys entirely and instead providing for nine
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attorney members to be appointed by the Supreme Court. This
change, combined with the existing six public members, would
have resulted in a smaller board of 15 members. The majority
report, on the other hand, recommended leaving the board at its
current size of 23 members and reconfigured its composition as
follows: 12 attorney members elected from five electoral
districts based approximately on existing District Court of
Appeal boundaries, three attorney members appointed by the
Supreme Court, one attorney member from the California Young
Lawyers Association, six public members appointed pursuant to
existing law, and one president.
In order to help ensure a diverse board, this bill would
provide that the Supreme Court-when making appointments of
attorney members to the board-should consider appointing
attorneys who represent the following categories: legal
services; small or solo practitioners, historically
underrepresented groups, including consideration of race,
ethnicity, gender, and sexual orientation; and legal academics.
The bill would also provide that the Supreme Court, in making
appointments, should consider geographic distribution, years of
practice, particularly attorneys who are within the first five
years of practice or age 36 or under, and participation in
voluntary local or state bar activities.
This bill would phase in the transition to a smaller board
gradually by requiring the State Bar to determine how to reduce
the size of the board from 23 members to 19 members by October
31, 2014. Under the bill, the State Bar must develop a plan
for implementing that transition by January 31, 2012 and submit
a written report detailing that plan to the Senate and Assembly
Judiciary Committees. In addition, the Bar must report
annually to those committees on its progress toward
implementing this transition. The bill would also prohibit the
State Bar from changing, reducing, shortening, lengthening, or
abolishing a board member's term, or forcing any board member
to resign, in order to institute a 19-member board. In
addition, under the bill, attorneys elected or appointed by the
Supreme Court may be reelected or reappointed for one
additional term only.
c. Officers of the board
Existing law requires the board to elect a president, vice
president, and treasurer for the following year within 270 days
of the next annual meeting. In order to better assure
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stability, this bill would instead provide that those officers
be elected at a meeting 90 days before the next annual meeting.
This bill would also provide that the officers of the board
include one vice president (rather than four, as under existing
law) who shall serve in the absence of the president to provide
for more continuity.
The bill would also specify that the president, vice president,
and treasurer may be elected from among all members of the
board. Under the bill, the term of the president shall be one
year, but he or she may be reelected to a second one-year term.
d. Bagley-Keene Open Meeting Act
The minority report recommended that the board adopt a rule
providing for substantially all of the requirements of the
Bagley-Keene Open Meeting Act to be applied to the State Bar.
Consistent with this recommendation, this bill would require
the board to ensure that its open meeting requirements are
consistent with, and conform to, the Bagley-Keene Open Meeting
Act. The board recently took action in this area, sending out
to public comment proposed revisions of its rules incorporating
some requirements of Bagley-Keene.
e. Strategic plan
This bill would require the board to complete and implement a
five-year strategic plan to be updated every two years. This
bill would also require the board president to report
annually-as part of existing annual reports-to the Supreme
Court, Governor, and Senate and Assembly Judiciary Committees
on the steps that the board has taken to implement that
strategic plan and indicate any measures that the board will
need to take in the upcoming years to address the projected
needs contained in the plan.
f. Governance in the Public Interest Task Force
This bill would revise the make-up of the Governance in the
Public Interest Task Force so that it would be made up of six
members of the board and the president. The bill would specify
that the six members be made up of two elected attorneys who
are selected by the other elected attorney members, two
attorneys appointed by the Supreme Court who are selected by
the other Supreme Court appointees, and two public members
selected by the other public members.
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1.State Auditor's biennial report on State Bar's performance
The State Auditor is required by law to conduct a performance
audit every two years of the State Bar's operations during the
prior fiscal year. This audit was released on May 26, 2011. At
the request of this committee, the audit reviewed the Lawyers
Assistance Program (LAP) to better understand whether LAP is
meeting its mission and, importantly, whether it is protecting
clients and the public from substance-abusing attorneys. The
Auditor's report noted the following about LAP:
It has poor monitoring procedures for ensuring case
managers appropriately send reports of participants'
noncompliance to disciplinary bodies.
§ Case managers failed to send immediate reports for
six of 34 instances we reviewed for 25 participants that
missed lab tests or tested positive for alcohol or drugs.
§ When case managers did report noncompliance, some of
the reports were not submitted within the required five
days-one was submitted 52 days later.
It does not adequately ensure that case managers treat all
noncompliance issues consistently.
§ It has limited guidance to help case managers
determine when to notify the evaluation committee.
§ There is no formal process for monitoring case
managers' adherence to policies and procedures.
§ One participant failed to comply with his
participation plan 20 times during the first three years
that he took part in the assistance program-yet the case
manager did not bring it to the evaluation committee's
attention.
Although only 11 percent of its participants have
successfully completed the assistance program, the State Bar
believes that other factors are a better measure of the
program's effectiveness. However, it has not measured the
program's effectiveness using these other factors.
The Auditor made a number of recommendations, including that LAP
"should ensure that case managers are submitting to the
appropriate entity the required reports in a timely manner, as
required by its policies." The Auditor also recommended that
case managers treat noncompliance issues consistently when they
do not require immediate reports to disciplinary bodies and also
suggested developing guidelines so that case managers can better
determine when a noncompliance issue should be reported to the
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evaluation committee. The Auditor also recommended that steps
be taken to better evaluate the effectiveness of LAP and noted
"if the assistance program believes that the effectiveness of
the program is better measured through other means, it should
develop these alternative measures and assess the program's
effectiveness in meeting its stated goals." The Auditor's
report notes that the State Bar agrees with its recommendations
and has indicated that it is already in the process of
implementing them. On this point, the State Bar indicates that
it has implemented the first two recommendations and is working
on the third.
As this bill moves through the legislative process, the author
may wish to consider engaging in discussion with the State Bar
to better ensure that LAP is meeting its mission and protecting
clients and the public from substance-abusing attorneys.
Support : None Known
Opposition : None Known
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HISTORY
Source : State Bar of California
Related Pending Legislation : AB 572 (Wieckowski), which is
identical to this bill, has been referred to the Assembly
Judiciary Committee.
Prior Legislation :
AB 2764 (Judiciary, Chapter 476, Statutes of 2010)
SB 55 (Corbett, Chapter 2, Statutes of 2010)
SB 641 (Corbett, 2009) vetoed
AB 3049 (Judiciary, Chapter 165, Statutes of 2008)
SB 686 (Corbett, Chapter 474, Statutes of 2007)
AB 1529 (Jones, Chapter 341, Statutes of 2005)
SB 1490 (Judiciary, Chapter 384, Statutes of 2004)
AB 1708 (Judiciary, Chapter 334, Statutes of 2003)
SB 352 (Kuehl, Chapter 24, Statutes of 2001)
SB 1367 (Schiff, Chapter 118, Statutes of 2000)
SB 144 (Schiff, Chapter 342, Statutes of 1999)
Prior Vote : Senate Judiciary Committee (Ayes 5, Noes 0)
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