The State Bar of California
April 9, 2021
California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
RE: State Bar of California Response to Audit Report 2020-030, for the period of January 1, 2019, to December 31, 2020
Dear Ms. Howle:
The State Bar welcomes suggestions for positive change, and audits provide a unique opportunity to re-examine the State Bar’s processes and procedures, and its compliance with those processes and procedures as well as state law. Having an independent set of eyes review our work can bring clarity and fresh ideas. Audits such as this one also serve to push us forward in bringing resolution to proposals and plans that we have been working on for some time and help to identify areas for further improvement. We are in general agreement with the recommendations for improvement and will implement virtually all of them, perhaps with some modifications discussed below and as further study indicates. We strongly disagree with some of the statements in the remainder of the text, but believe it is more productive to focus on the recommendations and how the State Bar will implement the auditor’s recommendations.
STATE BAR RESPONSE TO AUDIT RECOMMENDATIONS
RECOMMENDATIONS FOR THE LEGISLATURE
Recommendation: To clarify state law and provide more transparency regarding the nature of the existing backlog of discipline cases, the Legislature should:
- Revise state law to remove Business and Professions Code section 6140.2, which has similar requirements for the State Bar’s goals and policies for timely case processing but omits the State Bar’s authority to designate complicated matters.
- Revise Business and Professions Code Section 6086.15, subdivision (a)(1), to require the State Bar to report in the Annual Discipline Report the number of complicated matters as of the end of the reporting period that were pending beyond 12 months after receipt without dismissal, admonition, or the filing of formal charges by the trial counsel’s office.
Response: The State Bar agrees that reform of the metrics used to measure how the State Bar performs its mission of protecting the public from the malfeasance or misfeasance of attorneys is needed. In 2016, the State Bar proposed such changes to the Legislature in a report entitled, State Bar Backlog, submitted pursuant to Business and Professions Code section 6140.16. The State Bar has refined its thinking on this issue over the years and has shared with the auditor a proposed revised approach to measure the effectiveness of the State Bar in managing its discipline system and protecting the public. This revised approach places the focus and priority on the cases that pose the most harm to the public, as opposed to those that are simply the oldest, as the current statutory backlog measure does. These new principles for case processing goals are included in the supplemental information section below. The State Bar will be working with the Legislature to more fully develop these principles and agree upon appropriate measures. Adoption of these changes would render this recommendation moot.
Recommendation: To provide the Legislature sufficient time to consider the discipline report before reviewing the annual fee bill, [the Legislature] should:
- Amend state law to require the State Bar’s discipline report to cover the 12 months of July 1 through June 30 of the previous year[sic], and require that the State Bar submit the discipline report annually by October 31.
- In the year that the discipline report’s time period is amended, require the State Bar to report information for both the prior calendar year and the newly defined period to ensure that stakeholders can compare the information for the newly defined period to prior years.
Response: The State Bar has no concerns with this proposal.
RECOMMENDATIONS FOR THE STATE BAR
Recommendation: To ensure that it is operating efficiently, the State Bar should assess the impact of its discipline system reorganization, including how the changes have affected its ability to efficiently resolve cases and fulfill its mandate to protect the public. Based on the assessment’s results, the State Bar should determine whether additional changes to its organizational structure are warranted.
Response: The State Bar agrees with the recommendation to conduct an assessment to determine whether and, if so, how the restructuring of the Office of Chief Trial Counsel (OCTC) impacted the office’s ability to resolve cases and fulfill its public protection mandate.
Based on currently available information, the State Bar believes that the reorganization was a positive move. These structural changes were implemented based on recommendations from the National Center for State Courts (NCSC) as part of its workforce planning report. The State Bar contracted with NCSC to conduct the workforce planning review directed by Business and Professions Code section 6140.16. The reorganization yielded positive changes in several ways, including the elimination of redundant levels of review. And while the State Bar was not authorized to impose a licensing fee increase until 2020, the State Bar nonetheless allocated discrete resources to OCTC to increase the office’s total number of staff.
The State Bar believes that a comprehensive assessment of the reorganization will reveal that factors other than the reorganization explain some of the statistical trends noted in the Auditor’s report. OCTC’s work is largely complaint driven and as a result, the rate at which complaints are submitted drives OCTC’s workload. Starting in July 2018, complaints increased substantially. In October 2018, when the State Bar launched an online complaint portal, which allowed people to file a complaint online for the first time, complaints rose yet further. Overall, in 2018 and 2019, the number of complaints increased by four and five percent respectively, and OCTC managed that increased volume with largely the same resources it had before the increase. The rate of complaints subsequently decreased, which explains the Auditor’s note that the number of complaints rose only one percent between 2015 and 2019. However, that one percent figure obscures the surge in case volume that OCTC managed in 2018 and 2019, which was a significant contributor to the increased case processing times noted in the report.
In addition, in February 2019, the State Bar fully launched a new case management system, moving from a legacy computer system and largely paper-based process paper-based computer system to a modern electronic, paperless system. While the change was past due and will generate long-term benefits, the transition negatively impacted OCTC’s productivity in the short term. In addition, the impact of the COVID-19 pandemic on 2020 cannot be overlooked. Besides the challenge of launching remote work for hundreds of staff almost overnight, delays arose because those entities on which OCTC relies for evidence (e.g., banks and courts) were slow to respond to requests for information, and the State Bar Court temporarily halted proceedings.
Finally, while the 2020 fee increase allowed the hiring of staff to form a new OCTC team in the Los Angeles office, the pandemic impacted the ability to onboard and train those staff as quickly as desired. The staff were onboarded over the course of the year, with the new team formally constituted in September 2020. Most new staff to the office take six months to a year to develop sufficient expertise to carry a full caseload. Thus, the full benefit of the new resources will not be realized until later in 2021.
Recommendation: To determine if the changes to its discipline process have been effective and to help it identify problems in specific phases of its process before they affect the backlog, the State Bar should implement methods to monitor its enforcement process performance, including comparing the trial counsel staff’s performance against internal case processing benchmarks.
Response: The State Bar agrees with the recommendation. The State Bar had already begun to implement such changes prior to the audit. Staff have developed a wide range of customized management and operational reports that were not included in the new case management system when it launched. These new reports will provide the State Bar and its Board of Trustees a more detailed view of the inventory, individual performance, and the performance of the office overall. As recently as December 2020, several key reports were launched that reflect current inventory, number of newly assigned cases, and the number of dispositions by individual attorneys and investigators as well as by teams.
The State Bar continues to develop additional reports, including one to determine whether OCTC team members are able to accomplish relevant investigative tasks consistent with interim case-processing benchmarks. These benchmarks set time frames for interim steps in an investigation and are intended to encourage the prompt disposition of discipline matters as a whole. The report is expected to be in production soon and will be used to evaluate case processing and determine whether the benchmarks are reasonable in light of current resources.
Recommendation: To reduce its backlog of discipline cases and ensure that it has appropriately allocated resources to all phases of its discipline process, [the] State Bar should do the following:
- Develop and recommend an appropriate backlog measure and goal as required by state law – including the number of days at which a case should be added to the backlog as well as a goal for the number of cases in backlog.
- Determine the staffing level necessary to achieve that goal, as required by state law.
- Work with the Legislature to establish this backlog measure and goal, and revise its reporting requirements accordingly. If necessary, it should also request the additional resources required to meet the goal.
Response: As described above, in 2016 the State Bar proposed to the Legislature new metrics which would supersede the current statutory backlog measure. Since that time, recognizing that the focus on backlog inadvertently creates incentives to work cases in the order in which they arrive, regardless of their severity, OCTC adopted a case prioritization method. The fundamental purpose of this approach is to protect the public from misconduct that poses the greatest threat to the public while attempting to process all cases as expeditiously as current resources permit. The approach formed the basis of the State Bar’s recently developed principles for measuring our effectiveness in protecting the public. We believe these principles are superior to the current backlog measure. We look forward to working with the Legislature to continue to formulate and implement these improved measures to monitor and improve the effectiveness of the State Bar in protecting the public.
Recommendation: To ensure that the State Bar’s discipline report presents accurate, complete, and consistent information, as state law requires, the board should require the designated committee to review, evaluate, and approve the annual discipline report before submitting the report to the Board. Additionally, the committee should develop procedures outlining how the State Bar should compile the report in accordance with statutory requirements. The committee should approve these procedures for the State Bar’s use before finalizing its 2021 discipline report.
Response: As the audit report notes, each Annual Discipline Report discussed in the audit was reviewed either by the Board of Trustees itself, the Executive Committee based on its delegated authority from the Board, or the Board’s Regulation and Discipline Committee.
Because the Regulation and Discipline Committee includes nearly all Board members, in several years the Board determined that it would be more efficient and enable the most comprehensive review to have the full Board review the report in the first instance. Requiring review first by the Regulation and Discipline Committee, followed by the entire Board, would have been redundant and inefficient, because both bodies include essentially the same people. The Board will consider whether to revise its formal procedures in light of the Auditor’s recommendations.
The State Bar agrees with the Auditor that guidelines should be adopted for the review process to create a quality-control check and ensure that the Board review is as effective as possible.
Recommendation: To ensure that users of the discipline report can compare information from year to year, whenever the State Bar changes how it calculates a metric, it should describe the change in the discipline report and, for that year, provide information calculated under both its old and new methods.
Response: The State Bar agrees with this recommendation. The State Bar strives to adhere to this practice by noting when changes are made to how the data is reported. The State Bar notes that the Annual Discipline Report provides extensive, detailed information on the discipline system. The report is a lengthy and complicated document. Last year, it was nearly 100 pages long and included 18 statutorily mandated tables, 7 comparative figures, and countless other calculations and statistical analyses, along with other information. The Auditor notes instances in which some data points among the hundreds reported did not comply precisely with each requirement for presentation, in many instances because the Auditor interpreted a particular statutory requirement differently than the State Bar. In each case of such disagreement over the statutory interpretation, the State Bar is happy to adopt the Auditor’s preferred statutory interpretation.
Recommendation: To ensure that it receives the best value for the money it spends, the State Bar should establish documentation standards and templates for contract managers to follow when selecting vendors for the administration of the bar exam.
Response: The State Bar agrees with this recommendation and has already implemented it. The procurement policy regarding competitive bidding exemptions has been updated to require that a best value analysis be documented in a new Best Value Memo template which must be submitted with the procurement requisition. Procurement requisitions submitted without the required documentation will be rejected. The memo will be reviewed by Procurement staff to verify that the analysis is sufficient and justified. Office directors have been instructed to ensure that contract managers and other staff members involved in the procurement of goods and services are aware of this policy change, and the written instructions for completing procurement requisitions in the Oracle system have also been updated.
The State Bar notes that the recent ExamSoft situation was unique because, due to industry consolidation and the last-minute need to adopt a remote, online exam, ultimately ExamSoft was the only vendor available for recent online administrations of the bar exam. Nonetheless, the Auditor is correct that best practices must be followed at all times.
MEASURING THE STATE BAR’S EFFORTS TO PROTECT THE PUBLIC
As briefly mentioned above, OCTC continues to identify and prioritize the cases that represent the greatest danger to the public using a case prioritization system developed in 2018. The purpose of case prioritization is to marshal resources in a way that best protects the public from attorneys who pose the greatest threat. Highest priority cases include those that present significant, ongoing, or serious potential harm to the public; cases involving vulnerable victims including immigrants and seniors; cases of client abandonment; abusive or frivolous litigants; and, cases involving engaging in or abetting the unauthorized practice of law. OCTC devotes the most investigative and prosecutorial resources to pursuing these cases.
Given the increase in complaints filed during 2018 and 2019 and the numbers of criminal conviction matters opened in 2019 following the refingerprinting of all attorneys, the case prioritization system has proven to be an invaluable tool for protecting the public from misconduct that poses the greatest threat of harm. OCTC’s focused implementation of case prioritization has demonstrated results: In 2020, for every 100 new highest priority cases received, OCTC resolved 146, up from 136 per 100 cases in 2019, and 126 per 100 cases in 2018. In other words, in 2018 and 2019 OCTC resolved 26 percent and 36 percent more high-priority cases than it received, and in 2020 it resolved 46 percent more cases than it received. At the same time, OCTC also improved its caseload clearance for lower priority cases—resolving 113 for every 100 new cases received in 2020, compared to 97 per 100 in 2019 and 94 per 100 in 2018.
As described above, the State Bar has refined its thinking on the statutory backlog measure over the years and has recently formulated principles for creating case-processing goals and measuring the State Bar’s effectiveness in protecting the public. The Principles for Revised Case-Processing Goals for the State Bar’s Office of Chief Trial Counsel, shared with the auditor and briefly with legislative staff, are included as Attachment A.
In recent years the State Bar has initiated extensive and continuing efforts to evaluate the fairness and effectiveness of the discipline system. Just a few examples include:
- In 2019 the State Bar initiated a study to determine if there is disparity by race, ethnicity, or gender in the State Bar’s discipline system. Subsequently the Board of Trustees directed action to address the higher number of complaints made against African American male attorneys and their greater likelihood of being unrepresented, factors that resulted in more frequent and severe discipline for that demographic.
- In 2020 OCTC began issuing quarterly goals for case processing, to ensure consistent year-round efforts to resolve cases expeditiously.
- In September 2020, the Board of Trustees approved the creation of a new Ad Hoc Commission on the Discipline System to conduct an intensive study of the overall operation of the discipline system, building on reforms implemented since 2016. The commission will be looking to ensure a fair and effective discipline system by evaluating processes, policies, and procedures to ensure that they have had their intended effect, do not create inequity, and further the State Bar’s public protection mission and goals.
- In 2018, the State Bar launched an online complaint portal for both attorney misconduct and unauthorized process of law complaints in English and Spanish to make it easier to file complaints and provide greater access to the discipline system. In 2019 the system was expanded to four additional languages: Chinese, Korean, Russian, and Vietnamese.
- The State Bar refined reports and metrics presented every other month to the Regulation and Discipline Committee to provide more meaningful tools for the committee to exercise its oversight and assess the health and efficacy of the discipline system in protecting the public.
We look forward to incorporating the audit report’s suggestions into our ongoing evaluations of the fairness and effectiveness of the discipline system and otherwise making the changes noted above as part of our efforts toward continuous improvement.
Donna S. Hershkowitz
Interim Executive Director
Principles for Revised Case-Processing Goals for the State Bar’s Office of Chief Trial CounselMinor edits were made to this document following submission to the State Auditor and legislative staff for clarification purposes.
Purpose: To provide a more meaningful rubric to examine the performance of the State Bar in carrying out its mission to protect the public through its handling of attorney misconduct matters
- Consistent with Standard of Judicial Administration 2.2(b) regarding trial court delay- reduction measures, the State Bar’s goals of the Office of Chief Trial Counsel (OCTC) for case processing and disposition times are intended to encourage the prompt disposition of the matters submitted to the Office of Chief Trial Counsel. The goals apply to the overall inventory and are not meant to create deadlines for individual cases. The goals should be applied in a fair, practical, and flexible manner.
- Because many attorneys in the system have multiple complaints against them, the measure of whether the State Bar is protecting the public is whether an attorney has been disciplined, not how many cases have been disciplined.
- The best measure of OCTC’s efforts to protect the public should distinguish between attorneys who are eligible to practice law and those who are not. Attorneys who are not eligible to practice law do not pose the same risk to the public.
- Case-processing and case-disposition goals should not be tied only to what has been accomplished as of December 31 of a given year. Case-processing and case-disposition timelines are important year-round.
- OCTC’s goals for case processing and disposition should set time frames to encourage effective case management, following the same model established for civil case dispositions, i.e.:
- X% of cases disposed by ## months
- Y% of cases disposed by ## months
- Z% of cases disposed by ## monthsTo provide greater context, the goal for managing unlimited civil cases is that 75 percent are disposed of within 12 months, 85 percent are disposed of within 18 months, and 100 percent are disposed of within 24 months. More ambitious goals are set for limited civil cases. See Standard of Judicial Administration 2.2(f).
- Timelines and/or goals for percent of cases disposed within those times will differ by priority level.
- The State Bar will establish goals for different case types—such as those initiated from client complaints, those initiated from bank reports of overdrawn client trust accounts, etc.
CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM THE STATE BAR OF CALIFORNIA
To provide clarity and perspective, we are commenting on the response to our audit from the State Bar. The numbers below correspond to the numbers we have placed in the margin of the State Bar’s response.
The State Bar’s suggestion that our legislative recommendation is moot is premature. Whether or not the Legislature adopts the State Bar’s proposed changes to the backlog measure, the Legislature will still need to ensure that the various sections of the Business and Professions Code are consistent with each other.
The State Bar’s assertion that its reorganization was a “positive move,” resulting in “positive changes,” is not supported by demonstrably positive results. The State Bar indicates that the reorganization eliminated redundant levels of review. However, the dramatic increase in the backlog of attorney discipline cases and in the time to complete investigations indicate that the State Bar’s reorganization has not improved the efficiency or effectiveness of its discipline system. We look forward to reviewing the results of the State Bar’s assessment of the reorganization as part of our post‑audit review process.
The State Bar’s focus on the 2018 and 2019 time period distorts the overall trend in complaints. Because the reorganization began in early 2016, the starting point of a relevant comparison period would begin at the end of 2015. As we state here, the number of complaints increased by only 1 percent from 2015 through 2019. Thus, the number of complaints received in 2019 is not significantly different than the number of complaints received in 2015, prior to the reorganization, and we stand by our conclusion that it is unlikely the change in the number of complaints during 2018 or 2019 accounts for the increase in either the backlog or case processing times.
The State’s Bar’s discussion of the impact of the COVID‑19 pandemic on its operations in 2020 is irrelevant to the report’s conclusions and recommendations. The backlog and case processing times were steadily increasing well before 2020, as Figure 3 and Figure 4 show.
The State Bar’s discussion of the wide range of customized management and operational reports it has developed is not relevant to our recommendation. According to the State Bar, these reports are not related to the performance of its discipline system staff in meeting the internal benchmarks it has established. As we describe here, the special assistant confirmed that the State Bar does not monitor its staff’s performance against its internal benchmarks because it has not yet developed the reports necessary to do so. As a result, the State Bar is not currently assessing whether it is meeting its benchmarks, which has hampered its ability to determine whether its reorganization has been effective.
The State Bar’s principles for revised case‑processing goals do not contain sufficient information to accurately assess how they would be implemented. As we recommend here, the State Bar should develop and recommend an appropriate backlog measure and goal, including the number of days at which a case should be added to the backlog as well as a goal for the number of cases in the backlog. However, the number of goals and factors that the State Bar describes suggest that it anticipates creating multiple backlog measures. Such an approach increases the difficulty of assessing the State Bar’s overall case management. Although different time frames may be appropriate for different types of cases, a single backlog figure that can be compared to prior periods helps ensure that stakeholders can easily understand the overall health of the discipline system.
If the board believes the regulation and discipline committee’s review is redundant or unnecessary, it should revise its policies. However, based on the number of errors we identified in the 2019 discipline report, as Table 2 shows, the board’s current review process is not sufficient to ensure an accurate description of the discipline system’s performance.
We did not assess the policies and documents to which the State Bar refers. The State Bar provided this information after we had completed our fieldwork, and we did not have the opportunity to review them. However, as we state here, until it enforces these policies, the State Bar risks engaging in the kinds of practices that its procurement manual is meant to prevent, such as failing to determine whether more cost‑effective alternatives exist. We look forward to reviewing the updated policy and documents as part of our post‑audit review process.
The State Bar’s focus on its contract amendment with ExamSoft misrepresents the nature of its practices. When it entered into the $3 million contract with ExamSoft there was no last‑minute need to adopt a remote, online exam. Nor, from the information we reviewed, was ExamSoft the only vendor available. However, as we describe here, the State Bar ignored its exam exemption requirement for assessing whether it was receiving the best value for both the initial ExamSoft contract and the contract amendment. Because the requirement that it determine the best value is the only requirement established for contracts under the exam exemption, the State Bar effectively bypassed all of its contracting safeguards when entering into the ExamSoft contract and amendment.
We do not have sufficient data to address the statistics the State Bar presents for cases resolved during all of 2020. The data we obtained contained records for case activity through September 2020, and we limited our analysis to case activity through June 2020. Nevertheless, our analysis indicates that during the period we reviewed the backlog grew and both higher- and lower‑priority cases took longer to resolve.