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- The State Bar’s Changes to Its Discipline System Have Significantly Reduced That System’s Efficiency
- The State Bar’s Discipline Report Does Not Provide All Required Information, and Its Publishing Date Reduces Its Value to Stakeholders
- The State Bar Appropriately Administered the Bar Exam During the COVID‑19 Pandemic, but Its Procurement of Exam Software Did Not Comply With Its Policy
- Other Areas We Reviewed
The State Bar’s Changes to Its Discipline System Have Significantly Reduced That System’s Efficiency
- Beginning in 2016, the State Bar reorganized the staffing for its discipline system, in part by converting its discipline staff from specialists to generalists and promoting some of its most senior attorneys to full‑time supervisors. However, these actions did not fully address the audit recommendations and statutory requirements that originally prompted the State Bar to review its discipline system.
- Following the reorganization, the State Bar has experienced longer case processing times and an increasing backlog of discipline cases. In fact, the State Bar’s backlog grew by 87 percent from the end of December 2015 to the end of June 2020. This growing backlog allows attorneys who are under investigation more time to continue practicing law while their cases are pending, increasing the risk for potential harm to the public.
- The State Bar has not effectively monitored the impact of its reorganization because it does not adequately track performance benchmarks for its discipline system.
The State Bar’s Restructuring of Its Trial Counsel’s Office Has Not Fulfilled the Requirements of State Law or Addressed Our Prior Recommendations
Following a review of its discipline system, the State Bar implemented changes to the staffing of its discipline system in May 2016, including reorganizing the structure of its trial counsel’s office, which investigates and prosecutes cases of attorney misconduct. However, this reorganization did not address key elements of the recommendations and statutory requirements that originally motivated the State Bar to review its discipline system. Our June 2015 report titled State Bar of California: It Has Not Consistently Protected the Public Through Its Attorney Discipline Process and Lacks Accountability, Report 2015‑030, recommended—and a state law that took effect in 2016 required—that the State Bar implement a workforce plan that included the development of an appropriate backlog goal and an assessment of the staffing needed to achieve that goal. In 2016 the State Bar contracted with the National Center for State Courts for a workforce planning study that included recommendations regarding reengineering its business processes. This 2016 workforce plan made numerous recommendations, including that the State Bar reorganize the structure of its trial counsel’s office. The plan suggested that the reorganization would help address concerns about unequal distribution of work and improve staff efficiency and development.
Before the reorganization, the teams of investigators and attorneys in the trial counsel’s office who investigate and prosecute cases (enforcement teams) specialized in specific categories of cases. However, in response to the 2016 workforce plan, the State Bar converted its enforcement teams from specialists to generalists who review complaints of all types. The State Bar also promoted some of its most senior attorneys to full‑time supervisors and established new supervising attorney positions responsible for managing each team. However, these changes did not originate from our audit recommendations or statutory requirements, and none of them addressed the statutory requirements that the State Bar establish an appropriate performance goal for its discipline system and determine the number of staff needed to meet that goal. In May 2016, the State Bar submitted a report to the Legislature with the staffing levels that it estimated it needed to meet the current statutory backlog goal and two alternative backlog goals. Although the report provided multiple options for the Legislature to consider, the State Bar did not identify which backlog goal it had determined was most appropriate, or recommend or advocate for a specific backlog goal.
As the Introduction describes, the State Bar’s backlog is generally defined as discipline cases that remain pending beyond six months from receipt as of every December 31. The State Bar officials with whom we spoke were critical of using this measure. For instance, the chief of mission advancement and accountability (chief) explained that staff cannot control many aspects of case processing, such as the time that it takes a court to provide certified documents. The special assistant to the chief trial counsel (special assistant) added that it typically takes six months or more for the federal government to provide requested immigration records, which the State Bar uses when investigating some cases. Despite these concerns, the special assistant acknowledged that the State Bar has not set a target for the number of cases in the backlog; instead, it continues to track, report, and analyze its staffing needs based on the existing six‑month performance measure.
Although six months may be insufficient for resolving certain cases, the State Bar may take up to 12 months for more complicated cases. However, it has chosen not to take advantage of this option. State law sets a goal and policy of 12 months for the State Bar to reach specified outcomes regarding complaints that the chief trial counsel designates as complicated matters. Although in 2016 the State Bar identified criteria for designating an item as a complicated matter, the special assistant explained that the State Bar discontinued use of this designation sometime before July 2017 because the state law allowing this designation conflicts with other parts of the law. As specified, one section of state law sets a goal and policy of resolving or forwarding a completed investigation to the State Bar Court within 12 months for complaints designated as complicated;Business and Professions Code section 6094.5. however, two other sections of state law set a reporting requirement or goal of six months for certain outcomes regarding all complaints.Business and Professions Code sections 6086.15 and 6140.2. In addition, these sections of law use differing language for cases that proceed to the State Bar Court, including “filing of a notice of disciplinary charges” and “filing of formal charges.” The State Bar could request that the Legislature clarify state law, including ensuring that references to the backlog allow the longer period for complicated matters. Doing so would provide a backlog measure that more appropriately assesses the State Bar’s performance in processing those cases with timelines over which it has limited control.
Despite its criticism of the six‑month measure, the State Bar continues to use it for assessing its staffing needs because it is the goal currently established in law. However, in 2018 the State Bar reported to its board that according to a workload study, the trial counsel’s office needed 58 additional staff to process most cases within six months. In our 2019 report titled State Bar of California: It Should Balance Fee Increases With Other Actions to Raise Revenue and Decrease Costs, Report 2018-030, we noted that the State Bar had made several significant changes to its discipline system process and had based its assessment of its staffing needs on a study it conducted before completing these changes. As part of our 2019 report, we recommended a fee increase that would allow the State Bar to hire 19 additional staff, and we recommended that the State Bar analyze performance data to make more informed estimates of its future staffing needs. The special assistant told us that the State Bar hired these 19 staff in 2019 and 2020 and formed them into a new team in September 2020, but it has not yet studied the impact of this new team on caseloads and the backlog.
According to the chief, the State Bar plans to conduct another workload study designed to replicate the study it presented to its board in 2018. The chief stated that the new study is intended to inform a discussion with the Legislature on the necessary level of staff. However, he confirmed that the study will be based on the current statutory six‑month backlog measure. A study based on a measure that the State Bar does not believe is appropriate or achievable does not fulfill the requirements of state law or our recommendation to determine a staffing level based on an appropriate measure. Further, it is not an effective use of resources. Rather, as we recommended and state law required in 2016, the State Bar must develop and recommend an appropriate backlog goal and then assess the staff needed to achieve that goal.
The State Bar’s Case Processing Times and Backlog of Cases Significantly Increased Following Its Decision to Reorganize Its Trial Counsel’s Office
Two related measures point to problems with the reorganization of the State Bar’s discipline system. First, the number of cases in the investigation phase increased from fewer than 1,000 cases in January 2015 to more than 4,000 cases in June 2020. Multiple factors have contributed to this dramatic increase, including a reduction in the number of enforcement staff available for case processing and a reduction in the investigative efficiency of the trial counsel’s office. In combination, these factors have contributed to longer case processing times and growth in the second measure that indicates that there is a problem with State Bar’s discipline system: an increasing backlog of discipline cases. As Figure 3 shows, the State Bar’s backlog increased from 1,494 cases at the end of December 2015 to 2,791 cases at the end of June 2020—an increase of 87 percent. These delays allow attorneys under investigation to continue practicing law while their cases are pending, increasing the potential for harm to the public.
The State Bar’s Backlog of Cases Increased by 87 Percent From December 2015 Through June 2020
Source: Analysis of the State Bar’s case data.
Note: Although the backlog increased overall, the number of cases in the backlog declined near the end of each year. According to the special assistant, this decline was likely due to a focus on reducing the backlog by the mandated backlog reporting date.
The State Bar’s implementation of the 2016 workforce plan’s recommendations reduced the number of staff available to review cases. The special assistant explained that the State Bar moved 11 senior attorneys who previously carried full caseloads into supervisor positions, reducing the staff available for case processing. The reorganization also converted teams that were previously specialized by groups of complaint types into generalist teams that accept all types of case assignments. However, research on efficiency generally indicates that job specialization improves productivity by increasing expertise in a specific area. In fact, these changes appear to have increased case processing times. We found the percentage of cases that were in the investigation phase for more than one year steadily increased from 1 percent in 2015 to 11 percent in 2020. Further, as Figure 4 indicates, the average number of days the State Bar took to complete its investigation phase increased by 56 percent from 2015 through 2020, reaching 190 days in 2020. Thus, on average, the cases that progressed through the investigation phase exceeded the six‑month requirement and became a part of the backlog.
The Average Duration of the State Bar’s Investigations Has Increased by More Than 50 Percent From 2015 Through 2020
Source: Analysis of the State Bar’s data from 2015 through June 2020.
The special assistant suggested that other factors have contributed to the growing backlog of cases and the longer case processing times, including an increase in the number of complaints and the State Bar’s implementation of a new case management system in February 2019. However, our analysis suggests it is unlikely these factors account for the increase either in the backlog or in case processing times. First, although we found that the number of incoming complaints increased by 6 percent from 2017 through 2018, the total number of complaints increased by only 1 percent from 2015 through 2019. Second, our analysis suggests that the new case management system—which, according to the special assistant, slows case processing but captures more information and thus provides the State Bar with a more powerful tool for data analysis and reporting—slowed case processing speeds for only a short period of time after its implementation. According to the special assistant, a State Bar analysis found a 17 percent average decrease in the number of cases staff resolved per month at the intake phase, and our analysis similarly showed that the average time needed for case intake increased by 25 days from 2018 through 2019. However, this trend has since reversed course: through the first half of 2020, the average time a case remained in the intake phase decreased by 27 days. Further, the State Bar’s analysis did not include other phases of the enforcement process.
The State Bar’s Prioritization of Disciplinary Cases
High Priority (P1): Cases that present significant, ongoing, or serious potential harm to the public, including cases involving vulnerable victims, such as immigrants and the aged; unauthorized practice of law; abandonment of clients; a pattern of or continued engagement in abusive or frivolous litigation; and matters that the State Bar concludes—at its discretion—are appropriate for high priority treatment.
Expedited (P2): Cases that can be easily resolved or that require rapid investigation to determine if more significant harm is occurring or will occur.
Standard (P3): Cases that do not fall within the other two categories and that are not as time-sensitive or do not require as exacting an investigation.
Source: State law and the State Bar policy directive.
The State Bar created a new prioritization system in March 2018, and the special assistant asserted that one reason for slower case processing times is that since the State Bar began prioritizing higher priority cases, lower‑priority cases have taken longer to resolve. However, our analysis indicates that both higher‑ and lower‑priority cases are taking significantly longer to resolve. As the text box shows, the State Bar places first priority on cases that present a high potential for serious harm to the public rather than those that are either included in or at risk of being added to the backlog. However, we found that the length of time the State Bar took to resolve high‑priority cases in the investigation phase increased 14 percent from 2018 to 2020, from 187 days to 214 days. The average time it took the State Bar to resolve lower‑priority cases in the investigation phase—which may pose less of a threat to the public but that the State Bar is still obliged to resolve in a timely manner—increased 21 percent, from 188 days in 2018 to 228 days as of June 2020. Because processing times for both higher‑ and lower‑priority cases increased, the separation of cases by priority does not explain the increasing time taken to investigate and process cases.
The State Bar is also disciplining attorneys at a dramatically lower rate for reasons it cannot adequately explain. From 2015 through 2019, the total number of cases that resulted in discipline—including reprovals, suspensions, and disbarments—declined by 54 percent. Expressed as a percentage of total cases closed, cases that concluded with discipline decreased from 5 percent in 2015 to only 3 percent in 2019, as Table 1 shows. The special assistant believes that the decline is consistent with a nationwide decline in attorney discipline. He cited a number of possible reasons for such a decrease, including his belief that an increase in the number of complaints filed using the State Bar’s new online complaint portal may be offsetting a decrease in disciplinable consumer complaints. However, he did not provide data to support these assertions. Because the State Bar cannot definitively explain why discipline has decreased, we are concerned that the decline has continued even as the State Bar began prioritizing the processing of more serious cases in 2018.
The State Bar’s Discipline of Attorneys Declined Significantly From 2015 Through 2019
|YEAR||TOTAL CASES CLOSED||CASES CLOSED WITH DISCIPLINE||PERCENT OF CASES CLOSED WITH DISCIPLINE|
Source: Analysis of the State Bar’s case data from 2015 through 2019.
The increase in the backlog and the time to complete investigations, despite the decline in discipline, indicate that the State Bar’s reorganization has not improved its efficiency or effectiveness. Nonetheless, in 2019 the State Bar abandoned a plan to evaluate the results of its reorganization. However, the factors we describe throughout this section—an increase in the average number of cases in the investigation phase, an increase in case processing times, and an increase in the backlog of discipline cases—suggest that unless the State Bar takes steps to address its current process, its backlog will continue to increase.
The State Bar’s Lack of Adequate Monitoring Has Hampered Its Ability to Detect Problems in Its Discipline System
The State Bar has not effectively measured the performance of its discipline system staff against internal performance benchmarks (benchmarks), which has hampered its ability to determine whether its reorganization has been effective. In our 2019 report, we recommended that the State Bar develop benchmarks for the duration of each step in its investigation process, and in 2020 the State Bar asserted that it had established these benchmarks. For example, it established a goal of resolving higher‑priority cases and lower‑priority cases within 30 days and 45 days of obtaining all evidence, respectively. However, the special assistant confirmed that the State Bar does not have the ability to monitor its performance against these benchmarks because its case management system has limited reporting capabilities. Although he hopes to develop additional reports in the near future, the State Bar is not currently assessing whether it is meeting its benchmarks, which could help identify which aspects of its process are taking longer than it expects.
In addition, the State Bar’s caseload in the investigations phase—the number of cases per staff member—doubled from January 2015 to June 2020. However, the special assistant told us he does not use a workload benchmark for staff because the State Bar cannot control the number of cases it receives. Although the State Bar has increased the budgeted positions for the trial counsel’s office every year from 2016 through 2020, for a total increase of 18 percent, the special assistant asserted that the trial counsel’s office does not have enough staff to ensure an optimal workload and reduce the backlog. However, the State Bar must determine two numbers to persuasively advocate for a specific number of additional staff if it believes they are necessary to reduce the backlog. First, it must develop an appropriate backlog goal, as we recommended in our 2015 report, and work with the Legislature to adopt that goal. Second, it must determine the associated staffing level to meet that goal—as we also recommended in our 2015 report—which requires that it determine the workload benchmark for the number of cases each staff member should be able to process. If the State Bar were assessing its staffing against an appropriate goal as state law requires, it could better justify its requests for the additional resources it believes it needs.
To clarify state law and provide more transparency regarding the nature of the existing backlog of discipline cases, the Legislature should do the following:
- 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 include in its 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.
To ensure that it is operating efficiently, the State Bar should assess the impact of its discipline system reorganization, including determining 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.
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 its benchmarks.
- 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 the 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 to revise its reporting requirements accordingly. If necessary, the State Bar should also request the additional resources required to meet the goal.
The State Bar’s Discipline Report Does Not Provide All Required Information, and Its Publishing Date Reduces Its Value to Stakeholders
- The State Bar does not fully and consistently present required information in its discipline report, limiting the ability of stakeholders to evaluate its administration of its discipline system.
- The deadline established in state law for submitting the annual discipline report limits the amount of time the Legislature has to assess the State Bar’s performance before deliberating on the annual fee bill.
The State Bar’s Discipline Report Does Not Fully and Consistently Provide Information About Its Discipline System
As we discuss in the Introduction, state law requires the State Bar to issue a discipline report that enables key stakeholders—the Governor, the chief justice of California, and specified legislative members and committees—to evaluate certain aspects of its discipline system for the previous calendar year. State law requires the State Bar to include statistical information and accurate and complete descriptions for 15 topics related to the performance and condition of its discipline system, including the backlog of cases. The information in the discipline report is particularly important because it is the only comprehensive report that the State Bar submits to the Legislature describing the performance and condition of its entire discipline system.
To ensure that the discipline report contains accurate, complete, and consistent information so that stakeholders may compare it to previous years’ reports, state law requires the report to include the following:
- Data for the previous calendar year.
- Similar information for the previous three years.
- Accurate and complete data descriptions.
Information from multiple years is useful for determining how effectively the State Bar has used its resources over time and whether changes to the State Bar’s fee bill are warranted. Since the State Bar’s disciplinary functions support its mission to protect the public, accurate and complete descriptions of the information within the discipline report allow stakeholders to better understand the information they are reviewing and therefore determine if the State Bar is fulfilling that mission.
Nonetheless, the State Bar failed to include accurate and complete information in its most recent report. As Table 2 shows, the State Bar met all three reporting requirements for only two statutorily required topics, and it did not satisfy any reporting requirements for five of the 15 topics. For example, in June 2018, a California Rule of Court was adopted requiring all California attorneys to be re‑fingerprinted, which resulted in the State Bar receiving notifications from the California Department of Justice (Justice) regarding criminal charges and convictions against attorneys that had not been previously reported to the trial counsel’s office. This affected the State Bar’s reporting on metrics related to matters reported by other sources. The State Bar included metrics about criminal conviction cases in its 2018 discipline report and reported in 2019 that the number of attorneys with criminal conviction cases increased from 210 in 2018 to more than 2,300 in 2019.Criminal conviction cases can include cases in which an attorney is arrested and prosecuted for committing a crime, such as driving under the influence. Once the trial counsel’s office becomes aware of such a case it will monitor the case and, if the attorney is convicted, must submit the criminal conviction report to the State Bar Court. The State Bar Court may impose certain discipline or, if appropriate, recommend serious disciplinary issues to the Supreme Court for review. However, the State Bar left out these new cases when it disclosed the case statuses, average pending times, and outcomes for matters reported by other sources in 2019. The State Bar reported receiving only about 100 cases involving the filing of criminal charges or convictions in 2019; however, the chief confirmed that this number excludes criminal conviction cases reported by Justice.
The State Bar’s 2019 Discipline Report Omitted Required Information About Its Discipline System
|STATUTORILY REQUIRED TOPICS||DATA FOR THE PREVIOUS CALENDAR YEAR*||SIMILAR INFORMATION FOR THE PREVIOUS THREE YEARS*||ACCURATE AND COMPLETE DATA DESCRIPTIONS*||NUMBER OF REQUIREMENTS MET|
|Backlog of cases within the discipline system||X||X||X||0|
|Number of inquiries and complaints and their disposition||X||X||X||0|
|Matters self-reported by licensees||✓||✓||X||2|
|Matters reported by other sources, including outside organizations||X||X||X||0|
|Complaint handling and disposition processing times as specified||X||X||X||0|
|Disciplinary charges and formal disciplinary outcomes||X||X||X||0|
|Other matters, such as interim suspensions, admonitions, and agreements in lieu of discipline||✓||✓||X||2|
|Former attorneys engaged in the unauthorized practice of law||X||✓||X||1|
|Non-attorneys engaged in the unauthorized practice of law||X||✓||X||1|
|Client Security Fund’s condition and payouts||✓||X||✓||2|
|Accounting of the discipline system cost by function||✓||X||✓||2|
|Disposition of attorney felony allegations†||X||✓||X||1|
|Investigations of improper demand letters related to construction‑related accessibility claims†||✓||✓||✓||3|
|Insurance fraud investigations†||✓||✓||✓||3|
|Alleged violations of requirements related to lawyers selling financial products to elders and dependent adults†||✓||✓||X||2|
|Number of topics that met this requirement||7 out of 15||8 out of 15||4 out of 15|
Source: State law, the State Bar’s 2018 and 2019 discipline reports, and interviews with State Bar staff.
* State law requires the State Bar to include multiple metrics or measures for many of the discipline report topics. If the State Bar failed to meet the reporting requirement for any of the metrics or measures, we designated it as not having met the requirement for the related topic.
† State law does not establish that the discipline report must include similar information for the previous three years or accurate and complete data descriptions for these topics. Nevertheless, these requirements represent best practices, and for that reason, we assessed whether the State Bar’s discipline report included this information.
According to the chief, the State Bar did not include these cases because it interprets state law to require that it only report information it receives from the prosecuting agency involved in a case or from the court where a conviction occurred, and neither apply to the information that Justice provided. However, we disagree. State law specifically requires the State Bar to report on how it handles felony or certain misdemeanor charges and convictions against California attorneys, whether the State Bar receives this information from prosecuting agencies, from courts, or it is procured by the State Bar through other means—such as the information it obtained from Justice.
State law also requires that for 11 topics, the State Bar must include in the discipline report similar information for the previous three years to allow for year‑to‑year comparisons, and we used this criteria as a best practice to assess four other topics in the report as well. However, the State Bar included three years of information for only eight of the 15 topics. For example, the State Bar reported only one year’s worth of information for the two financial metrics that Table 2 lists—the Client Security Fund’s condition and payouts, and the discipline system costs. According to the chief, the State Bar does not include previous years’ information for these financial topics because it interprets state law to require only three years of information for statistical information and it does not consider these specific financial topics to be “statistical.” However, state law does not differentiate between reporting financial and other statistical information, and therefore the State Bar should provide the previous three years of information for all topics required by the law. Further, without financial information from prior years, it is more difficult for stakeholders to compare changes in spending to changes in the performance and condition of the discipline system.
The State Bar’s lack of adequate oversight over the discipline report approval process may explain why the report has not consistently met statutory requirements. Our 2015 audit report also identified issues with the discipline report, and we recommended that the State Bar improve its oversight, in part by conducting a review of both the discipline report and the underlying discipline statistics. In response, the State Bar amended a board committee’s responsibilities in 2016 to include overseeing the discipline report process. However, the committee reviewed only one of the four reports the State Bar published after 2016. Although the board and its executive committee approved the discipline reports in the other three years, the numerous issues described above clearly illustrate that the board’s review of the 2019 report was deficient. Further, the State Bar has not adopted policies or procedures outlining how it will compile or review the report to ensure that the information is consistent with state law. The board’s policy clearly assigns the committee the responsibility to oversee the report process and the underlying discipline statistics. However, whether the committee or the board itself reviews the report, the amount of information missing from the 2019 report suggests that the current oversight is inadequate for producing an accurate and complete description of the State Bar’s discipline system.
Revising the Publishing Date for the Discipline Report Would Provide the Legislature More Time to Evaluate the State Bar’s Performance
State law requires the State Bar to issue its discipline report to the Legislature and other stakeholders by April 30 each year. However, that date hampers the Legislature’s ability to review the State Bar’s performance before it introduces the annual fee bill. As the Introduction describes, the Legislature is responsible for setting attorneys’ annual license fees through this bill. These fees are particularly important because they represent nearly half of the State Bar’s annual revenue and they fund the discipline system. However, the Legislature typically introduces and begins deliberating on the fee bill before it receives the discipline report. For example, in 2019 the Legislature introduced the 2020 fee bill in January and began reviewing the bill in March. Consequently, it had already introduced and begun discussing the fee bill before the State Bar published its discipline report on April 30.
Because the discipline report is the only report describing the performance and condition of the State Bar’s entire discipline system, the Legislature should consider changing the report’s deadline to give itself additional time for review before addressing the fee bill. If the State Bar submitted the discipline report annually in October, the Legislature would have time to more thoroughly review its contents before introducing the fee bill in January. For the State Bar to submit a report in October, the Legislature would need to alter the requirement that the report contain information from the prior calendar year. Requiring the report to include information for a period from July 1 through June 30, aligned with the state fiscal year, would provide the State Bar with the same amount of time to compile the report as it currently has while providing the Legislature with more time to review the State Bar’s performance before introducing the fee bill.
To provide itself sufficient time to review the discipline report before considering the annual fee bill, the Legislature should do the following:
- Amend state law to require the State Bar’s discipline report to cover the 12 months from July 1 through June 30 of the previous year and to require that the State Bar submit the discipline report annually by October 31.
- In the year in which it amends the discipline report’s time period, 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.
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 discipline report before submitting it 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.
To ensure that users of the discipline report can compare information from year to year, the State Bar should describe in each discipline report any changes it makes to its approach to calculating metrics and, for that year, provide information calculated under both its old and new methods.
The State Bar Appropriately Administered the Bar Exam During the COVID‑19 Pandemic, but Its Procurement of Exam Software Did Not Comply With Its Policy
- At the direction of the Supreme Court, the State Bar developed a provisional licensure program for recent law school graduates who were negatively affected by bar exam delays caused by the COVID‑19 pandemic. In addition, to avoid the risks associated with in‑person contact during the pandemic, the State Bar modified how it administered the bar exam, allowing applicants to take the October 2020 bar exam remotely.
- The State Bar did not follow its contracting policy when it entered into software agreements worth nearly $4 million related to the bar exam. As a result, it did not verify that it was using its resources responsibly.
The State Bar Effectively Implemented the Supreme Court’s Directive to Modify Its Admission Practices and Its Administration of the Bar Exam in Response to the COVID‑19 Pandemic
The Supreme Court directed the State Bar to delay offering the bar exam multiple times because of the COVID‑19 pandemic. In order to practice law in California, an applicant must pass the bar exam, which state law allows an applicant to take twice a year, and maintain an active license. Consequently, the bar exam delays prevented recent law school graduates from becoming attorneys. When the Supreme Court postponed the July 2020 bar exam for a second time, it required the State Bar to mitigate the impact the postponement would have on these graduates’ employment prospects and livelihoods. Specifically, it directed the State Bar to implement a temporary supervised provisional licensure program (temporary licensure program) and arrange to administer the bar exam remotely.
In October 2020, the Supreme Court authorized the State Bar to administer its proposed temporary licensure program for eligible 2020 law school graduates beginning in November 2020. The program allows a provisionally licensed lawyer to provide legal services under the direction of a supervising lawyer. The supervising lawyers must be licensees in good standing with the State Bar, among other things, and they must agree to assume professional responsibility for the work of the provisionally licensed lawyers. Applicants must meet a number of criteria, including having been eligible to sit for the bar exam at some point from December 2019 through December 2020, and they must have submitted a complete application for determination of moral character to the State Bar. According to the State Bar, it had received about 1,500 applications for a provisional license as of February 2021, and it had approved about 700 of these applications. The remainder consisted primarily of incomplete applications. The State Bar will terminate approved applicants’ provisional licenses under certain circumstances, such as if it sanctions the applicants for misconduct, if the applicants are admitted to the State Bar, and when the program ends in June 2022.
In addition, following the Supreme Court’s August 2020 order modifying how and when it should administer the bar exam, the State Bar amended an existing contract with its software vendor, ExamSoft, to obtain remote proctoring services for the October 2020 exam. The State Bar had previously signed a five‑year, $3 million contract with ExamSoft in May 2020 providing it with software that applicants install on their personal computers or use on the State Bar’s computers in order to take the exam.The records that the State Bar provided indicate that it has contracted with ExamSoft since at least 2003 to provide software for bar exams. This contract provided the software for 10 bar exam dates expected to occur from July 2020 through February 2025.The State Bar pays ExamSoft according to the total number of individuals who register to take the bar exam; therefore, the actual amount the State Bar pays may be more or less than the original contract amount. The State Bar amended this contract in August 2020 to include ExamSoft’s verifying applicants’ identity, recording applicants for the duration of the exam, and reviewing the recordings to identify suspicious behavior. This amendment was exclusive to the October 2020 bar exam and cost the State Bar an additional $830,000.
According to the State Bar, about 8,900 applicants of the 9,300 applicants who took the exam in October 2020 did so remotely.The State Bar provided in‑person examinations on a case‑by‑case basis to applicants requesting certain testing accommodations and to applicants who indicated they lacked a testing environment conducive to taking the exam. Subsequently, the State Bar reviewed nearly 3,200 videos that the software and human review had flagged for possible violations, such as the applicants’ leaving the camera’s view or using other electronic devices, and it ultimately found fewer than 50 violations of examination rules and policies. The State Bar signed another contract amendment with ExamSoft in January 2021 for an additional $1.3 million to obtain remote proctoring services for the February 2021 exam after the Supreme Court issued an order in November 2020 directing it to also administer that bar exam remotely.
The State Bar’s actions effectively implemented the Supreme Court’s orders related to the temporary licensure program and the remote administration of the October 2020 bar exam. Its actions provided eligible graduates an opportunity to practice law in California under the supervision of an eligible California attorney while waiting to take the bar exam. Further, the State Bar administered the bar exam remotely for the first time while taking steps to preserve the bar exam’s integrity through the acquisition of additional services to verify applicants’ identity and to monitor for suspicious behavior. However, as we describe in the next section, the State Bar should have documented that it received the best value when contracting for these services.
The State Bar Entered Into Multimillion Dollar Agreements Without Adequately Justifying the Vendor It Selected
The State Bar’s procurement policy provides its staff with significant levels of discretion when selecting vendors for the administration of the bar exam. However, the State Bar did not follow its contracting policy when it entered into software agreements related to the bar exam. Although state law requires the State Bar to use formal competitive bidding procedures and obtain at least three competitive bids or proposals for information technology‑related goods and services in excess of $100,000, it provides an exception from competitive bidding for contracts related to licensing or proficiency testing examinations, such as the bar exam (exam exemption). In these instances, the State Bar’s procurement manual gives contract managers the authority to select the vendor to provide the required goods or services, rather than requiring competitive bidding. The State Bar used the exam exemption to approve both the five‑year, $3 million contract with ExamSoft and the $830,000 contract amendment we describe in the previous section.
Selected Best Value Evaluation Strategies and Documentation Requirements
Contract managers who use the competitive bidding exemption must document their efforts taken to determine best value, including the following:
- Vendors solicited
- Evaluation criteria
- Manager’s determination and reasoning
The State Bar’s procurement manual outlines the type of evaluations that contract managers can use to select a vendor that provides the best value, including the following:
- Conduct online price checks
- Review a third-party analysis
- Compare the vendor’s products or services to other similar solutions
Source: State law, the State Contracting Manual, and the State Bar’s General Procurement Manual.
However, the State Bar entered into these contracts without meeting its own requirement to evaluate whether it would receive the best value for the money that it spent. According to the State Bar’s procurement manual, when using a bidding exemption—such as the exam exemption—contract managers must use some type of evaluation to select a vendor that provides the State Bar with the best value, as the text box describes. Further, contract managers must document their efforts to determine the best value for a contract and must maintain these records within their department.
The State Bar’s ExamSoft contract manager stated that she did not document how she determined that ExamSoft provided the best value before submitting the April 2020 contract or the August 2020 amendment. She also stated that she did not perform a best‑value analysis, in part because the State Bar was not sure whether any other vendor could meet its technical needs. However, she could not provide any documentary support for this conclusion either. The chief administrative officer (administrative officer) confirmed that for the ExamSoft agreements, the State Bar did not enforce its procurement policies related to documenting the best value because of its knowledge about and history of contracting with ExamSoft. In response to our concerns, he stated that the State Bar developed policies requiring that contract managers submit to its procurement unit descriptions of their justification for using a competitive bidding exemption and of their best‑value analysis. Until it enforces these policies, the State Bar risks engaging in the kinds of practices that its general procurement manual is meant to prevent, such as failing to determine whether more cost‑effective alternatives exist.
To ensure that it receives the best value for the money it spends, the State Bar should establish documentation standards and templates for contract mangers to follow when using the exam exemption.
Other Areas We Reviewed
To address the audit objectives, we also reviewed the State Bar’s efforts to manage its revenue and expenditures in a manner that fully supports its mission of protecting the public.
The State Bar’s General Fund
The State Bar uses its general fund to maintain, operate, and support its attorney discipline system. It had a general fund surplus for 2020, and it has taken steps to maintain its general fund reserve level. It has an ongoing policy requiring it to maintain a minimum reserve level in its general fund that equates to two months (or 17 percent) of its operating expenses. In its 2021 adopted budget, the State Bar projected that its general fund revenue would exceed its expenses by nearly $6 million in 2020, increasing its operating reserve to a projected $18.5 million. This amount equals about 21 percent of its expenses, which is above its minimum reserve requirement. The State Bar’s chief financial officer attributed the 2020 surplus to decreases in personnel expenses, supplies costs, and equipment costs, all of which were because of the COVID‑19 pandemic. For example, the State Bar projected that in 2020 it spent 11 percent less than budgeted for personnel costs. The State Bar projects a general fund reserve balance level of 19 percent for 2021, which is more than its 17 percent minimum and less than its 30 percent maximum reserve‑level requirements.
Potential Revenue From the State Bar’s Real Estate
The State Bar has made some efforts to increase revenue and reduce costs associated with its real estate properties. In October 2020, the State Bar refinanced the loan on its Los Angeles building and thereby reduced its annual debt service through 2027 by $1.2 million. Further, the State Bar commissioned a space usage study of its San Francisco office in 2020 to determine how it can more effectively occupy this building and how it can increase revenue by vacating unneeded space that it can then lease to tenants. The study identified a 20 percent vacancy rate for its staff’s workspace and a low usage rate for many of its conference rooms.
According to the State Bar’s administrative officer, the COVID‑19 pandemic has created uncertainty about the demand for the space it leases to tenants. Further, the administrative officer explained that the State Bar will need to assess the extent to which teleworking will continue in the long term in order to plan for its future space needs. The State Bar’s interim executive director also explained that due to the challenges and uncertainties associated with the COVID‑19 pandemic, the State Bar does not currently know how successful it will be in leasing existing vacant tenant space, or when it will make decisions regarding any underutilized space that it currently occupies itself.
We conducted this audit under the authority vested in the California State Auditor by Government Code sections 8543 et seq. and according to generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives specified in the Scope and Methodology section of the report. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
ELAINE M. HOWLE, CPA
California State Auditor
April 29, 2021