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The California State Bar: Assessment of Proposed Disciplinary Case Processing Standards

Legislative Analyst's Office · lao-4655 · Report · 2023-01-06

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The California State Bar: Assessment of Proposed Disciplinary Case Processing Standards GABRIEL PETEK | LEGISLATIVE ANALYST JANUARY 2023 AN LAO REPORT ii LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Executive Summary On October 28, 2022, the State Bar provided our office with its proposed (1) caseload processing standards for resolving attorney discipline cases within its Office of Chief Trial Counsel (OCTC), (2) establishment of a backlog goal and metrics to measure such a goal, and (3) staffing requirements needed to achieve the new standards. As required by Chapter 723 of 2021 (SB 211, Umberg), this report presents our assessment of the State Bar’s proposal. State Bar Licenses Attorneys and Regulates Their Professional Conduct. The State Bar functions as the administrative arm of the California Supreme Court for the purpose of admitting individuals to practice law in California and regulating the professional conduct of attorneys by adopting and enforcing rules of professional conduct. As of December 2022, there were more than 286,000 members of the State Bar—of which about 196,000 (or 69 percent) have elected to actively practice law in California. State Bar Administers Own Disciplinary Process. The State Bar administers its own disciplinary system primarily through OCTC and the State Bar Court (SBC). OCTC receives, investigates, and prosecutes cases against attorneys, while the SBC adjudicates these cases. Generally, the disciplinary process consists of four stages: (1) Intake, in which complaints are received; (2) Investigation, in which cases are investigated; (3) Charging, in which OCTC determines whether to formally file charges; and (4) Hearing, in which OCTC prosecutes cases in the SBC. OCTC currently prioritizes the processing of cases based on potential risk to members of the public. State law currently requires the State Bar to complete the first three stages of the disciplinary process—specifically for OCTC to dismiss a complaint, admonish an attorney, or file formal charges against an attorney—within 180 days after receipt of a written complaint for “noncomplex” cases and 365 days for “complex” cases. State Bar Proposal. In its report, the State Bar proposes the following changes related to its attorney disciplinary process: • New Case Processing Standards. The State Bar proposes that disciplinary cases be prioritized based on both risk to members of the public as well as case complexity. It also proposes average case processing time standards across six case categories based on when a case is closed, the stage at which it is closed, and the case risk/complexity (such as high-risk, complex cases closed in the Investigation Stage). • Establishment of a Backlog Goal and Metrics. The State Bar proposes a backlog goal of 10 percent or fewer cases as well as a backlog standard for each of the new case processing standards. • Defers Comprehensive Staffing Analysis. The State Bar defers a comprehensive staffing analysis to 2023 in order to incorporate legislative direction on the proposed case processing standards as well as various OCTC operational changes that are currently in progress or are being considered. However, the State Bar preliminarily calculates that an additional 78 to 119 additional OCTC staff could be needed, which would cost between $10.6 million to $16.3 million. www.lao.ca.gov 1 AN LAO REPORT Analyst’s Review of State Bar Proposal. We reviewed the State Bar’s proposal and identified key questions for legislative consideration on the overall proposal as well as its three key components. • Overarching Comments—Consider Whether Changes for Additional Oversight Are Warranted. The State Bar’s proposal assumes that the existing disciplinary process is generally reasonable. However, the Legislature will want to consider whether it believes changes are warranted. Additionally, we note that the lack of legislative approval of the State Bar budget can make oversight difficult. Accordingly, the Legislature will want to consider what level of oversight it wants to exercise over State Bar processes and funding. • New Case Processing Standards—Partially Reasonable, but Raises Several Concerns. We found it reasonable to include both risk and complexity when prioritizing cases. However, we identified several concerns related to the proposed standards. For example, we find it unclear whether the aggressive time lines reflected in the standards are reasonable. In light of these concerns, we raised five key questions for legislative consideration. For example, the Legislature will want to consider how aggressive they believe case processing standards should be. • Establishment of Backlog Goal and Metrics—Partially Reasonable, but Also Raises Several Concerns. We found that alternative definitions of backlog could also be reasonable and identified several concerns with the State Bar’s proposal. For example, the State Bar’s proposed backlog metrics measure closed, rather than pending, workload. Based on our review, we identified three key questions for legislative consideration. For example, the Legislature will want to consider how backlog should be defined and calculated. • Staffing Analysis—Makes Sense to Delay Analysis. We found that it was reasonable that the State Bar report only provides a preliminary estimate of staffing and resource needs. However, we are concerned with the State Bar’s plan to conduct a staffing analysis in 2023 given that the full impact of various operational changes will likely not be known at that time. Based on our review, we identified two key questions for legislative consideration. For example, the Legislature will want to consider when would be the most appropriate time for the State Bar to conduct the staffing analysis. 2 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT INTRODUCTION Chapter 723 of 2021 (SB 211, Umberg) required On October 28, 2022, the State Bar provided our the State Bar to propose (1) case processing office with its proposed case processing standards. standards for resolving attorney discipline cases This report presents our required assessment of within the Office of Chief Trial Counsel (OCTC) in a these standards. Specifically, in this report, we timely, effective, and efficient manner while allowing first provide background on the State Bar and the for small backlogs of attorney discipline cases and attorney discipline system. We then summarize the (2) the OCTC staffing requirements needed to achieve key provisions of the State Bar’s proposal. Finally, these standards. Senate Bill 211 also required that we provide our assessment of the overall proposal, the State Bar’s analysis and recommendations be as well as the individual provisions, and identify key submitted to our office for review. Finally, SB 211 questions for legislative consideration. required we report to the Senate and Assembly Judiciary Committees on our review. BACKGROUND What Is the State Bar? programs administered by the State Bar. For example, the fee collected for the Client Security Fund is used Oversees the Practice of Law in California. to reimburse clients who suffer financial losses due The California Constitution requires attorneys to to attorney misconduct. Other State Bar revenue be members of the State Bar to practice law in the sources include grants and lease revenue. state. The California Supreme Court has the power to regulate the practice of law in the state—including The State Bar’s adopted 2022 calendar year establishing criteria for admission to the State Bar budget estimates total revenues of $244 million and disbarment. The State Bar functions as the and total expenditures of $257 million, with the administrative arm of the Supreme Court for the difference requiring the use of funds from its reserve. purpose of admitting individuals to practice law in In its 2022 budget, the State Bar estimates that its California and regulating the professional conduct General Fund will receive $91 million (or 37 percent) of attorneys by adopting and enforcing rules of of total revenues. Remaining revenues will go to professional conduct. The State Bar is established by various special funds. Of this amount, $84 million (or the Constitution as a public corporation. The State 92 percent) will come from a portion of the mandatory Bar currently is governed by a 13-member board of annual license fee. As shown in Figure 1 on the next trustees. As of December 2022, there were more page, the 2023 maximum annual fee that can be than 286,000 members of the State Bar—of which charged is $515 for active attorneys and $182.40 for about 196,000 (or 69 percent) have elected to actively inactive attorneys. The majority of this amount—$415 practice law in California. of the fee paid by active attorneys and $117.40 of the fee paid by inactive attorneys associated with How Are State Bar Activities Funded? licensing and discipline—is deposited into the State Fees Are Assessed to Support Activities. Bar’s General Fund. The General Fund, however, State Bar activities are generally funded by various is used to support a major portion of State Bar fees paid by attorneys—most notably the annual operations. For example, the State Bar estimates mandatory licensing fee. These fees are deposited total 2022 personnel costs of $95 million—of which into the State Bar’s General Fund—its main operating $81 million (or 86 percent) will be supported from the account which can be used for various purposes—as General Fund. well as various special funds that support specific www.lao.ca.gov 3 AN LAO REPORT entity’s operations as well as to ensure that any approved funding is Figure 1 used accountably and consistently Summary of 2023 Maximum Annual License Fee with legislative expectations. Active Inactive How Does the State Mandatory Fees Bar Oversee Attorney Licensing $390.00 $92.40 Discipline 25.00 25.00 Conduct? Client Security Fund 40.00 10.00 Attorneys Required to Lawyer Assistance Program 10.00 5.00 Subtotals ($465.00) ($132.40) Meet Various Professional and Ethical Requirements. Voluntary Feesa California—similar to other Legal Services Trust Fund $45.00 $45.00 Lobbying activities 5.00 5.00 states—has various professional Subtotals ($50.00) ($50.00) and ethical requirements for Total Fees That May Be Charged $515.00 $182.40 attorneys practicing law in a Attorneys are able to choose whether to pay these fees. the state. Examples of such requirements include: providing competent service to existing Legislature Establishes Annual Fees, but and former clients, prohibiting false or misleading Does Not Approve State Bar’s Annual Budget. communication or advertising of legal services, Each year, the judiciary policy committees of the keeping certain information provided by clients Legislature set the license fees charged to members confidential, and ensuring appropriate use of client of the State Bar for the coming year through the monies held in trust accounts. These requirements annual “fee bill.” When a fee bill is not enacted, are outlined in state law, California Rules of Court, the California Supreme Court has authority to set rules approved by the board, and the California the license fees. Under current law, if either the Rules of Professional Conduct. Claims of attorney Legislature or the Supreme Court does not approve misconduct—specifically, complaints that such these fees for a given year, the State Bar does not professional and ethical requirements were have authority to levy fees on its members in that violated—are adjudicated by the State Bar. year. In contrast, the State Bar’s budget is approved by the board and does not require approval by the State Bar Administers Own Disciplinary Legislature. As such, the annual budget of the State Process. The State Bar administers its own Bar is not reviewed by legislative budget committees disciplinary system primarily through OCTC and through the annual state budget process. This is the State Bar Court (SBC). OCTC—consisting different than the process for nearly all other state of teams of attorneys, investigators, and other licensing entities that regulate other professions, legal administrative staff—receives, investigates, which generally involves an entity’s fee structure and prosecutes cases against attorneys—which (such as fee levels) and proposed expenditure we describe in more detail below. The SBC— levels being approved by the Legislature and the consisting of judges, attorneys, and other legal Governor. Moreover, these other entities generally and administrative staff—adjudicates these cases. need to provide written budgetary justification for (We note that the Supreme Court reviews and any substantive changes to existing budget levels issues the final order when SBC recommends the (such as to cover increased costs of operations or suspension or disbarment of an attorney.) Various to support new activities) as well as explain why other departments within the State Bar—such as additional revenues in the form of higher fees are the Probation Department that supervises attorneys needed to support these costs. Annual legislative who are required to comply with certain conditions oversight of both revenues and expenditures allows set by the SBC or the Supreme Court—also support the Legislature to conduct ongoing oversight of an the disciplinary system. 4 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Disciplinary Process Consists of Four If OCTC determines there is sufficient Stages. The disciplinary system consists of four evidence to file charges against an accused stages. We describe each of these stages in attorney, OCTC will notify the attorney in greater detail below. writing of its intent to file formal charges with SBC. Before the charges can be filed, • First Stage: Intake. The Intake Stage (also the accused attorney is entitled to request known as the Inquiry Stage) generally begins a confidential meeting(s)—also known as an with a written complaint filed with OCTC Early Neutral Evaluation Conference (ENEC)— that an attorney has violated a professional in which the attorney and OCTC appear or ethical requirement. The State Bar also before an SBC hearing judge to evaluate may initiate its own investigations against the facts and charges and potentially attorneys. After an initial review and limited try to resolve the case by negotiating a information-gathering on the complaint, settlement. Such meetings are mandatory OCTC will either close the complaint (for if requested by accused attorneys. If the example, notifying the complainant that no accused attorney does not request an action is to be taken or issuing a warning ENEC, informal negotiations may still occur letter to the accused attorney) or refer the between the accused attorney and OCTC. case for investigation. The State Bar reports The State Bar reports that about 4 percent of that about 63 percent of complaints are complaints processed by OCTC were closed closed at this stage and require an average of at the Charging Stage, reached negotiated 42 days to close. settlement, or resulted in the filing of charges. • Second Stage: Investigation. The Such actions required an average of 449 days Investigation Stage consists of OCTC to achieve. investigators, under the guidance and • Hearing Stage. When disciplinary charges supervision of OCTC attorneys, analyzing are formally filed with the SBC, the Hearing the case through interviews, subpoenas, Stage begins. OCTC is responsible for filing document review, and other activities the changes and prosecuting the cases. to determine whether there is clear SBC adjudicates the case and imposes and convincing evidence that attorney the appropriate level of discipline—which misconduct has occurred or if the case can include case dismissal, public or should be closed. Cases are closed in various private reprovals, probation, suspension, ways, such as notifying the complainant and disbarment. (The SBC also reviews and the accused attorney of the reasons settlement terms reached at the end of why no action is to be taken or reaching an the Charging Stage.) For cases where the agreement in lieu of discipline for low-level proposed discipline involves the suspension violations. The State Bar reports that about or disbarment of the attorney, the California 33 percent of complaints are closed at the Supreme Court reviews the SBC’s findings Investigation Stage and require an average of and recommended disciplinary action and 230 days to close. issues a final order. • Third Stage: Charging. The Charging Stage (also known as the Pre-Filing Stage) How Much Does the Disciplinary begins with OCTC evaluating the evidence System Cost to Operate? collected in the Investigation Stage as well as internally documenting potential charges System Costs About $89 Million. The State and appropriate levels of discipline to Bar reports it cost $89 million (or 45 percent seek. If the case is closed, the complainant of total expenditures) to operate its entire and the accused attorney receive letters disciplinary system in 2021—most of which explaining why no action is to be taken. came from its General Fund. As shown in www.lao.ca.gov 5 AN LAO REPORT Figure 2, $59 million (or 66 percent) of this total amount supported about 279 positions in OCTC Figure 2 and $14 million (or 15 percent) supported about 42 positions in SBC. The remaining 19 percent Two-Thirds of Disciplinary System supported various other departments involved with Costs Support OCTC the disciplinary system. 2021 (In Millions) How Much Disciplinary Workload Is Processed Annually? OCTC Workload. Total OCTC workload steadily increased from 2017-18 through 2019-20. The total Other $17 number of cases opened peaked in 2019-20 with 20,979 cases. The cases opened decreased in the subsequent years. In 2021-22, 16,355 cases were opened—a decrease of 4,624 cases (or 22 percent) from 2019-20. These opened cases are added to SBC $14 OCTC workload that remained unresolved from prior years. As shown in Figure 3, the number of cases closed have not matched the number of OCTC $59 cases opened annually. This generally resulted in an increase in the number of the cases pending at the end of the year. This increase has generally slowed between 2019-20 (9,668 pending cases) and 2021-22 (10,054 cases). OCTC = Office of Chief Trial Counsel and SBC = State Bar Court. As reported by the State Bar, Figure 4 shows the number of cases that are opened and closed by OCTC as well as the number of cases that resulted in the filing of Figure 3 charges. State law allows OCTC to Total OCTC Workload Between 2017-18 and 2021-22 exclude certain types of workload (such as resolving complaints related Number of Cases to the unauthorized practice of law) when reporting certain workload data. 35,000 Cases Pending at Beginning of Year Accordingly, Figure 4 excludes such Cases Opened During Year data, which means that the workload 30,000 Cases Closed During Year numbers will not be the same as those 25,000 shown in Figure 3, which reflects total workload. As shown in Figure 4, 20,000 the number of cases opened and 15,000 closed have fluctuated in recent years. In 2021-22, the State Bar reports 10,000 opening 14,989 cases and closing 14,409 cases. Of the cases closed, 5,000 13,979 cases (or 97 percent) were closed without charges being filed 2017-18 2018-19 2019-20 2020-21 2021-22 and 430 case (or 3 percent) resulted OCTC = Office of Chief Trial Counsel. in charges being filed in the SBC. Less than 4 percent of OCTC cases closed annually resulted in charges filed in SBC between 2017-18 and 2021-22. 6 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT SBC Workload. As shown in Figure 5, the number of cases received Figure 4 and resolved annually by SBC has fluctuated in recent years. In 2021-22, Less Than 4 Percent of OCTC Closed Cases SBC received a total of 430 cases Result in Charges Filed in SBC and closed 514 cases. Of the cases Number of Cases closed, about 89 percent were closed with SBC imposing disciplinary New Cases action. The number of cases closed Cases Filed in SBC 20,000 has generally exceeded the number Cases Closed by OCTC Without 18,000 Charges Filed in SBC of cases opened in recent years. 16,000 This has resulted in a steady reduction 14,000 in the number of cases pending at 12,000 the end of the year. Specifically, SBC 10,000 had 637 cases pending at the end 8,000 of 2021-22—a decrease of nearly 6,000 22 percent from 2017-18. 4,000 Case Processing Time Frame 2,000 Established by Statute for OCTC Workload. State law currently 2017-18 2018-19 2019-20 2020-21 2021-22 requires the State Bar to complete the first three stages of the disciplinary OCTC = Office of Chief Trial Counsel and SBC = State Bar Court. process—specifically, for OCTC to dismiss a complaint, admonish an attorney, or file formal charges Figure 5 against an attorney—within six months (or 180 days) after receipt of a written SBC Pending Workload Has Steadily Declined complaint for “noncomplex” cases and Number of Cases 12 months (or 365 days) for “complex” or “complicated” cases. The Chief of 1,600 Cases Pending at Beginning of Year OCTC determines which cases are Cases Filed in SBC complex or complicated. 1,400 Cases Resolved by SBC The majority of OCTC closed 1,200 cases are designated as noncomplex. In 2021-22, OCTC closed 1,000 14,409 cases—10,593 noncomplex 800 cases (or 74 percent) and 3,816 complex cases (or 27 percent). 600 However, as shown in Figure 6 on the next page, the proportion of total cases 400 closed that are designated as complex 200 has increased in recent years. In 2017-18, the State Bar reports closing a 2017-18 2018-19 2019-20 2020-21 2021-22 total of 15,052 cases—which included 2,241 complex cases (or 15 percent). SBC = State Bar Court. This means that the proportion of complex closed cases has increased by 12 percentage points since 2017-18. www.lao.ca.gov 7 AN LAO REPORT The State Bar reports that the majority of its closed cases meet Figure 6 the time frames specified in statute for the first three stages of the Proportion of Total Closed Cases disciplinary process. Specifically, Designated as Complex Increasing in 2021-22, the State Bar reports that 12,444 closed cases (or 100% 86 percent) met these time frames 90 and 1,965 closed cases (or 80 14 percent) did not. The number 70 of noncomplex closed cases 60 not meeting these time frames 50 has decreased in recent years. 40 Specifically, 865 noncomplex 30 cases (or 8 percent) closed in 20 2021-22 did not meet these 10 time frames—a decrease from the 1,938 noncomplex cases 2017-18 2018-19 2019-20 2020-21 2021-22 (or 15 percent) closed in 2017-18 Noncomplex Cases that did not meet these time Complex Cases frames. In contrast, as shown in Figure 7, the number of complex closed cases not meeting these time frames increased in recent Figure 7 years. Specifically, the number of closed complex cases not meeting Increase in Complex Cases such time frames increased Failing to Meet Statutory Time Frames from 536 cases (or 24 percent) Number of Cases in 2017-18 to 1,344 cases (or 33 percent) in 2020-21, before 2,500 decreasing slightly to 1,100 cases (or 29 percent) in 2021-22. 2,000 How Does OCTC Operate? Noncomplex Cases OCTC Generally Structured 1,500 Around Teams. In 2021, OCTC reported 280 staff positions. This 1,000 amount consisted of 96 attorneys (34 percent); 82 investigators Complex Cases 500 (29 percent); 73 support staff (26 percent), such as paralegals; and 29 other administrative 2017-18 2018-19 2019-20 2020-21 2021-22 staff (10 percent). The majority of attorneys, investigators, and support staff are organized by teams, with each team reporting to a single supervising attorney. Staff physically located in the State Bar’s San Francisco and Los Angeles offices are fully integrated within these teams. 8 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT For example, a couple members of a team may of cases not closed in the Intake Stage. Priority be physically located in San Francisco while the rest Three cases consist of all other cases. Irrespective are located in Los Angeles. of their priority designation, some cases may be In general, there are two different types of designated as “major” cases—typically cases those OCTC teams based on their responsibilities—intake that meet certain criteria such as those alleging teams and trial teams. Intake teams are responsible significant public harm, likely to generate publicity, for the Intake Stage. OCTC maintains two intake or likely to be of special interest to the public. teams that each consist of around seven to nine Cases Referred for Investigation Prosecuted attorneys and four to five support staff. Trial teams Vertically. OCTC’s two intake teams typically are responsible for the Investigation, Charging, review submitted complaints, resolve those that can and Hearing Stages. OCTC maintains 13 trial be closed, and assign case prioritization to those teams that each generally consist of around 4 to being referred to the trial teams. Cases are typically 6 attorneys, 6 investigators, and 3 to 4 support assigned to trial teams based on the size of the staff. The one exception is the trial team designated team. When a case is assigned to a specific trial as an “expeditor team” responsible for addressing team, the supervising attorney of the team typically complaints OCTC believes can be resolved quickly. assigns both an investigator and attorney to the This expeditor trial team consists of four attorneys, case in a vertical prosecution model—meaning eight investigators, and one support staff. Of the assigned staff stay with a case from the case 13 trial teams, three of them each respectively initiation to resolution. (In contrast, a horizontal specialize in addressing immigration, unlawful prosecution model has different staff assigned to practice of law, and client trust account matters. specific activities or stages of the case.) During (The team specializing in client trust account the Investigation Stage, the investigator generally matters is currently a pilot program.) The remaining obtains necessary evidence, while the attorney trial teams (including the expeditor trial team) are approves documents (such as investigative plans typically generalists capable of processing nearly all and closing memos) and provides legal advice on complaint types. the case. During the Charging Stage and Hearing Cases Prioritized Based on Potential Public Stage, the attorney typically determines whether Risk. OCTC currently prioritizes cases into three additional investigation is needed, files charges categories based on the risk of potential impact and/or settles the case, and prosecutes the case on members of the public. Priority One cases in the SBC. involve serious misconduct or other behavior with Workload Formula Developed and Used to the potential for significant or ongoing harm to Identify OCTC Staffing Need. In 2018, the State members of the public. According to the State Bar, Bar implemented a workload study to identify the number of cases referred to the trial teams for the staffing needs for its disciplinary system. investigation that can be designated as Priority Specifically, for OCTC, the State Bar used a random One is capped at 20 percent due to the availability time-study methodology—similar to one used by of resources. Priority Two cases are those that the judicial branch—to identify all staff activities can be easily resolved or have been identified required to process a case as well as the amount of as needing quick (or “expedited”) investigation staff time associated with these activities. The State to determine if significant harm could occur. Bar then used these data to calculate one set of According to the State Bar, Priority Two cases are “case weights” for all case types that represent expedited by assigning them specifically to the the average amount of staff time each component expeditor trial team and eliminating certain OCTC of a case is expected to take. For example, the tasks. For example, formal investigation plans, State Bar calculated that intake activities average investigator reports, and closing memos prepared 110 minutes per case while enforcement activities by investigators and approved by attorneys may average 3,332 minutes per case. The State Bar be waived for such cases. The State Bar estimates then used (1) historical data to identify patterns that Priority Two cases represent about 20 percent between the number of filled investigator positions www.lao.ca.gov 9 AN LAO REPORT and the median amount of time required to close Senate Judiciary Committees. The specific a case and (2) staffing ratios (such as a staffing requirements included in statute have been ratio of 1.4 attorneys for every investigator) to modified over time to reflect legislative calculate the number of staff needed to meet the oversight needs. existing statutory time frame of 180 days to dismiss • State Auditor Performance Audits. State a complaint, admonish an attorney, or file formal law requires the State Bar to contract with charges against an attorney after receipt of a CSA to conduct a performance audit of written complaint for noncomplex cases. the State Bar’s operations every two years. In 2021, the State Bar reviewed the workload State law can require certain information be formula and identified potential areas of refinement. included in particular years. For example, state For example, the State Bar examined six broad law requires the 2023 CSA audit (currently categories of case types—such as the notification in progress) to evaluate the operations of from banks about insufficient funds in client trust each program—such as OCTC—supported accounts and certain general complaints filed by by the annual licensing fees and whether members of the public—and identified that the there are appropriate program performance number of staff and resources needed to process measures in place. The 2023 audit is also cases could differ by case types. required to evaluate how the State Bar administers discipline cases that require an How Does the Legislature Conduct outside investigator or prosecutor and how Oversight of the Disciplinary Process? that process can be improved, including the Legislature Has Various Tools Available. cost-effectiveness and timeliness of such The Legislature has various tools to conduct investigations and prosecutions. The audit oversight of the disciplinary process. This includes in progress shall be presented by April 2023 conducting policy hearings, confirming the to the State Bar Board of Trustees, the Chief appointment of the Chief of OCTC, imposing Justice, and to the Assembly and Senate reporting or other requirements on the State Bar Judiciary Committees. through statute, and directing other state entities— • One-Time Evaluations. Statute has been particularly the California State Auditor’s Office enacted in recent years to require one-time (CSA) and our office—to conduct evaluations evaluations related to aspects of the State and assessments. Key reporting or evaluation Bar’s disciplinary process. For example, requirements in recent years include: SB 211 required CSA to submit a report by April 2022—which has been completed— • Annual Discipline Report. State law requires evaluating whether the disciplinary process the State Bar to submit an annual report by adequately protects the public from attorney October 31 describing the performance of the misconduct, including whether the State disciplinary system for the most recent fiscal Bar takes reasonable steps to determine the year. State law requires the report to include existence and extent of alleged misconduct. a range of information—such as the number Additionally, our office was directed to of inquiries received and their disposition, conduct an evaluation of the State Bar’s the median and average processing times, proposed fee increase in 2019, since a portion and formal disciplinary outcomes. The of the increase would support additional statistical information must be presented OCTC disciplinary staff. in a consistent manner for year-to-year comparison and, if available, must include Reports Consistently Raised Concerns With the required information for the preceding Disciplinary Process and Level of Resources five years. This annual report is presented Needed. Various CSA reports have regularly to the Chief Justice, the Governor, the raised concerns with the efficacy of the disciplinary Speaker of the Assembly, the President pro process, the reporting of data, and the use Tempore of the Senate, and the Assembly and and/or level of resources. Similarly, our office also 10 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT raised some concerns in 2019. Key findings determine appropriate backlog goals, and and recommendations from these recent determine the level of resources needed to reports include: meet such backlog goals. • Some Attorneys Not Held Accountable • Annual Discipline Report Needs for Misconduct. The April 2022 CSA report Improvement. The April 2021 CSA report found that (1) some cases were prematurely also found that the State Bar’s lack of closed that warranted further investigation adequate monitoring has hampered its and potential discipline, (2) weak processes ability to detect problems in its disciplinary allowed attorneys who engaged in misconduct system. CSA also raised concerns with in other states to continue practicing in the annual discipline report submitted by California, and (3) information that the State the State Bar, including that the report Bar provided its staff limits their ability to does not fully and consistently provide identify patterns of complaints. The report information about the disciplinary system. also found that weak safeguards have To address these concerns, CSA made hampered the State Bar’s ability to prevent various recommendations, including repeated violations associated with client trust requiring appropriate State Bar review and accounts. To address these concerns, CSA approval of the annual discipline report to presented various recommendations including ensure information is accurate, complete, directing the State Bar revise policies to and consistent. (1) define specific criteria for the closure of • Request for Additional Resources cases using nonpublic disciplinary measures, Premature. In 2019, the State Bar proposed (2) begin using complaint type categories increasing the annual licensing fee by $40 when determining whether to investigate a for active attorneys to support 58 additional complaint in order to more easily identify OCTC staff to improve disciplinary case patterns of similar complaints against an processing times. Both the April 2019 CSA accused attorney, and (3) require staff take report and our June 2019 report found that certain actions when investigating client trust this request was premature since recently account complaints. implemented operational changes—such as • Organizational Changes Decreased to the existing organizational structure and Operational Efficiency. In April 2021, CSA case prioritization methodology—were still in found that the State Bar’s changes to its the process of being implemented and would disciplinary system—specifically, converting not be reflected in the workload study used to OCTC trial teams from specialist teams that calculate the additional resources requested. handle particular case types to generalist As such, both offices recommended a fewer teams who generally handle all case types and number of positions until the impact of the promoting some of its most senior attorneys recently implemented changes were known. to full-time supervisors in 2017—significantly This resulted in a lower fee increase than reduced the efficiency of the system by originally proposed. significantly increasing case processing times • Workload Formula May Require Revision. and the backlog of cases even with attorneys In 2019, both CSA and our office raised being disciplined at a significantly lower concerns that the State Bar’s workload study rate. To address these concerns, the report may not accurately identify staffing needs. made various recommendations, including Our office specifically found that (1) the case directing the State Bar to (1) assess how weights capture the average amount of time it OCTC’s current organizational structure has takes for OCTC to process a case with existing impacted its ability to efficiently resolve cases staffing levels, rather than the time that would and determine whether additional changes be needed to process cases within existing are needed and (2) establish a backlog metric, statutory time frames; (2) different case www.lao.ca.gov 11 AN LAO REPORT weights may be needed for different complaint beneficial and suggested various options for types or priority categories to the extent they legislative consideration—including potentially require different levels or combinations of including the State Bar in the annual state disciplinary tasks; and (3) fewer staff could budget process or approving a fee specifically be required if the Legislature changed the to support the disciplinary process. statutory time frames. The Legislature has used these various reports • Proposal for Annual Inflationary in different ways—including changing existing Adjustment Lacked Justification. In 2019, state law, determining the appropriate fee level the State Bar requested the authority to to approve, and informing discussions with the annually adjust the annual licensing fee, State Bar. For example, as recommended by CSA, including the existing $25 disciplinary fee the Legislature amended state law to change the (as shown in Figure 1 above), to account for due date for submission of the State Bar’s annual inflation. Our office found that there was a lack discipline report from April 30 to October 31 of of justification for the proposed authority and each year in order to provide the Legislature with that the request could severely limit legislative sufficient time to review the discipline report before oversight over State Bar operations. Our considering action on the annual fee bill. overall review of State Bar programs indicated that increased legislative oversight could be STATE BAR PROPOSAL Analysis Required by SB 211. Senate Bill 211 from the State Bar include the staffing requirements expressed the Legislature’s intent to codify new needed to achieve the new case processing case processing standards (or time frames) to standards being proposed. replace the existing statutory time frames for OCTC The State Bar provided its report on to dismiss a complaint, admonish an attorney, or October 28, 2022. In this section, we summarize file formal charges against an attorney. To assist the key components of the report: (1) new case with this, SB 211 required the State Bar to propose processing standards, (2) the establishment of a case processing standards by October 31, 2022 backlog goal and metrics for measuring it, and for review by our office. Specifically, the legislation (3) a staffing analysis. directed the State Bar to propose standards with the goals of (1) resolving cases in a timely, effective, New Case Processing Standards and efficient manner within OCTC; (2) allowing for Prioritizes Cases Based on Both Risk and only small backlogs of attorney discipline cases; Complexity. As discussed earlier, cases are and (3) protecting the public. Certain case types— currently prioritized based on risk to members such as the unauthorized practice of law—would be of the public. The State Bar proposes to instead excluded from these standards. The new standards prioritize cases based on both risk and case should also consider all relevant factors—including complexity. Higher-risk cases would include those the mechanics of the discipline process, public risk, where the alleged attorney’s behavior has caused, reasonable public expectations for the resolution or has the potential to cause, significant harm to of cases, and the complexity of cases. In preparing clients and members of the public. Such cases the standards, the State Bar was required to review could include those where clients may have been attorney disciplinary system case processing misled when settling cases, misappropriation of standards in at least five states with strong and client funds for which restitution has not been effective systems, consult with experts on attorney paid, or allegations of misconduct to vulnerable discipline, and review relevant CSA and LAO populations (such as immigrants and seniors). reports. Finally, SB 211 required that the report 12 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT It could also include cases in which there are Across all six categories, the State Bar proposes multiple complaints or recurring complaints against to reduce average case processing times by the same attorney. The State Bar estimates that 24 percent to 33 percent. Times in which cases 30 percent to 40 percent of cases not closed in are deferred (or suspended) pending separate Intake would be designated as higher-risk cases. criminal or civil litigation are excluded from the case Higher-complexity cases tend to require longer processing standards. investigation. For example, such cases could The State Bar calculated the proposed average include those cases (1) where multiple charges case processing standards by taking current case against an attorney arise from multiple events, processing times for cases closed or filed between (2) designated as “major cases,” (3) requiring 2018 to 2021 (four years) and adjusting them in subpoenas to banks or other third-party entities; various ways. First, the State Bar did not include (4) where analysis of a large number of documents the number of days between case processing (such as bank records) may be needed; or (5) where events—meaning from the end of one processing an accused attorney is unresponsive. According to event to the start of the next processing event—if the State Bar, these are the same factors it currently the number of days exceeded 59 days. Specifically, uses to designate cases as complex. if the time period between two different events was Proposes Average Case Processing Times 60 days or more, the entire time period would be in Six Categories. The State Bar proposes removed before average processing times were six case categories based on when a case is calculated. For example, if a case took 300 days closed, the stage at which it is closed, and the but had a 65 day time period between processing case risk/complexity. Specifically, the six case events, the case processing time for that case categories are: (1) closed in Intake; (2) high-risk, would be adjusted to 235 days. According to noncomplex cases closed after Investigation; the State Bar, 44 percent of cases closed or (3) low-risk, noncomplex cases closed after filed between 2018 to 2021 were impacted by Investigation; (4) high-risk, complex cases closed this adjustment. Second, the processing times after Investigation; (5) low-risk, complex cases were adjusted to be more similar to the caseload closed after Investigation; and (6) cases closed processing standards of six other states: Arizona, or filed in Charging. As shown in Figure 8, for Colorado, Illinois, Maryland, New Jersey, and Texas. each case category, the State Bar proposes an The times were further adjusted based on the State average case processing standard. For example, Bar’s consultation with three experts on attorney the State Bar proposes a 120-day average discipline and the State Bar’s review of reports case processing standard for closing high-risk, by CSA and our office related to the disciplinary noncomplex cases after Investigation—a decrease system. Finally, the State Bar conducted five of 47 days (or 28 percent) from the current average. internal focus groups of OCTC attorneys and investigators to solicit feedback on the proposed Figure 8 State Bar Proposed Average Case Processing Times Compared to Current Average Case Processing Times Average Case Processing Times Proposed Current Percent Case Category (in Days) (in Days) Difference Difference 1: Closed in Intake 30 42 -12 -29% 2: Closed After Investigation—High-Risk, Noncomplex Cases 120 167 -47 -28 3: Closed After Investigation—Low-Risk, Noncomplex Cases 150 197 -47 -24 4: Closed After Investigation—High-Risk, Complex Cases 180 248 -68 -27 5: Closed After Investigation—Low-Risk, Complex Cases 210 307 -97 -32 6: Closed or Filed in Charging 300 449 -149 -33 www.lao.ca.gov 13 AN LAO REPORT standards, compared the proposed standards to the above, the State Bar proposes a calculated backlog standards used by Department of Consumer Affairs time standard. Specifically, the State Bar proposes (DCA) licensing boards and bureaus, and solicited backlog standards that are 150 percent of the public feedback. proposed average case processing time for each Changes Definition of “Filing Charges” for case category. For example, as shown in Figure 9, Case Processing Standards. The State Bar the State Bar proposes an average case processing proposes to change the definition of filing charges standard of 120 days for high-risk, noncomplex for the purpose of the case processing standards. cases closed in the Investigation Stage and a (This impacts the proposed case category: “Closed backlog standard of 180 days. This means that or Filed in Charging.”) As discussed above, if high-risk, noncomplex cases that take longer than requested by the accused attorney, at least one 180 days to close in the Investigation Stage would ENEC is mandatory before charges can be filed. be deemed to be “closed in backlog” or “not meeting Since such meetings require coordination with both goals.” The number of such cases in each case the accused attorney and the SBC, the State Bar category would be added together to calculate a asserts that OCTC loses control over the timeliness single backlog measure. of the charging process at that time. As such, the Staffing Analysis State Bar proposes to change the definition of “Filed in Charging” to mean the date the accused attorney Defers Comprehensive Staffing Analysis is notified of their right to request an ENEC—if one is to 2023. Senate Bill 211 required that the State Bar provide a staffing analysis to identify the ultimately conducted. If an ENEC is not conducted, resources needed to achieve the proposed case the definition remains the date on which OCTC files processing standards. The State Bar states that a charges or negotiated resolution with the SBC. If this comprehensive final staffing study will be deferred proposed definition is not adopted, the State Bar and instead initiated in 2023. The reasons for this recommends increasing the proposed average case delay are to incorporate legislative direction on the processing standard for “Cases Closed or Filed in proposed case processing standards as well as Charging” from 300 to 330 days. various OCTC operational changes that are currently Establishment of Backlog Goal and in progress or are being considered. Examples of Metrics to Measure Goal such operational changes include: Proposes Backlog Goal of 10 Percent or Less. • Potential changes related to OCTC’s generalist The State Bar proposes defining an appropriate teams after analyzing various opinions and backlog goal of 10 percent or fewer cases. concerns raised by employees, stakeholders, According to the State Bar, this means that no more and others about these teams. than 10 percent of cases should be in backlog status • Potential changes to reduce or simplify at any time. unnecessary steps, as well as use the Proposes Backlog Standards for Each appropriate staff for certain tasks (for example, Proposed Case Processing Standard. For each of whether certain tasks are best conducted by the proposed case processing standards discussed attorneys or support staff). Figure 9 State Bar Proposed Backlog Standards Average Case Processing Times Backlog Standard Case Category (in Days) (in Days) 1: Closed in Intake 30 45 2: Closed After Investigation—High-Risk, Noncomplex Cases 120 180 3: Closed After Investigation—Low-Risk, Noncomplex Cases 150 225 4: Closed After Investigation—High-Risk, Complex Cases 180 270 5: Closed After Investigation—Low-Risk, Complex Cases 210 310 6: Closed or Filed in Charging 300 450 14 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT • Distribution of fliers to all accused attorneys the State Bar. The workload formula calculated advising them of the importance of having a need for an additional 119 positions (or a counsel in State Bar disciplinary proceedings 44 percent increase in staff based on filled in January 2022. (We note that this change positions)—47 attorneys, 25 investigators, resulted from a State Bar contracted study 40 support staff, and 7 supervisors. on racial disparities in attorney discipline An estimated $16.3 million would be needed to that found accused Black attorneys were support these additional positions. To support less likely to be represented by counsel than this increased cost, an estimated $83 increase white attorneys.) in the annual licensing fee paid by active • Deployment of operational reports to track attorneys would be required. key performance measures in 2022 and plans • Mathematical Calculation. This method on continuing to develop and test new data mathematically compares the changes in reports to help OCTC staff improve efficiency. the current and proposed case processing standards, and assumes that a similar increase The State Bar indicates that the comprehensive in staffing levels would be needed to achieve staffing analysis will consider a range of factors. them. Specifically, the State Bar noted that the These include: risk and complexity to ensure that proposed caseload standards would result in different cases receive case weights; staffing the reduction of the average case processing needs, responsibilities, and expertise (such as the times by 29 percent. The State Bar then impact experience, turnover, and training has on assumed that a similar percentage increase in workload processing speed and the amount of investigator staffing levels would be needed time available for work); the appropriate ratios of to achieve the proposed caseload processing staff types (such as attorneys versus administrative standards. Increases to other positions, such support staff); and the allocation of staff time across as attorneys, were based on ratios similar complaint types and case processing activities. to the workload formula. For example, the Provides Preliminary Estimates of Staffing calculation included a staffing ratio of one and Resource Need. To meet the requirements of attorney for every investigator. In total, this SB 211, the State Bar provides preliminary estimates method calculated a need for an additional of the level of staffing and resources needed to 78 positions (or a 29 percent increase in staff meet the proposed case processing standards. based on filled positions)—23 attorneys, Two different methods were used to calculate these 23 investigators, 25 support staff, and preliminary estimates—the workload formula and 7 supervisors. An estimated $10.6 million a mathematical calculation. Figure 10 summarizes would be needed to support these additional the estimated staffing needs under each method. positions. To support this increased cost, an • Workload Formula. This method is based on estimated $55 increase in the annual licensing the existing workload formula developed by fee paid by active attorneys would be required. Figure 10 State Bar Preliminary Estimate of Additional Staffing Needs Workload Formula Calculation Mathematical Calculation Additional Percent Additional Percent Staff Type Filled Positions (2021)a Staff Needed Increase Staff Needed Increase Attorney 80 47 59% 23 29% Investigator 79 25 32 23 29 Support 88 40 45 25 28 Supervisor 25 7 28 7 28 Totals 272 119 44% 78 29% a Differs slightly from earlier-referenced numbers due to various factors, such as whether positions were filled. www.lao.ca.gov 15 AN LAO REPORT ANALYST’S REVIEW OF STATE BAR PROPOSAL The State Bar’s submitted report fulfills the annual state budget process. The State Bar is also requirements specified in SB 211. Specifically, not required to justify changes to existing budget the State Bar developed the standards after levels and requests for additional revenues in the considering the timely and effective processing same manner as these other entities. This can make of cases, potential impacts on public protection, it difficult for the Legislature to ensure that the fees and the allowance of small backlogs of attorney authorized annually align with expenditure levels discipline cases. As required, to inform this work, that match legislative priorities and expectations for the State Bar reviewed disciplinary systems how such funding will be used. in six other states, consulted with experts on Key Questions for attorney discipline, reviewed CSA and LAO reports, and solicited public feedback on the Legislative Consideration proposed standards. Are Existing Disciplinary Procedures In this section, we provide our review of the Reasonable? The Legislature will want to consider State Bar’s report. Specifically, we provide whether the existing disciplinary procedures are our assessment and identify key questions for reasonable or if changes are warranted. This is legislative consideration for the entire proposal as because the specific steps in the process impact well as for each of the three key components of how long it takes to resolve cases, how OCTC the report: (1) the proposed new case processing should be organized and operated, and the standards, (2) the establishment of a backlog specific level of resources needed. For example, goal and metrics to measure the goal, and (3) the as shown in Figure 11, the average amount of staffing analysis. time needed to file cases in the SBC increased by 41 percent between 2017-18 (466 days) and OVERARCHING COMMENTS 2021-22 (658 days), and the median amount of time increased by 47 percent between 2017-18 Assessment Assumes Existing Disciplinary Figure 11 Process Is Generally Reasonable. While the State Bar Average and Median Times continues to consider operational Needed to File Cases in SBC Increasing and procedural changes to improve Number of Days OCTC efficiency and efficacy, the State Bar’s proposed case 700 processing standards generally Average Median assume that the existing steps 600 of the disciplinary process 500 are reasonable and should be maintained. 400 Lack of Legislative Approval 300 of State Bar Budget Can Make Oversight Difficult. As discussed 200 above, unlike nearly all other state 100 licensing entities that regulate professions, the State Bar’s budget 2017-18 2018-19 2019-20 2020-21 2021-22 is not reviewed by legislative budget committees through the SBC = State Bar Court. 16 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT (401 days) and 2021-22 (591 days). To the extent NEW CASE that that Legislature would like to reduce such PROCESSING STANDARDS times, it could consider eliminating ENECs. We note that the attorney discipline experts consulted Assessment by the State Bar noted that California is the only Reasonable to Include Both Risk and jurisdiction that they are aware of which uses a Complexity in Case Prioritization System… formal ENEC before charges are filed. The experts We find that it is reasonable for OCTC to prioritize suggested eliminating the ENEC prior to charging cases based on both the actual or potential risk and shifting it to after charges have been filed in of public harm and case complexity. Prioritizing the SBC. Prior to charges being filed, accused and more quickly addressing high-risk cases can attorneys would continue to be able to informally help stop an attorney from continuing to engage pursue settlement discussions with OCTC (which in problematic behavior and can help obtain they currently are able to do). justice or restitution for those who are wronged. What Level of Legislative Oversight Is Additionally, it is reasonable to expect more Needed? The Legislature will want to consider complex cases to take more time than noncomplex what level of oversight it wants to exercise over cases to thoroughly investigate, obtain clear and State Bar processes and funding. As noted above, convincing evidence, and resolve. The failure to we previously indicated in 2019 that increased dedicate sufficient investigatory and prosecutorial legislative oversight could be beneficial. One such time to high-risk and complex cases could result in option to consider is including the State Bar in harm to the public to the extent accused attorneys the annual state budget process to increase do not ultimately receive the appropriate level legislative oversight by leveraging the expertise of discipline. We would note, however, that the of the budgetary committees to evaluate State specific definitions of what types of cases constitute Bar funding requests in a manner similar to other high/low risk as well as complex/noncomplex will be state departments. (The Assembly and Senate important and should be consistently defined over Judiciary Committees would retain policy oversight. time. Without clear and consistent definitions, this This would be similar to what is in place for certain could result in data reporting fluctuating over time other state licensing departments.) Additionally, and make comparison difficult—thereby making it requiring the State Bar to submit budgetary difficult to conduct meaningful oversight of OCTC information in a manner similar to other state performance. As noted before, existing statute departments would enable easier comparison authorizes the Chief of OCTC to determine which to ensure standardized or similar treatment cases are complex. across the various departments responsible for …But Unclear Why Proposed Case licensing professions. Another option to increase Processing Standards for Cases Closed or transparency and oversight is to consider a fee Filed in Charging Do Not Incorporate Risk. specifically to support the disciplinary system Two of the six case categories—specifically to ensure the State Bar uses the funding for this those closed in Intake and those closed or filed in specific purpose. The current $25 disciplinary Charging—for which the State Bar proposes case fee generates around $5.7 million annually— processing standards do not explicitly differentiate significantly less than is needed to support the cases based on risk and complexity. As such, entire disciplinary system. The Legislature could only one case processing standard is proposed consider adjusting this fee and directing that this for those two case categories—in contrast to fee be placed in a special fund specifically for the four different standards proposed for cases disciplinary system purposes. This would enable closed after Investigation. According to the State the Legislature to ensure that the authorized level of Bar, cases closed in Intake should inherently be funding was used to support legislatively expected cases that are low risk and noncomplex. Cases of service levels. greater risk and complexity should be referred for investigation. We find this logic to be reasonable. www.lao.ca.gov 17 AN LAO REPORT For cases closed or filed in Charging, the State For example, the Department of Justice Bar believes that cases that reach this stage are (DOJ)—who is responsible for representing DCA inherently more complex in nature and that risk licensing boards and bureaus before the Office of does not greatly impact the amount of time needed Administrative Hearings—reports annually on key to process the cases. However, if high-risk cases metrics to provide greater insight into DOJ-specific are prioritized in the Investigation Stage, it would actions contributing to overall formal discipline be reasonable to assume that those cases would case processing times. Such metrics include the be referred to the Charging Stage more quickly for average, median, and standard deviation number resolution. This means that the overall amount of of days (as well as the number of cases) for fully time needed to process high-risk cases would likely adjudicated matters from receipt of the complaint be less than the amount of time needed to process from investigators to when charges are filed; from low-risk cases. Arguably, such cases should be the filing of an accusation to when a stipulated expected to be resolved more quickly given the agreement is reached; from the filing of charges actual or potential for public harm. to when a hearing date is requested; and from the Case Processing Standards Do Not Reflect date a hearing was requested to when a hearing Full OCTC Workload. Both the existing statutory commenced. We note that OCTC and SBC are fully time frames and the proposed case processing located within the State Bar, which should make standards do not reflect full OCTC workload. cooperation easier, in contrast to DCA licensing Specifically, the case processing standards do disciplinary processes that require coordination not include the Hearing Stage in which OCTC across several separate state entities. staff engage in activities to prosecute and resolve New Filed in Charging Definition Further cases in SBC. Such a metric would be helpful Reduces Measurement of OCTC Workload. to capture how long it takes to resolves cases As discussed above, the State Bar proposes to generally. For example, DCA includes a formal change the definition of filed in Charging to mean discipline performance benchmark of 540 days the date an accused attorney is notified of their from the complaint receipt through the completion right to request an ENEC—if such a meeting is of the entire disciplinary process for cases that are ultimately conducted. If a meeting is not conducted, forwarded to the Attorney General for disciplinary the definition remains the date on which OCTC files proceedings (including intake and investigation). charges or a negotiated resolution with the SBC. OCTC should not be solely responsible for This new definition could exclude a potentially achieving a particular time standard as case significant amount of time and OCTC workload processing in the Hearing Stage requires from the proposed case processing standards. coordination with SBC and accused attorneys. According to the State Bar, more than half of cases However, OCTC is a key participant whose actions that request an ENEC will require multiple ENECs. will impact the overall ability to effectively resolve Multiple ENECs can add an average of 79 days cases in the Hearing Stage. As such, OCTC should to case processing times for cases to close or for continue to monitor and to improve the efficacy charges to be filed in the Charging Stage. and efficiency of its actions in this stage. A time Unclear Extent to Which Proposed Standards standard would provide an expectation for how Are Reasonable. In developing the proposed case long it should take to resolve those cases that processing standards, the State Bar assumed that may result in the most severe disciplinary actions. it was unreasonable for there to be time periods of This serves as a benchmark to measure against 60 days or more between case processing events. actual completion times. In combination with This is because, during such time periods, cases other reporting requirements, the State Bar and were effectively sitting idle awaiting OCTC staff Legislature would be better positioned to monitor to take action. The State Bar acknowledges that and identify the particular areas where delays are this is an aggressive approach that assumes that occurring or where operational, procedural, or such idle time periods will no longer occur—rather staffing changes could improve case processing than assuming that idle periods will be shorter in efficiency or quality. length. It also acknowledges that this approach 18 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT could mean that time needed for the investigation needed to process specific types of complaints and process may have been mathematically removed used them to calculate proposed case processing as well. However, the State Bar believes that this standards. In such an approach, there may be is an appropriate starting point as it is reasonable time periods where a case sits idle for more than to expect that such idle periods should not exist 60 days—which is reasonable if there is a clearly in cases that have not been deferred and that it identified rationale and need for the case to sit idle. provides an estimate of the minimum amount of The benefit of such an approach is that the resulting time required for thorough investigation when there case processing standards would be based on is sufficient staff and resources. actual investigatory and prosecutorial need. We find that it is reasonable to attempt to Unclear Impact of Implemented or Potential minimize the amount of time that cases are Operational and Procedural Changes. As noted sitting idle. However, it is unclear to us how much above, various operational and procedural necessary investigatory or charging time was changes to OCTC processes have recently been removed as part of this analysis. For example, implemented. The full impacts of some of these conversations with State Bar staff indicated that it changes are unknown—such as the practice of could sometimes take more than 60 days for banks providing flyers to all accused attorneys notifying to provide documents that are subpoenaed to them of the benefits to hiring legal counsel as of investigate cases that involve client trust accounts. January 2022. To the extent more legal counsel Such cases that require this investigatory step is hired, it could result in cases taking more time likely are forced to sit idle while OCTC staff wait (such as if the accused attorney refuses to settle for documents to be provided. However, the cases and chooses to fight the case) or less time (such as processing standards assume no unavoidable if hired counsel helps an accused attorney realize idle times like this take place despite the delays that early settlement of a case would be beneficial). being arguably justified as OCTC requires such Other changes have drawn concern and/or information (and cannot obtain it via alternative require additional evaluation. For example, CSA means) to fully investigate and resolve such cases. recently identified concerns that the organizational Similarly, an April 2021 CSA report documented shift to generalist teams decreased operational that the State Bar indicated that it typically takes efficiency, even with attorneys being disciplined at six months (180 days) or more for the federal a lower rate. Additionally, the State Bar notes that government to provide requested immigration other potential changes—such as those raised in records. It is unclear the extent to which OCTC will conversations with staff and stakeholders during be able avoid such idle times and/or if they impact the preparation of the State Bar’s case processing particular types of cases. As such, it is unclear the report—are in the process of being considered and/or extent to which these case processing standards implemented. We also note that other changes could are reasonable. If case processing standards are be forthcoming as a new Chief of OCTC joined the unreasonable, it is possible that the quality of State Bar in October 2021. Lacking information case processing—such as the thoroughness of on the impact of such changes makes it difficult investigations or the proposed disciplinary action— to assess whether they will help staff achieve the will decrease in order to meet the standards. For proposed case processing standards. example, a July 2015 CSA audit found that the Annual Reporting Requirements Will Need State Bar’s focus on reducing an excessive backlog to Be Updated. State law requiring reporting of disciplinary cases in the years preceding the of data and metrics in the State Bar’s annual audit resulted in a decrease in the severity of discipline report will need to be updated, discipline imposed. regardless of which specific case processing We note that alternative approaches may have standards are finally adopted by the Legislature. also been possible. For example, the State Bar Specific data and metrics will be needed to could have identified those cases that it believed to measure annual performance against any adopted be accurate representations of the amount of time benchmarks.These include those directly related www.lao.ca.gov 19 AN LAO REPORT to the proposed standards. For example, such procedural changes or additional resources are data and metrics could include average processing needed by SBC to effectively resolve discipline times for cases closed at the various disciplinary cases in their entirety—arguably what members of stages categorized by their risk and complexity, the public would be most concerned about. as well as the number of cases deferred and Are Greater Differentiations in the Case the amount of time that passes while the cases Processing Standards Needed? In additional are deferred. Other data and metrics would also to risk and complexity, the Legislature may want provide helpful context. For example, it could to consider whether additional factors should be helpful to have mean, median, and standard be considered in the establishment of new case deviation data between specific steps taken by processing standards. This would help ensure staff in the disciplinary process—such as the time that disciplinary workload is measured against period between complaint receipt and referral to appropriate benchmarks. For example, the investigation, as well as the time period between Legislature could have cases that are closed or the completion of investigation to the notification filed at the Charging Stage incorporate risk as well. of the accused attorney of their right to an ENEC The Legislature could also have separate standards before charges can be filed. Without such metrics, for certain types of cases to be prioritized (such as it will be difficult for the Legislature to conduct complaints related to client trust funds) or “repeater” meaningful and consistent oversight of the cases where there are numerous prior or current disciplinary process and identify potential areas of complaints against the same attorney. improvement or concern. Are Changes to OCTC’s Organization and Additionally, to ensure that data is comparable Operation Needed? The Legislature will also across reports, it is important to clearly specify the want to consider whether changes to OCTC’s definitions for the statistics and metrics included current organization and operation are warranted. in the report. This should include a requirement This is because how OCTC is structured impacts for the State Bar to provide clear explanations any how effectively and efficiently it operates. time changes are made in the definitions, criteria, or For example, the Legislature could prefer more methodologies used to pull and report data. This will specialized trial teams based on case type or ensure that the Legislature receives the necessary approach (such as more expeditor teams) or the information and that performance can be compared use of horizontal prosecution in certain case types consistently and accurately. It would also address or at certain stages of the disciplinary process. CSA concerns that the annual discipline report does Specialized teams or specializing in particular tasks not fully and consistently provide information about through the use of horizontal prosecution focuses the disciplinary system. staff work in particular areas which could result in the processing of cases more efficiently and Key Questions for effectively as staff would be more familiar with how Legislative Consideration to investigate (such as what evidence is needed Should There Be Case Processing Standards and how to obtain that evidence) and prosecute for the Entire Disciplinary Process? The such cases. Legislature will want to consider whether there How Aggressive Should Case Processing should be case processing standards to monitor Standards Be? The Legislature will want to the entire disciplinary process or simply OCTC. consider how aggressive case processing Focusing on the entire system places responsibility standards should be. More aggressive standards on the State Bar to ensure that OCTC and SBC will either require a greater increase in resources coordinate effectively with one another. It also or more significant operational and/or procedural provides OCTC with an incentive to comprehensively changes. We note that State Bar staff indicated consider the efficacy and efficiency of actions in focus groups that the State Bar’s proposed throughout the disciplinary process. Finally, case processing standards were only achievable standards for the entire system would also enable if staff caseload was generally lower than existing the Legislature to identify whether operational or caseload levels. 20 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT At the same time, if the Figure 12 standards are unreasonable (or even unachievable), the quality Comparison of 2021 Case Processing Times of investigations and the severity Assuming Removal of Certain Amounts of Time of discipline obtained may suffer. Where Cases Were Idle Accordingly, the Legislature may want to consider adopting less Median aggressive case processing Removal of Idle Time Periods of standards. For example, the 120 Days or More State Bar identified that about 26 percent of cases that closed Removal of Idle Time Periods of after the Intake Stage or resulted 90 Days or More in charges being filed between 2018 to 2021 had time periods of Removal of Idle Time Periods of 60 Days or More 90 days or more where cases were sitting idle and 16 percent had time periods of 120 days or more where Actual 2021 cases were sitting idle. As shown in Figure 12, if the Legislature 200 400 600 800 1,000 1,200 1,400 1,600 1,800 chooses the same approach as the State Bar in which idle time periods of a certain duration are mathematically removed, selecting accurately from year to year. Clearly specifying one of these less aggressive standards—in which specific data and metrics, as well as other times periods of (1) 90 days or more or (2) 120 days requirements (such as requiring descriptions of any or more, respectively, are mathematically removed— changes in methodology in pulling and reporting would still likely result in improved case processing data or prohibiting such changes without legislative times but reduce the likelihood that necessary approval) will ensure the State Bar consistently investigatory or charging time is eliminated. and accurately reports the information desired by the Legislature. Such metrics would help the What Data and Metrics Are Needed to Legislature to conduct meaningful and consistent Conduct Legislative Oversight? The Legislature oversight of the disciplinary process, hold the State will want to consider what specific data and metrics Bar accountable for its performance, and identify should be required by state law in the annual potential areas of improvement or concern. discipline report to enable effective legislative oversight. The State Bar completed implementation ESTABLISHMENT OF BACKLOG of a new case management system in 2019 that captures more case processing information. GOAL AND METRICS TO MEASURE As such, more data is potentially available SUCH GOAL for reporting. In developing such metrics, the Legislature will want to consider what level of detail Assessment is necessary to comprehensively and accurately Alternative Definition of “Small Backlog” assess disciplinary workload and processing. Could Also Be Reasonable. The State Bar For example, the Legislature could include some proposes that a small backlog of cases should of the statutory reporting requirements related constitute 10 percent or fewer cases. This was to DCA licensing cases referred to DOJ for generally selected as a statistical indicator of prosecution. Additionally, the Legislature could outliers—cases that take significantly more time place requirements on the State Bar to ensure that to process than other cases. It would be equally data is being pulled and reported consistently and reasonable to select a different percentage. www.lao.ca.gov 21 AN LAO REPORT For example, it could be reasonable to define this backlog, including the age of the cases in the a small backlog as 15 percent or fewer cases. backlog. By focusing on pending workload, such As noted above, in 2021-22, 14 percent of total metrics provide a sense of how much work has not closed cases did not meet the statutory time been started or remains unaddressed (such as due frames to dismiss a case, admonish an attorney, to long gaps between case processing events). or file formal charges against an attorney within In contrast, the proposed backlog time standards 180 days for noncomplex cases and 365 days for are based on closed workload. This means that complex cases. cases that remain open, for whatever reasons, will Proposed Standard Effectively Sets an Upper not be captured. For example, a case that remains Limit Goal for Processing Cases. The State Bar’s open in the Investigation Stage for over a year— proposed case processing standards are based on such as due to a lack of staff to investigate the case averages, which means that there are cases that or because the investigation is complicated and will take both more and less time. In order to ensure lengthy—would not be reflected as backlog. Such that only 10 percent or fewer cases in each case a case would only be reflected under the proposed category exceed the proposed backlog standards, standards once it was closed after Investigation or the State Bar expects 90 percent of cases closed in Charging, or if charges were filed—which could or filed in the SBC will not exceed these proposed be some time in the future. As shown in Figure 13, standards—meaning a certain number of cases are backlog data reported in 2020 under the prior state expected to exceed these standards. As such, the definition demonstrates that at least half of cases proposed standards effectively set an upper limit remained open longer than one year after complaint goal for processing cases. For example, the State receipt. About 20 percent to 25 percent of cases Bar proposes an average case processing standard remained open for more than two years—including of 120 days for high-risk, noncomplex cases closed some that were pending for more than five years. in the Investigation Stage and a backlog standard Measuring pending workload helps ensure that all of 180 days. This means that nearly all such cases cases are being captured and monitored in real should aim for closure in under 180 days. Such an time. This provides administrators, policymakers, upper bound can help limit the number of cases and others with the ability to conduct effective and that could otherwise drag on without valid reasons. timely oversight. Backlog Metrics Tend to Measure Pending, Rather Than Closed, Workload. Figure 13 Our understanding is that backlog At Least Half of Backlog Cases Open metrics tend to measure pending More Than One Year After Complaint Receipt workload in order to provide administrators, policymakers, and Number of Cases others with timely information on when workload is outstanding 3,000 Over Two Years and/or not able to be completed 2,500 Over One Year - Two Years in a timely manner. For example, 181 Days - One Year state law prior to 2021 generally 2,000 defined annual backlog as cases that were pending—meaning that 1,500 OCTC did not dismiss a complaint, admonish an attorney, or file formal 1,000 charges against an attorney—six 500 months after complaint receipt as of December 31 of the preceding year. - State law required reporting on 2017 2018 2019 2020 22 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Good Reasons Why Cases May Remain the State Bar proposes average case processing Pending. There may be good reasons why cases standards that recognize that higher-risk cases remain pending. For example, some cases may should proceed faster, while more complex be deferred pending resolution of criminal or civil cases should take longer. On the one hand, the cases. Some cases may also be deferred, or take Legislature could determine that having different longer to resolve, if OCTC is already pursuing backlog metrics for high-risk versus low-risk cases serious discipline against an accused attorney or is warranted, because it recognizes the differences if numerous complaints are being assessed to see in how long such cases should take and could if OCTC can establish a case that there has been make it easier to track where delays are occurring. gross negligence or a pattern of repeated failures On the other hand, the Legislature could determine to provide competent service. According to the that a single metric for all cases (such as the prior State Bar, one of the attorney discipline expert statutory backlog definition) is warranted, because consultants raised concern that deferral was it would be easier to track/calculate and focus on all overused and that OCTC is developing guidelines cases that exceed a designated time period. for case deferral. Appropriate backlog metrics What Data or Metrics Are Needed to Conduct should separately categorize workload that is Legislative Oversight? The Legislature will want pending for valid, clearly understandable reasons to consider what specific data and metrics should and those that are not. be required by state law in the annual discipline report to enable effective legislative oversight Key Questions for of the backlog. For example, depending on the Legislative Consideration definition of backlog used, the Legislature may How Should Backlog Be Defined and want to require reporting on how long cases have Calculated? The Legislature will want to consider been pending as well as the reasons why they are what is an appropriate backlog definition. pending. This would help identify how many cases The Legislature could restore the definition used are pending for valid reasons and whether certain previously or develop new ones. For example, actions (such as case deferral) are being used the Legislature could define backlog to constitute more frequently. Such information would provide cases that were pending after 300 days without the Legislature with comprehensive context to case closure, admonishment, or filing of charges assess the backlog and what actions may need from date of receipt. (This is the time proposed by to be taken. Additionally, the Legislature will want the State Bar by which 90 percent of cases that to ensure that accurate and consistent data is reach the Charging Stage should either be closed being reported over time for comparison—such or result in the filing of charges.) At minimum, we as clearly specifying how to pull or calculate these recommend the Legislature focus this definition backlog-related statistics and metrics as well as on pending workload so that it can monitor OCTC what types of cases are included. workload in a comprehensive and timely manner. It is also important to define how backlog should STAFFING ANALYSIS be calculated. For example, the Legislature could exclude cases deferred for valid reasons from the Assessment calculation of backlog. This would mean that the Reasonable That Only Preliminary Estimates backlog metric would only reflect those cases for of Staffing and Resource Need Are Provided. which there is a lack of resources or no valid reason We find it reasonable that the State Bar only for delay. We note that the criteria for deferral provided preliminary estimates of staffing needs to would be important in this situation and could merit fulfill SB 211 requirements and indicated its intent to legislative consideration as well. conduct a comprehensive analysis in the future. It Should There Be a Single Backlog Metric? would be premature to assess appropriate staffing The Legislature will want to consider whether there needs since OCTC has recently implemented, or is should be a single backlog metric. For example, considering implementing, various organizational www.lao.ca.gov 23 AN LAO REPORT and disciplinary process changes that could needs compared to minor changes to the criteria for substantially change how cases are addressed as what types of cases constitute complex cases. well as what types of staff and how much of their A staffing analysis that begins in 2023 will, time is needed to resolve cases. OCTC may also by necessity, use data that reflects workload need to consider further operational and procedural conducted before such changes are fully changes in order to meet the proposed case implemented. As such, all of these impacts would processing standards (such as additional expeditor not be accounted for in the analysis. Alternatively, teams and/or staff) or to address concerns with the staffing analysis may make assumptions related previously implemented changes (such as concerns to expectations of the full impacts of such changes, that OCTC’s shift to its current generalist teams in which may not actually be realized. Accordingly, 2017 resulted in decreased efficiency). the resulting study may suffer which could lead Additionally, legislative action in response to to both too many resources or too few resources the State Bar’s report, as well as our review, could being identified as being needed—and potentially impact staffing and resource needs. For example, provided—to support OCTC workload. less staff could be needed (or a different mix of Difficult to Assess Impact of Additional staff may be needed) if the Legislature modifies Positions Funded in 2019. The Legislature the proposed case processing standards to authorized an increase in the annual license fee provide more time or takes steps to streamline the beginning in 2019 to support 19 additional OCTC disciplinary process (such as eliminating ENECs disciplinary staff—6 attorneys, 9 investigators, and prior to charging). As such, we think it makes sense 4 support staff. A new trial team was created with to delay a comprehensive staffing and resource 12 of these additional positions, while the remainder analysis to incorporate legislative priorities. were distributed to other OCTC teams. The specific Full Impact of Organizational and Procedural impact of these positions is difficult to assess Changes Will Likely Not Be Known in 2023. as the State Bar is unable to provide data clearly The State Bar indicates its intent to begin a demonstrating their impact. Such information comprehensive staffing analysis in 2023. However, would have been helpful to determine whether the the full impacts of recently impacted organizational additional resources and staff were used effectively and procedural changes as well as any that will be as well as to estimate the impact of any additional implemented in the near future will not be known provided resources. at that time. Such changes typically require time to Workload Formula Needs Revision. implement and for those involved to adapt to before The workload formula will need to be revised to the full potential of the changes is realized. In some reflect all operational and procedural changes that cases, changes that were expected to increase have, or will be, implemented since the formula was efficiency or quality may actually decrease them adopted in 2018. As we raised in our 2019 report, unintentionally. For example, as noted above, CSA the resulting case weights should capture the identified concerns that the State Bar’s changes amount of time actually needed to process cases to its disciplinary system—specifically, converting within the proposed case processing time periods OCTC trial teams from specialist teams that handle rather than actual processing times reflected in particular case types to generalist teams who data. (We note that the workload formula actually generally handle all case types and promoting some captures all OCTC activities, including workload of its most senior attorneys to full-time supervisors associated after charges are filed in the Hearing in 2017—significantly reduced the efficiency of Stage.) This is even more important given that the system. Additionally, some changes will have available data does not reflect the impacts of greater impacts than others. For example, an OCTC changes that have recently, or will need to be shift to make greater use of specialized teams or implemented. For the same reasons, the State horizontal prosecution could have a much more Bar should also be cautious of using relationships significant impact on ongoing staffing and resource identified in historical data in the workload formula. 24 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT As we previously reported in 2019, different case what level of additional resources would be weights may be needed for different complaint justified without an updated study. types or priority categories to the extent that Should Certain Organizational or Procedural they require different levels or combinations of Changes Be Assessed Separately From and/or disciplinary tasks. For example, expedited cases Prior to the Comprehensive Staffing Analysis? move more quickly because certain investigatory or The Legislature will want to consider whether the other tasks are omitted which means less staff work impacts of certain organizational or procedural is required. At the same time, the expeditor team changes should be assessed separately from requires more investigators than attorneys to meet and/or prior to the initiation of a comprehensive internal benchmarks for such cases. It is unknown staffing analysis (if the analysis is delayed). As noted at this time whether more cases will be handled above, an April 2021 CSA report recommended in an expedited manner to meet the proposed OCTC assess how its current organizational case processing time standards. We note that the structure impacted its ability to efficiently resolve State Bar subsequently identified that there were case and what additional changes are needed. differences between the resources allocated to To the extent significant changes are made to process particular case types. Additionally, analysis OCTC’s organizational structure, it could seriously could be merited regarding whether investigator impact OCTC operations and ensuing staffing and and attorney responsibilities are sufficiently resource needs. For example, the amount of staff different to merit separate case weights. available to process workload (such as fewer or more supervisors), the amount of time available Key Questions for to process workload (such as more or less time Legislative Consideration needed for more senior staff to mentor less When Should a Comprehensive Staffing experienced staff), the amount of time needed to Analysis Be Conducted? The Legislature will complete particular tasks (such as less time being want to consider when the State Bar should needed with more experienced staff due to the conduct a comprehensive staffing analysis. Given specialization of certain tasks), or the mix of staff that various operational and procedural changes needed (such as shifting certain responsibilities may be forthcoming, the analysis would be the from attorneys or investigators to support staff) most accurate and helpful if it was delayed until could all be impacted. Having such analyses after the full impacts of those changes on staffing could provide the Legislature with the necessary and resource needs were realized. We think information to determine whether statutory changes potentially delaying the staffing analysis further or informal feedback to the State Bar are needed. to 2024 or 2025 would allow for the preliminary Making such decisions prior to the completion impacts of such changes to be observed and of a comprehensive staffing analysis could help incorporated into the analysis. The analysis could ensure the resulting the staffing analysis reflects the then be updated in 2028 or 2029 to reflect the full Legislature’s perspective and expectations. impacts of such changes. At the same time, we recognize that it would be difficult to determine CONCLUSION Pursuant to state law, the State Bar submitted needed to achieve the new standards. We generally a report to our office for review which proposes found some portions of the report reasonable, but new caseload processing standards for resolving also identified concerns with other portions. Based attorney discipline cases within OCTC, the on our review, we also identified a series of key establishment of a backlog goal and metrics to questions for legislative consideration to assist with measure such a goal, and the staffing requirements any future decisions. www.lao.ca.gov 25 AN LAO REPORT LAO PUBLICATIONS This report was prepared by Anita Lee, and reviewed by Drew Soderborg and Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, California 95814. 26 LEGISLATIVE ANALYST’S OFFICE