(Spoiler Alert: This week’s blog has nothing to do with mediation!)

As the then chair and now the immediate past chair of the California State Bar ADR committee, I have had the pleasure of meeting and getting to know Joanna Mendoza, a trustee on the Board of Trustees and liaison to the ADR Committee. (Thank you Joanna for editing this blog!)

Through her, I learned that she and another trustee Dennis Mangers are urging that the California State Bar de-unify or divide in two so that the admissions, discipline, law school regulation and accreditation, assistance program, client security fund and a few other purely regulatory functions remain with the regulatory agency to be called the California Legal Services Regulatory Board (CLSRB). The specialty law sections, CYLA and other parts of the State Bar that perform professional trade association functions would be separated from the government agency and be allowed to use the name the California State Bar Association. While the CLSRB would continue to focus on regulation of the profession, the “new” California State Bar Association would be responsible for putting on the programs and supporting the profession.

As now drafted, the lengthy process to split the bar into a purely regulatory agency and into a professional trade association would begin in January 2017. At the start of the New Year, the State Bar would have until March 31, 2018, to prepare a plan to separate the professional association functions from its regulatory functions. This requires, at a minimum, a 60-day public comment period and two public hearings, before the proposal must be presented to the Governor, the Chief Justice of the California Supreme Court and the Senate and Assembly Judiciary Committees of the legislature to consider and review. Then starting in April 2018 the implementation proposal (draft legislation) would proceed through the legislative process with the hope that it passes by the end of 2018 so that the de-unification would take effect on January 1, 2019.

No doubt, you are asking “why is there the need to de-unify?” There appears to be at least four reasons.  The first is that even though the State Bar is supposed to be a regulatory agency, the Board of Trustees has been unable to direct its full attention to doing just that due to a myriad of other issues with which it must deal.

Second, because the State Bar is a governmental agency, the Sections are quite limited in what they can do. For example, due to two judicial decisions and statutory law, the Sections must be self-supporting resulting in 67% and sometimes more of the Sections’ budget going to overhead charged to them by the State Bar. These charges include the cost of the state mandated audit of the Bar, which is roughly $500,000.00. Obviously, this is a charge the Sections would not incur if they were not affiliated with a government agency that was required by law to be audited every other year. In addition, and again because the Sections are part of a governmental agency, the Sections have had issues in the past with access to staff support (eg., 9 months of no staff support when the fee bill was vetoed), issues with websites and their content, and severe social media limitations. As part of a state agency, the Sections must follow government procurement rules and restrictions when it comes to hiring vendors and contractors. And, as any Section member knows, members of the Sections are severely limited in obtaining reimbursement for travel and lodging, again due to being part of a state agency. If “liberated”, these restrictions would vanish.

The third and perhaps the most important reason is the imposition of the Bagley-Keene Open Meeting Act on all sections and committees of the State Bar. As part of Senate Bill 387 (2015-2016 legislative session) (http://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0351-0400/sb_387_bill_20151006_chaptered.htm)  approving this year’s State Bar annual dues, a provision was included to no longer exempt the State Bar from the provisions of this open meeting act. Effective April 1, 2016, meetings of all sections, committees and other constituent bodies of the State Bar must be open and public so that any member of the public may attend. To comply with this statute, at least ten (10) days written notice must be provided. The notice must include the agenda and location which must be ADA (Americans with Disabilities Act) compliant. Thus, an agenda can no longer contain the vague term “new business”. Each substantive issue of business must be specified on the notice. If a member of the Section’s committee is attending the meeting by telephone, that location must be in the notice and be ADA compliant (so that a member of the public can attend at the telephone location). This Act applies whenever a subcommittee of three or more members are meeting or whenever more than a quorum (defined as one plus 50% of the membership) of the Section is meeting.  As a consequence, any discussion relating to any substantive business of the Sections can no longer occur via e mails, nor by telephone conference dialed in from a member’s non-compliant home nor by telephone while driving. As noted, any subcommittee meeting of 3 or more persons (for example to discuss the editing of a Section’s publication) must be noticed as well.

Needless to say, the application of the Bagley –Keene Open Meeting Act has made it extremely difficult for many Sections of the Bar to carry on. Some have given up in frustration while others are still trying to figure out how to comply and still carry on.

If the Bar de-unifies, the Sections would be liberated from the Bagley- Keene Open Meeting Act and the many restrictions noted above placed upon them by being part of a state agency. They would also be freed of the large overhead expense (67% of Section’s dues) they are paying but for which they are receiving little benefit.

A fourth concern is the anti-trust implications of attorneys regulating themselves. At present, the majority of members on the State Bar Board of Trustees are lawyers. In North Carolina State Board of Dental Examiners v Federal Trade Commission, (http://www.supremecourt.gov/opinions/14pdf/13-534_19m2.pdf ) Case no. 13-534 (February 25, 2015), the U. S. Supreme Court held that “…

[b]ecause a controlling number of the Board’s decision makers are active market participants in the occupation the Board regulates, the Board can invoke state-action antitrust immunity only if it was subject to active supervision by the State, and here that requirement is not met.” (Id. at 1, 5–18). Consequently, the Court held the board could not invoke immunity to the laws on anti-trust. This case raises anti-trust law concerns for the present State Bar Board.

So… please keep an eye out for further information on this topic as I do not believe that it will be disappearing any time soon but rather will become more prominent in the coming months.

… Just something to think about!

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