James Towery

No bloat found, bar leader declares

State Bar President Jim Towery answers questions from members each month in this column. Questions should be addressed to Ask the President, California Bar Journal, 555 Franklin St., San Francisco 94102. This month's question and Towery's response:

QUESTION: With the recent conclusion of the SB 60 audit, what will be the impact on the bar?

TOWERY: I believe that the impact will be two-fold: On one hand, the audit will provide great comfort to those who have been speaking out in support of the State Bar.

In addition, it will provide the Board of Governors and senior staff assistance as they continue to identify ways to develop a more streamlined and efficient organization.

Specifically, the report gave deserving praise to the bar for its progress in a number of areas, particularly in the discipline system.

The report also supported the State Bar's commitment to maintain two offices, and found the recent purchase of a new building in San Francisco for that purpose to be appropriate.

The state auditor found that the portion of each lawyer's bar dues attributable to discretionary (as opposed to mandatory) activities is only $38 per member per year.

This confirms the belief that abolishing the bar would have a negligible financial impact on lawyers, since the vast majority of dues goes to mandatory functions.

Nothing earthshaking

The report did contain some criticisms, though none was earthshaking.

The report pointed out some areas where tighter administrative controls would help, such as travel and meal expense by volunteers, and contractual payments.

We appreciate the state auditor identifying these areas of weakness, and we will move promptly to address those areas by strengthening administrative controls. Other criticisms represented policy differences between the state auditor and the bar, and on those we agree to disagree.

Some brief background on this report: Most lawyers identify SB 60 with the plebiscite now underway as to whether the independent bar should be abolished.

However, SB 60 contained a second distinct part, requiring the bar to undergo a comprehensive performance audit by the state auditor's office. SB 60 specified nine areas to be studied (such as the building purchase, the cost of legislative activities and seven others), though the audit was not limited to these areas.

This audit, at a cost of $100,000 (plus significant additional audit costs picked up by taxpayers), began in January. Since then, a team of seven state auditors have been thoroughly examining the bar's operations.

The results

Now to the findings. The report is divided into four sections: discipline; use of dues; administrative controls; and strategic planning.

Because of the recent reforms in the discipline system, I was most interested in this section. Those findings began with praise for the State Bar in making "significant improvements to its discipline system in response to the recommendations of the Discipline Monitor and DEC [the Alarcon committee]."

The report also noted that "the State Bar is able to discipline attorneys more efficiently because it merged the investigations and trials units," and that the bar had saved money by eliminating a level of middle management in investigations as recommended by DEC.

The auditors also made suggestions on how to further improve the discipline system. Some of these, such as improving our cost recovery from disciplined attorneys, are ones with which I concur. Others are more problematic. For example, the auditors criticized the fact that there are too many private reprovals (where no cost recovery is permitted), as op-posed to public reprimands (where cost recovery is allowed).

The reason there are private reprovals is that many cases are plea-bargained at this level, which saves us significant resources in not having to prosecute these minor cases.

The auditors also criticize the bar for removing the right of complaining witnesses to appeal to the Complainants' Grievance Panel (CGP) when their complaints are not prosecuted.

A puzzling conclusion

This is a particularly puzzling recommendation. First, DEC found the right of appeal not productive and the State Bar agreed. The bar introduced a successful bill last year to change the CGP into the Discipline Audit Panel (DAP), which became operational January 1.

In effect, the auditor is substituting his policy judgment for one made by the bar and concurred in by the legislature (unanimously) and the governor.

By restructuring, the bar was able to eliminate almost 50 percent of the CGP's staff and save more than $300,000. The auditor's recommendation would reverse these savings.

The most constructive section of the audit concerned administrative controls. This highlighted travel and meal reimbursements, contract payments and use of consultants where administrative controls could be stronger.

I agree generally with these findings, and we will move promptly to strengthen these areas. I should note that, particularly in the travel/meal areas, the dollars involved are minimal. The specific examples cited by the auditor in this area involve potential overpayment of $78, $59 and $61.

On the strategic planning issue, the auditors were critical that the bar does not have a sufficient plan with measurable goals.

This, in fact, was noted by the Board of Governors at the beginning of the year, and we have a board task force that has been working diligently for many months to have such a plan in place next fall.

Member dues

On the use of dues issue, the auditors primarily recommended greater cost recovery efforts (noted above), and that voluntary efforts such as sections should be self-supporting.

In fact, for some time we have been moving toward making the bar functions more and more self-supporting. In the case of many sections, as with various other State Bar activities, the board has made a conscious decision to support those programs seen as vital to our primary mission.

Like any report of this nature, the report is as significant for what it does not say as what it does.

The report does not reveal any significant financial improprieties. The report does not reveal any bloated bureaucracy (in fact, it gives the bar credit for downsizing and achieving efficiencies). As to the weaknesses in administrative controls identified by the auditor, we will address those promptly to make even more efficient use of our members' dues.