Attorneys cannot be trusted to govern themselves

In August 2009, the California legislature enacted a law requiring the State Bar to examine how it governs itself. I don’t think any other state in the Union has a legislature overseeing the bar. This is usually a function for the State Supreme Court. However, in California, since the 1920s, the Bar must get permission for it to send out dues bills to members; thus, the legislature has the power to impact the legal system through the back door.

Does this remind you of law firms whose compensation structures govern what its lawyers find to be important? If the firm emphasizes and rewards new client acquisition more than work performed, that is what lawyers will spend their energy doing  ("eat what you kill").  If, on the other hand, the firm compensates more for hours expended, then focus on new client generation will go down and billable hours will go up.

The same is true in the relationship between the bar and the legislature. Today, with less than 30% of the members in the legislature having a law school degree, there surfaces an animosity between lawyers (the bar) and those (the legislature) who approve the dues to be paid by lawyers to retain their license. Oh, did I forget to say? California is a mandatory license state, meaning that you must be a member of the State Bar in order to practice law. Voluntary bars exist at the county and local levels, not at the state level. The state is mandatory. Voluntary bars exist, but only at the local (county and city) levels.

So, what’s the big deal? The fear by legislators is that a self-regulating body (more than half of the Board of Governors are elected by lawyers; others are appointed by the Governor and others) will serve the interests of their constituencies, not the public interests. I thought that was the whole point of public members being part of the Board; they are, they participate and they have a significant influence from the Board. The legislature wants the Bar to "protect the public" only; the well-being of lawyers is unimportant.

More than 50% of lawyers earn less than $100,000, a relatively paltry sum when considering the number of years of education required and the good that lawyers provide. (Yes, I know there are a few bad apples, but that is true in every profession … hmmmm, even with law makers.

If lawyers were helped by the bar and did earn more money, there would be far less temptation to invade clients’ trust accounts. This would be real public protection.

I have yet to find a set of rules of professional conduct that favor lawyers over the public. And what the rules of professional conduct does not "catch," the penal code does. And sometimes rules are made that hurt the public.  For example, in the loan modification fracas, the legislature enacted a new penal code provision that made it a felony to take money from clients for loan mod work before the work is done … can’t even take money for the clients’ trust account! The rules of professional conduct were similarly altered. But, no intelligent, business savvy, lawyer would now represent such clients unless pro bono. If the client has insufficient funds to keep the mortgage current, what makes legislators believe such clients will pay their lawyers after the modification is completed? The clients didn’t suddenly get flush with money! So, lawyers will not now help the people who need help the most, those about to be kicked out of their homes …

A new wrinkle to this, however, is that the law seems not to apply when a lawsuit is filed. So, the lawyer might take the client into bankruptcy or sue the lender on some pretense, all with the ultimate objective of merely getting a loan modification. This is more costly and adversarial than needs to be … if the law makers kept their hands off! There were already rules on the books sufficient to punish the "bad apples" in the profession who were guilty of fraud on the clients.

Back to the main point: If the legislature removes governance from lawyers, the resulting agency will be merely a licensing and disciplinary agency … and lawyers who volunteered their time and expertise to the bar for the benefit of many in the public and produced much good work will go elsewhere. That would be a grave loss that will hurt the public.

The Bar should push back and fight the legislature … All the more reason for the separation of powers! Let the legislature do its job … and this does not include determining how lawyers govern themselves.

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