State Bar Seeking “Excessive” Fee Increase, State Auditor Concludes

California State Auditor Elaine Howle reported April 30 that State Bar of California’s proposal to increase active attorneys’ mandatory fees in 2020 is “excessive.”

The State Bar recently proposed more than doubling the mandatory fee for active attorneys in California, from $383 in 2019 to $813 in 2020. This increase is intended to reduce the State Bar’s backlog of attorney misconduct cases, fund information technology and capital improvement projects and replenish the State Bar’s general fund, the association said.

The auditor found that the State Bar calculated much of its requested increase “based on its proposal to hire 58 new staff to perform discipline activities.” While the auditor agreed that additional staff is needed, she said adding 58 new positions in 2020 would be “disruptive” and “unrealistic,” and recommended adding 19 positions. The auditor noted that in the past two years, there have been up to 20 vacant positions available, and adding 58 open positions would “only increase the hiring challenge it faces.”

Reducing the staff increase from 58 to 19 would save approximately $4 million, and allow every lawyer to save $29 in fees compared to the State Bar’s proposal, the auditor said.

The proposed fee includes $120 for the Client Security Fund and a $250 one-time assessment for projects, capital improvements, and to rebuild the general fund reserve. The one-time assessments are unnecessary at this time, the auditor said, as some of the proposed projects still require significant planning and others are simply not justified.

The auditor noted that the $120 assessment for the Client Security Fund was calculated based on all current pending claims. The auditor said the 2020 fee should “only fund those claims State Bar will likely pay that year” – a change that would require a fee of $80 rather than $120.

The auditor also examined other ways for the State Bar to increase revenue, which may help lower the fees. The auditor’s appraiser “found that State Bar has not maximized lease revenue from its San Francisco building” because it hasn’t leased all available spaces in the building and isn’t charging market-value rent to existing tenants.

The auditor recommended that the mandatory fee charged in 2020 should be $525, nearly $300 less than what the State Bar proposed.

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