Bad News for Bad Lawyers

Getting bad lawyers out of the legal profession isn't cheap. Just ask State Bar of California officials who have calculated that policing their own puts the agency in a financial hole to the tune of about $600,000 a year.

But that might be changing soon as agency leaders push aggressive new measures that could force errant attorneys to pay a substantial portion of the costs of their own prosecution in State Bar Court.

Legislation went into effect this year that lets the State Bar go to court to seek civil judgments for certain costs assessed against disciplined lawyers. And Bar leaders are now reviewing a proposal that would force attorneys to pay several other costs, including prosecutors' hourly fees.

"The goal isn't to collect more money," says Roderick McLeod, one of the Bar governors backing the idea, "but rather to force these lawyers to shoulder more of these costs. We are trying to get attorneys that are causing the problems to share the burden."

Even so, the idea remains controversial -- even within the State Bar itself. Some feel that the move would come across as an attack on solo practitioners and small-firm lawyers, while others believe it's an overly harsh punishment and very likely uncollectible.

"I don't think it's going to increase our recovery," says Scott Drexel, administrative officer and chief counsel for the State Bar Court. "Our statistics show that the people that are most likely to pay the discipline costs are people who want to return to practice. So people who resign or are disbarred are very unlikely to pay costs."

Adds Diane Karpman, a Los Angeles lawyer who represents attorneys: "Many of these lawyers wind up flipping burgers or selling clothes at Macy's. They are barely making it economically, and I would anticipate that this would result in less money being recovered."

Floundering lawyers might choose not to return to the law rather than to make payments beyond their means, some Bar staff agree.

"All of the indications are that the lesser the amount, the more likely you will collect it," says State Bar Chief Trial Counsel Mike Nisperos Jr., who is in favor of recouping some, but not all, costs. "And the higher the amount, the less likely you are going to collect it."

As it now stands, state law lets the Bar recoup from lawyers certain costs, such as transcript and deposition expenses, investigation and hearing costs and some witness fees. Some of the costs are added to the disciplined lawyers' membership dues for the next year, while disbarred or resigned attorneys must pay those costs as a condition of reinstatement.

Even so, the State Bar recovers only about $350,000 to $400,000 of its $950,000 to $1 million in discipline costs each year.

"That's a big chunk of our budget," says McLeod, a partner in Jones Day's San Francisco office. "It just seems intrinsically fair that they who cause the problem, and can pay, should bear the burden more."

Since Jan. 1, Business and Professions Code §6086.10(a) and 6140.7(d), passed by the Legislature last year, have allowed the State Bar to seek recovery costs as civil judgments. Nisperos and President-Elect John Van de Kamp hope the laws, which have yet to be tested, will put some muscle behind its attempts to collect from disbarred lawyers, who have less incentive to pay because they can't return to practice.

"In the past, the ability to recover has not been as good as some would like," says Van de Kamp, who becomes president in October.

Several Bar leaders, however, thought the new laws weren't enough, and at a July committee meeting, a handful of State Bar governors gave their tentative approval to proposals that would:

• Allow the agency to recover the costs of prosecutors' fees. Mid-level deputy trial counsel, who would most likely be involved in the cases, charge $40 an hour.

• Insist on payment of costs as a condition of applying for reinstatement.

• Require payment of costs for involuntary inactive enrollment proceedings.

• Shorten the months-long delay on payments by requiring attorneys to repay costs within 30 days after they become final.

• Force out-of-state applicants for reinstatement to come to California for their depositions. Currently, prosecutors must travel at State Bar expense to the applicants' home states. "We have been so jerked around by not having that kind of rule," Nisperos says. "It didn't make any sense to me."

The full Board of Governors has yet to review the proposals, and legislative approval would likely be needed if any were to be adopted.

The committee considered, and rejected, a couple of other proposals that were deemed too harsh. One was to raise the filing fees to apply for reinstatement from $900 to more than $11,000. The committee settled on $2,000 as a more reasonable sum. The other proposal would have allowed the State Bar to fine lawyers on top of suspending or disbarring them. The committee dismissed the idea entirely.

State Bar Executive Director Judy Johnson raised "class concerns," saying a reprehensible but well-heeled attorney could fork over the money and go back to work, while a financially poor lawyer who may be rehabilitated would be stuck.

"They are basically really pitiable human beings at this point," she said, "and have nothing to pay."

State Bar Governor Joel Miliband, a partner at Irvine's Rus, Miliband & Smith, agreed, saying he didn't like the idea of someone "buying their way" out of a problem.

"The goal is to protect the California consumer of legal services, and the discipline system is designed to do that," he says. "I think we can accomplish that without the fine aspect."

San Francisco Bar Governor McLeod, however, believes fines should be levied, and points to 12-year-old legislation that expressly permits the Bar to do so. Specifically, Business and Professions Code §6086.13 authorizes a fine of up to $5,000 per violation, with a maximum fine of $50,000.

"Here's a statute that's been crying out for implementation," he said at the July committee meeting.

Bar officials are too lenient on bad lawyers, McLeod said. "They are not going after attorneys who face discipline problems tooth and nail. They want to give them every benefit of the doubt.

"It's almost like they have a sensitivity for the fallen," he adds. "And yet I don't see the same sensitivity for the upstanding, the people who don't get into trouble."

Bar officials say that the 1992 fine statute was never implemented because they worried that it would violate lawyers' due process rights to both fine and discipline them. Plus, they said they would need the state Supreme Court's approval.

Incoming President Van de Kamp takes McLeod to task about Bar leniency.

"I'd like to see the evidence of that," he says. "Tell him to put up or shut up."

There's definitely more debate down the road. And L.A.'s Karpman warns Bar leaders to be cautious about crossing the line from discipline into punishment.

"The historic and traditional theory has always maintained that discipline is intended to protect the public," she said. "If it becomes punishment, [the Bar] will be required to give an accused attorney more due process rights, and, in the end, it will result in a more costly and cumbersome system."