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Posts Tagged ‘California State Bar’

History was made today in California. Governor Jerry Brown signed Senate Bill 36, unprecedented legislation that required painstaking effort the past two years to realize. Bar reform failed in 2016 but this time was different. The legislation sailed through both legislative chambers.

SB 36 increases the California State Bar’s focus on its core regulatory functions — public protection, admissions, licensing and lawyer discipline. It accomplishes this by requiring the California Bar to transfer its 16 specialty sections (with more than 60,000 members) and the California Young Lawyers Association (with its 48,000 members) to create what becomes the nation’s second largest voluntary association of lawyers after the American Bar Association.

The functions and activities of the existing Sections will become a part of a new private, non-profit corporate entity, defined as the Association. The Association will be governed by a board of directors selected by the individual sections themselves. It is not part of the State Bar. Moreover, the Association is prohibited from being funded by membership fees and is not considered a state, local, or other public body for any purpose.

Membership in the new organization is strictly voluntary. It will receive no funding from the State Bar’s mandatory membership fees – though members will have the convenience of continuing their Section membership as the Section dues check-off will remain on the State Bar dues statements.

Focus on public protection

Under the new law, the implementation process begins January 1, 2018. The current 19-member State Bar governing board will transition to a 13-member board with a maximum of 6 non-lawyer public board members. Unlike the current State Bar Act that required the board to elect or select the president and vice president, the new law requires the California Supreme Court to appoint a chair and vice chair. The State Bar is also required to adhere to a Supreme Court-approved policy to identify and address any proposed board decisions that trigger antitrust concerns. Read the entire bill text here.

Two-headed Bar

Meanwhile back in the Arizona desert, similar legislative efforts to carve out the regulatory from the non-regulatory functions of the Arizona Bar continue road-blocked. Arizona Bar bureaucrats and entrenched establishment interests have strenuously fought any proposed bar reform legislation. More recently, the Bar opposed a rule petition that would have split the functions of the Arizona Bar into two distinct subsets, a mandatory membership organization (“Mandatory Bar”) and a purely voluntary membership organization (“Voluntary Bar”).

In Arizona — and what will soon no longer be the case in California — the Arizona Bar has two heads. It acts as both regulator protecting the public from unethical lawyers — while at the same time acting as the trade association looking out for the interests of lawyers. This creates a conflict of interest. The interests of the public and the interests of lawyers are not the same.

In California, the Sections had for decades been a part of the regulatory umbrella of the State Bar. During that time the Sections worked on behalf of lawyer interests providing them trade association-like benefits and services.

But unlike Arizona and other reform-resistant jurisdictions like Washington and Wisconsin, the separation of regulatory from non-regulatory functions was finally accomplished only through collective effort. The bill signed by California’s governor today came about through collaboration by the legislature, the State Bar, the Supreme Court’s Chief Justice, the Sections and other stakeholders working together to make history.

Only time will tell whether California’s hard-fought success now helps to put two-headed bars in other states not just on notice —  but on the block.

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High temperatures, sweaty cheeks, thunderstorms, flash floods and fungus-dispersing dust storms are our annual devil’s brew during monsoon season. This time of year is the flip side of what locals otherwise consider heaven.

Circumstances permitting, more fortunate desert dwellers of the non-snowbird variety temporarily pack up their monkey butt powder and flee for whatever short-lived respite is found in cooler climes.

https://upload.wikimedia.org/wikipedia/commons/c/c2/Demonstration_of_Sweat.jpgBut notwithstanding sticky summer’s infernal doldrums, elsewhere there’s news of a different sort involving your friendly state bar associations. Here’s a quick rundown from The Irreverent notebook:

Washington State Bar President Unexpectedly Resigns

https://upload.wikimedia.org/wikipedia/commons/thumb/5/54/Flag_of_Washington.svg/320px-Flag_of_Washington.svg.pngWithout much notice or fanfare but citing “personal matters that require her attention,” Washington State Bar President Robin Haynes abruptly resigned last month following news reports she was under investigation stemming from accusations by two former law firm employers claiming Haynes had committed financial improprieties, specifically allegations she embezzled some $9,300. See “WA State Bar Association president accused of embezzling nearly $10k” and “President Of Washington Bar Association Resigns — Right Before The Criminal Charges.”

In a statement reported by Spokane’s Spokesman-Review newspaper, Haynes’ lawyer explained, “While Ms. Haynes has done nothing wrong and looks forward to clearing her name in a fair tribunal, she was also aware that even the rumor of an investigation would cast a shadow over the important work that the State Bar Association does.” See “Former bar president accused of using law firms’ credit cards for gym, political donations.”

Haynes who at 39 was also publicized as the youngest Washington Bar president ever — had a term that was not without some controversy. This is because she used her ‘bully pulpit’ to editorialize often in the state bar magazine against sexism and bias. In some ways, her admonitions took on the cast of what’s become the méthode du jour embodied in the polarizing proposed ABA Model Rule 8.4(g) amendment that would impose an unconstitutional speech code on lawyers. See “Allies in the Law” at February 2017 NW Lawyer where author and former WSBA Governor Phil Brady writes in her defense, “We’ve seen a lot of negative reaction to WSBA President Robin Haynes speaking up about the sexism present in our profession.”

Haynes, like the rest of bar leadership was also an ardent defender of the bar’s recently passed 141% dues increase. See “The Dialogue Continues.” Inasmuch as the bar’s governing board and court had nullified a member referendum calling for a dues increase vote, Washington State Senator and WSBA Member Mike Padden subsequently introduced Senate Bill 5721 to require the WSBA “to obtain an affirmative vote prior to increasing bar dues for membership.” Unfortunately, Padden’s bill did not get out of committee and to the floor for a vote.

California State Bar non-regulatory function split moving forward

https://upload.wikimedia.org/wikipedia/commons/thumb/9/98/California_State_Assembly_room_p1080879.jpg/320px-California_State_Assembly_room_p1080879.jpgLast week, the California Assembly Judiciary Committee unanimously approved SB 36, a bill that has had multiple amendments since it’s 2016 introduction. According to the July 17, 2017 assembly bill analysis, it “prioritizes the State Bar’s regulatory functions by separating the trade association functions into a new nonprofit and helping improve governance of the State Bar.”

To do this, SB 36 splits off the Cal Bar’s 16 specialty practice groups into a private nonprofit. The bill covers a lot of terrain impacting both bar governance and structure, including eliminating elections for officers of the Board of Trustees and changing the current governing board super majority into a simple majority of practicing lawyers. It also gives the Bar explicit authority to re-fingerprint active lawyers so that it can receive arrest alerts about them. Assuming swift legislative passage next month and gubernatorial signing, it becomes effective January 1, 2018.

Meanwhile in Arizona, a rule amendment petition asking the Arizona Supreme Court to similarly prioritize public protection by bifurcating the State Bar of Arizona’s regulatory and non-regulatory functions is still awaiting court action. In June, a reply was filed by the petitioner responding to the State Bar of Arizona’s wholly predictable comment against the petition. It’s worth reading here.

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Credits: monkey via morguefile.com; Washington flag, Wikimedia Commons, public domain; sweat demonstration by Dogbertio 14 at Wikimedia Commons Creative Commons Attribution; California State Assembly via Wikipedia by David Monniaux, Creative Commons Attribution-Share Alike license.

 

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petition | by League of Women Voters of CaliforniaA petition was filed today asking the Arizona Supreme Court to amend Rule 32(c) and (d) so as to split the functions of the State Bar of Arizona into two distinct subsets, a mandatory membership organization (“Mandatory Bar”) and a purely voluntary membership organization (“Voluntary Bar”). The amendment to the Court Rules would maintain the current mandatory membership requirement for all lawyers but (1) eliminate mandatory membership dues for non-regulatory functions and (2) allow voluntary contributions for all non-regulatory functions. Read the petition here.

The petition was filed by Sherman & Howard attorney Gregory Falls on behalf of the Goldwater Institute. By way of explanation on its website, the Goldwater Institute reiterates its opposition to “conditioning the practice of law on bar membership in Arizona because coerced membership violates the rights to free speech and free association guaranteed by the United States and Arizona Constitutions.”

It is for this reason, the Institute says it is “sponsoring a rule change petition to allow attorneys to practice law without being forced to fund the lobbying and other non-regulatory functions of the State Bar of Arizona.”

Change Management | by Jurgen AppeloThe petition is reminiscent of HB2221, which the petition acknowledges, “called for a less nuanced version of what Petitioner proposes here.” HB2221 came within 5 votes of clearing the Arizona Legislature and landing on the governor’s desk during the 2016 legislative session. Like today’s petition, HB2221 was modeled on the Nebraska Supreme Court’s bifurcated approach to bar membership articulated in its December 6, 2013 decision Petition For Rule To Create Vol. State Bar Assn. 286 Neb. 108.

j0289753The Nebraska Supreme Court ordered that the requirement be left in place mandating membership in the Nebraska State Bar Association. But the Court also lifted the requirement that attorneys fund the Nebraska Bar’s non-regulatory functions. This meant Nebraska attorneys still paid regulatory and disciplinary costs but were no longer forced to subsidize the Nebraska Bar’s speech and its non-regulatory activities.

In its website statement, the Goldwater Institute acknowledges that “the Nebraska Model falls short of the fully voluntary model used in 18 other states.” It adds, however, that Nebraska’s bifurcated model “is a significant positive step toward associational freedom.”

Another front.

The petition filing opens up another front in the long-term campaign to reform lawyer regulation in Arizona. Along with continuing legislative efforts, the goal is to remediate a system not only rife with inequity but which represents a continuing threat to consumers. In addition to impinging constitutional rights on lawyers by preconditioning membership in a trade association to earn a living in their chosen profession, mandatory bar associations have an inherent conflict of interest because they act as both regulators of and trade associations for lawyers. And that conflict of interest is further exacerbated when lawyers elect a controlling number of other lawyers to represent them in their own regulatory board. By its very nature, then, this cartel-protection system threatens capture of the regulatory board by lawyers at the expense of the public.

Jen, kissing the First Amendment goodbye? | by jasoneppinkConditioning the practice of law on bar membership also violates lawyers’ constitutional rights. The U.S. Supreme Court has found that the only compelling state interest in coercive bar association membership is to improve the practice of law through lawyer regulation. But the fact is that lawyer regulation and improved legal practice can be attained through less restrictive means. 18 states — Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Ohio, Pennsylvania, Tennessee, and Vermont — have already found ways to regulate attorneys without compelling membership

Arizona lawyers aren’t the only professionals concerned with a mandatory bar’s opacity, bureaucratic wastefulness, and divided loyalties to the public and lawyers. Indeed, attorney and public members of the California State Bar’s Board of Trustees are working again with California Legislators to bifurcate that Bar’s regulatory and trade association functions. See Calif. State Bar Blasted for Lack of Transparency  and Lawmakers Fight to Reform California Bar After Audits Skewer Agency for Mismanagement, Lack of Transparency, and Pricey Salaries.

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Credits: Petition, by League of Women Voters of California LWVC at Flickr Creative Commons Attribution license; Change Management by Jurgen Appelo at Flickr Creative Commons Attribution License; Jen, kissing the first amendment goodbye, by Jason Eppink at Flickr Creative Commons Attribution.

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https://upload.wikimedia.org/wikipedia/commons/thumb/b/bc/Grombecki_Bart%C5%82omiej_Sztosik.jpg/193px-Grombecki_Bart%C5%82omiej_Sztosik.jpg

Sure I thought it was grand the California State Auditor again stepped on the State Bar of California last week. My praise, though, is restrained. The California Bar has sustained plenty of hits and fault-finding the past 30 years.1 And still it has resisted genuine reforms. Apart from that, the Cal Bar getting stomped on is such old hat that even the beaver and muskrat’s come off.

Indeed, just last June the state auditor alleged the Cal Bar may have put the public at risk by going soft on discipline by rushing settlements to reduce a festering 5,000+ lawyer disciplinary case backlog. The auditor also berated the Bar for going $50 million over-budget on a building renovation. In sum, the report declared the Cal Bar “has not consistently protected the public through its attorney discipline process and lacks accountability.”

On the heels of that, last July I criticized the Arizona Supreme Court’s on State Bar Mission and Governance for inexplicably consulting the California Bar about its governance reforms — as though the Cal Bar’s done such a good job of that. “That’s like asking Kim Kardashian about modesty or Donald Trump about hairdos,” I quipped.

Today, I still wonder, ‘What’s next?’ Consult Trump on Hispanic outreach?

State audit rips Cal Bar.

Calif State Auditor May 12 2016 Cover Letter Re. State Bar of California Audit Report

The 62-page audit report concerning the Cal Bar’s financial operations and management practices was released last Thursday. It decried the Bar’s lack of transparency, the excessive salaries paid its executives and its massive budget shortfall to repay victims of attorney misconduct. When I saw the headlines about non-transparency and inflated executive compensation, for a moment I thought the story was about the State Bar of Arizona.

https://upload.wikimedia.org/wikipedia/commons/thumb/d/df/Opie_Read_in_the_Ozarks%2C_including_many_of_the_rich%2C_rare%2C_quaint%2C_eccentric%2C_ignorant_and_superstitious_sayings_of_the_natives_of_Missouri_and_Arkansaw_%281905%29_%2814766331541%29.jpg/240px-thumbnail.jpgBut no, it was the California Bar. Also see “Audit rips California’s state bar for shady finances and bloated salaries.”

About those so-called inflated salaries, the auditor recommended that “to ensure that the compensation it provides its executives is reasonable, the State Bar should include in the comprehensive salary and benefits study it plans to complete by October 2016 the data for salaries and benefits for comparable positions in the state government’s executive branch.” 

According to Table 8 of the auditor’s report, the Bar’s Executive Director earns $267,500 per year while the Governor of California makes $182,784 annually. At 146% of what the governor makes, the value of presiding over the world’s 8th largest economy clearly pales in comparison to running the nation’s largest bar association. Meanwhile, at 18,250 active members, the State Bar of Arizona is one-tenth the size of the Cal Bar’s 186, 346 active members. And at $65M, the Cal Bar’s budget is more than 4 times the size of Arizona’s. All the same, the Arizona Bar’s Executive Director also makes more than the California Governor.

Sunshine | by nateOne

Several months ago, a local Arizona Bar apologist took exception to my comparing the Arizona Bar Executive Director’s annual compensation with that of Arizona’s Governor. He told me comparing the executive director’s salary with Arizona government employees was “meaningless.” Arizona state employees are “underpaid,” he scolded. And in any case, the governor gets a lot of non-salary perks. If you look at the table below obtained via Ballotpedia, he’s right. The Arizona Governor is indeed underpaid along with everyone else in state government — not just the executive branch.

State executive officials
Office and current official Salary
Governor of Arizona Doug Ducey $95,000
Arizona Secretary of State Michele Reagan $70,000
Attorney General of Arizona Mark Brnovich $90,000
Arizona Treasurer Jeff DeWit $70,000

A Bed | by CarbonNYC [in SF!]Just the same, the Cal auditor’s advice remains sound, to ensure reasonableness, “the data for salaries and benefits for comparable positions in the state government’s executive branch” ought to be included in any state bar salary review.

Per the federally mandated IRS Form 990 disclosures on the State Bar of Arizona’s website, the most recently available 2014 IRS Form 990 reveals the Arizona Bar’s Executive Director makes 2 times the Arizona governor’s salary. The data, though, is two years old. As a matter of fact, buried in the May 2016 issue of the bar’s monthly magazine, was a brief mention that in February the Board unanimously approved the Executive Compensation Committee’s recommendation to give the Executive Director another raise.

What it all means for transparency.

The real implications from the Cal audit report are what they mean for transparency. The legal establishment isn’t known for transparency — their disingenuous exhortations notwithstanding. That’s why I believe transparency suffers where public records access and disclosure mandates aren’t overseen by independent non-legal establishment third parties.

In Texas, for example, the Texas State Bar discloses a lot. Admittedly, that’s not necessarily because it wants to — but because it has to. The Texas Bar is subject to State Sunset Law review of its mission, continued viability, fiscal management and performance by the Texas Sunset Commission. This review by legislators and public members is required by the Texas Sunset Act.

Open Kimono Management | by standardpixelYears ago, Arizona had a Sunset Law that likewise applied to the State Bar of Arizona. But that ended in 1985 when the State Bar Act sunsetted over a dispute between the Bar and the Arizona Legislature and before the State Bar could or would open its management and financial kimono. So when the Texas Bar opens its books, it does so not as much by choice but as by statute.

The California Bar must likewise open its financial operations and management practices not by dint of munificence for open government but as required by the State Bar Act under Business and Professions Code §6145.

The lesson in Arizona, then, is that to ensure free and open governance and preserve the public’s unfettered access to financial and management information, the State Bar of Arizona needs to be treated like every other state regulator. This means being subject to Arizona Public Records Law, A.R.S. §§ 39-101 to -161 not Arizona Supreme Court Rule 123.

Gustaf Dalén 1926.jpgAlthough Arizona Courts meet the plain meaning of a “public body” supported by state monies, the high court has deemed that Arizona courts are not subject to Arizona’s public records laws. Instead, the Court says it alone under its own Rule 123 constitutionally dictates the breadth of what governs the maintenance and disclosure of its records.2

Not that the Arizona Supreme Court is alone in that thinking. In 2009, the Washington State Supreme Court expanded on that view in City of Federal Way v. Koenig. And in 2013, the Nevada Supreme Court followed in the same general direction in Civil Rights for Seniors, v. Administrative Office of the Courts.

Under Arizona public records law, most documents in a public officer’s possession are public records — except for documents that relate solely to personal matters with no relation to official duties. Rule 123(e), on the other hand, restricts access to certain administrative records including employee records, judicial case assignments, and what it alone determines is attorney and judicial work product. Ariz. R. Sup.Ct. 123(e)(1)(11)

The State Bar Mission and Governance task force has proposed the Arizona Bar not fall under Arizona Public Records Law. Rather it recommends the Bar “conduct meetings and maintain records pursuant to public access policies adopted by the Supreme Court.” How much transparency will that entail? What judicial records does the Bar create that have relation to Rule 123?

And besides, as I recently posted, the Arizona Bar already thinks “our organization has worked to be exceptionally transparent.”

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1 For more Golden State Bar dysfunction, see “California State Bar in Turmoil After Shake-up Triggers Whistleblower Claim.”

2 In Arpaio v. Davis, the Court of Appeals explained:

“Arizona’s constitution provides that “[t]he Supreme Court shall have administrative supervision over all the courts of the State.” Ariz. Const., art. 6, § 3. This administrative power “is a function of its responsibility to administer an integrated judiciary.” Scheehle v. Justices of the Ariz. Supreme Court, 211 Ariz. 282, 289, ¶ 27, 120 P.3d 1092, 1100 (2005). The Supreme Court fulfills its administrative responsibilities by promulgating rules. Id. at ¶ 23, 120 P.3d at 1099. “Such rules are valid even if they are not completely cohesive with related legislation, so long as they are an appropriate exercise of the court’s constitutional authority.” Id. at ¶ 24, 120 P.3d at 1099. Accordingly, Rule 123—not the Arizona Public Records Law—controls requests for judicial records.”

Credits: Portrait of Bartłomiej Sztosik,Creator:Henryk Grombecki, at Wikimedia Commons, public domain; Opie Read in the Ozarks, by Opie Percival, Library of Congress via Wikimedia Commons, public domain; Sunshine, by Nate Grigg at Flickr Creative Commons Attribution; A Bed, by David Goehring at Flickr Creative Commons Attribution; Two women wearing funny glasses . . . ., by Yuko Honda at Wikimedia Commons, Creative Commons Attribution-Share Alike 2.0 Generic License; Open Kimono, by Eric Gélinas at Flickr Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic license; Gustaf Dalén, Wikimedia Commons, public domain.

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Note: The State Bar of Arizona begins online elections tomorrow to elect 11 lawyers from three counties to its 30-person board of governors. I am reblogging this from Transform the Bar: 2014 ARIZONA BAR BOARD OF GOVERNORS ELECTION.

It is the Op-ed I wrote in March for a local business and legal publication, The Record-Reporter, which published it a week after the State Bar of Arizona’s Board of Governors voted to increase member dues. Tomorrow’s vote, which runs until 5 PM, Wednesday, May 21, 2014 is being called one of the most important elections in recent years. Why? Because it can potentially signal at long last, a new direction for the State Bar of Arizona.


WILL ANY OF US EVER LIVE LONG ENOUGH TO SEE AN ACTUAL DECREASE IN DUES? ONE LAWYER DOESN’T THINK SO.

By Mauricio “Mo” Hernandez

March 7, 2014

People 15551“What kind of bar do you want?” asked Arizona Bar Executive Director John Phelps. This was last week when the bar’s board of governors debated whether to raise members’ dues. The board had tried last December. But the largely unannounced below-the-radar vote 12 days before Christmas ended up postponed after brouhaha erupted among members.

The last licensing fee hike was in 2005. Happily for board members who’ve never met a fee increase they didn’t like and who wanted more of the same, the answer to John’s question last Thursday came by 12-11 vote in their favor.

Speaking of rhetorical questions, I have a better one, “How old will I be when the bar lowers dues?” With an annual budget topping $14.6 million, almost 60% of which is compensation and benefits, methinks I’ll be ashes in search of an urn before that ever happens.

Work World 38According to the 2013 ABA Survey, among mandatory bars with more than 20,000 members, Arizona’s budget is already 125% higher than the $11,720,787 average for comparable bars. High budgets notwithstanding, last week’s board meeting also revealed that by the time the total dues increase is fully implemented, the bar projects a $4.1MM surplus. But dues still had to go up.

Hardly a surprise for Arizona lawyers consigned more to stoic resignation than sulky rancor. In four consecutive $15 annual increments starting next year, dues will increase an overall 13% for a total of $60. By 2019, Arizona lawyers will be paying $520 per year. And by separate motion, the board also imposed higher fees for in-house counsel; admissions on motion; pro hac vice; and MCLE late fees.

No matter that Arizona presently finds itself among the ‘leaders’ in highest costs to practice bars in the U. S. On an apples-to-apples dues comparison, Arizona is currently among the top 5 of the country’s 33 mandatory bars behind Alaska at $660 and Hawaii at $522. And not that going inactive saves you, either. Inactive members pay $265 annually, highest among all jurisdictions and equal to or higher than what 20 other jurisdictions charge active bar members.

‘Quo Vadis?’
When a bare majority of the bar’s governors voted to stay the course, they meant a fully-loaded ‘full-service,’ ‘first-class’ bar. That’s an objective made more attainable when others foot the bill. So no need for tea leaves to read or for bones to throw to divine the bar’s high-priced future.
Miscellaneous 603
But does this mean members are forever destined to sing a merry refrain to “Whither Thou Goest?” That was really the nub of what John Phelps asked. Do members want or need an organization trying to do everything from protecting the public from its lawyers; to regulating the profession; to advancing the administration of justice; to educating lawyers; and ostensibly, to enhancing the legal profession? Um, don’t mind the mule going blind, just load the wagon.

Or will members eventually resist the appropriation of limitless resources and instead ask the bar to stop trying to be all things for all people? That’s what happened in Washington State in 2012 when a majority of lawyers objecting to persistent mission creep in a tough economy rolled back dues 25% by referendum. Or should the bar just limit itself to lawyer discipline and licensing? That’s what Nebraska’s high court ordered its bar to do last December. Nebraska dues fell from $335 to $98.

Besides, do all those multi-headed missions even do any good? Someone should find out and I don’t mean having the bureaucratic stakeholders do the asking.

People 1055Looking to the future.
Lawyers increasingly face cost and compensation pressures from clients who are demanding more for less. Meantime the delivery of legal services continues liberalization allowing non-lawyer legal document preparers; non-lawyer owned global law firms; and emerging information technologies to compete in the legal marketplace. At the same time, young lawyers burdened with six-figure student loan debt continue facing a historic oversupply of lawyers in a fearsome job market where only half will find full-time, long-term lawyer employment.

These days, the legal academies and legal establishment pay lip service to the changes in the profession. But in truth, girded by group-think and an abiding faith in the status quo, very few actually do much transformational work. Sure a handful of bars belatedly adopted mandatory mentoring programs purporting to help new lawyers transition into practice. Always better at self-congratulation than self-assessment, those bars will be hard-pressed to measure efficacy. Will those mandatory programs actually provide benefits? Or are they window-dressing hiding one more bar revenue stream?

Several years ago, lawyer and legal ethicist Richard Zitrin criticized his California bar in a different context for its then perceived lapses. He observed, “On the other hand, the State Bar has unfortunately long been more interested in how things look rather than how they really are.” Here in Arizona, though, when it comes to the high cost to practice, count on both being true. A full service bar looks expensive and it really is.


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