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Attorneys Claim Victory After Newsom Nix’s Bar Sandbox

Daily Journal Sep. 20, 2022

“With the signing of AB 2958, the Legislature and the governor have made it abundantly clear that the State bar must cease its reckless push to allow corporations to practice law,” said Consumer Attorneys of California CEO Nancy Drabble.

Attorney groups are claiming victory after Gov. Gavin Newsom signed the annual bar dues bill. Lawmakers amended AB 2958 last month to halt the State Bar’s explorations into regulatory changes.

Newsom’s office announced the bill’s signing on Sunday. Some prohibitions will be permanent, according to Consumer Attorneys of California CEO Nancy Drabble.

“With the signing of AB 2958, the Legislature and the governor have made it abundantly clear that the State bar must cease its reckless push to allow corporations to practice law,” said Drabble in an email. “The statutory ban on the radical ‘sandbox’ proposals is permanent. The two-year halt on their paraprofessional proposals should allow them to listen to legal services organizations and others who have extremely legitimate substantive concerns that have been previously dismissed or diminished.”

“Reflecting the State Bar’s statutory mission which includes increasing access to justice as a primary goal, AB 2958 calls for engaging with key partners in addressing the lack of access to legal services that exists for millions of Californians,” State Bar Board of Trustees Chair Ruben Duran said in an email. “The State Bar’s Five-Year Strategic Plan also calls for engaging with these partners, and to meet the goals of both these mandates we are beginning to plan for discussions with legal service providers, community based and small business organizations, and others. In the meantime, we continue our efforts on several fronts to strengthen the effectiveness, fairness, and efficiency of our discipline system.”

The chairs of the Legislature’s Judiciary Committees — Assemblyman Mark Stone, D-Scotts Valley, and Sen. Tom Umberg, D-Santa Ana — added the changes on Aug. 11. They will require the bar to report any “funding spent since 2018 to study the creation of a regulatory sandbox or the licensing of non-attorneys as paraprofessionals” by Jan. 23, 2025.

The reporting requirement for exploring paraprofessional licensing will expire on Jan. 1, 2025, but will remain in place for sandbox proposals. The law will also exclude the bar from allowing “corporate ownership of law firms and splitting legal fees with non-lawyers, which has historically been banned by common law and statute due to grave concerns.”

Reached last week, Umberg said he might be open to limited proposals to expand licensing of paraprofessionals. But he drew the line at sandbox proposals, saying he is “extremely dubious” of “corporations practicing law.” The annual bar dues bill will originate in Umberg’s committee next year; Stone opted not to run for reelection this year.

The changes also require the bar to “prioritize protecting individuals, especially those in need of legal assistance, from unscrupulous actors, including those actors seeking to do business in the legal field, above all else.” This references recent failures by the bar to quickly catch unscrupulous attorneys, such as celebrity trial lawyer Tom Girardi, who is accused of stealing client funds for years.

AB 2958 also emphasizes that lawmakers hold the agency’s purse strings. The previous year’s dues bill allowed licensees to opt out of allowing the bar to use $5 of their license fee to support the agency’s lobbying efforts. The new law requires attorneys to opt in. According to figures provided by the bar in April, about 37% of licensees opted out under the old rules.

The law would also lower the annual fee by $4 for an active license and $1 for an inactive license if the bar sells its San Francisco headquarters. The bill set these fees at $390 for an active license and $97.40 for an inactive one.

Ann I. Park​ She/Her/Hers Partner | T: 213-283-2160 | F: 213-283-2101181 W. Huntington Drive, Suite 210, Monrovia, CA, 91016, foleymansfield.com

Ann I. Park

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