By Erin Joyce & Natalie Manoukian

Erin Joyce, Esq., brings over 30 years of civil litigation experience and in-depth knowledge of State Bar investigations and disciplinary proceedings, including handling attorney discipline cases from the initial complaint through trial and review in State Bar court.

Natalie Manoukian is a law clerk at Erin Joyce Law. She is currently pursuing her J.D. at Southwestern Law School.

Ethics articles are provided regularly by LACBA’s longstanding Professional Responsibility and Ethics Committee. The views and opinions expressed in this publication are solely of the authors.

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Following recent headlines where it came to light that the State Bar took no action on matters of serious misconduct, the State Bar of California faced scathing negative publicity and calls for more legislative oversight. As a response to significant pressure from the media, the State Bar has removed the option of imposing non-public discipline on attorneys, an option which should only have been used for low level misconduct.

At the same time, the State Bar has been deluged by an increasing number of complaints coming through the online portal, which has made timely resolution of complaints more challenging. 

To remediate the State Bar’s image with the public and Sacramento, the State Bar has undertaken some reforms to move cases more efficiently and effectively, including the adoption of a formal diversion program. The State Bar is on a mission to rehabilitate the general public’s view of the agency, which is viewed as ineffective from sensational headlines revealing the State Bar’s refusal to act on scores of complaints alleging serious misappropriation.

Historically, the main function of the State Bar has been to investigate and prosecute attorney misconduct cases. Typically, penalties for professional misconduct range from private reproval to disbarment. In the past, Office of Chief Trial Counsel (OCTC), the prosecuting arm of the State Bar, employed diversionary measures during the intake, investigation, and even charging stages. These measures, such as admonitions, agreement in lieu of discipline, warning letters, and resource letters were intended to address minor misconduct without imposing formal discipline. These diversionary efforts were informal, inconsistent, and not necessarily effective. Consequently, in 2023, OCTC established a pilot program to formalize efforts to address certain minor violations in a more uniform and efficient manner. The diversion program worked well enough to expand and become a permanent part of the discipline process. 

The Annual Discipline Report (ADR) for Fiscal Year 2023, the last year before implementation of the pilot diversion program, reported that 1,465 cases involving 1,237 attorneys were closed with the various non-disciplinary methods utilized by OCTC. Annual Discipline Report, Fiscal Year Ending June 30, 2023, Table SR-7B. These cases made up approximately 9.7% of the total number of closures by OCTC in Fiscal Year 2023. Going forward, OCTC planned to increase this percentage, to more quickly identify and resolve low level misconduct matters. 

On April 1, 2024, the State Bar submitted to the State Legislature a report entitled “Recommendations for Codifying a Formal Disciplinary Diversion Program” (the “Diversion Report”). As a result, OCTC has already implemented a dramatic shift in its operations. Pursuant to Bus. & Prof. Code § 6068.20(a), the attorney discipline system no longer affords the option of non-public discipline (i.e., private reprovals) to attorneys found to have committed misconduct. 

The Diversion Report includes the following recommendations for implementing “a formal disciplinary diversion program for attorneys accused of minor violations of the Rules of Professional Conduct,” as mandated by Bus. & Prof. Code § 6086.20(b).

OCTC’s Diversion Program

As an alternative discipline, OCTC has implemented a model version of its diversion program. This program allows for diversion to be offered at various stages of the discipline process, assuming that the criteria for diversion are met. It aims to target those attorneys who either 1) pose no significant risk of future harm to their clients or the public; or 2) those whose alleged misconduct is minor. OCTC claims that the diversion program protects the public in similar ways to formal discipline, as the overall goal is to deter repeat misconduct through means of education and rehabilitation. If a matter is determined to be eligible for diversion, the decision is then left to OCTC staff as to whether diversion is an appropriate method to handle the matter. The Diversion Report (at pages 9-10) lists the following as examples of conduct that should be eligible for diversion: 

• Performance violations;
• Communication violations (including communication issues with clients and improper communications with represented parties);
• Failures to disclose potential conflicts of interest sufficiently (if the result is the development of an actual conflict or client harm, diversion would not be appropriate);
• Minor failures to obey court orders (assuming the failure did not cause significant harm to a litigant or the administration of justice); 
• Failures to return files to clients after termination of representation;
• Failures to report events to the State Bar as required by Business and Professions Code section 6068(o);
• Failures to supervise (assuming the failure did not result in significant harm to a client, litigant, or the administration of justice); and
• Threats of civil, disciplinary, or administrative charges to secure an advantage in a civil dispute (assuming the threat does not result in harm to a litigant or the administration of justice).

Once eligibility is determined, the attorney is sent a letter with specifications for the conditions of diversion and an explanation of what will happen depending on whether diversion is accepted or denied. If the attorney accepts diversion, the attorney must then satisfy the specified conditions. If the attorney fails to meet the conditions, OCTC may reopen the complaint and further investigate the matter. The conditions of diversion vary depending on the type of alleged misconduct. Conditions may include the need to refund fees, resolve any breach of duty, or complete education and instructional courses. If the attorney chooses to accept diversion, the attorney must sign the diversion letter, thereby agreeing to its conditions. OCTC’s model program has also implemented the use of diversion warning letters which essentially allow the closure of a matter as long as additional complaints are not received during a specified time period. An OCTC staff member will be assigned to monitor the matter for the specified diversion period. 

OCTC has implemented a “trial run” to test the Diversion Program. It is presently composed of two paralegals who, in addition to their regular duties, monitor the participating attorneys and their compliance with the conditions of diversion. Additional funding is required to implement a fully functional diversion program. The expanded staff prediction is comprised of one attorney, one investigator, and two paralegals. It is expected that this combination of staff will allow for a fully operable diversion program.

Ultimately, the underlying goals which seem to be a driving force in the State Bar’s implementation of a formal diversion program are greater efficiency, providing more control to complainants in the overall resolution of complaints, and a higher number of closures involving discipline by allowing OCTC to prioritize more serious matters. If fully implemented, the State Bar expects an estimated 10-20 percent of disciplinary complaints to be diverted. Beyond the goal of lessening the burden on OCTC, there seems to be little concern by the State Bar for the genuine rehabilitation of attorneys or providing attorneys with the proper opportunity to expunge baseless complaints. These reforms are unlikely to make meaningful advances in attorney rehabilitation. With limited staffing and an emphasis on closing cases quickly, the State Bar’s attempt at reform is likely to fall short. The programs inconsistencies leave cause for concern as they are largely being implemented as a response to public criticism without the proper structural procedures needed to actually deliver on promises made.

The State Bar offers a number of what it views as benefits of the use of diversion programs to resolve minor misconduct. The State Bar’s stated benefits include properly addressing complaints rather than immediate closures for minor offenses, tailored conditions for different areas of concern raised by complainants, the potential for more timely resolution, and a substantial reduction of OCTC’s caseload, which will allow investigators to utilize their time and resources to address more serious cases of attorney misconduct. With respect to consistency, anecdotal evidence indicates that the diversion program has not resolved the endemic problem of inconsistent results as it aims to do.

It remains to be seen whether implementation of a formal diversion program will achieve its goals of reforming the general public’s perception of the State Bar. It is unclear when the implementation of the full diversion program can be expected, however, funding has been approved by the legislature in anticipation of 2027 State Bar reports to determine the effectiveness of recent changes in OCTC’s operations.