Monday, 17 October 2016 00:00

California Bar’s Request for a Special Regulatory Assessment Neglects Antitrust Concerns

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Responsive Law has submitted an amicus curiae letter urging the Supreme Court of California to require the State Bar of California (SBC) to reform its governance structure to address insufficient public oversight of the bar.

The current structure of the SBC is inadequate to meet its titular primary mission of public protection. Currently, the State Bar Board of Governors consists of 13 attorneys and only six public members. When an industry's regulatory body is composed predominantly of industry members, inherent conflicts of interest arise. Lawyers, for example, have incentive to exclude competition (from both non-lawyers and out-of-state lawyers), restrict innovation (in the structure of law firms or new forms of advertising), maintain the status quo, and minimize the need to adapt their business models to a changing marketplace.

The California Legislature adjourned its most recent session without authorizing the SBC to collect annual dues from its more than a quarter million members. In directing the SBC to request a funding assessment, the California Supreme Court instructed the SBC to also formulate a policy addressing "proposed Board actions that implicate antitrust concerns." However, the SBC's recent request for a Special Regulatory Assessment failed to acknowledge this directive.

Responsive Law advocates structural change that will vest the ultimate authority to determine whether particular regulations are in the public interest in representatives of the public, not in members of the legal industry. "Although the Special Regulatory Assessment requested by the SBC cites public protection rationales," noted Responsive Law Executive Director Tom Gordon, "it tellingly ignores the Court's request for a proposal addressing the shortcomings of its current governance structure and neglects U.S. Supreme Court precedent and Federal Trade Commission antitrust guidelines that make clear a need for public oversight over legal services' regulation.

For this reason, Responsive Law urged the Court to tie the requested Special Regulatory Assessment to a requirement that the SBC propose structural reform aimed at imposing active state supervision over potentially anticompetitive actions taken by the SBC.

You can read the full text of Responsive Law's comment to the California Supreme Court here.

Lynn Bechtol is a Responsive Law Legal Fellow.

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