Proposed New State Bar Rules: Conflict of Interest Policy for State Bar Subentitities

The State Bar seeks public comment regarding a proposed new conflict of interest policy, to be set forth in new State Bar Rules, that will apply to members of State Bar subentities.

Deadline: March 18, 2019

Background

In September 2018, the Board of Trustees approved recommendations regarding the number, size, organizational structure, and functions performed by many of the committees, commissions, boards, and councils that support the work of the State Bar, also known as the “subentities.”

Among the recommendations approved was that the State Bar institute a conflict of interest policy for the volunteers that serve on State Bar subentities.These proposed new rules effectuate that recommendation.

Discussion

The proposed new conflict of interest policy will apply broadly to multiple subentities.At minimum, the following subentities would be subject to the new proposed conflict of interest policy:

  • The Committee of Bar Examiners (CBE)
  • The California Board of Legal Specialization (CBLS)
  • The Council on Access and Fairness (COAF)
  • The Client Security Fund Commission (CSF)
  • The Lawyer Assistance Program Oversight Committee (LAP)
  • The California Commission on Access to Justice (CCAJ)
  • The Legal Services Trust Fund Commission (LSTFC)
  • The Committee on Professional Responsibility and Conduct (COPRAC)

The State Bar is seeking comment on two different versions of the subentity conflicts of interest policy:(1) Alternative 1 specifically enumerates eight subentities that will be subject to the new policy; and (2) Alternative 2 applies generally to all subentities, with the exception of the Commission on Judicial Nominees Evaluation (JNE) and the Review Committee of the Commission on Judicial Nominees Evaluation (RJNE).JNE has conflict of interest rules that are tailored to the work of that body: State Bar Rules 7.24 and 7.25.These rules will be unaffected by the proposed new rules.

The proposed rules set forth a conflict of interest policy for subentities, and will promote uniformity and strengthen the State Bar’s commitment to maintaining a conflict-free decision-making process.The proposed rules at Rule 6.70, et seq., of Title 6 of the State Bar Rules are based on the conflict policy applicable to the Board of Trustees, and require disqualification from decision-making that has a reasonably foreseeable material effect on a member’s financial interests and/or when members have a personal nonfinancial interest that would prevent them from applying disinterested skill and undivided loyalty to the State Bar in the decision-making process.

To promote efficient operation of the subentities and avoid situations in which a subentity member is unable to participate meaningfully in the subentity’s activities, the proposed new rule would require subentity members either to resign or to eliminate the disqualifying conflict (for instance, by divesting their financial interest) if, during any three-month period, they are required to disqualify themselves from more than 25 percent of the subentity’s votes.Setting the threshold at 25 percent will allow subentity members with limited conflicts to continue to serve, while ensuring that subentity operations are not impacted by an unreasonable number of conflict disqualifications.

Proposal

The proposed new rules add Chapter 1, including Rules 6.70 – 6.77, to Division 3 of Title 6 of the Rules of Procedure of the State Bar of California.

Full text of Alternative 1 and Alternative 2 of the proposed new rule are available here.

The new proposed rules are:

  • Rule 6.70 (Subentities Subject to Conflict of Interest Policy; two different versions of this rule are presented for public comment as Alternative 1 and Alternative 2)
  • Rule 6.71 (Intent of Conflict of Interest Policy)
  • Rule 6.72 (Financial Conflicts)
  • Rule 6.73 (Gifts)
  • Rule 6.74 (Personal Conflicts)
  • Rule 6.75 (Disclosure of Conflict)
  • Rule 6.76 (Appearance of Conflict)
  • Rule 6.77 (Mandatory Resignation from Subentity or Elimination of Conflict)

Any fiscal/personnel impact

None.

Background material

Board of Trustees Agenda Item

Proposed New Rules – Alternatives 1 and 2

Source

Board of Trustees

Deadline

March 18, 2019

Direct comments to

Greg Shin
Special Projects Liaison
Admissions
State Bar of California
845 S. Figueroa Street
Los Angeles, CA 90017
Phone: 213-765-1000
Email: Greg.Shin@calbar.ca.gov