Monday, May 4, 2026
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State Bar’s 2025 Annual Report Acknowledges Financial Woes, Highlights Discipline Wins
By a MetNews Staff Writer
The State Bar has released its annual report for the last fiscal year, highlighting the distribution of historically high legal aid funding, sourced primarily from interest on attorney trust accounts and public grants, while acknowledging continuing operational budget strains in part linked to the problem-riddled February 2025 exam.
Thursday’s release also outlines disciplinary statistics and points to the disbarment of former Chapman University School of Law Dean John Eastman as well as investigations into “attorneys involved in the LADWP billing scandal” as examples of success in prosecuting “attorneys who posed high risks of harm to clients, the public, and the administration of justice.”
In the report, the regulatory body pointed to the “precarious” position of the State Bar’s Admissions Fund, a budgetary pool dedicated to the administration of the entrance exam and other admissions-related activities, following the botched February 2025 test.
Attorney-hopefuls complained of crashes, issues with proctors, and confusing questions, some of which the State Bar later admitted were drafted with the help of artificial intelligence, during the rollout of the first examination to offer a remote option, a change implemented for the stated purpose of saving money. Instead, the body found itself reimbursing fees, certain travel costs, developing an adjusted score metric, and considering testing options anew.
Thursday’s report says:
“The Admissions Fund has…been strained by unanticipated costs resulting from the February 2025 exam, including several million dollars in fee waivers issued as part of remedial measures and the return to in-person administration. As a result, the fund’s reserve is projected to total $1.7 million at the end of 2026, or 5.1 percent, which is well below the [Board of Trustee’s] 17 percent minimum reserve policy. Given the uncertainty surrounding future bar exam development costs, the fund’s financial position remains precarious.”
Recognizing the perilous financial position of the fund, the body commented:
“To prevent insolvency of the Admissions Fund, the Board of Trustees approved fee increases for 11 key programs. However, fees for nonattorney California Bar Exam applicants were increased only by the consumer price index (CPI) in an effort to keep the bar exam affordable for nonattorney applicants. The impact of the decision not to raise fees higher than the CPI means that anticipated costs for the 2026 bar exams exceed projected revenues by approximately $2.8 million.”
Budget Shortfall
In February, the State Bar released its 2026 budget detailing an anticipated $374.5 million in total revenue, with 31.2% of that amount attributed to the collection of attorney licensing fees and 53% coming from grants, and projecting total expenses to exceed $463 million, leaving a shortfall of approximately $89 million.
The biggest contributors to the default are personnel costs of more than $124 million and building operations costs of $10.5 million, attributed to expenses related to the Los Angeles office building, lease costs for the San Francisco office, and equipment repair and maintenance. Despite the extra expenses attributable to the February exam, the body faced a greater deficit in 2025, approximating $125 million.
While boasting that “the Office of Strategic Communications and Stakeholder Engagement launched the State Bar’s and State Bar Court’s newly redesigned public-facing websites” in December, the report provides no detail about the cost of the update. The body’s 2024 budget allocated approximately $300,000 to the project.
Thursday’s release adds:
“In 2025, the Office of Access & Inclusion (OA&I) assisted the State Bar’s Legal Services Trust Fund Commission (LSTFC) in distributing $308 million in legal aid funds to 114 organizations. However, OA&I’s impact brief…outlines the severe consequences of declining federal support for civil legal aid and the subsequent effects on housing, immigrant communities, and legal access.”
Discipline Numbers
According to the State Bar, a total of 69 attorneys were disbarred last fiscal year, and the same number were suspended or placed on probation. The disciplinary body opened a total of 21,205 cases.
The report specifically mentions the high court’s decision to order that Eastman’s name be stricken from the roll of attorneys. That action was taken after State Bar Court Judge Yvette D. Rolland found in 2024 that Eastman had “transgressed those ethical limits by advocating, participating in and pursuing a strategy to challenge the results of the 2020 presidential election that lacked evidentiary or legal support.”
References to the “attorneys involved with the LADWP billing scandal” likely refers to recent actions by the disciplinary body against a number of lawyers tied to an alleged conspiracy between employees of the City Attorney’s Office and outside counsel to recruit friendly plaintiffs’ counsel to favorably resolve class claims over the 2013 disastrous rollout of a new billing system that resulted in systemic overbilling of customers.
In January of last year, the State Bar Court recommended to the high court that Tarzana-based lawyer Michael J. Libman be disbarred relating to allegations that he put his name on the putative class complaint, knowing that the pleading had been entirely drafted by an attorney for the municipality, as well as claims that he tried to hack into personal accounts belonging to Los Angeles Superior Court Judge Elihu Berle, one of the judges assigned to the case.
Other Actions
Earlier this year, the body also recommended that Former Chief Deputy Jim Clark of the Los Angeles City Attorney’s Office “be suspended from the practice of law for a minimum of the first two years” of a three-year probationary term.
The Office of the Chief Trial Counsel (“OCTC”) initiated disciplinary proceedings against Clark in September, asserting that the lawyer, while serving as the second in command at the City Attorney’s Office between 2015-19, secretly colluded in the plan to rig the class action litigation.
In March, the State Bar announced charges against Paul Kiesel, founder of the prominent Beverly Hills firm Kiesel Law LLP and a former president of the Los Angeles County Bar Association. According to the OCTC, Kiesel was hired by the city to pursue claims against Pricewaterhouse Coopers LLP, the developer of the disastrous billing program, and was also involved in securing friendly counsel to pursue the ratepayer claims.
Kiesel has said he “rejects” the allegations against him as “unfounded.” No disciplinary charges have been filed against Michael Feuer, who was city attorney at the time of the litigation.
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