Board Approves a 2025 Offer and Compromise Attorney Debt Relief Program

Board Approves a 2025 Offer and Compromise Attorney Debt Relief Program

At its September 19, 2024, meeting, the State Bar of California Board of Trustees approved establishing a 2025 offer and compromise program, which conservatively could generate $9 million-$11 million by providing current and former attorneys the option to settle their State Bar debt at a discounted rate. While the State Bar's total 2024 uncollected debt is $168 million, less than $2.5 million is currently collected annually.

AB 3279, the recently signed licensing fee bill, allows the State Bar to reduce or waive Client Security Fund reimbursements owed by attorneys in the discipline system. For 2025 only, the bill also allows revenue collected through the offer and compromise program to be divided equally between the Client Security Fund and the State Bar's General Fund. The Board approved circulating for public comment a new State Bar rule and amendments to a California Rule of Court needed to implement the program, along with contract authority for the chair and executive director.

"The 2025 offer and compromise program will provide welcome relief to attorneys hoping to settle their debts, is consistent with the Board's recent efforts to make the discipline cost structure more fair and will generate much-needed revenue for the State Bar's General Fund," said Brandon Stallings, Board Chair.

Among other actions at its September meeting, the Board:

• Approved changes to the deadlines for attorneys who plan to go inactive in 2025 and beyond. Starting immediately, the deadline to request inactive status in 2025 is December 1, 2024, with the change taking effect on December 31, 2024. Attorneys can still switch to inactive status anytime during 2025, but they will need to pay the full active licensing fee if they don't request the change by December 1.
• Heard a presentation by the Chief Trial Counsel about adjustments to case processing targets, particularly for complex cases, reflecting the reality of the State Bar's need to reduce its headcount in the coming years.
• An update from Admissions staff on the planned changes to the February 2025 bar exam. Wednesday, the California Supreme Court denied without prejudice a petition regarding the proposed modifications to the February 2025 bar exam, directing the State Bar to seek formal approval from the Committee of Bar Examiners. Staff shared plans to hold a September 30 Committee of Bar Examiners meeting to address the Court's requests, file a new petition, and move forward with opening exam registration on October 1.

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The State Bar of California's mission is to protect the public and includes the primary functions of licensing, regulation and discipline of attorneys; the advancement of the ethical and competent practice of law; and support of efforts for greater access to, and inclusion in, the legal system.