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State Bar Board of Trustees Discusses Components of Needed Licensing Fee Increase

At its meeting on January 18–19, the State Bar of California’s Board of Trustees discussed the State Bar’s significant budget challenges and provided direction on plans to request of the Legislature a licensing fee increase for 2025. When the Legislature authorized flat licensing fees for 2024 amid an ongoing structural deficit in the State Bar’s General Fund, it directed submission of reports by April 1 that will outline the State Bar’s future funding needs.  

“This Board is committed to working with our partners in the Legislature to find a path to appropriate funding that will enable the State Bar to fulfill its mission, including additional reforms that we and our partners agree are necessary, while ensuring the organization’s financial stability,” said Board Chair Brandon Stallings. “With only one licensing fee increase in over two decades, we need to be creative and open-minded in how to reach that goal. We are looking at all options, including proposing new fee structures, to achieve our common goal of protecting the public.”  

Background on the State Bar’s General Fund 

The State Bar’s General Fund, fueled primarily by attorney licensing fees, is projected to run a deficit this year of approximately $22 million, with a similar forecast for 2025. Proceeds from the sale of the San Francisco headquarters building in November 2023 will cover the 2024 deficit, but the agency needs funding to sustain core operations and make needed improvements in 2025 and beyond. The current early estimate of an increase to sustain core operations is approximately $103 per active licensee. The licensing fee, authorized each year by the Legislature, has increased only once in two decades, during a time when inflation has run nearly 80 percent.  

Approves modified cost reduction plan for July 2024 Bar Exam 

The Board of Trustees also approved a cost-reduction plan for the July 2024 bar exam needed to help close a deficit in the Admissions Fund. The plan streamlines the numbers of test sites compared to July 2023 by removing Santa Clara but maintains locations in the following cities:

For general bar exam takers	For testing accommodations takers
Anaheim Oakland Ontario Pasadena Sacramento San Diego area (Chula Vista)	Los Angeles Orange Sacramento San Diego San Francisco

After thoroughly exploring other cost-reduction strategies, staff found that reducing the number of exam sites achieved the best balance between reducing costs and ensuring exam security, integrity, and other administrative considerations. Applications for the July exam become available on March 1. 

Background on Admissions Fund 

The State Bar’s admissions functions are expected to be self-funding. To address an ongoing structural deficit (projected at $8.4 million in 2024 absent any changes) in the Admissions Fund, in September 2023, the Board approved substantial increases in admissions fees, including those for law study, exams, and special admissions. These increases are projected to add to revenue by $7.5 million annually. The staff has also been working to identify cost-cutting strategies. Because administering the bar exam twice yearly is the costliest admissions program, cost reduction efforts have focused there. Reducing the number of sites in July, the largest of two annual bar exams, is expected to save approximately $350,000. Staff continue to refine a plan for further fee increases, particularly the fees that California Accredited Law Schools pay for accreditation. 

Other actions 

In other actions at its January meeting, the Board:  

• Reviewed progress on dozens of reforms in governance, conflict of interest policies and procedures, and other areas resulting from the findings arising from the May investigation into the State Bar’s past handling of complaints against now-disbarred attorney Thomas V. Girardi. 
• Approved a preliminary list of 2024 legislative priorities, designating the need to secure a fee increase in the amount necessary to effectively carry out its public protection mission as the organization’s highest priority. 
• Received training on conflicts of interest and on the use of generative AI in the legal profession. 
• Reviewed progress at the two-year mark on the State Bar’s 2022–2027 strategic plan and discussed adjustments to the plan that will return to the Board for approval at its next meeting. 

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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.