The California State Bar's proposal to more than double the licensing fees that lawyers would pay in 2020 to $813 goes too far and should be scaled back, the state auditor said in a report released Tuesday.

State Auditor Elaine Howle concluded that while the bar has made the case for a fee increase—which would be its first in 20 years—the lawyer-oversight agency can get by with a lower charge of $525 if it spreads certain costs over several years, cuts other expenses and derives more income from leases at its San Francisco office.

“This report concludes that [the] State Bar should balance its need for fee increases with other actions to raise revenue and decrease costs,” Howle wrote.

State Bar leaders are seeking an ongoing $100 increase in fees, once known as dues, plus one-time charges next year totaling $330 to pay for technology and building projects as well as a boost in reserves and a program that aids victims of attorney misconduct. Without the extra funding, the agency risks service cuts and a projected $32 million operating deficit, its leaders say.

Bar officials said they agree with most of the auditor's recommendations. Jason Lee, president of the bar's board of trustees, called the findings “fairly rewarding” given that past audits have been more critical of the agency's practices.

“I think the audit report provides that assurance” that lawmakers and others will be looking for in backing a fee increase, Lee told The Recorder.

Sen. Hannah-Beth Jackson, D-Santa Barbara, who is carrying this year's licensing-fees bill, has said that whether the bar gets all the money it's seeking will depend largely on the findings of Howle's audit and a report from the legislative analyst's office expected this summer. The first legislative hearing on an early version of the 2020 fees bill, which does not yet include a fee hike, was scheduled to take place Tuesday afternoon.

Part of the fee increase sought by the bar would cover the cost of hiring 58 employees in the disciplinary office to reduce the time it takes to process complaints and to cut into a long-standing backlog of cases. But the bar derived the 58-workers figure from a workload study that didn't take into account a new staffing structure and case-prioritizing efficiencies, the auditor's report said. Adding 58 positions in a single year is also unrealistic, the report concluded, because of existing vacancies and new openings that would be created when current workers are promoted to new supervisory jobs.

“We recommend that instead of adding all 58 new staff in 2020, [the] State Bar should set its goal, and the consequent licensing fee amount, at a level that would allow for a more gradual staffing increase,” the report concluded. “Specifically, we suggest that it add up to 19 new positions in 2020 and that it subsequently reassess its staffing needs as it moves forward.”

Similarly, the auditor found that some of the bar's planned technology projects aren't needed immediately and that some building improvement costs, including a $12.5 million resurfacing and facade repair at its San Francisco office, “exceed acceptable market rates.” The bar also isn't doing enough to lease potentially high-earning vacant space in its San Francisco building, the report said.

Howle, too, said the bar should drop a $10 fee for the lawyer's assistance program, which offers help for licensees, law school students and bar exam applicants with substance abuse and mental health issues. The program has an “excess” reserve that can handle projected costs, she said.

Howle's office recommended that the bar reduce the amount it wants to charge lawyers in 2020 for tech projects, capital improvements and an increase in reserves from $250 to $41. The bar can spread out some of the remaining costs over the following four years, the auditor said. As for the one-time $80 fee the bar wants for the Client Security Fund, which pays claims submitted by victims of lawyer misconduct, the report said $40 should cover anticipated costs in 2020.

Finally, the report suggests the Legislature adopt a three-year fee cycle instead of setting an amount every year.

“Establishing a fee cap for the three-year period would enable State Bar to anticipate consistent revenue and would allow licensed attorneys to plan for their future expenses,” the report concluded.

Leah Wilson, the state bar's executive director, said the agency made its fee requests with the historic perspective of not having received an increase in two decades. If the bar can plan its budgets over three years, she said, the one-time fee hikes would not be so high.