The California State Bar’s botched roll out of a new exam — a move that the cash-strapped agency made in the hopes of saving money — could ultimately end up costing it an additional $5.6 million.

Leah T. Wilson, executive director of the State Bar, told state lawmakers at a Senate Judiciary hearing Tuesday that the agency expects to pay around $3 million to offer free exams to test takers, an additional $2 million to book in-person testing sites in July, and $620,000 to return the test to its traditional system of multiple-choice questions in July.

Wilson, who announced last week she will step down when her term ends this summer, revealed the costs during a 90-minute hearing called by Sen. Thomas J. Umberg (D-Orange), chair of the Senate Judiciary Committee, to find out what went so “spectacularly wrong.”

Chaos ensued in February when thousands of test takers seeking to practice law in California sat for the new exam. Some reported they couldn’t log into the exam because online testing platforms repeatedly crashed. Many experienced screen lags and error messages, struggled to finish and save essays and complained of multiple-choice questions that were worded improperly and included typos.

“The question is, how did we come to this place?” Umberg said at the beginning of the hearing. “And how do we make sure we never ever come back to this place?”

Last year, the State Bar was on the verge of a financial crisis when it announced a plan to develop a new bar exam: its 2024 budget forecast a deficit of $3.8 million in its admissions fund, which deals with fees and expenses related to administering the bar exam. The fund, it warned, faced insolvency in 2026.

The agency made plans to ditch the traditional national bar exam, which requires test takers sit in-person, and develop its own exam that would allow for remote testing. The State Bar promoted its plan as a “historic agreement” that would save up to $3.8 million a year.

It’s unclear how much the State Bar could pay next year if it goes back to experimenting with its own exam. Its expenses are likely to shift as it pursues a lawsuit against Meazure Learning, the vendor that administered the February test.

But the cost to the State Bar is not just financial. After the exam debacle, the agency faces the embarrassment of reverting to traditional in-person exams in July and the prospect of more scrutiny.

After hearing from February test takers, law school deans and leaders of the State Bar, the Senate committee approved an independent review of the exam by the California State Auditor.

Test taker Andrea Lynch told lawmakers she faced constant disruptions during the exam from proctors, technical glitches and computer crashes. Near the end, as she prepared to begin a final section of the exam, a message popped up telling her her exam had been submitted before she’d even seen the questions.

“This was just not a technical failure,” Lynch told lawmakers. “It was a systemic failure, a breakdown in the integrity, accessibility and fairness of one of the most important professional milestones in the legal profession. I urge this committee to consider what it means when a test intended to uphold justice fails to deliver it to its own applicants.”

The State Bar has filed a civil complaint against Meazure Learning in Los Angeles Superior Court, accusing the vendor of fraud, negligent misrepresentation, and breach of contract by claiming it could administer a remote and in-person exam in a two-day window.

But critics of the State Bar argue that agency leadership bears responsibility for failing to take enough time to develop the new test.

Jessica Berg, Dean of UC Davis School of Law, told lawmakers that the State Bar’s rush to roll out of the bar exam and lack of transparency throughout the process caused financial and emotional harm to the test takers and significant financial and reputational harm to the State Bar and the state of California.

“The problems that we saw with the bar exam were absolutely predictable and they rest on two pieces of what was going on here — problems with the substance of the exam and problems with the administration of the exam,” Berg said.

The hearing explored problems with the exam’s multiple-choice questions.

Two weeks ago, the State Bar revealed that its independent psychometrician — who measures the reliability of exams and recommends scoring adjustments, but is not a lawyer — drafted a subset of 29 multiple-choice questions using artificial intelligence.

Under questioning by Umberg, Wilson, the State Bar’s executive director, admitted “no lawyer assisted in the initial drafting.” She said she did not find out until after the exam that some questions were drafted by Chat GPT.

Wilson also admitted that the State Bar did not copy edit test questions ahead of the exam.

Asked when she learned that some multiple-choice questions had typos, Wilson said after the exam “when I saw it on Reddit.”

Then, Sen. Umberg raised a new concern: the fairness of exam grading.

The State Bar announced Monday that the pass rate for the February exam was 55.9%, the highest spring pass rate since 1965. Last February, the pass rate was significantly lower at 33.9%.

“I don’t think anyone here has any interest in going back and revisiting this issue for those who pass the bar, but what it tells me is that there are issues with respect to grading,” Umberg said.

“How do you account for this huge disparity between what happened in the February bar in terms of passage rate and what’s happened historically?” he asked.

Alex Chan, an attorney who serves as chair of the State Bar’s Committee of Bar Examiners, said that despite the bar exam’s problems, the grading process remained rigorous and consistent with previous administrations. He attributed the high passing score to the California Supreme Court’s approval of his committee’s petition to lower the total raw passing score for general bar exam takers to 534 points or higher on the essay, performance test and multiple-choice questions.

“The scoring adjustments were not designed to be lenient in any way,” Chan said. “They were designed to be fair and measured in light of the circumstances and the unprecedented and well documented technical failures.”

Wilson also noted that the February 2025 test takers had a higher average raw score on the written section of the bar exam than their 2024 or 2023 cohorts. “This is without any psychometric adjustment,” she said. “So looking apples to apples, these 2025 test takers performed better.”

“So this deviation was because they were smarter,” said Umberg. “What would the passage rate have been if the score wasn’t lowered?”

Donna S. Hershkowitz, the State Bar’s chief of admissions, said the overall pass rate would have been 46.9% — still significantly higher than normal— if the minimum raw passing score had not been lowered.

“I’ll be curious as to what happens next year when we use the old format,” Umberg said. “In any event — again to assure those who pass — we’re not going to go back.”