The State Bar of California and Kaplan Exam Services, LLC (Kaplan), a subsidiary of Kaplan North America, LLC, signed an $8.25 million, five-year exam development agreement on August 9, authorizing Kaplan to create multiple-choice, essays, and performance test questions for the California Bar Exam. As part of the agreement, Kaplan will also provide faculty and student study guides, which the State Bar will distribute at no cost. Kaplan will also exit the retail bar prep business specific to California, while continuing to serve other bar exam jurisdictions.
The multiple-choice questions will replace the National Conference of Bar Examiners’ (NCBE) Multistate Bar Examination (MBE) in time for the February and July 2025 exams.
The agreement will help the State Bar transition to remote and test center-based exam administration, both of which test takers prefer. These test administration changes will also help the State Bar close a significant gap in its Admissions Fund, which is projected to reach insolvency in 2026, absent further efforts to reduce costs. The State Bar projects that the new arrangement will result in annual cost savings of up to $3.8 million in exam-related expenses—enough to significantly reduce if not fill the gap.
At its July 18, 2024, meeting, the State Bar Board of Trustees voted to authorize the Board Chair and Executive Director to negotiate the terms of and, if appropriate, execute, an agreement with Kaplan.
“This historic agreement allows us to provide applicants with exam options that they prefer and also helps us close a significant deficit in the State Bar Admissions Fund,” said Board Chair Brandon Stallings. “I want to thank the Board of Trustees for its leadership and State Bar staff and our partners at Kaplan for their significant efforts in ushering in this agreement, which represents a generational change for applicants and the State Bar.”
“Kaplan is honored to be selected by the State Bar of California to help further its mission of producing qualified and practice-ready lawyers,” said Steven Marietti, Chief Commercial Officer, Kaplan North America. “We look forward to supporting the State Bar of California in the creation of this new exam.”
The State Bar initially sought approval from the Board in the spring but deferred until July due to contractual concerns including safeguards against intellectual property and copyright infringement. The parties have worked diligently to build a legally sound deal structure and method for independent question development, including Kaplan creating a new unit in the company to develop material and oversee the effort.
In a bold act of collaboration, the contract includes a cost-sharing provision whereby the State Bar and Kaplan will share potential copyright infringement litigation costs. The State Bar’s cost is capped at $6.75 million over the life of the contract, which amounts to the lower end of net projected cost savings over the five-year term. The parties also agreed to a mutual indemnification provision with a $1.65 million cap.
Even in the unlikely event that the State Bar would have to share in the cost of litigation, the caps ensure that the new arrangement would still be cheaper, or cost neutral, compared to the projected status quo exam administration costs that were leading Admissions to insolvency.
The questions developed pursuant to this agreement will not substantially modify the training or preparation required for passage of the exam. For years, the State Bar has utilized the NCBE’s multiple-choice question set, the MBE. However, the NCBE does not allow remote or test center-based exam administration, and NCBE will be phasing out the MBE as a stand-alone product in 2028.