In major reform, California attorneys must report misconduct by their peers

Tom Girardi, the disgraced former attorney, shown in 2014.

June 22, 2023 Updated 5:11 PM PT

Attorneys in California will be required to report misconduct by their peers starting Aug. 1, in yet another major reform to emerge from the Tom Girardi scandal.

The state Supreme Court announced the new rule Thursday. It obligates attorneys to notify the State Bar if they have “credible evidence that another lawyer has committed a criminal act or has engaged in conduct involving dishonesty, fraud, deceit” or other wrongdoing that “raises a substantial question as to that lawyer’s honesty, trustworthiness, or fitness.”

Those who do not comply face penalties of up to a three-year suspension of their law licenses.

Versions of the reporting law are on the books in 49 other states. But for decades, Golden State attorneys resisted what many call the “snitch rule,” with some arguing that such regulation was unnecessary for members of California’s prestigious bar.

That changed last year after The Times wrote about the state’s outlier status and how it contributed to the longevity of Girardi’s corruption. The powerful trial attorney misappropriated millions of dollars of settlement money at least as far back as the 1980s, but many attorneys who knew or should have known that he was stealing from clients did not turn him in.

One former employee of Girardi’s firm told The Times he was aware that his boss was pilfering a burn victim’s settlement. But he said he opted not to notify the State Bar after determining that the state’s Rules of Professional Conduct for lawyers did not require him to do so.

The State Bar’s board of trustees initiated the drafting of the mandatory reporting rule last year and submitted it to the Supreme Court for approval this spring. The high court justices added additional features, such as specifying that lawyers could also inform a judge about misconduct during ongoing litigation and highlighting that a false report to a judge can result in discipline or criminal penalties.

The chair of the State Bar’s board of trustees, Ruben Duran, said he was “grateful” to the Supreme Court “for quickly refining and approving” what the trustees had proposed.

“Protecting the public is our most important duty,” Duran said. The new requirement “will further our mission, aid the State Bar in the investigation of misconduct, and provide California with a similar rule that is in place in every other state in the nation.”

Sen. Tom Umberg (D-Orange), who proposed a similar version of the rule in the Legislature, called it “an important step forward for consumer protection.”

“Maintaining the integrity of the legal profession is not a weight that should fall solely on the public, and this action finally brings California into the ranks of all other 49 states,” Umberg said.

Not all attorneys were enthusiastic.

Glendale lawyer James Ham, who represents lawyers accused of misconduct, called the new rule “just classic bureaucratic CYA” that “will have no significant impact, but looks good.” In his experience, he said, honest lawyers already report misconduct, and those who opt not to alert the State Bar are often prosecuted for much more serious offenses than a failure to report.

“I think they are creating the illusion of quote, unquote ‘doing something,’” Ham said. “What you are going to get is a bunch of lawyers who are going to use it as an excuse to file mediocre, low-level, nickel-and-dime complaints against their adversaries and cloak themselves in the self-righteous obligations of this rule.”

Jeremy M. Evans, president of the California Lawyers Assn., had been among those expressing concerns about the move toward mandatory reporting, noting in February that “lawyers may be less likely to assist or engage with one another for fear of inviting liability resulting from a failure to report about another lawyer’s conduct.”

Evans said in a statement on Thursday that his organization “will ensure that attorneys are educated as to the new standards that guide the profession forward.”

There are some exceptions to the rule. If information about misconduct is learned during a substance abuse or mental health treatment program, or in the context of attorney-client privilege, then the attorney is not required to alert the State Bar.

The new reporting rule is the latest reform effort prompted by the downfall of Girardi, the Los Angeles plaintiff’s attorney made famous by his work on the toxic litigation depicted in the movie “Erin Brockovich.” After his firm imploded in 2020, evidence emerged that Girardi had used settlement funds to underwrite the opulent lifestyle he shared with his third wife, Erika, a cast member of “Real Housewives of Beverly Hills.”

The 84-year-old is facing federal wire fraud charges in Chicago and Los Angeles related to his raiding of millions of dollars from settlement funds. He has pleaded not guilty in both criminal cases.

In the wake of revelations about his mishandling of client funds, cozy ties with State Bar officials and use of mediators to siphon funds, the State Bar has introduced new rules to govern client trust accounts and tightened conflict-of-interest regulations.

The mandatory reporting law is one of the most consequential changes stemming from the Girardi scandal, as it affects nearly every member of the profession, no matter their specialty.

The need to continue pursuing wholesale reform was one of the motives for adopting the new rule. At the State Bar trustees meeting last month, San Francisco-based litigator and trustee Sarah Good noted, “We are coming from a place of trying to rebuild trust in the State Bar as an institution, and I think that this is one of the necessary reforms that we need to take.”

The American Bar Assn. developed the model rule for reporting in 1983, and states began adopting it in the years that followed. Some, such as Georgia and Washington, merely encouraged lawyers to file reports, but most made doing so mandatory.

In California, commissions studied the possibility, but many rank-and-file lawyers saw it as an unnecessary intrusion into their relationships with clients and each other.

One opponent was then-federal prosecutor George Cardona, who voted to reject the rule in 2015 while serving on a blue-ribbon commission to improve legal ethics. In the wake of the Girardi scandal, Cardona was hired by the State Bar as chief trial counsel, or top prosecutor, with the aim of cleaning up the agency’s tattered reputation.

He told The Times last year that he had changed his mind after surveying the damage inflicted on the profession by the wayward attorney.

“I think, ultimately, an adoption of a rule like this might help that,” he said.