California State Bar Proposes Rule Requiring Lawyers to Report Ethical Violations

In a move aimed at enhancing lawyer oversight and addressing concerns of professional misconduct, the State Bar of California’s board of trustees has voted in favor of a new ethics rule that would require lawyers to report fraudulent activities, misappropriation of funds, and other criminal acts committed by their fellow attorneys. Referred to as the “snitch rule” by critics, the proposed change marks a significant shift in the state’s legal landscape. The rule, if adopted, would bring California in line with every other state that already mandates lawyers to report ethical violations.

The board’s recommendation for the new rule will now be forwarded to the California Supreme Court, which has the final authority to decide whether to implement it. The State Bar’s proactive approach in implementing such measures stems from the aftermath of the highly publicized Tom Girardi scandal. Girardi, the founder of Girardi Keese, a now-defunct law firm, faced a staggering 205 attorney ethics complaints over the course of his career, with more than half of them accusing him of misusing client funds, according to a state bar investigation. Despite the numerous complaints, Girardi retained his license to practice until June of last year when federal prosecutors charged him with embezzling over $18 million from his firm’s clients. Girardi has pleaded not guilty, with his defense team citing Alzheimer’s disease as a factor impacting his competency to stand trial.

The proposed rule has drawn mixed reactions from the legal community and beyond. With California housing the largest number of lawyers in the United States, it is unsurprising that nearly 200 attorneys voiced their opposition to the rule through submitted comments. Critics argue that the mandatory reporting requirement could inundate the state bar’s disciplinary system with an overwhelming number of complaints, potentially straining its capacity. Furthermore, concerns have been raised about the potential negative impact on the lawyer-client relationship.