In a significant development for legal ethics within the state, the California legislature passed Senate Bill 40 (SB 40). This milestone legislation has received unanimous approval from the California State Senate and the State Assembly. The decision now lies in the hands of Governor Gavin Newsom, who must choose whether to sign it into law or issue a veto.

Stricter Reporting Standards for Lawyers

SB 40 is poised to introduce stricter reporting standards for lawyers when addressing professional misconduct. This legislation emphasizes instances that could potentially harm clients and tarnish an attorney’s professional reputation, competence, and ethical standing. Attorneys must promptly notify the state bar if they become aware of their peers engaging in serious wrongdoing that jeopardizes a client’s well-being or raises significant doubts about the attorney’s trustworthiness and capabilities.

Furthermore, this bill compels attorneys to report colleagues involved in acts of treason, sedition, or insurrection against the State of California or the United States.

Guarding Against Misuse

To prevent any potential misuse of the reporting mechanism for personal vendettas or the obstruction of lawful legal practice, SB 40 contains a crucial provision. It explicitly states that any complaint filed with the state bar intending to intimidate, harass, or obstruct another attorney’s practice constitutes professional misconduct. This provision acts as a safeguard against potential abuse of the reporting process.

A Turning Point for Legal Ethics in California

The passage of SB 40 marks a pivotal moment for California in reinforcing ethical standards within its legal community. Recent high-profile cases involving attorneys John Eastman and Tom Girardi have underscored the need for enhanced safeguards and transparency within the legal profession.

The John Eastman Case

John Eastman is an American lawyer who has been criminally indicted for assisting former President Donald Trump’s efforts to maintain the presidency and prevent its transition to Joe Biden after the 2020 U.S. presidential election. He is currently facing disbarment proceedings in California for his role in assisting the former president’s attempts to undo the 2020 election results.

Eastman was accused of pressuring Vice President Mike Pence to reject the votes of electors from crucial swing states that Biden won while certifying the 2020 United States presidential election. 

Eastman is also facing criminal charges including racketeering for his efforts to challenge the election results in Georgia. He has pleaded not guilty in the criminal case and has defended his actions in the California ethics case, arguing that his legal theories were viable and advanced in good faith. His actions have raised significant ethical concerns about his conduct as a lawyer.

The Tom Girardi Case

Tom Girardi, a once-renowned personal injury lawyer, has been charged with federal crimes related to his mistreatment of client funds.

The Los Angeles-based Girardi and his firm, Girardi Keese, were sued for allegedly embezzling funds from settlements Boeing reached with victims of the 2018 Lion Air crash. The lawsuit alleges that Girardi and his firm used the settlement funds to pay off litigation financing firms and to maintain an extravagant lifestyle.

The case involved five relatives of Lion Air crash victims, who were represented by Girardi Keese in lawsuits against Boeing. The firm won them a combined $12.55M in settlements. However, it is alleged that Girardi embezzled at least $3M from the settlement fund. In total, federal prosecutors claim his firm pocketed more than $18M owed to clients. The lawsuit has caused significant controversy. 

In March 2021, he was diagnosed with dementia and late-onset Alzheimer’s disease and was later moved into an assisted living home. He has been residing in a memory care facility since October 2022 due to declining cognitive functions.

Effect of the Bill on Attorney-Client Relationship

Senate Bill 40 (SB 40) has the potential to significantly impact the attorney-client relationship in several ways:

1. Enhanced Trust: By mandating stricter reporting standards, SB 40 can help foster a greater sense of trust between attorneys and their clients. Clients can be more confident that their attorneys are adhering to high ethical standards and that any misconduct will be reported.

2. Increased Transparency: This bill promotes transparency in the legal profession. Clients will have a clearer understanding of their attorney’s professional conduct, which can lead to more informed decisions when choosing legal representation.

3. Protection of Client Interests: SB 40 protects clients from potential harm caused by attorney misconduct. By requiring attorneys to report serious wrongdoing, the bill ensures that client interests are prioritized.

4. Potential for Strained Relationships: On the other hand, the bill could potentially strain relationships between attorneys and their clients. Clients might worry about their privacy and confidentiality if they know their attorneys are obligated to report certain types of misconduct.

5. Fear of Retribution: Some clients might fear retribution if they report their attorney’s misconduct, especially in cases where the attorney has significant influence or power.

Senate Bill 40 represents a significant step forward in attempting to strengthen legal ethics and maintain public trust in the legal profession. It serves as a reminder to all attorneys of their ethical obligations and responsibilities towards their clients and society at large.