California is polishing up its rules of conduct for more than 250,000 lawyers. One notable proposal would discipline lawyers for harassment and discrimination-in some cases even if they aren’t directly engaged in the behavior.

What’s changed since the state bar last year submitted the rules for California Supreme Court approval are the #MeToo movement and a proposal to make settlements public if they involve judicial employees accused of discrimination or harassment. Chief Justice Tani Cantil-Sakauye pitched the idea last month, and proponents are hoping for the court’s endorsement.

The chief justice’s proposal will “open the robes to let daylight in,” Diane Karpman, of Karpman & Associates in Beverly Hills, who represents lawyers in ethics cases, told Bloomberg Law.

No one is handicapping exactly what the justices will do with the state bar’s proposed rules package drafted to cover conduct. The 70-rule package covers everything from firm operations, representing clients with diminished capacity, conflicts of interest, and supervising and managing lawyers. The rules on lawyer-client sexual relationships tend to get the most attention.

Discriminating Practice 

One of the proposed rules (State Bar Proposed Rule 8.4.1) would prohibit discrimination, harassment, and retaliation at a law practice and would protect both clients and employees, Mark L. Tuft, who’s been involved for 17 years in initiatives to revise California’s rules, told Bloomberg Law. The rule would also make it a violation for attorneys at law firm to “knowingly permit” the harassment of individuals, employees, applicants, unpaid interns or volunteers, or contractors.

“I think we can conclude pretty easily that the Supreme Court is very attuned to the subject matter of our proposed rule, and particularly as it relates to lawyers and the operation of law firms,” said Tuft, a partner in the San Francisco office of Cooper, White & Cooper LLP, who was a vice chair of the original rules revision commission.

“I think that we’re going to have a rule and it’s going to be much better than our current rule,” Tuft said.

California was one of the earliest jurisdictions with a professional conduct rule for lawyers prohibiting employment discrimination. But that existing rule requires a court to find that there was unlawful discrimination before the bar could impose discipline. The new proposed rule would eliminate that requirement, Tuft said.

Failing to Help = ‘Knowingly Permit' 

The proposed rule defines “knowingly permit” as “to fail to advocate corrective action where the lawyer knows of a discriminatory policy or practice that results in the unlawful discrimination or harassment” prohibited against clients, employees, applicants, workers, or contractors.

“The rule imposes on all law firm lawyers the responsibility to advocate corrective action to address known harassing or discriminatory conduct by the firm or any of its other lawyers or nonlawyer personnel,” the rule’s comment section said.

“A lawyer who outright discriminated, lawyers lose their jobs over this type of unconscionable conduct, as they should. That’s why what this chief justice has done is extraordinary, and maybe it will open the doors to the type of exposure in the legal marketplace,” Karpman said.

Given the potential economic exposure from harassment, discrimination, and retaliation, “the anxiety of managing partners is huge,” said Karpman, who advises law firms on ethics.

Law firms well remember the $7.1 million judgment, later reduced to $3.5 million, against Baker & McKenzie in 1994 for a partner’s sexual harassment, attorneys said.

No Deadline for Action 

The proposed rule is part of a multiyear rules package. The proposals came from the second Commission for the Revision of the Rules of Professional Conduct, which the state bar launched in 2015 after the California Supreme Court abruptly told the bar to go back to the drawing board in its yearslong effort to update the state’s lawyer conduct rules.

The revised rules were filed in March 2017, and the court has no deadline for approving or rejecting the package or individual rules.

“Whether they’re going to go beyond the judicial realm certainly remains to be seen. But it wouldn’t surprise me given what we’re seeing from the chief justice and this particular revision,” said Matthew Kahn, a Gibson, Dunn & Crutcher LLP partner on the Bar Association of San Francisco’s malpractice section executive committee.

The anti-discrimination, harassment, and retaliation rule “recognizes that lawyers, like other professionals, need to hold themselves to a particular standard of conduct” and that part of the purpose of the rules of the bar is “to ensure the public has trust and confidence in lawyers,” Kahn said.

“I think it’s just another reminder really of how serious our obligations are and how serious the issues of harassment are,” he said.

Unique California 

California is the only state that hasn’t yet remodeled its lawyer conduct rules along the lines of the American Bar Association templates. Any rules must recognize that unlike other states, California lawyers are regulated by both the state Supreme Court and the state Business and Professions Code. California lawyers, for instance, have a competence standard and a strict approach to the duty of confidentiality.

The California Supreme Court is the ultimate voice on admission, discipline, and conduct. Justices decide which lawyers get admitted to practice and who is disciplined after receiving a referral from the bar. That authority includes approving or rejecting the proposed rules.

Lawyers also are controlled by the State Bar Act, which is in the Business and Professions Code.

That’s where the Legislature comes into the picture, using its lawmaking powers to regulate lawyer conduct through the annual fee bill, which sets the fees attorneys must pay to practice.

“If the Legislature is not happy, they not only refuse the fee bill, they go and enact legislation over lawyers,” Karpman said.

Informing the Bar of Charges 

California’s State Bar Court charges and holds trials of lawyers for violating professional rules such as misappropriating client funds. The disciplinary process is much like that of any other court with a prosecutor from the chief trial counsel’s office and defense attorneys representing lawyers.

Under the proposed rule, lawyers going through the disciplinary process must promptly notify the bar of “any criminal, civil, or administrative action premised, whether in whole or part, on the same conduct” that’s the subject of a bar investigation or State Bar Court proceeding.

“It’s another and I think appropriate procedural safeguard to ensure the integrity of our profession; especially if an action has been filed and publicly available, it’s not surprising the bar would also want to be aware of it,” Kahn said.

And that may be where the real enforcement lies, Karpman said.

“The person accused of this conduct doesn’t want this to see the light of day,” she said.