BRIDGET STEIN—Real Housewife Erika Girardi titled her New York Times Bestseller, A Pretty Mess, but little did she know her life would become one two years later. The Real Housewives franchise is known mostly as a guilty pleasure reality television show. However, quite a lot can be learned from the current legal battle for the bankruptcy estate of Tom Girardi amidst allegations that he defrauded settlement funds from his clients who were involved in mass tort accidents. This legal battle was on display during the past season of Real Housewives of Beverly Hills, which includes cast member Erika Girardi. Erika is Tom Girardi’s ex-wife who filed for divorce one month before news broke that he allegedly defrauded the victims.
Real Housewives are no strangers to the courtroom. Theresa Guidice, a cast member from Real Housewives of New Jersey, served 11 months in prison for bankruptcy fraud. The Salahis of the short-lived Real Housewives of DC were involved in bankruptcy, although they were mostly known for crashing a State dinner party at the White House in 2009. And Jenn Shah of Real Housewives of Salt Lake City was arrested for wire fraud in connection to a national telemarketing scheme. Although Erika Girardi may seem like just another Real Housewives cast member caught up in legal drama, her legal issue may be the most complex of all Real Housewives franchises. Beyond providing what some consider to be “good” television drama, lawyers can learn powerful lessons from the unfolding litigation.
One of the overlooked elements in this evolving story is the State Bar of California’s acknowledgment that previous complaints against Tom Girardi were mishandled. Citizens of a state need to feel confident that allegations of bad behavior are taken seriously, and the state bar has a role in ensuring that accountability. This story exemplifies the need for independent auditing and taking allegations of misconduct seriously. The need for an independent monitoring system does not stop with the State Bar, law firms should ensure that settlement funds are monitored and that no misappropriation is occurring. Tom Girardi’s firm, Girardi Keese, failed to keep clients’ funds in a client trust account required by regulations. Firms can learn from Girardi Keese’s mistakes and do two things: implement monitoring systems and retain malpractice insurance. Both actions should be encouraged to avoid the preventable situation that occurred here.
Another valuable lesson is the importance of being a “good client,” especially in bankruptcy proceedings. Erika Girardi has not been the model client—her social media, breakdown of her attorney-client relationship, and appearances on reality tv have bruised her public image. In July, Erika reposted fans’ tweets that made disparaging comments about a lawyer involved in Tom Girardi’s bankruptcy case. One week after the Housewife and the Hustler aired, Erika’s attorney filed to be removed as counsel due to deterioration of the attorney client privilege, which the attorney later rescinded. However, Erika retained new counsel afterward.
While there is no roadmap for dealing with this situation, Erika Girardi has managed to write the “how to” book on being an imperfect client. Thinking about this situation in the context of a bankruptcy proceeding, especially an involuntary proceeding, emphasizes the importance of being a good client. Or, at the very least, don’t expect to fare well if you model the activities of Erika Girardi as a client. First, unworthy clients can pose a professional responsibility risk for lawyers. It is particularly important to have a good attorney-client relationship in bankruptcy because of the large amounts of disclosure that the process requires, whether you are the debtor or not. In Girardi’s case, it may not be in her best interest to showcase an opulent lifestyle every week on television or maintain her controversial social media presence as attorneys pursue her assets and a bankruptcy judge evaluates whether to allow a lawsuit to proceed against her. While it may be entertaining for a Real Housewives viewer to witness the events unfold, opposing counsel now has plenty of televised statements that could potentially be used against her. Erika Girardi’s situation can provide a lesson to others, especially anyone involved in a high-profile case, that staying out the press may be in a client’s best interest.
Erika Girardi’s unfolding legal drama shows that Real Housewives is more than just showboating extravagant lifestyles (including Erika’s $40,000 per month “glam squad”) and entertaining arguments amongst the housewives—it’s also a lesson book for lawyers on professional responsibility, and how to be a good client.
