And usually lawyers are personally liable, so there is no “going out of business” unless they go personally bankrupt.
Dunno how true all of the above is in CA.
Get your own lawyer’s advice :)
The question isn’t whether it’s moral or ethical. It’s what the risk exposure? What are the likely outcomes? Do we have our bases covered?
Fire them! (Or, we can’t, it overexposes us, create a new department, assign them and then dissolve the department some time later and declare them redundant).
Stating that a thing is or is not legal is making a claim about the opinion other humans in positions of authority (whose specific identity is unknown) will have on a similar question in the future.
There is always subjectivity in it, since you are literally predicting someone else's subjective opinion. The objectivity of law is a conceit, not a reality.