Failure to do so subjects the attorney failing to make the report to discipline.
The conduct at issue must rise to the level of misconduct under the rules of professional responsibility.
Thus, an attorney who witnesses another attorney become intoxicated, engage in adultery, or gamble away a large sum of money is under no duty to report these acts because they are not prohibited by the rules of professional responsibility.
Conduct that must be reported, on the other hand, includes matters such as breaching client confidentiality, misusing client funds, tampering with evidence, suborning perjury, offering bribes, and committing criminal acts of violence or dishonesty.
This is to encourage attorneys who have drug or alcohol problems to seek treatment for those problems by ensuring that they may disclose misconduct prompted by their addiction in the course of seeking treatment for it.