Apparently word people conclude that Shyster is not related to Shylock in Shakespeare.

The word, shyster, “appeared first in the New York newspaper The Subterranean in July 1843, at first in spellings such as shyseter and shiseter but almost immediately settling down to the form we use now.

The Tombs prison

In the 1840s it was infested by ignorant and unqualified charlatans, who pretended to be lawyers and officers of the court. Before shyster came into being, pettifogger was the usual term for them, a word of obscure origin for lawyers of little scruple or conscience that dates from the sixteenth century. Mike Walsh, the editor of The Subterranean and the first user of shyster, summed up these plaguers of the Tombs in this passage:

Ignorant blackguards, illiterate blockheads, besotted drunkards, drivelling simpletons, ci-devant mountebanks, vagabonds, swindlers and thieves make up, with but few exceptions, the disgraceful gang of pettifoggers who swarm about its halls.”

This is lifted from World Wide Words.

It continues:

“Professor Cohen concluded the word derives from German Scheisser for an incompetent person, a term known in New York through the many German immigrants there. Mike Walsh considered it obscene because it derives from Scheisse, shit, through the image of an incontinent old man. This is plausible, because British slang at the same period included the same word, meaning a worthless person; the usual spelling was shicer, though it appeared also as sheisser, shiser and shycer. It’s recorded first in print in Britain in 1846, but must be significantly older in the spoken language. (It was taken to Australia and from the 1850s was used there for an unproductive gold mine.) It may have been exported to New York by London low-lifers.”