Shyster is a term widely used for unethical lawyers of any race. Shylock is a term for an unethical Jewish moneylender, from Shakespeare, you know.
I read up on it too. Looks like it's etymology was essentially german as Red indicated but through general assumption of being a racial slur, it kind of became one. Kind of like the term "niggardly." http://en.wikipedia.org/wiki/Controversies_about_the_word_"niggardly"
What people seem to ignore is that a slur is not a slur when not intended to be slur. I doubt the shyster was meant to be racist.