Update from State Bar Councilor Anna Hamrick

Dear Friends and Colleagues –

I hope you are well. The Bar Council held the annual meeting in Raleigh October 18-21. As it was the Annual Meeting, we installed new officers and received reports from various bar-related entities.

The new officers are:

  1. Marcia Armstrong, President.  Marcia is a board-certified family lawyer from Smithfield.
  2. Todd Brown, President-Elect.  Todd is a lawyer in Charlotte practicing complex civil litigation.
  3. Matthew W. Smith, Vice-President.  Matt practices in a variety of areas of law in Eden.
  4. Darrin D. Jordan of Salisbury completed his excellent tenure as our President, and is now Past President.

General Bar Business:

  1. Ethics Committee:

The Council Approved Proposed 2022 FEO 5, Client Paying Public Adjuster-Witness a Contingency Fee.  The opinion provides a lawyer may call as an expert witness a public adjuster who will collect a statutorily authorized contingency fee paid by the client.

Regarding Proposed 2022 FEO 4, Billing Considerations for Overlapping Legal Services:  This opinion remains in subcommittee for another quarter.  The Committee received only one comment in the entire State, and it came from one of our Buncombe Bar members.  This one comment is the only reason it was sent back to the subcommittee for further consideration.  I mention this to illustrate the power of the comment.  Please know that they do read the comments, and they take them very seriously.  If you are a lawyer who travels for work and uses your downtime while traveling (say while you are driving in the car or waiting in the airport) to conduct business for clients for which you are not travelling, you may want to read the proposed rule and consider commenting.

It is probable the subcommittee will meet at least once over the next quarter.  If it does, the meeting will be streamed on our YouTube page if you would like to see it.

Random Audit Report

I thought it might be interesting to see the recent results of the 2022 Third Quarter Random Audit Report.  As you see, it does not apply to our District, but could provide some valuable insight as to areas of common concern.  The report provides as follows:

Judicial Districts 30 and 35 were randomly selected for random audit for the third quarter of 2022.  Lawyers randomly selected for audit are drawn from a list generated from the State Bar’s database based upon judicial district membership designations in the database.  District 30, composed of Union County was previously audited in 1988, 1993, 1997, 2001, 2005, 2013 and 2019. District 30 has a listing of 314 lawyers. 25 audits were conducted collectively representing 47 lawyers.

District 35, composed of Avery, Madison, Mitchell, Watauga, and Yancey counties, was previously audited in 1990, 1993, 1996, 2001, 2006, 2012 and 2016. District 35 has a listing of 177 lawyers. 14 audits were conducted collectively representing 38 lawyers.

The Ethics Committee recommended to open grievance investigations on four lawyers/firms based on the audit results and the significance of the violations found.

Areas of common rule deficiencies include:

(a) 22% failed to maintain images of cleared checks or maintain them in the required format;

(b) 21% failed to perform quarterly transaction reviews;

(c) 19% failed to review bank statements and cancelled checks each month;

(d) 17% failed to sign, date and/or maintain reconciliation reports;

(e) 14% failed to identify the client on confirmations of funds received/disbursed by wire/electronic/online transfers;

(f) up to 10% failed to:

  • perform monthly bank statement reconciliations;
  • perform quarterly reconciliations;
  • prevent over-disbursing funds from the trust account resulting in negative client balances;
  • prevent bank service fees being paid with entrusted funds;
  • maintain a ledger of lawyer’s funds used to offset bank service fees;
  • take the required one-hour trust account management CLE course;
  • identify the client and source of funds, when the source was not the client, on the original deposit slip;
  • properly deposit funds received with a mix of trust and non-trust funds into the trust account;
  • properly record the bank date of deposit on the client’s ledger;
  • indicate on the face of each check the client from whose balance the funds were withdrawn;
  • promptly remit to clients funds in possession of the lawyer to which clients were entitled;
  • provide written accountings to clients at the end of representation or at least annually if funds were held more than twelve months;
  • escheat unidentified/abandoned funds as required by GS 116B-53;
  • provide a copy of the Bank Directive regarding checks presented against insufficient funds;
  • use business size checks containing the Auxiliary On-Us field.

Areas of consistent rule compliance:

  • properly maintained a ledger for each person or entity from whom or for whom trust money was received;
  • removed signature authority from employee(s) responsible for performing monthly or quarterly reconciliations;
  • promptly removed earned fees or cost reimbursements;
  • signed trust account checks (no signature stamp or electronic signature used);
  • properly maintained records that are retained only in electronic format.

Judicial Districts randomly selected for audit for the fourth quarter of 2022 are District 12, composed of Harnett and Lee counties, and District 22 composed of Caswell and Rockingham counties.

  1. Grievance Committee: 

During the third quarter of 2022, the Attorney Client Assistance Program staff responded to 2,034 phone calls from members of the public and placed 78 calls to lawyers. Staff also responded to 1,046 emails from members of the public and attorneys and responded to 579 letters from inmates. In addition, there were 11 translations completed of fee dispute petitions submitted in Spanish. Intake logged 4,170 entries this quarter.

The State Bar opened 124 requests for fee dispute resolution during the first quarter, all of which were assigned to the two State Bar facilitators.

In 2018, 1,247 grievance files were opened. In 2019, 1,254 grievance files were opened. In 2020, 927 grievance files were opened. In 2021, 986 grievance files were opened. As of October 10, 1,061 grievance files have been opened in 2022.

As of October 10, 1,577 grievances were pending. One hundred ninety-eight grievances were stayed. Thirty-one pending files were in judicial district grievance committees or had been returned by district grievance committees within the past 30 days. The OOC had made its recommendation in 83 of the pending cases and the cases were ready for the Grievance Committee’s decision. Of the remaining 1,265 files in which no recommendation has yet been made, 259 were more than six months old. In the third quarter of 2022, 248 files were dismissed by the Grievance chair or by the Grievance chair and a vice chair. There were no inquiries about lawyer advertising in the third quarter of 2022.

Ninety-four lawyers have completed the Trust Account Compliance Program since its inception. Six lawyers accepted offers to participate in the TAC Program after the July 2022 Quarterly Meeting. The Bar currently supervises forty-five participants. The Bar also monitors four DHC defendants whose stayed suspensions include trust account compliance conditions and oversees compliance with random audit corrections.

  1. Below please find selected parts of presented annual reports:

The Board of Law Examiners Annual Report

1,376 applications were received for the 2022 North Carolina Bar Examinations, a decrease from the 1,449 applications filed for the 2021 North Carolina Bar Examinations.

The February 2022 bar examination was administered to 348 applicants. The overall pass rate for the examination was 50.29%, and the examination proceeded without incident.  Of the 114 first-timers from North Carolina law schools, 69 passed for a rate of 60.53%. 61 of the 96 first-timers from out-of-state law schools passed for a rate of 63.54%. Of the 138 applicants who had taken the examination previously, 45 passed for a 32.61% pass rate. The July 2022 bar examination was administered to 835 applicants. The overall pass rate for the examination was 68.02%. Of the 492 first-timers from North Carolina law schools, 377 passed for a rate of 76.63%. 144 of the 198 first-timers from out-of-state law schools passed for a rate of 72.73%. Of the 145 applicants who had taken the examination previously, 47 passed for a 32.41% pass rate.

The Board continues to receive a significant number of requests for special testing accommodations for the 2022 bar examinations. At the February 2022 bar examination, the Board received 37 requests for special testing accommodations and provided special testing accommodations for 29 applicants due to a disability. For the July 2022 examination, the Board received 67 such requests and granted 54 of these petitions.

North Carolina continues to be the first among states to let applicants know the results of their examination. Most jurisdictions release their July results between late October and mid-November, and some come even later. The Board released results to applicants for the July 2022 bar examination on September 1, 2022. The Board expects to issue licenses to applicants meeting all requirements in late September. This is a great help to applicants whose jobs hinge on licensure.

North Carolina continues to remain a popular place to practice law and seek legal employment. Numbers of comity applications have increased over the course of 2022. Since January 1, 2022, the Board has received 151 comity applications.

Annual Report of Board of Continuing Legal Education

Lawyers continue to meet and exceed their mandatory continuing legal education requirements. By mid-March 2022, 27,491 annual report forms had been filed electronically for the 2021 compliance year. Ninety-nine percent of the active members of the North Carolina State Bar complied with the mandatory CLE requirements for 2021. The report forms show that North Carolina lawyers took a total of 376,085 hours of CLE in 2021, or 14 CLE hours on average per active member of the State Bar. This is two hours above the mandated 12 CLE hours per year.

The CLE program operates on a sound financial footing and has done so almost from its inception over thirty years ago. Funds raised from attendee and non-compliance fees not only support the administration of the CLE program but also supplement three programs that are fundamental to the administration of justice and the promotion of the professional conduct of lawyers in North Carolina. The program’s total 2021 contribution to the operation of the Lawyers Assistance Program (LAP) was $334,844.73. As of September 30, 2022, the board has also collected and distributed $283,488.46 to support the work of the Equal Access to Justice Commission and $283,488.46 to supplement the work of the Chief Justice’s Commission on  Professionalism. In addition, the CLE program generated $70,378.93 to cover the State Bar’s costs for administering the CLE-generated funds for the LAP and the two commissions.

This year the CLE Board has proposed sweeping changes to its rules and procedures to improve the program. We are hopeful to have final recommendations to submit to the Council in early 2023

Annual Report of the Board of Legal Specialization

North Carolina’s Legal Specialization program exists for two reasons: first, to assist in the delivery of legal services to the public by identifying lawyers who have demonstrated special knowledge, skill, and proficiency in a specific field, so that the public can more closely match its needs with available services; and second, to improve the competency of the Bar. Under the guidance of the Board of Legal Specialization, and with the tireless efforts of the specialty committees and staff, our program is stronger than ever and continually achieving the very purpose for which the State Bar Council created the program in 1985. On top of that, our program is entirely self-sufficient. With the addition of 57 new specialists last November, there are nearly 1,100 certified legal specialists in North Carolina. The State Bar’s specialization program certifies lawyers in thirteen specialties. This spring, we received 111 applications from lawyers seeking certification. Of these applicants, 98 met the substantial involvement, CLE, and peer review standards for certification and were approved to sit for their respective specialty exams. In 2020 and 2021, due to public health considerations stemming from the COVID-19 pandemic, we administered our specialty certification exams using remote proctoring through ExamSoft, the software program our Board has employed in administering our exams for the past 7 years. Our experience with remote proctoring has been a resounding success, both from the

examinees’ and staff’s perspective. This year, we are offering our exams both in-person and via remote proctoring based upon the examinee’s and/or the specialty committee’s preference. We expect to continue to offer the option to take the certification exams remotely in the future, thereby increasing access to our program across the state by eliminating the barriers of time and travel that may have previously prevented lawyers from pursuing certification. To assist lawyers interested in becoming certified specialists but who are not yet qualified, in 2018 we successfully created and implemented a new process allowing lawyers to fill out a Declaration of Intent form. We continue to utilize this form to track, communicate with, and assist interested lawyers regarding the lawyer’s eligibility under the applicable certification standards.

Last year, the board, with the Council’s support, made significant strides in clarifying an existing specialty area of law and in creating a new specialty certification. First, the board approved important amendments to the administrative rules governing the criminal law specialty – these amendments clarify the criminal law specialty by creating a new sub-specialty focused on federal criminal law practice and ensure consistency among what will be three sub-specialties within criminal law: state criminal law, federal criminal law, and juvenile delinquency. Second, the board approved the creation of a new specialty in child welfare law. This area of law was identified to the board as a developing and increasingly important area of law in need of a resource for the public to identify lawyers who have objectively demonstrated their proficiency in the field.  Both efforts were considered and adopted by the Supreme Court, and the board has certified the first individuals under these new specialties.

Annual Report of the Board of Paralegal Certification

Seventeen years after the first application for paralegal certification was accepted by the board in 2005, there are today over 3,700 North Carolina State Bar certified paralegals.  In 2020, and as a product of the COVID pandemic, our program successfully pivoted to administer our certification exams via remote proctoring. Our proactive measures paid off – we continued to administer our exams despite the ever-present uncertainties brought by the COVID pandemic, and we have seen an overall increase in the number of examinees over the past eighteen months due to the exam being more accessible to paralegals across the state. Importantly, the software used to remote proctor the exams has produced minimal, if any, technological issues for examinees and assists us in ensuring the integrity of our exam. On April 23, 2022, we administered our paralegal certification exam to 140 applicants via remote proctoring; of those applicants, 83 achieved passing scores and were so certified by the board. On October 15, 2022, we will administer our paralegal certification exam via remote proctoring to approximately 200 applicants. We anticipate designating a total of over 200 new certified paralegals in 2022. We had one of our highest application years in 2021, and the total number of applicants 2022 was equally impressive. We had hoped the switch to remote proctoring would enable more paralegals to pursue paralegal certification, particularly those who ordinarily could not afford the time or the travel expense of taking the exam at one of our traditional testing locations. I am delighted to report that our hope has become our experience, and I am proud that our program converted the difficulties of 2020 and 2021 into opportunities to evolve our program for the betterment of legal services offered by paralegals in all parts of our state. Also, in 2022, the board will have considered over 3,700 recertification applications. To maintain certification, a certified paralegal must complete six hours of continuing paralegal education (CPE) credits annually, including one hour of ethics.

Client Security Fund Annual Report

Pursuant to the Rules of Administration and Governance of the Client Security Fund of The North Carolina State Bar (the “Fund”), the Board of Trustees submits this annual report covering the period October 1, 2021, through September 30, 2022.

The Fund was established by order of the Supreme Court dated October 10, 1984 and commenced operations January 1, 1985. As stated by the Supreme Court, the purpose of the Fund is “. . . to reimburse, in whole or in part in appropriate cases and subject to the provisions and limitations of the Supreme Court and [the] Rules, clients who have suffered financial loss as a result of dishonest conduct of lawyers engaged in the private practice of law in North Carolina … .” Claims Procedures The Fund reimburses clients of North Carolina attorneys where there was wrongful taking of the clients’ money or property in the nature of embezzlement or conversion, which money or property was entrusted to the attorney by the client by reason of an attorney/client relationship or a fiduciary relationship customary in the practice of law. Applicants are required to show that they have exhausted all viable means to collect those losses from sources other than the Fund as a condition to reimbursement by the Fund. Specific provisions in the Rules declare that certain types of losses are non-reimbursable. All reimbursements are a matter of grace in the sole discretion of the Board and not a matter of right. Reimbursement may not exceed $100,000 to any one applicant based on the dishonest conduct of an attorney.

During the period October 1, 2021 – September 30, 2022, the Board decided 65 claims, compared to 61 claims decided the preceding fiscal year. For a variety of reasons under its rules, the Board denied 40 of the 65 claims in their entirety. Of the 25 remaining claims, some were paid in part and some in full. Reimbursements authorized by the Board totaled $349,722.88.

NC IOLTA Annual Report

NC IOLTA funded organizations providing legal assistance and representation. In 2021, NC IOLTA provided funding of more than $4.8 million to 15 organizations that provide legal aid to individuals, families, and children. Grants support access to housing and shelter, family safety, and healthcare, and protect the basic human rights of North Carolinians.  NC IOLTA supported conversations about unmet civil legal needs in North Carolina. With support from NC IOLTA, the NC Equal Access to Justice Commission released the 2020 Legal Needs Assessment in April 2021, the first comprehensive assessment of civil legal needs in North Carolina in more than two decades. NC IOLTA continues to support conversations about how we can improve the availability of legal services.

NC IOLTA grantees continued service to those most in need.  Grantees closed more than 31,000 cases impacting 91,000 household members. Of 38,000 clients served, nearly 7,000 were seniors, 2,200 were children, and 2.000 were veterans. Pro bono volunteers contributed 16,000 of service.

NC IOLTA released the 2023 IOLTA grant application and information in August. In anticipation of the grant cycle, the Board approved several changes to grant policies and criteria. The deadline for submission of grant requests was on September 23. 37 requests were submitted for funding exceeding $7.83 million. Staff are reviewing applications and meeting with applicants to collect additional information prior to the Board’s review of applications later this year. 2023 awards will be finalized and announced in mid-December.

The next quarterly meeting will take place January 17-20, 2023.

Thank you, and please let me know if you have any questions, concerns, or criticisms.  I will do my best to help.

Take care,

Anna

Update From State Bar Councilor Anna Hamrick

Dear Friends and Colleagues –

I hope you are well.  The Bar Council met July 19-22 in Wilmington.  Here are some pertinent updates from the meeting:

  1. Regarding the CLE Board’s Proposes Sweeping Changes to CLE Rules – There is now some mention of allowing a carryover of 6 hours.  I think they should allow for 12 hours to carryover.  However, I am but one voice.  The Bar will be re-publishing the CLE Rules along with another article in the next Journal, so comments can be received throughout this quarter.  The Bar will also be sending out a video and a podcast via email in August, and Peter Bolac will be doing a YouTube Live Q&A as well (time and date TBD).  If you have thoughts, I strongly encourage you to email them in comment form to:  Pbolac@ncbar.gov and ethicscomments@ncbar.gov.  The Bar would like to get them from you by October 1, if possible.
  2. There is a new administrative level to the Grievance procedure.  This came out of the General Assembly, and we can all do the math on why, but long story short, if you get a grievance with which you disagree, you can now have a reconsideration hearing before heading to DHC.  The rules on how that will work are not final (even though the law is, and so we are now going to be doing it very soon).  Essentially, you can have a hearing before a panel (whom is on the panel is TBD) and your lawyer can argue why the penalty issued is wrong.  One caveat – if you appeal, the panel is free to give you a worse penalty than the Grievance Committee did.
  3. Every six years the Bar does a recalculation of the allotment of councilors to determine how the at-large councilors get distributed amongst the districts.  The calculation is based on population.   The latest numbers mean Forsyth will lose its at-large councilor as part of the new reapportionment to Mecklenburg.  The at-large councilor breakdown as January 1, 2023 will be as follows:
  • Wake – 7 at large (8 total)
  • Mecklenburg – 7 at large (8 total), increase of 1 councilor
  • Durham – 1 at large (2 total)
  • Guilford – 1 at large (2 total)
  • Forsyth – 0 at large (1 total), decrease of 1 councilor

If trends continue, there’s a chance that Durham and/or Guilford could lose their at-large seat in 6 years.  If you are wondering , increasing the number of at-large councilors or capping a district’s at-large councilors would require a statutory change.

In other NCSB news:

  1. Grievance Committee:  As of July 13, 1,544 grievances were pending. One hundred ninety-one grievances were stayed.  Thirty-five pending files were in the judicial district grievance committees or had been returned by the district grievance committees within the past 30 days. The OOC had made its recommendation in 239 of the pending cases and the cases were ready for the Grievance Committee’s decision. Of the remaining 1,079 files in which no recommendation has yet been made, 216 were more than six months old. In the second quarter of 2022, 148 files were dismissed by the Grievance chair or by the Grievance chair and a vice chair.
  2. Ethics Committee:
    A. The Ethics Committee introduced the following FEO to be adopted by Council:

Proposed 2022 Formal Ethics Opinion 2  – Limited Representation in a Criminal Matter

Proposed opinion rules that a privately retained lawyer may provide limited representation to a criminal defendant who has been appointed counsel if the limitation is reasonable under the circumstances.

Proposed 2022 Formal Ethics Opinion 3 – Inclusion on Allied Professional’s List of Recommended Lawyers

Proposed opinion rules that a lawyer may be included in an allied professional’s list of recommended lawyers provided that the professional does not disseminate the lawyer’s name and information in a manner that is prohibited by the Rules of Professional Conduct.

B. The Ethics Committee proposed the following Formal Ethics Opinions for Publication:

Proposed 2022 Formal Ethics Opinion 5 – Client Paying Public Adjuster/Witness a Contingency Fee

Proposed opinion rules that a lawyer may call as an expert witness a public adjuster who will collect a statutorily authorized contingency fee paid by the client.

The next meeting will take place in October.  Thank you, and please let me know if you have any questions, concerns or criticisms.  I will do my best to help.

Take care,

Anna

From Anna Hamrick, State Bar Councilor

Dear Friends and Colleagues –

I hope you are well. Though Albert Einstein said “time is an illusion,” my tardiness in this report is very real, and I apologize. This report about the April meeting is much later than I would have liked, and I hope it has not caused you any inconvenience.

On the issue of time, one of the biggest pieces of news to come out of the meeting is that the CLE rules are being significantly overhauled. Please see below for a preview of an article that will soon be published in the NCSB Journal:

(TL; DR: (this is what the kids apparently say when they don’t have the band-width to read something – it stands for “Too Long, Didn’t Read”).  Here is my take on the new rules if you don’t feel like reading the article now: they change the reporting requirements so one needs to do 36 hours of CLE in three years, rather than 12 hours per year. You can take the 36 hours at whatever point you choose during three years. This does not change your annual CLE requirements if you wish to maintain any board certification. Is this a good idea, or will one be tempted to kick the can down the road and then have a 36 hour marathon in January of the year one’s hours are due? Time will tell!)

CLE Board Proposes Sweeping Changes to CLE Rules

On March 12, 2022, the North Carolina State Bar’s Board of Continuing Legal Education (CLE Board) approved large-scale amendments to its rules following a multi-year review process. The CLE Board believes that these proposed changes will have the combined effect of providing more flexibility for lawyers while also improving efficiency for the CLE program. This Executive Summary details the key changes. The full text of proposed rule changes follows this summary. Lawyers are encouraged to read both the summary and the full-text version of the proposed amendments.

The rules of the Continuing Legal Education program were originally adopted by Order of the Supreme Court in 1987. While various minor changes have been made in the 35 years since adoption, the general structure of the CLE program remains unchanged since its inception. Requirements that once made practical sense (e.g., the Annual Report Form requirement), and administrative tasks that were easier to accomplish when there were fewer licensed lawyers (e.g., collecting fees based on credit hours), have become both inefficient and unnecessary.

Beginning in 2020, the Board of Continuing Legal Education undertook an all-encompassing review of its rules to create a more efficient and flexible CLE program. The review included meetings with State Bar CLE directors in other states, where board members were able to ask questions and learn what works best around the country. The review process was conducted transparently (meetings are available on the State Bar’s YouTube page), and the Board received regular feedback from CLE providers, including the North Carolina Bar Association.

The proposed rule changes were presented to the North Carolina State Bar Council in April and were subsequently approved for publication. The CLE Board and the Council are very interested in receiving comments from both lawyers and sponsors. In addition to publication in this edition of the Journal, we intend to hold multiple question and answer sessions for lawyers, and we are available to meet with bar groups and other professional associations over the next quarter. The CLE Board, along with the Council, will review any comments received. Following the comment period, if no substantive changes are needed, the rules will come back before the State Bar Council for adoption. The adopted rules will then be sent to the Supreme Court for its review and approval. It is the Board’s desire that these new rules will be effective beginning with the 2023 CLE year.

KEY CHANGES TO CLE RULES

Increase Reporting Period

Three-year reporting period for lawyers to complete their CLE requirements. Lawyers split into 3 reporting groups.

Reason: Gives lawyers more flexibility to take courses at their own pace and eases administrative burden on CLE staff.

No “Grace Period”

The CLE year will run from March 1 through the end of February.

Reason: Most lawyers do not realize that the CLE year ends in December, and that January/February is meant to be a grace period. A clean 12-month CLE year is more efficient for everyone.

Eliminate Annual Report

The requirement to file an Annual Report is eliminated.

Reason: If a lawyer’s CLE record shows compliance with the requirements, a filing requirement is unnecessary.

No Carry-Over Credit

Carry-over credit from one period to another is prohibited.

Reason: The trade-off for a 3-year reporting period is eliminating carry-over credit. This will also increase administrative efficiency.

Change Fee Structure

Changes from a $3.50/hr fee to program application fees and an annual CLE attendance fee (likely $25) paid during the membership dues process.

Reason: Improves efficiency for the CLE program, reduces a lawyer’s annual cost of attendance (currently $42), and eliminates “bill collecting.”

Improved Enforcement

Lawyers who fail to complete their hours requirements will be subject to additional compliance fees and a more streamlined suspension process.

Reason: With additional flexibility comes increased individual responsibility and accountability.

ADDITIONAL INFORMATION

• As part of the 36-hour requirement over three years, lawyers must complete at least:

o 6 Ethics hours (Professional Responsibility, Professionalism, or Social Responsibility);

o 1 Professional Well-Being and Impairment (PWI) hour; and

o 1 Technology Training hour.

• The CLE Board intends to create staggered reporting periods so that roughly one-third of lawyers are reporting each year. This will require a one-time modification to the rules where one-third of lawyers have a 1-year/12-hour requirement and one-third have a 2-year/24-hour requirement before starting the three-year reporting period.

• Program application fees will be based on the number of credit hours sought for approval and will be due upon submission of the program application.

• Courses offered for free will have a reduced application fee and will be searchable in the CLE Course Directory.

• On-Demand programs will be approved for three years and thereafter may be renewed annually as long as the program continues to meet accreditation standards.

• Eliminating carry-over credit may frustrate lawyers who like to stay ahead on their requirements. The reasons for eliminating carry-over credit include:

o A three-year reporting period provides the flexibility and additional time that carry-over credit now provides.

o If carry-over credit was permitted (36-hours, for example) then lawyers could theoretically take 72 hours in year 1 of their reporting period and not have to complete another CLE program for 8 or 9 years. This is not a good way to ensure continued competency in the profession.

o The elimination of carry-over credit improves administrative efficiency, and the Board believes it is an acceptable trade-off for the additional flexibility provided to lawyers in these changes.

• The additional credit for teaching CLE courses (6 hours for every hour taught) remains the same.

• The Substance Abuse and Mental Health program definition is modernized and is now called Professional Well-Being and Impairment (PWI).

• A new type of ethics program called “Social Responsibility” is created and is defined as “a program, directly related to the practice of law, devoted to education about diversity, inclusion, bias, or equal access to justice.” The program is not mandatory. Lawyers can choose to take Social Responsibility programs as part of their 6-hour ethics requirement.

• Exemptions will be claimed during the annual membership dues renewal process and will be effective for one year. Exempt lawyers will not be assessed an annual attendance fee.

• To encourage and recognize service to the profession, the CLE Board recommends that State Bar Councilors be exempt from CLE requirements in the same manner as members of the Board of Law Examiners.

• There will be increased penalties for late-compliance, and a faster process for administrative suspensions due to non-compliance. Notices to Show Cause and Orders of Suspension will operate in tandem without the need for additional Council action.

• The designation of “Registered Sponsor” is eliminated.

• Sponsors failing to timely submit attendance reports will be charged a late reporting fee and also prohibited from having new courses approved for credit until the report is filed.

• The CLE Board intends to maintain its historical funding in support of the Chief Justice’s Commission on Professionalism (CJCP) and the Equal Access to Justice Commission (EAJC).

• Specialists should note that these changes do NOT impact the CLE requirements for obtaining and maintaining specialty certification through the Board of Legal Specialization. Existing specialists and lawyers intending to apply for specialty certification in their practice area should consult the administrative rules governing their specific specialty for a full list of CLE requirements associated with specialty certification (including annual, cumulative, and content requirements).

In other NCSB news:

1. Upon recommendation from the Issues Committee, the Full Council adopted the following written Diversity, Equity, and Inclusion (DEI) Statement:

Lawyers swear an oath to defend the United States and North Carolina Constitutions. These constitutions decree all persons are created equal and endowed with certain inalienable rights and guarantee all persons equal protection of the laws. The North Carolina Constitution also specifically prohibits discrimination by the State against any person because of race, color, religion, or national origin. The North Carolina State Bar considers diversity and inclusion essential elements of promoting equity and preventing discrimination. Diversity encompasses characteristics that make each of us unique. Equity promotes fairness by aiming to ensure fair treatment, access, opportunity, resources, and advancement for everyone to succeed. Inclusion fosters a collaborative and respectful environment where diversity of thought, perspective, and experience is valued and encouraged. The North Carolina State Bar therefore recognizes diversity, equity and inclusion as core values and is committed to being intentional about incorporating diversity, equity and inclusion into its operations and mission.

This will be published on the State Bar’s website in the About Us section, Lawyer’s Handbook, State Bar Journal, and on social media as appropriate.

2. Grievance Committee: The Grievance Committee dismissed 115 files, continued 4 files, referred one lawyer to the Lawyer Assistance Program, referred 3 lawyers to the Trust Accounting Compliance program, issued 12 letters of warning, 4 admonitions, 4 reprimands, 1 censure and referred 9 cases to the Disciplinary Hearing Commission.

3. Ethics Committee: The Ethics Committee introduced one FEO to be adopted by Council:

a. 2022 Formal Ethics Opinion 1

Attorney Serving Dual Role of Guardian ad Litem and Advocate

Proposed opinion rules that an attorney appointed by the court as the Guardian ad Litem

and the Attorney Advocate in an abuse, neglect, and dependency proceeding may not

testify as a witness unless directed to do so by the court.

The Ethics Committee proposed three Formal Ethics Opinions for Publication:

a. Proposed 2022 Formal Ethics Opinion 2

Limited Representation in a Criminal Matter

Proposed opinion rules that a privately retained lawyer may provide limited representation to a criminal defendant who has been appointed counsel.

b. Proposed 2022 Formal Ethics Opinion 3

Inclusion on Allied Professional’s List of Recommended Lawyers

Proposed opinion rules that a lawyer may be included in an allied professional’s list of recommended lawyers provided that the professional does not disseminate the lawyer’s name and information in a manner that is prohibited by the Rules of Professional Conduct.

c. Proposed 2022 Formal Ethics Opinion 4

Billing Considerations for Overlapping Legal Services

Proposed opinion rules that a lawyer may not separately bill multiple clients a full hourly rate when the lawyer provides legal services to all clients simultaneously. Any increase in the lawyer’s efficiency in providing legal services must be passed on to the client.

The Ethics Committee is also publishing a rule amendment –

Rule 1.19 – expansion of the current prohibition on lawyers having sex with clients; the rule will now prohibit not just sexual activity with clients but also sexual communications with clients. These amendments are in response to increased reports of sexually inappropriate (and unsolicited) communications between lawyers and clients.

4. In January 2020, the Council established a Subcommittee on Regulatory Change under the umbrella of the Issues Committee. The subcommittee was tasked to “study the various efforts taking place in the U.S. and abroad aimed at examining and proposing potential changes to the regulatory structure of the legal profession, with a focus on how regulatory changes could improve access to justice.” A lot of people worked very hard on this committee. The subcommittee was going to present its findings at the April meeting, but it became clear this would have to wait until the July meeting after many questions were raised about the report and its conclusions and intentions.

The subcommittee made six recommendations, including “Pursue a Limited License for Nonlawyers/paraprofessionals.” Before the subcommittee could even make its presentation, it became clear there were a lot of questions and the matter would need to be tabled until July. It is unclear to me what will take place on this matter going forward, but we will learn more in July and I will keep you posted.

Episode 11 of the State Bar’s BarTalk podcast is now available!  This episode is a recap of the April Quarterly Meeting.  BarTalk – Episode 11

Please let me know if you have any questions, concerns or criticisms. I will do my best to help. Take care, Anna

 

Update from State Bar Councilor

Dear Members of The Buncombe Bar –

I hope everyone is doing well and staying warm.  I am very honored to have been re-elected to represent you for one final term at the Bar Council.  Thank you for your support, and please reach out if you need me for anything.

The Council met virtually (due to Omicron) on January 18-21.  As always, you should receive a more detailed report directly from the Bar in a bit, but in the meantime here are a few key points:

  1. The NC Lawyer Assistance Program has officially launched a new Sidebar Podcast (https://www.nclap.org/podcast-sidebar/) as a companion to its quarterly e-newsletter, Sidebar (https://www.nclap.org/sidebar-resources/). Episodes will feature interviews of lawyers and judges who share their personal stories and journeys of recovery.  New episodes will come out weekly on Fridays. You can listen to the podcast directly from the LAP website or on Apple podcasts, Spotify podcasts, or anywhere you listen to your podcasts. The first dozen episodes have been released and interviews with lawyers cover compassion fatigue, anxiety, imposter syndrome, addiction in an adolescent child, and problems with alcohol. You can subscribe to the podcast directly on your player of choice. Please feel free to share across social media platforms. LAP is excited about the podcast as a new way to engage with its material.

2. FEOs which were adopted:

  • 2021 Formal Ethics Opinion 3

Charging Fees to Separately Represented Party in Residential Real Estate Closing

Opinion rules that a closing lawyer representing the buyer in a residential real estate

transaction may not charge a fee for services performed that primarily benefit the buyer

to a separately represented seller unless the seller consents to the fee and the lawyer

complies with Rules 1.5(a) and 1.8(f). The opinion also allows a closing lawyer to

charge a seller for services performed that primarily benefit the seller if seller is notified

in advance of the charge and has a reasonable opportunity to object to the charge.

  • 2021 Formal Ethics Opinion 4

Taking Possession of Photographs Portraying Minor Committing Sexual Acts

Opinion rules that a lawyer may not take possession of photographs portraying a minor

engaged in sexual activity.

  • 2021 Formal Ethics Opinion 6

Departing Lawyer’s Email Account January 21, 2022

Opinion addresses a law firm’s ethical responsibilities as to a departing lawyer’s email account.

3. One FEO issued for Publication:

  • Proposed 2022 Formal Ethics Opinion 1

Attorney Serving Dual Role of Guardian ad Litem and Advocate

Proposed opinion rules that an attorney appointed by the court as the Guardian ad Litem and the Attorney Advocate in an abuse, neglect, and dependency proceeding may not testify as a witness unless directed to do so by the court.

4. Reports Received; Debate Postponed to April Quarterly Meeting:   Two reports, with action recommendations, were presented to the State Bar Issues Committee at its meeting in January. One report was from the Regulatory Change Subcommittee.  This subcommittee, which was appointed in January 2020, was tasked with studying the efforts in other states to examine and propose changes to the regulatory structure of the legal profession in an effort to improve the access to legal representation to people with limited financial means.  The other report was from the Diversity and Inclusion Subcommittee. This subcommittee was appointed in December 2020 to consider and discuss diversity and inclusion at the State Bar.  The reports and recommendations of the two subcommittee were presented at the Issues Committee meeting; however, because the meeting was virtual, the Issues Committee voted to postpone discussion of the recommendations to the April meeting of the Issues Committee (which, it is hoped, will be in-person at State Bar Headquarters in Raleigh).

5. Reports Distributed to Stakeholders: Two reports that were approved by the Council at its October Annual Meeting were distributed to stakeholders with the objective of obtaining support for the recommendations in the reports.  The Report of the Subcommittee to Study Secure Leave Policy was sent to the Chief Justice of the NC Supreme Court and to the General Counsel at the Administrative Office of the Courts.  The report recommends changes to Rule 26 of the General Rules of Practice, Appellate Rule 33.1, and 26 NCAC 03.0119 to, among other things, expand secure leave  and allow it to be taken in smaller increments. The Report on Private Appointed Counsel Caseload and Compensation Study from the Subcommittee on Compensation of Court-Appointed Counsel was sent to bar organizations,  judicial officials, and other stakeholders that can lobby for increases in the compensation of appointed counsel.  The two reports will be published on the State Bar’s website soon.

6. Appointment of a New Subcommittee of the Issues Committee:  The Issues Committee agreed that a subcommittee should be appointed to study “attorney deserts” in North Carolina.  An attorney desert is a place where too few lawyers live and work, leaving unmet legal needs.

7. Adoption of Amendment to Rule of Professional Conduct 1.1, Competence:  A proposed amendment to the comment to Rule 1.1 that was published in the State Bar Journal last quarter was adopted by the State Bar Council and will be sent to the Chief Justice of the NC Supreme Court for review and acceptance.  The amendment adds the following comment [9] to the rule:

“A lawyer should be aware of implicit bias and cultural differences relative to a client or anyone involved in a client’s matter that might affect the lawyer’s representation of the client. Such awareness enhances a lawyer’s competency and works to ensure understanding of the client’s needs, effective communication with the client and others, and adequate representation of the client.”

8. Proposed Amendments to Rules of Professional Conduct 1.6, Confidentiality of Information, and 1.9, Duties to Former Clients, Published for Comment:  Upon the recommendation of the Ethics Committee, proposed amendments to Rule 1.6 and Rule 1.9 will be published in the State Bar Journal and website. The proposed amendments clarify that information acquired during a professional relationship with a client does not include information acquired through legal research and explain when a lawyer who has formerly represented a client may use or reveal information relating to the representation. Comment is welcomed.

9. 2022 State Bar Budget:  The Council approved the State Bar’s budget for 2022.  Anticipated revenue is $10, 103, 999 and anticipated operating expenditures, exclusive of capital expenditures (including principal payments on the mortgage on the State Bar Building), are $9,929,485.

Thank you and please let me know if you have any questions or concerns.

Take care,

Anna
Anne Hamrick, State Bar Councilor

Update from State Bar Councilor Anna Hamrick

Dear Friends and Colleagues –

I hope you are well!  The NCSB recently held its October quarterly meeting.  As per the new procedure, you will receive a full summary of the results of the meeting directly from the Bar.  However, I wanted to pass along some highlights.

To begin, we have a new slate of officers.  They are :

Darrin D. Jordan – President, Salisbury, NC (Darrin practices criminal law)
Marcia Armstrong – President-Elect, Smithfield, NC  (Marcia practices family law)
Todd Brown – Vice-President, Charlotte, NC (Todd practices complex commercial litigation and dispute resolution)
Barbara R. Christy – Past-President, Greensboro, NC (Barbara practices commercial real estate law).
Alice Neece Mine – Secretary/Treasurer, Raleigh, NC (our wonderful Executive Director)

Some of the big news out of the October meeting of the Council (apart from the new officers) is the completion of the two studies, one on compensation for court-appointed private counsel and the other on secured leave.  Both reports have the potential to impact lawyers in very positive ways and in ways that will help with lawyer wellbeing and, as a consequence, help the public by improving the fitness and competency of practicing attorneys.  Although the implementation of the conclusions and recommendations in the reports will be up to other government agencies or branches of government, the value of the studies cannot be underestimated.

The news out of the Regulatory Change Subcommittee continues to be interesting.  At the July meeting, upon the recommendation of the subcommittee, the Executive Committee authorized the officers to appoint an ad hoc committee to study the creation of a paraprofessional license that would permit the licensee to engage in limited practice in areas where there is a serious access to justice problem (as demonstrated by the Equal Access to Justice Commission’s Civil Legal Needs Assessment Report (2021)).  The ad hoc committee will be appointed soon.

In internet news, our State Bar has a podcast entitled BarTalk.  There are now eight episodes.  The most recent one, hosted by Peter Bolac (Assistant Executive Director and Legislative Liaison) and Brian Oten (Ethics Counsel) is a recap of the October meeting, and can be found at:  https://bit.ly/2ZosFYa.

In award news, I would like to solicit nominees from our local bar for the John B. McMillan Distinguished Service Award.  I sit on this committee, and would love to see some lawyers from our area.  The last recipient from our Bar was Howard Gum, in 2016.  This award honors current and retired members of the North Carolina State Bar throughout the state who have demonstrated exemplary service to the legal profession. Members of the Bar are encouraged to nominate colleagues who have demonstrated outstanding service to the profession.  The award criteria are as follows:

Cultivating knowledge of the law beyond its use for clients, employing that knowledge in reform of the law, and working to strengthen legal education.

Furthering the public’s understanding of and confidence in the rule of law and the justice system.

Devoting professional time and resources and providing civic leadership to ensure equal access to our system of justice for all those who, because of economic or social barriers, cannot afford or secure adequate legal counsel.

Aiding the legal profession by helping the bar regulate itself in the public interest and by seeking to improve the administration of justice and the quality of services rendered by the legal profession.

Providing professional services at no fee or a reduced fee to persons of limited means or to public service or charitable groups or organizations, by service in activities for improving the law, society, the legal system or the legal profession, and providing financial support for organizations that provide legal services to persons of limited means.

Treating opposing counsel with courtesy and respect; encouraging and counseling peers by providing advice and mentoring; and fostering civility among members of the bar.

Promoting diversity and diverse participation within the legal profession.

Please consider if there is anyone you know who would be a good candidate for this award.  Again, it would be wonderful to have a local recipient.  Here is a list of past recipients:

https://www.ncbar.gov/bar-programs/distinguished-service-award/#:~:text=Click%20here%20to%20view%20a%20list%20of%20past%20DSA%20recipients.

Lastly, my second term is coming to an end this year.  I am eligible for one final three-year term. I would be honored if you would consider allowing me to serve in this capacity one more time.  I have learned a great deal about our Bars (both the local and the statewide) over the past six years, and hope that I have been able to put that knowledge to the use of each and every one of you in some way.  This experience has been very rewarding to me personally, but that means nothing if I have not been of help to you.

Please let me know if you have any questions, concerns, criticisms, or just want to discuss the working of the NCSB and what the local bar councilor does.  I believe you will hear in the near future from our local bar about the time and place of an election.

Thank you for the opportunity to represent our bar in Raleigh for these past six years.

Sincerely, Anna Hamrick