August, 2020 Update from State Bar Councilor Anna Hamrick

Dear Fellow Members of the Buncombe County Bar –

I hope everyone is well. The North Carolina State Bar Council held its Quarterly Meeting last week via Zoom. It was our second Quarterly Meeting held via Zoom, and all committees were able to meet. I would like to share with you some of its highlights. You will get a more detailed report later directly from the Bar.

1. The Ethics Committee approved publication for comment of an amendment to the preamble to the Rules of Professional Conduct that identifies the avoidance of discriminatory conduct as a fundamental value of the profession.

Below is the proposed language. Your opinion matters, and so please consider sending your comments to: ethics@ncbar.gov. Continue reading

November, 2019 Update From State Bar Councilor Anna Hamrick

Dear Members of the Buncombe County Bar –

I hope everyone is well and enjoying the Fall.

The NCSB Council recently held its final 2019 quarterly meeting.  You will get a more detailed report from the Bar, but in the meantime here are some brief updates:

*We have a new leader.  Colon Willoughby was sworn in over this meeting as our newest President.  For many years he was the elected district attorney in Wake County, and he is currently in private practice with McGuire Woods in Raleigh.  He originally hails from Tabor City, which is also my nickname for him.  Colon is a kind, generous, smart, modest person.  He will do a wonderful job for us in the coming year.

*Under the leadership of our former President, Gray Wilson, the Bar sponsored an Opioid Summit which was the first of its kind.  The full video of the Opioid Summit will be uploaded next week.  Lawyers will be able to watch it if they want, but to get CLE credit they’ll need to watch it in an organized CLE setting.   The only exception will be for lawyers who attended the live stream event but left early due to technical difficulties.  Those lawyers will be able to watch it on their own to complete the program and get full CLE credit.

*Happily for everyone, the Supreme Court approved our rule amendment eliminating the 6 hour cap on online CLE.  That change will become effective for the 2020 CLE year.

*The Bar’s PMBR Committee continues its work on a program that will assist lawyers to manage their law practices in compliance with the Rules of Professional Conduct.  As background, in early 2019, President Gray Wilson appointed a special committee of the State Bar Council to study the concept of “Proactive Management-Based Regulation,” or PMBR. At that time, the concept had been implemented in several foreign jurisdictions and two states. The general purpose of PMBR is to proactively provide lawyers (and potentially others connected to the practice of law) with education and resources on maintaining a lawyer’s high standards of professional responsibility in managing a law practice.  The PMBR committee recommended the State Bar should continue to study proactive based management regulation and consider implementation of a PMBR program in North Carolina, and the State Bar Council should continue the PMBR Special Committee for the next year.

*The Council adopted a resolution endorsing an administrative order to be entered by local judiciary that will facilitate entry to courthouses by lawyers, the judiciary, and lawyers with business in the courthouse.

*The Advertising Rules Committee continues to study ABA amendments to the Model Rules on Advertising.   A report and recommendation from the committee is expected in April 2020.

*Some statistics for your consideration:  The ACAP staff responded to 2,491 phone calls from members of the public and contacted 384 lawyers in efforts to resolve concerns expressed by members of the public. Staff also responded to 2,119 emails and 707 letters from inmates. During the same quarter of 2018, staff responded to 2,801 phone calls, contacted 650 lawyers, and responded to 971 emails and 637 letters from inmates. The office received 108 requests for fee dispute resolution during the quarter. No fee disputes were assigned to district bar committees. During the same quarter in 2018, the office received 133 requests for fee dispute resolution, of which 114 files were assigned to the two State Bar facilitators and 19 files were assigned to district bar committees.

*In my ongoing effort to increase transparency about the Bar, I would like to spend some time on the North Carolina State Bar Client Security Fund.

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.

The Board of Trustees

The Board is composed of five trustees appointed by the Council of the State Bar to five-year terms. Four of the trustees must be attorneys admitted to practice law in North Carolina and one must be a person who is not a licensed attorney. Current members of the Board are:

  1. Ranee Singleton, Vice-Chair, is an attorney in private practice in Washington, North Carolina.
  2. Calvin E. Murphy, Vice-Chair, a former President of the North Carolina State Bar and is a former Special Superior Court Judge for Complex Business cases in Mecklenburg County, North Carolina.
  3. Erwin Fuller, Jr., a former Councilor and member of the Client Security Fund Board is retired from the firm of Brooks Pierce in Greensboro, North Carolina.
  4. John E. Burns is Executive Vice President and Chief Banking Officer at UnionBank in Oxford, North Carolina.
  5. Thomas Lunsford, II is the retired Executive Director of the North Carolina State Bar and lives in Chapel Hill, NC.

Subrogation Recoveries

It is standard procedure to send a demand letter to each attorney or former attorney whose misconduct results in any payment, making demand that the attorney either reimburse the Fund in full or confess judgment and agree to a reasonable payment schedule. If the attorney fails or refuses to do either, suit is filed seeking double damages pursuant to N.C.G.S. §84-13 unless the investigative file clearly establishes that it would be useless to do so.

In North Carolina criminal cases involving embezzlement of client funds by attorneys, our Counsel, working with the district attorney, is sometimes able to have restitution ordered as part of the criminal judgment. Another method of recovering amounts the Fund pays to clients of a dishonest attorney is by being subrogated to the rights of clients whose funds have been “frozen” in the attorney’s trust account during the State Bar’s disciplinary investigation. When the Court disburses the funds from the trust account, the Fund gets a pro-rata share.

During the year covered by this report, the Fund recovered $89,295.49 because of these efforts. Hopefully, our efforts to recover under our subrogation rights will continue to show positive results.

Funds Received From Court Orders

In the FY ending September 30, 2017, judges in Wake County Superior Court ordered funds frozen by the State Bar during disciplinary investigations to be paid to the Fund if the clients to whom those funds belonged could not be determined. In that year, the Fund received $7,176.52. In the following year, the Fund received $41,107.49. This year, judges who appointed trustees to wind down a lawyer’s practice also ordered funds to be paid to the Fund if the trustee could not determine the clients to whom those funds belonged. The total paid to the Fund by court orders this year was $256,556.64.

Claims Decided

During the period October 1, 2018 – September 30, 2019, the Board decided 107 claims compared to 128 claims decided the previous reporting year. For various reasons under its rules, the Board denied 68 of the 107 claims in their entirety. Of the 39 remaining claims, some were paid in part and some in full. Authorized reimbursements totaled $92,740.51. One $680.00 claim that had been paid was rescinded after the applicant could no longer be located. The most common basis for denying a claim in its entirety is that the claim is a “fee dispute” or “performance dispute.” That is, there is no allegation or evidence that the attorney embezzled or misappropriated any money or property of the client. Rather, the client feels that the attorney did not earn all or some part of the fee paid or mishandled or neglected the client’s legal matter. However meritorious the client’s contentions may be, the Fund’s rules do not authorize reimbursement under those circumstances.

Funding

The 1984 order of the Supreme Court that created the Fund contained provisions for an assessment of $50.00 to provide initial funding for the program. In subsequent years, upon being advised of the financial condition of the Fund, the Court in certain years waived the assessment and in other years set the assessment in varying amounts to provide for the anticipated needs of the Fund.

In 2007, the Supreme Court approved a $25 assessment per active lawyer that was to continue from year to year until circumstances require a modification. No modification of the continuing $25 annual assessment will be necessary for FY 2020.

Claims: Reimbursements over the last ten years have averaged $628,215.72 per year.

ANALYSIS

The Fund’s balance at the end of FY 2019, $2,157,023.84, plus projected income for FY 2020, $820,155.00, minus projected expenses, $239,489.21, and FY 2020 claims paid at the average of the past ten years, $628,215.72, would leave a projected balance in the Fund at the end of FY 2020 of $2,109,473.91.

CONCLUSION

In 2007, the Supreme Court entered an order imposing an annual assessment of $25 per active member which, by its terms, was to continue in effect from year to year unless superseded. Even though the Fund’s current financial condition has improved, given the high awards totals for years just prior to last year, it is recommended that no superseding order be entered this year, leaving the $25 assessment in place.

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Thank you for the opportunity to serve as your State Bar Councilor.  Please let me know if there is any way I can be of help to you in State Bar related matters, or if you have any questions, concerns, or criticisms.  My email is Hamrick@gtalaw.net.

Sincerely, Anna R. Hamrick

September, 2019 Update From State Bar Councilor Anna Hamrick

Dear Members of the Buncombe County Bar –

I hope everyone is well and enjoying Spring!

The NCSB Council recently held its second quarterly meeting of the year.  You will get a more detailed report from the Bar, but in the meantime here are some brief updates:

*As of 1/1/19 each member must do 1 hour of technology CLE per year as part of the 12 required hours.

*Regarding the option to take all 12 hours of CLE online, we are moving forward on that, but not quite there yet.  The rule amendments necessary to remove the 6.0 hour cap on on-line CLE were published for comment following the January meeting and approved by the Council at the April meeting.  They will be sent to the Supreme Court for approval following the July Council meeting (the Bar sends proposed rule amendments to the Supreme Court every other quarter).  If approved by the Court, they will go into effect for the 2020 CLE compliance year.

*Proposed amendments to the Rules Governing the Practical Training of Law Students will be published for comment.  The proposed rule amendments will enable more experiential educational opportunities for law students.

*A proposed rule amendment will be published that will eliminate the requirement that all attendees of the Professionalism for New Admittees must complete a course evaluation form.

*The Committee to Review Amendments to the ABA Model Rules on Advertising continues to study the changes and is working on a proposal to change the State Bar’s advertising rules.

*The Special Committee on Proactive  Management-Base Regulation continues to study the Colorado voluntary PMBR and the Illinois mandatory PMBR to determine whether a similar program would be beneficial in North Carolina.

*The Ethics Committee is publishing proposed 2018 FEO 5 on “friending” opposing parties and witnesses on social media.  The proposed opinion takes a 180 degree turn and holds that a lawyer may not friend someone who is represented by counsel without consent of the opposing lawyer.

*The Council approved and adopted 2019 FEO 1 – lawyer cannot  jointly represent clients and prepare separation agreement.

*The Council approved and adopted  2019 FEO 3 regarding intimate relationships with opposing counsel.

In my ongoing effort to increase transparency about the Bar, I would like to tell you here about the Board of Continuing Legal Education.  The rules and regulations for the administration of the CLE Board are found at 27 NCAC 1D, Sections .1500 and .1600.  The rules apply to each active member licensed by the North Carolina State Bar (unless you are covered by a specific exemption).  The following is (mostly) verbatim from the Administrative Code:

The Council of the North Carolina State Bar established the Board of Continuing Legal Education as a standing committee of the council.  The Board has authority to establish regulations governing a continuing legal education program and a law practice assistance program for attorneys licensed to practice law in this state.

 The Board of Continuing Legal Education has nine members, all of whom must be attorneys in good standing and authorized to practice in the state of North Carolina.

Board members are appointed at quarterly State Bar Council meetings.  The term of office is three years.  The chairperson presides at the board meetings and prepares and presents the annual report of the board to the State Bar Council. 

 The purpose of the continuing legal education rules is to assist lawyers licensed to practice and practicing law in North Carolina in achieving and maintaining professional competence for the benefit of the public whom they serve. The North Carolina State Bar, under Chapter 84 of the General Statutes of North Carolina, is charged with the responsibility of providing rules of professional conduct and with disciplining attorneys who do not comply with such rules. The Revised Rules of Professional Conduct adopted by the North Carolina State Bar and approved by the Supreme Court of North Carolina require that lawyers adhere to important ethical standards, including that of rendering competent legal services in the representation of their clients.

 At a time when all aspects of life and society are changing rapidly or becoming subject to pressures brought about by change, laws and legal principles are also in transition (through additions to the body of law, modifications and amendments) and are increasing in complexity. One cannot render competent legal services without continuous education and training.

 The same changes and complexities, as well as the economic orientation of society, result in confusion about the ethical requirements concerning the practice of law and the relationships it creates. The data accumulated in the discipline program of the North Carolina State Bar argue persuasively for the establishment of a formal program for continuing and intensive training in professional responsibility and legal ethics.

 It has also become clear that in order to render legal services in a professionally responsible manner, a lawyer must be able to manage his or her law practice competently. Sound management practices enable lawyers to concentrate on their clients’ affairs while avoiding the ethical problems which can be caused by disorganization.

 It is in response to such considerations that the North Carolina State Bar has adopted these minimum continuing legal education requirements. The purpose of these minimum continuing legal education requirements is the same as the purpose of the Revised Rules of Professional Conduct themselves—to ensure that the public at large is served by lawyers who are competent and maintain high ethical standards.

So, the NCSB Council created the Board of CLE, and appoints its members.  The Board is a standing committee of the NCSB Council.  It shares the general purpose of the NCSB to protect the public and regulate the profession.  I hope this small presentation has been of some use to you.

Lastly, I would like to let you know how much I appreciate your reelection of me to represent you in this office.  I hope to be of use to our Bar, and welcome any ideas you may have how I can improve .  I just acted as Vice-Chair of my first Grievance subcommittee meeting at the April meeting.  I pulled out a copy of my grandmother’s Roberts Rules of Order which she used to run her DAR and various other meetings in the 1940s and 50s.  It was extremely helpful.  Like the Rules of Civil Procedure, but with more discretion.

Please let me know if there is any way I can be of help to you in State Bar related matters, or if you have any questions, concerns, or criticisms.  My email is Hamrick@gtalaw.net.

Sincerely, Anna R. Hamrick

January, 2019 Update from State Bar Councilor Anna Hamrick

Dear Members of the Buncombe County Bar –

I hope everyone is well and enjoying the new year!

The NCSB Council recently held its first quarterly meeting of the year. You will get a more detailed report from the Bar, but in the meantime here are some brief updates:

One of the big pieces of news is we are one step closer to being able to do all of our required CLE online. The proposed rule changes which would allow this are being drafted and will go to the Supreme Court for approval within a couple weeks. Hopefully it will not take a long time for the Court to review the proposed amendments and let us know their thoughts. I will keep you posted.

You may have heard of the proposal regarding use of the term “specialist.” The Ethics Committee declined to endorse the proposed language as it was determined a large number of board-certified specialists did not support it. Unlike many states, NC has a board-certified specialization program, so the use of the term in NC carries more weight than it may in states which do not have such a program.

The NC IOLTA Report to the North Carolina State Bar Council has some positive news: While all 2018 IOLTA income from participating banks that hold IOLTA accounts will not be received and entered until the end of January. Participant income through November 2018 was more than $2.5 million, an increase of 64% over the same period in 2017. This increase during the same period from 2016 to 2017 was only 2%. We hope this positive trend will continue into 2019 to enhance availability of funds for grantmaking. At the November 30 grantmaking meeting, the IOLTA trustees approved 2019 IOLTA grant awards. Regular 2019 IOLTA grants totaled nearly $1.85 million: $1,447,000 to support providers of direct civil legal services, $305,000 to volunteer lawyer programs, and $112,500 to projects to improve the administration of justice. An additional grant of $998,000 was made to the Home Defense Project Collaborative to support foreclosure prevention legal services provided by six organizations across the state. This grant was made with funds from the national Bank of America settlement.

The IOLTA trustees also dedicated funds to rebuild the reserve fund which has a current balance of $367,201. Though the amount will not be finalized until all 2018 income has been received, we anticipate a contribution of at least $500,000.

One of the goals of the NCSB is to make itself and its functions more transparent to our members and the public. We recently started to show the full council meeting live on Facebook (this is the meeting that usually starts on the Friday of the quarterly meetings at 8:30 am). If you follow the NCSB’s Facebook page, you can be part of the action. In the interest of trying to help with increased transparency, I thought I would start doing a short segment focusing on one part of the Bar. In this edition, let’s get to know the Office of Counsel.

The Office of Counsel (“OOC”) is the legal department of the North Carolina State Bar. It consists of disciplinary staff, authorized practice staff, the investigations department, the Attorney/Client Assistance Program (ACAP) staff, and the trust account compliance program. The OOC reports to the Grievance Committee upon all grievance files opened by the State Bar involving allegations of professional misconduct by North Carolina lawyers. It investigates and tries claims of professional misconduct and disability. The OOC assists the Authorized Practice Committee by investigating and reporting upon complaints concerning the unauthorized practice of law, including representing the State Bar in lawsuits to obtain injunctions prohibiting the unauthorized practice of law. It provides legal counsel to the Client Security Fund Board of Directors and pursues subrogation actions for recovery of funds paid by the CSF. It coordinates the appointment of trustees to wind down the practices of deceased, disabled, and disbarred lawyers and obtains court orders to disburse funds in the trust accounts of disbarred and suspended lawyers. The OOC represents the State Bar in litigation in federal and state trial and appellate courts and provides legal opinions on issues of interest to all departments, committees, and boards of the State Bar.

The ACAP staff helps members of the public resolve problems with lawyers other than matters involving potentially serious violations of the Rules of Professional Conduct. The ACAP staff also provides information about the grievance process, the courts and the justice system, and helps resolve fee disputes between lawyers and their clients.

The OOC includes sixteen lawyers, one of whom serves as trust account compliance counsel, one administrator, ten investigators, one random auditor, eight paralegals, four administrative assistants,one investigative assistant, two investigative clerks, the ACAP director, who is also a fee dispute resolution facilitator, a second fee dispute resolution facilitator, and two public liaisons. After this brief introduction, if you have questions about the OOC, please let me know and I will try to get you the answer.

If you need any ethics CLE, I will be doing a one-hour CLE presentation created by the NCSB on Friday, February 22, 2019 from 12:30 p.m. – 1:30 p.m. at First Presbyterian Church. It covers the basic workings of the State Bar. Just FYI, it is the same one given last year when the Supreme Court came to town.

Lastly, I would like to let you know how much I appreciate your reelection of me to represent you in this office. I hope to be of use to our Bar, and welcome any ideas you may have how I can improve . For this year, I have been assigned to the following committees: Communications, Distinguished Service Award, Executive, Legislative, and Grievance (Vice Chair, subcommittee II). Please let me know if there is any way I can be of help to you in State Bar related matters, or if you have any questions, concerns, or criticisms. My email is Hamrick@gtalaw.net.

Sincerely,
Anna R. Hamrick