Update from State Bar Councilor Anna Hamrick

Dear Fellow Members of the Buncombe Bar –

Welcome to 2021.   The Bar Council had its first meeting of the year January 11 – 15, 2021.  As expected, we met via Zoom.  We will also Zoom for the April meeting.  The July meeting is scheduled to take place in Asheville, depending on Covid.  If we can meet live, I will let you know of the meeting schedule in case you would like to attend any in person.

Below are what I hope is some helpful information from our most recent meeting:

  1. Remote work and closed State Bar Building is to continue for present.
  2. Proposed Amendments for Supreme Court Review: These amendments were approved by the Council at its January 15, 2021, meeting and will be sent to the Supreme Court for review and certification (pursuant to G.S. 84-21(b) this week.

Rules of Professional Conduct on Advertising (Rule 7.1 to 7.5) The advertising rules have been comprehensively amended to accomplish the following:

A. strengthen and prioritize the prohibition on false and misleading communications concerning a lawyer’s services;

B. streamline the rules on advertising and eliminate unnecessary or unclear provisions;

C. update the rules to reflect the current state of society and the profession, including the recognition of technology’s presence in personal and professional lives and the evolution of the consuming public; and enable lawyers effectively and truthfully to communicate the availability of legal services, including utilizing new technologies.

Other rules that will be sent, with the advertising rules, to the Court for review and certification:

A. Amendments to the student practice rules that clarify the different forms of student practice placements outside of the law school and the supervision requirements for those placements.

B. Amendments to Rule 1.5, Fees, of the Rules of Professional Conduct, that add a specific prohibition on charging a client for responding to a disciplinary inquiry.

C. Amendments to the Board of Law Examiners’ Rules Governing Admission to the Practice of Law to permit the bar exam to be administered anywhere in North Carolina.

Initiatives to address discrimination – The State Bar is considering several initiatives to address the historical inequities of our justice system and of our society, including racial issues within the profession.  These include:

  1. At its July meeting, the Council approved the publication for comment of an amendment to the Preamble of the Rules of Professional Conduct that states that discrimination on the basis of specified suspect classes or characteristics is contrary to the values of our profession.  Comments were received following publication and a subcommittee of the Ethics Committee is currently studying those comments.
  2. The Ethics Committee is studying whether Rule 8.4 of the Rules of Professional Conduct should include a provision that states that discriminatory conduct during a lawyer’s professional activities is professional misconduct subject to discipline.
  3. The Ethics Committee is also studying whether the comment to Rule 1.1, on the duty of competence, should be amended to include a statement that competency requires knowledge and understanding of implicit bias and its impact on the representation of clients.
  4. At its October 2020 meeting, the Council approved for publication rule amendments requested by the Board of Continuing Legal Education that would require one hour of diversity, inclusion, and elimination of bias training beginning 2022. Comments both critical and supportive of the proposal were received.  The Executive Committee sent the proposal back to the Board for further study.
  5. At the October 2020 meeting, a subcommittee of the Council’s Issues Committee began its study of diversity and inclusion and the role of the State Bar in addressing the same in the profession and the State Bar.

At the January 2021 meeting the preamble was sent to the existing subcommittee studying the potential inclusion of anti-discrimination language; that subcommittee is looking to meet in mid-February, and it is expected the next meeting to focus entirely on the preamble.  The other subcommittee studying a comment re: implicit bias in Rule 1.1 is looking to meet toward the end of February.  Whether those subcommittees produce any recommendations for the April Council meeting is unknown.  If anyone wants to follow these subcommittees, the Bar will be livestreaming the meetings through the State Bar’s YouTube page (just do a google search for “NC State Bar Youtube” and folks should be able to find it).  Notices of the meetings being scheduled will be posted on the State Bar’s website under “upcoming events.”

The comments on all proposed rule amendments are public record, so please let me know if you are interested in reading them, and I will get them to you.

Other initiatives:

  1. Issues Subcommittee to Study Proposed Regulatory Changes in Other Jurisdictions.  The subcommittee is studying initiatives from Arizona, California, Utah, and other states to change the regulation of the practice of law to facilitate innovation and access to justice.
  2. Issues Subcommittee to Study the Expansion of Secured Leave.  The subcommittee will be appointed to study whether there should be additional secure leave and whether it can be taken in increments shorter than a week.  Mel Wright, executive director of the Chief Justice’s Commission on Professionalism, has indicated his interest in working with the subcommittee and that the CJCP will be supportive of this endeavor.
  3. Issues Subcommittee on Compensation of Court-Appointed Defense Counsel.  The subcommittee will survey stakeholders on whether the current fee schedule is impacting competency.


A. The State Bar will continue to pursue the passage of the bill to increase the cap on State Bar dues from $300 to $400.

B. The State Bar will continue to support efforts to bring the numbering system for prosecutorial districts in line with judicial districts.

In other news:

Thankfully, we are not up for the Bar’s random audit.  However,  just as we know the sun rises in the East, we know our time will come.  Therefore, I thought I would pass along information from the 2020 Fourth Quarter Random Audit Report (from a different judicial district) to give you an idea of issues found in a typical report.  (Just as a reminder, the 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).

Areas of common rule deficiencies:

(a) 41% failed to perform quarterly transaction reviews;

(b) 36% failed to identify the client and source of funds, when the source was not

the client, on the original deposit slip;

(c) 31% failed to escheat unidentified/abandoned funds as required by GS 116B53;

(d) 21% failed to identify the client on confirmations of funds received/disbursed

by wire/electronic/online transfers;

(e) 18% failed to:

  • perform quarterly reconciliations;
  • maintain images of cleared checks, or failed to maintain them in the

required format;

  • take the required one-hour trust account management CLE course;
  • sign, date and/or maintain reconciliation reports;

(f) up to 10% failed to:

  • perform monthly bank statement reconciliations;
  • provide written accountings to clients at the end of representation or at

least annually if funds were held more than twelve months;

  • prevent bank service fees being paid with entrusted funds;
  • prevent over-disbursing funds from the trust account resulting in

negative client balances;

  • use business size checks containing the Auxiliary On-Us field;
  • maintain a ledger of lawyer’s funds used to offset bank service fees;
  • provide a copy of the Bank Directive regarding checks presented

against insufficient funds;

  • indicate on the face of each check the client from whose balance the

funds were withdrawn;

  • remove signature authority from employee(s) responsible for

performing monthly or quarterly reconciliations;

  • sign trust account checks (used a signature stamp or electronic


  • review bank statements and cancelled checks each month;

In an effort to make us all feel better, areas of consistent rule compliance include:

  • properly maintained a ledger for each person or entity from whom or for whom

trust money was received;

  • properly recorded the bank date of deposit on the client’s ledger;
  • properly deposited funds received with a mix of trust and non-trust funds into the

trust account;

  • promptly removed earned fees or cost reimbursements;
  • promptly remitted to clients funds in possession of the lawyer to which clients

were entitled;

  • properly maintained records that are retained only in electronic format.

Thank you for the opportunity to represent you at the Bar Council.  Please do not hesitate to contact me with any questions or concerns.

Take care,

Anna R. Hamrick, Councilor

State Bar Councilor Update

Dear Friends and Colleagues of the Buncombe County Bar –

I hope you are all hanging in there.  Please find below my informal report of the October 2020 NCSB Quarterly meeting.  As you probably expect, we met via Zoom.  All meetings open to the public were also livestreamed on the NCSB Youtube page, should you wish to see them.

Notable points of interest include the following:

*We bid farewell to C. Colon Willoughby, Jr., originally of Tabor City, currently of Raleigh, as our President.  He led us wonderfully during this especially difficult year.  Chief Justice Beasley swore in our 86th president, Barbara R. Christy, of Greensboro.  Barbara earned her BS magna cum laude from Appalachian State University, and her JD from the University of North Carolina School of Law.  A member of Schell Bray PLLC, in Greensboro, North Carolina, her practice focuses on commercial real estate transactions.  Her professional activities include volunteering with Legal Aid of North Carolina’s Lawyer on the Line initiative and the Pro Bono Resource Center. She is also a North Carolina State Bar board certified specialist in real property law—business, commercial, and industrial transactions, a fellow with the American College of Real Estate Lawyers, and a member of the Piedmont Triad Commercial Real Estate Women. Additionally, Barbara is involved with her community, serving on the Board of Directors for Southern Alamance Family Empowerment, Inc., and is a past member of the UNC Law Foundation, Inc. Board of Directors.

*The Bar passed a motion adopting the CLE Board’s proposal for a publication of rule change to require 1 hour of CLE on Diversity, Inclusion, and Elimination of Bias Training be added to the CLE requirements for active members of the State Bar.  Because the CLE Board is currently studying ways in which the reporting requirements might be more efficiently managed, the proposed rule is a temporary measure that only requires all active lawyers to take a 1 hour course in 2022.  It is anticipated that eventually the Board will propose a rule requiring the course on some periodic basis, like once every 3 years.

*The Ethics Committee Report included:

  1. Due to the great number of comments received , the amendment to Preamble of the North Carolina Rules of Professional Conduct regarding inclusion of anti-discrimination language is being sent to a subcommittee for further consideration.
  1. A proposed new comment to Rule 1.1 (Competency) regarding awareness of implicit bias and cultural differences will continue to be studied by an ethics subcommittee.
  1. The subcommittee tasked with studying whether the North Carolina State Bar should add language to Rule 8.4 of the Rules of Professional Conduct making discrimination and harassment while acting as a lawyer professional misconduct  is continuing its work.

The Council adopted 2 Ethics Opinions:

  1. 2020 Formal Ethics Opinion 3 Solo Practitioner as Witness/Litigant – This opinion rules that a solo practitioner/owner of a PLLC is not prohibited from representing the PLLC and testifying in a dispute with a former client.
  2. 2020 Formal Ethics Opinion 4 Investment in Litigation Financing – This opinion rules that a lawyer may not invest in a fund that provides litigation financing if the lawyer’s practice accepts clients who obtain litigation financing.

Fees and Dues for 2021:

Each year the Council must set the amount of the annual membership fee. Dues are currently $300, which is the statutory maximum. The Finance and Audit Committee recommended, and the Bar Council agreed that the same amount be charged in 2021.

Client Security Fund:  The fiscal year for the Client Security Fund ends on September 30.  For 2020, the assessment imposed by the Supreme Court was $25 for each active member. The Bar Council recommended a $25 assessment for 2021.

*For those of you who may be interested in statistics, please see below.

Ethics Committee Stats:

The Ethics Committee responded to 1086 inquiries this third quarter.

Bar Exam Stats:

In terms of new lawyers for the year, 1300 applications were received for the 2020 North Carolina Bar Examinations, a decrease from the 1443 applications filed for the 2019 North Carolina Bar Examinations.  The February 2020 bar examination was administered to 402 applicants. Of the 116 first-timers from North Carolina law schools, 84 passed for a rate of 72.41%. The overall pass rate for the examination was 50.75%.  The July 2020 bar examination was administered in-person to 668 applicants on July 28 and 29, 2020.   The Board granted testing accommodations to all applicants who filed a request for accommodations due to immunocompromised conditions, and to applicants who filed a request due to having an immunocompromised member of their household. Fourteen applicants were granted a private testing room with a dedicated proctor.

The overall passing rate for the July 2020 Bar Examination was 83.08%. The passing rate for first-timers from North Carolina law schools was 91.82%. For out-of-state law schools, the passing rate for first-time applicants was 84.92%.

Attorney Client Assistance Program Stats:

During the third quarter of 2020, the Attorney Client Assistance Program staff responded to 778 phone calls from members of the public and placed 186 calls to lawyers in an effort to resolve their concerns. Staff also responded to 1,251 emails from members of the public and from attorneys and responded to 613 letters from inmates.

The State Bar opened 91 requests for fee dispute resolution during the third quarter, all of which were assigned to the two State Bar facilitators.

Grievance Stats:

In 2016, 1,375 grievance files were opened. In 2017, 1,305 grievance files were opened. In 2018, 1,247 grievance files were opened. In 2019, 1254 grievance files were opened. Through October 15, 2020, 770 grievance files were opened. As of October 14, 1052 grievances were pending. One hundred-forty-three grievances were stayed. Seventy-eight 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 168 of the pending cases and the cases were ready for the Grievance Committee’s decision. Of the remaining 663 files in which no recommendation has yet been made, 137 were more than six months old. In the third quarter of 2020, 156 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 2020.

Thank you for the opportunity to serve you at the Council, and please let me know if you have any concerns, questions or criticisms!

Sincerely, Anna Hamrick

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.


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.


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.


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.


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