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