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THE PROCESS AND YOUR COMMENTS

Proposed amendments to the Rules of the North Carolina State Bar are published for comment during the quarter after the council of the North Carolina State Bar approves their publication. The proposed amendments are published in the North Carolina State Bar's Journal and on this website. After publication for comment, the proposed rule amendments are considered for adoption by the council at its next quarterly meeting. If adopted, the rule amendments are submitted to the North Carolina Supreme Court for approval. Amendments become effective upon approval by the court. Unless otherwise noted, proposed additions to rules appear in in bold and underlined print, deletions are interlined. Proposed amendments to the Rules of Professional Conduct appear at the end of the page.

The State Bar welcomes your comments regarding proposed amendments to the rules. Please adress them to ethicscomments@ncbar.gov

Highlights

  • As authorized by 27 N.C. Admin. Code 1E.0306, and publicized in a sidebar to this article in the Fall 2022 edition of the Journal, at its meeting in October, the  council approved increasing the fee for initial and annual renewal registrations of prepaid legal services plans from $100 to $300.

Amendments APPROVED BY THE SUPREME

On  November 2, 2022, the North Carolina Supreme Court approved the following rule amendments. (For the complete text of the amendments, see the Spring 2022 and Summer 2022 editions of the Journal or visit the State Bar website: www.ncbar.gov.)

Amendments to the Rules Concerning Rulemaking Procedures

27 N.C.A.C. 1A, Section .1400, Rules Concerning Rulemaking Procedures

The amendment increases the timeframe within which a rule or rule amendment adopted by the council must be transmitted to the Supreme Court for its review.

Amendments to the Rules Concerning Procedures for the Administrative Committee

27 N.C.A.C. 1D, Section .0900, Procedures for the Administrative Committee

The amendment gives the secretary of the State Bar the discretion to transfer an active member to inactive status upon the completion of a petition to transfer to inactive status in the same manner that the secretary has the discretion to reinstate inactive members.

Amendments to the Rules Concerning the Plan for Certification of Paralegals

27 N.C.A.C. 1G, Section .0100, The Plan for Certification of Paralegals

The amendments revise administrative requirements for the Board of Paralegal Certification and permit a member of the board who is a certified paralegal to serve as chair.

Amendments to the Rules of Professional Conduct

27 N.C.A.C. 2, Section .0100, Client-Lawyer Relationship

The amendment to Rule 1.6 adds a sentence to comment [1], explaining that information acquired during a professional relationship with a client does not encompass information acquired through legal research. The amendments to Rule 1.9 clarify when a lawyer who has formerly represented a client may use or reveal public information relating to the former representation. The amendments to Rule 1.19 specify that the prohibitions in the rule apply to sexual conduct including sexually explicit communications with a client or others involved in a legal matter.

AMENDMENTS PENDING SUPREME COURT APPROVAL

At its meeting on October 21, 2022, the North Carolina State Bar Council voted to adopt the following rule amendments for transmission to the North Carolina Supreme Court for its approval. (For the complete text of the rule amendments, see the Fall 2022 edition of the Journal or visit the State Bar website.)

Additional proposed amendments pending before the North Carolina Supreme Court can be found in the Winter 2020 and Summer 2021 editions of the Journal.

Proposed Amendments to the Discipline and Disability Rules

27 N.C.A.C. 1B, Section .0100, Rule .0119, Effect of a Finding of Guilt in Any Criminal Case

The proposed amendments address what the State Bar must do when a criminal conviction relevant to a disciplinary matter has been expunged, overturned, or otherwise eliminated.

Proposed Amendments to the Procedures for the Administrative Committee

27 N.C.A.C. 1D, Section .0900, Rule .0902, Reinstatement from Inactive Status

The proposed amendments permit a federal judge who is an inactive member of the State Bar to use each year (or portion thereof) of service as a federal judge to offset each year of inactive status for the purpose of determining whether the judge must sit for and pass the bar exam to be reinstated to active status.

Proposed Amendment to the Rules Concerning Prepaid Legal Services Plans

27 N.C.A.C. 1E, Section .0300, Rules Concerning Prepaid Legal Services Plans

The proposed amendment changes the definition of a prepaid legal services plan to prohibit a plan from operating simultaneously as an “intermediary organization” (formerly known as a lawyer referral service).

Proposed Amendments to the Rules of Professional Conduct

27 N.C.A.C. 2, Rule 1.15, Safekeeping Property

The proposed amendments add definitions for four different types of ledgers to Rule 1.15-1, and reorder the subparagraphs in Rules 1.15-2 and 1.15-3 to make the progression of requirements more logical.

27 N.C.A.C. 2, Rule 4.1, Truthfulness in Statements to Others

The proposed technical correction to Rule 4.1, comment [2], replaces a reference to “tortuous misrepresentation” with “tortious misrepresentation.”

AMENDMENTS APPROVED BY THE SUPREME COURT

At its meetings on April 22, 2022, and July 22, 2022, the North Carolina State Bar Council voted to adopt the following rule amendments for transmission to the North Carolina Supreme Court for its approval. (For the complete text of the rule amendments, see the Spring 2022 and Summer 2022 editions of the Journal or visit the State Bar website.)

Additional proposed amendments pending before the North Carolina Supreme Court can be found in the Winter 2020 and Summer 2021 editions of the Journal.

Proposed Amendments to Rulemaking Procedures

27 N.C.A.C. 1A, Section .1400, Rulemaking Procedures.

The proposed amendment increases the timeframe within which a rule or rule amendment adopted by the council must be transmitted to the Supreme Court for its review.

Proposed Amendment to the Rule on Petitions for Inactive Status

27 N.C.A.C. 1D, Section .0900, Procedures for Administrative Committee

The proposed amendments will give the secretary of the State Bar the discretion to transfer an active member to inactive status upon the completion of a petition to transfer to inactive status in the same manner that the secretary has the discretion to reinstate inactive members.

Proposed Amendments to the Rules Governing the Paralegal Certification Program

27 N.C.A.C. 1G, Section .0100, The Plan for Certification of Paralegals

The proposed amendments revise administrative requirements for the Board of Paralegal Certification and permit a member of the board who is a certified paralegal to serve as chair.

Proposed Amendments to the Rules of Professional Conduct

27 N.C.A.C. 2, Rule 1.6, Confidentiality of Information

The proposed amendment adds a sentence to the comment to Rule 1.6 clarifying that information acquired during a professional relationship with a client does not encompass information acquired through legal research.

27 N.C.A.C. 2, Rule 1.9, Duties to Former Clients

The proposed amendments clarify when a lawyer who has formerly represented a client may use or reveal information relating to the former representation.

27 N.C.A.C. 2, Rule 1.19, Sexual Relations with Clients Prohibited

The proposed amendments specify that the prohibitions in the rule apply to sexual conduct including sexually explicit communications with a client or others involved in a legal matter.

Published on Behalf of the Board of Law Examiners: Proposed Amendments to the Board of Law Examiners’ Rules Governing Admission to the Practice of Law

Section .0500, Requirements for Applicants

The proposed amendments eliminate the North Carolina state-specific component requirement for general and Uniform Bar Examination transfer applicants.

Proposed Amendments

At its meeting on October 21, 2022, the council voted to publish for comment the following proposed rule amendments:

Proposed Amendments to the Rule on Standing Committees of the Council

27 N.C.A.C. 1A, Section .0700, Standing Committees of the Council

The proposed amendments designate the Access to Justice Committee as a standing committee of the council.

Rule .0701, Standing Committees and Boards

(a) Standing Committees. Promptly after his or her election, the president shall appoint members to the standing committees identified below to serve for one year beginning January 1 of the year succeeding his or her election. Members of the committees need not be councilors, except to the extent expressly required by these rules, and may include non-lawyers. Unless otherwise directed by resolution of the council, all members of a standing committee, whether councilors or non-councilors, shall be entitled to vote as members of the standing committee or any subcommittee or panel thereof.

(1) Executive Committee. It shall be the duty of the Executive Committee to receive reports and recommendations from standing committees, boards, and special committees; to nominate individuals for appointments made by the council; to make long range plans for the State Bar; and to perform such other duties and consider such other matters as the council or the president may designate.

...

(9) Access to Justice Committee. It shall be the duty of the Access to Justice Committee to study and to recommend to the council programs and initiatives that respond to the profession’s responsibility, set forth in the Preamble to the Rules of Professional Conduct, “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.” 27 N.C. Admin. Code 2.0.1, Preamble.

(b) Boards...

...

Proposed Amendments to the Discipline and Disability Rules

27 N.C.A.C. 1B, Section .0100, Discipline and Disability Rules

Proposed amendments to Rule .0113 were published after the July 2022 Quarterly Meeting following the adoption of statutory amendments that required the establishment of a review procedure for public discipline issued to a respondent by the Grievance Committee. Upon the initiation of the review procedure in the third quarter, it was determined that the amendments to Rule .0113 required some minor revisions, and two additional rules required amendment.

Rule .0105, Chairperson of the Grievance Committee: Powers and Duties

(a) The chairperson of the Grievance Committee will have the power and duty

(1) to supervise the activities of the counsel;

...

(20) to appoint a subcommittee to make recommendations to the council for such amendments to the Discipline and Disability Rules as the subcommittee deems necessary or appropriate.;

(21) to appoint the members of a grievance review panel; and

(22) to perform such other duties as the council may direct.

(b) Absence of Chairperson and Delegation of Duties. ...

Rule .0106, Grievance Committee: Powers and Duties

The Grievance Committee will have the power and duty

(1) to direct the counsel to investigate any alleged misconduct or disability of a member of the North Carolina State Bar coming to its attention;

...

(15) to consider and decide whether to follow the recommendation of a grievance review panel; and

(16) to perform such other duties as the council may direct.

Rule .0113, Proceedings Before the Grievance Committee

(a) ...

...

(m) There shall be a grievance review panel of the Grievance Committee. For each review conducted, the chair shall appoint a panel consisting of the chair, two vice-chairs, and two other members of the Grievance Committee, including one public member. The panel shall not include any member who serves on the subcommittee that was assigned to address the underlying grievance file. The chair shall serve as the chair of the panel. If the chair or either of the two vice-chairs from the other subcommittees served on the subcommittee that issued the discipline or are otherwise unable to serve on the review panel, the chair may appoint a substitute member or members of the committee to serve on the review panel in the place of the chair or in the place of such vice-chair or vice-chairs.

(1) The panel shall have the following powers and duties:

(A) Upon a timely-filed written request by a grievance respondent, to review an order of public discipline issued to the respondent by the Grievance Committee.

(i) A written request for review must be filed with the secretary of the State Bar within 15 days of service of the public discipline upon the respondent.

(ii) The written request shall contain the grounds upon which the respondent believes review is warranted and may include supporting documentary evidence that has not previously been submitted to the Grievance Committee.

(iii) The respondent shall have the right be entitled to be represented by legal counsel at the respondent’s expense. The respondent or the respondent’s legal counsel and legal counsel for the State Bar shall have the right be entitled to appear and to present oral arguments to the panel. The panel’s review shall be conducted upon the written record and oral arguments. Neither the respondent nor the State Bar may present live testimony or compel the production of books, papers, and other writings and documents in connection with a request for review. The panel may, in its discretion, question the respondent, legal counsel for the respondent, and legal counsel for the State Bar.

(iv) The panel shall consider the request for review, any documentation submitted in support of the request for review, and all materials that were before the Grievance Committee when it made its decision. The respondent shall be entitled to receive all material considered by the panel other than attorney-client privileged communications of the Office of Counsel and work product of the Office of Counsel. The panel shall determine whether the public discipline issued by the Grievance Committee is appropriate in light of all material considered by the panel.

(a) After considering the request for review, oral arguments, and the documentary record, the panel may, by majority vote, either concur in the public discipline issued by the Grievance Committee or remand the grievance file to the Grievance Committee with its recommendation for a different disposition.

(b) The panel shall prepare a memorandum communicating its determination to the respondent and to the Office of Counsel. The memorandum will not constitute an order and will not contain findings of fact, conclusions of law, or the rationale for the panel’s determination.

(c) The Grievance Committee shall act upon a remand at its next regularly scheduled meeting.

(d) Upon remand, the Grievance Committee may affirm its original public discipline issued or may reach a different disposition of the grievance file.

(e) The decision of the Grievance Committee upon remand is final, and its decision is not subject to further consideration by the Grievance Committee.

(f) Within 15 days after service upon the respondent of (i) the panel’s memorandum concurring in the original public discipline issued by the Grievance Committee, or (ii) the Grievance Committee’s final decision upon remand after review, the respondent may refuse the public discipline imposed by the Grievance Committee and request a hearing before the commission. Such refusal and request shall be in writing, addressed to the Grievance Committee, and served upon the secretary of the State Bar by certified mail, return receipt requested.

(v) Second or subsequent requests for review of Grievance Committee action in the same file will not be considered.

(vi) A request for review is in addition to and not in derogation of all procedural and substantive rights contained in the Discipline and Disability Rules of the State Bar.

(2) All proceedings and deliberations of the panel shall be conducted in a manner and at a time and location to be determined by the chair of the Grievance Committee. Reviews may be conducted by videoconference in the discretion of the chair.

(3) All proceedings of the panel are closed to the public. Neither the respondent nor legal counsel for the respondent and the State Bar shall be privy to deliberations of the panel. All documents, papers, letters, recordings, electronic records, or other documentary materials, regardless of physical form or characteristic, in the possession of the panel are confidential and are not public records within the meaning of Chapter 132 of the General Statutes.

(mn) Disciplinary Hearing Commission Complaints - Formal complaints will be issued in the name of the North Carolina State Bar as plaintiff and signed by the chairperson of the Grievance Committee. Amendments to complaints may be signed by the counsel alone, with the approval of the chairperson of the Grievance Committee.

Proposed Amendments to the Rules Governing IOLTA

27 N.C.A.C. 1D, Section .1300, Rules Governing the Administration of the Plan for Interest on Lawyers’ Trust Accounts (IOLTA)

The proposed amendments are largely technical in nature, improving clarity and revising designated dates and timeframes to comport with practice.

Rule .1306, Appointment of Members; When; Removal

The members of the board shall be appointed by the Council of the North Carolina State Bar. The council will make appointments for upcoming vacancies occurring at the end of a member’s term prior to the term ending on August 31. The July quarterly meeting is when the appointments are made. Vacancies occurring by reason of death, resignation or removal shall be filled by appointment of the council at the next quarterly meeting following the event giving rise to the vacancy, and the person so appointed shall serve for the balance of the vacated term. Any member of the board may be removed at any time by an affirmative vote of a majority of the members of the council in session at a regularly called meeting.

Rule .1313, Fiscal Responsibility

All funds of the board shall be considered funds of the North Carolina State Bar, with the beneficial interest in those funds being vested in the board for grants to qualified applicants in the public interest, less administrative costs. These funds shall be administered and disbursed by the board in accordance with rules or policies developed by the North Carolina State Bar and approved by the North Carolina Supreme Court. The funds shall be used only to pay the administrative costs of the IOLTA program and to fund grants approved by the board under the four categories approved by the North Carolina Supreme Court as outlined above.

(a) Maintenance of Accounts: Audit - The funds of the IOLTA program shall be maintained in a separate account from funds of the North Carolina State Bar such that the funds and expenditures therefrom can be readily identified. The accounts of the board shall be audited on an annual basis. The audit will be conducted after the books are closed at a time determined by the auditors, but not later than March 31 April 30 of the year following the year for which the audit is to be conducted.

...

Rule .1314, Meetings

The board by resolution may set regular meeting dates and places. Special meetings of the board may be called at any time upon notice given by the chairperson, the vice-chairperson or any two members of the board. Notice of the meeting shall be given to all members of the board at least two days prior to the meeting as directed by the board. by mail, telegram, facsimile transmission, or telephone. Notice shall also be provided as required by any statutory provision regulating notice of public meetings of agencies of the state. A quorum of the board for conducting its official business shall be a majority of the total membership of the board.

Rule .1316, IOLTA Accounts

(a) IOLTA Account Defined. Pursuant to order of the North Carolina Supreme Court, every general trust account, as defined in the Rules of Professional Conduct, must be an interest or dividend-bearing account. (As used herein, “interest” shall refer to both interest and dividends.) Funds deposited in a general, interest-bearing trust account must be available for withdrawal upon request and without delay (subject to any notice period that the bank is required to reserve by law or regulation). Additionally, pursuant to G.S. 45A-9, a settlement agent who maintains a trust or escrow account for the purposes of receiving and disbursing closing funds and loan funds shall direct that any interest earned on funds held in that account be paid to the North Carolina State Bar to be used for the purposes authorized under the Interest on Lawyers Trust Account Program according to Section .1316(d) below. For the purposes of these rules, all such accounts shall be known as “IOLTA Accounts” (also referred to as “Accounts”).

(b) Eligible Banks. Lawyers may only maintain an one or more IOLTA Account(s) only at banks and savings and loan associations chartered under North Carolina or federal law, as required by Rule 1.15 of the Rules of Professional Conduct, that offer and maintain IOLTA Accounts that comply with the requirements set forth in this Subchapter (Eligible Banks)...

(c) Notice Upon Opening or Closing IOLTA Account. Every lawyer/law firm or settlement agent maintaining IOLTA Accounts shall advise NC IOLTA of the establishment or closing of each IOLTA Account. Such notice shall include (i) the name of the bank where the account is maintained, (ii) the name of the account, (iii) the account number, and (iv) the names and bar numbers of the lawyer(s) in the firm and/or the name(s) of any non-lawyer settlement agent(s) maintaining the account. The North Carolina State Bar shall furnish to each lawyer/law firm or settlement agent maintaining an IOLTA Account a suitable plaque notice to clients explaining the program, which plaque shall be exhibited in the office of the lawyer/law firm or settlement agent.

(d) Directive to Bank. Every lawyer/law firm or law firm and every settlement agent maintaining a North Carolina IOLTA Accounts shall direct any bank in which an IOLTA Account is maintained to:

(1) ...;

(2) transmit with each remittance to NC IOLTA a statement showing for each account: (i) the name of the lawyer/law firm/lawyer or settlement agent maintaining the account, (ii) the lawyer/law firm’s or settlement agent’s IOLTA Account number, (iii) the earnings period, (iv) the average balance of the account for the earnings period, (v) the type of account, (vi) the rate of interest applied in computing remittance, (vii) the amount of any service charges for the earnings period, and (viii) the net remittance for the earnings period; and

(3) transmit to the lawyer/law firm/lawyer or settlement agent maintaining the account a report showing the amount remitted to NC IOLTA, the earnings period, and the rate of interest applied in computing the remittance.

(e) Allowable Reasonable Service Charges... Allowable reasonable service charges for IOLTA Accounts are: (i) a reasonable account maintenance fee, (ii) per check charges, (iii) per deposit charges, (iv) a fee in lieu of a minimum balance, (v) federal deposit insurance fees, and (vi) automated transfer (Sweep) fees. All service charges other than allowable reasonable service charges assessed against an IOLTA Account are the responsibility of and shall be paid by the lawyer/ or law firm or settlement agent. No service charges in excess of the interest earned on the Account for any month or quarter shall be deducted from interest earned on other IOLTA Accounts or from the principal of the Account.

Rule .1319, Certification

Every lawyer admitted to practice in North Carolina shall certify annually on or before June 30 to the North Carolina State Bar that all general trust accounts maintained by the lawyer or his or her law firm are established and maintained as IOLTA accounts as prescribed by Rule 1.15 of the Rules of Professional Conduct and Rule .1316 of this subchapter or that the lawyer is exempt from this provision because he or she does not maintain any general trust account(s) for North Carolina client funds. Any lawyer acting as a settlement agent who maintains a trust or escrow account used for the purpose of receiving and disbursing closing and loan funds shall certify annually on or before June 30 to the North Carolina State Bar that such accounts are established and maintained as IOLTA accounts as prescribed by G.S. 45A-9 and Rule .1316 of this subchapter.

Proposed Amendments to the Rules Governing the Continuing Legal Education Program

27 N.C.A.C. 1D, Section .1500, Rules Governing the Administration of the Continuing Legal Education Program; 27 N.C.A.C. 1D, Section .1600, Regulations Governing the Administration of the Continuing Legal Education Program

The following proposed amendments to the CLE rules are part of the ongoing process of improving the procedures for regulating compliance with mandatory CLE. Additional proposed amendments to the CLE rules can be found in the Fall 2022 edition of the Journal.

Rule .1517, Exemptions

(a) Notification of Board. To qualify for an exemption, for a particular calendar year, a member shall notify the board of the exemption in during the annual membership renewal process or in another manner as directed by the board report for that calendar year sent to the member pursuant to Rule .1522 of this subchapter. All active members who are exempt are encouraged to attend and participate in legal education programs.

(b) Government Officials and Members of Armed Forces. The governor, the lieutenant governor, and all members of the council of state, members of the United States Senate, members of the United States House of Representatives, members of the North Carolina General Assembly, full-time principal chiefs and vice-chiefs of any Indian tribe officially recognized by the United States or North Carolina state governments, and members of the United States Armed Forces on full-time active duty are exempt from the requirements of these rules for any calendar year in which they serve some portion thereof in such capacity.

(c) Judiciary and Clerks. Members of the state judiciary who are required by virtue of their judicial offices to take an average of (twelve) 12 or more hours of continuing judicial or other legal education annually and all members of the federal judiciary are exempt from the requirements of these rules for any calendar year in which they serve some portion thereof in such judicial capacities. Additionally, Aa full-time law clerk for a member of the federal or state judiciary is exempt from the requirements of these rules for any calendar year in which the clerk serves some portion thereof in such capacity, provided, however, that

(1) the exemption shall not exceed two consecutive calendar years; and, further provided, that

(2) the clerkship begins within one year after the clerk graduates from law school or passes the bar examination for admission to the North Carolina State Bar whichever occurs later.

(d) Nonresidents. The board may exempt an active member from the continuing legal education requirements if, for at least six consecutive months immediately prior to requesting an exemption, (i) the member resides outside of North Carolina, (ii) the member does not practice law in North Carolina, and (iii) the member does not represent North Carolina clients on matters governed by North Carolina law. Any active member residing outside of North Carolina who does not practice in North Carolina for at least six (6) consecutive months and does not represent North Carolina clients on matters governed by North Carolina law shall be exempt from the requirements of these rules.

(e) Law Teachers. An exemption from the requirements of these rules shall be given to any active member who does not practice in North Carolina or represent North Carolina clients on matters governed by North Carolina law and who is:

(1) A full-time teacher at the School of Government (formerly the Institute of Government) of the University of North Carolina;

(2) A full-time teacher at a law school in North Carolina that is accredited by the American Bar Association; or

(3) A full-time teacher of law-related courses at a graduate level professional school accredited by its respective professional accrediting agency.

(f) Special Circumstances Exemptions. The board may exempt an active member from the continuing legal education requirements for a period of not more than one year at a time upon a finding by the board of special circumstances unique to that member constituting undue hardship or other reasonable basis for exemption., or for a longer period upon a finding of a permanent disability.

(g) Pro Hac Vice Admission. Nonresident attorneys lawyers from other jurisdictions who are temporarily admitted to practice in a particular case or proceeding pursuant to the provisions of G.S. 84-4.1 shall not be subject to the requirements of these rules.

(h) Senior Status Exemption. The board may exempt an active member from the continuing legal education requirements if

(1) the member is sixty-five years of age or older; and

(2) the member does not render legal advice to or represent a client unless the member associates with under the supervision of another active member who assumes responsibility for the advice or representation.

(i) Bar Examiners. Members of the North Carolina Board of Law Examiners are exempt from the requirements of these rules for any calendar year in which they serve some portion thereof in such capacity. CLE Record During Exemption Period. During a calendar year in which the records of the board indicate that an active member is exempt from the requirements of these rules, the board shall not maintain a record of such member’s attendance at accredited continuing legal education programs. Upon the termination of the member’s exemption, the member may request carry over credit up to a maximum of twelve (12) credits for any accredited continuing legal education program attended during the calendar year immediately preceding the year of the termination of the exemption. Appropriate documentation of attendance at such programs will be required by the board.

(j) Permanent Disability. Attorneys who have a permanent disability that makes attendance at CLE programs inordinately difficult may file a request for a permanent substitute program in lieu of attendance and shall therein set out continuing legal education plans tailored to their specific interests and physical ability. The board shall review and approve or disapprove such plans on an individual basis and without delay.

(kj) Application for Substitute Compliance and Exemptions. Other requests for substitute compliance, partial waivers, and/or other exemptions for hardship or extenuating circumstances may be granted by the board on an annual yearly basis upon written application of the attorney member.

(l) Bar Examiners. Credit is earned through service as a bar examiner of the North Carolina Board of Law Examiners. The board will award 12 hours of CLE credit for the preparation and grading of a bar examination by a member of the North Carolina Board of Law Examiners.

(k) Effect of Annual Exemption on CLE Requirements. Exemptions are granted on an annual basis and must be claimed each year. An exempt member’s new reporting period will begin on March 1 of the year for which an exemption is not granted. No credit from prior years may be carried forward following an exemption.

(l) Exemptions from Professionalism Requirement for New Members.

(1) Licensed in Another Jurisdiction. A newly admitted member who is licensed by a United States jurisdiction other than North Carolina for five or more years prior to admission to practice in North Carolina is exempt from the PNA program requirement and must notify the board of the exemption during the annual membership renewal process or in another manner as directed by the board.

(2) Inactive Status. A newly admitted member who is transferred to inactive status in the year of admission to the North Carolina State Bar is exempt from the PNA program requirement but, upon the entry of an order transferring the member back to active status, must complete the PNA program in the reporting period that the member is subject to the requirements set forth in Rule .1518(b) unless the member qualifies for another exemption in this rule.

(3) Other Rule .1517 Exemptions. A newly admitted active member who qualifies for an exemption under Rules .1517(a) through (i) of this subchapter shall be exempt from the PNA program requirement during the period of the Rule .1517 exemption. The member shall notify the board of the exemption during the annual membership renewal process or in another manner as directed by the board. The member must complete the PNA program in the reporting period the member no longer qualifies for the Rule .1517 exemption.

Rule .1518, Continuing Legal Education Requirements

(a) Reporting period. Except as provided in paragraphs (1) and (2) below, the reporting period for the continuing legal education requirements shall be three years, beginning March 1 through the last day of February:

(1)New admittees. The reporting period for newly admitted members shall begin on March 1 of the calendar year of admission.

(2) Reinstated members.

(A) A member who is transferred to and subsequently reinstated from inactive or suspended status before the end of the reporting period in effect at the time of the original transfer shall retain the member’s original reporting period and these Rules shall be applied as though the transfer had not occurred.

(B) Except as provided in Subparagraph (A) above, the first reporting period for reinstated members shall be the same as if the member was newly admitted pursuant to Paragraph (1) above.

(ab) Annual Hours Rrequirement. Each active member subject to these rules shall complete 12 36 hours of approved continuing legal education during each calendar year beginning January 1, 1988 reporting period, as provided by these rules. and the regulations adopted thereunder.

Of the 12 36 hours:

(1) at least 2 6 hours shall be devoted to the areas of professional responsibility or professionalism or any combination thereof ethics as defined in Rule .1501(c)(8) of this subchapter;

(2) at least 1 hour shall be devoted to technology training as defined in Rule .1501(c)(1719) of this subchapter. This credit must be completed in at least 1-hour increments; and further explained in Rule .1602(e) of this subchapter; and

(3) effective January 1, 2002, at least once every three calendar years, each member shall complete an hour of continuing legal education at least 1 hour shall be devoted to programs instruction on professional well-being substance abuse and debilitating mental conditions as defined in Rule .1501(c)(18) of this subchapter.1602 (a). This credit must be completed in at least 1-hour increments. This hour shall be credited to the annual 12-hour requirement but shall be in addition to the annual professional responsibility/professionalism requirement. To satisfy the requirement, a member must attend an accredited program on substance abuse and debilitating mental conditions that is at least one hour long.

(bc) Carryover credit. Members may carry over up to 12 credit hours from one reporting period to the next reporting period. Carryover hours will count towards a member’s total hours requirement but may not be used to satisfy the requirements listed in Paragraphs (b)(1)-(3) of this Rule. carry over up to 12 credit hours earned in one calendar year to the next calendar year, which may include those hours required by paragraph (a)(1) above. Additionally, a newly admitted active member may include as credit hours which may be carried over to the next succeeding year any approved CLE hours earned after that member’s graduation from law school.

(d) The board shall determine the process by which credit hours are allocated to lawyers’ records to satisfy deficits from prior reporting periods. The allocation shall be applied uniformly to the records of all affected lawyers and may not be appealed by an affected lawyer.

(ce) Professionalism Requirement for New Members. Except as provided in Rule .1517(l), paragraph (d)(1), each newly admitted active member admitted to of the North Carolina State Bar after January 1, 2011, must complete the an approved North Carolina State Bar Professionalism for New Attorneys Pprogram (PNA Pprogram) as described in Rule .1525 in during the member’s first reporting period. year the member is first required to meet the continuing legal education requirements as set forth in Rule .1526(b) and (c) of this subchapter. It is strongly recommended that newly admitted members complete the PNA program within their first year of admission. CLE credit for the PNA Pprogram shall be applied to the annual mandatory continuing legal education requirements set forth in pParagraph (ab) above.

[Subsequent subparts and paragraphs deleted.]

Rule .1520, Requirements for Program Approval Registration of Sponsors and Program Approval (replaced in its entirety)

(a) Approval. CLE programs may be approved upon the application of a sponsor or an active member on an individual program basis. An application for such CLE program approval shall meet the following requirements:

(1) The application shall be submitted in the manner directed by the board.

(2) The application shall contain all information requested by the board and include payment of any required application fees.

(3) The application shall be accompanied by a program outline or agenda that describes the content in detail, identifies the teachers, lists the time devoted to each topic, and shows each date and location at which the program will be offered.

(4) The application shall disclose the cost to attend the program, including any tiered costs,

(5) The application shall include a detailed calculation of the total CLE hours requested, including whether any hours satisfy one of the requirements listed in Rules .1518(b) and .1518(d) of this subchapter, and Rule 1.15-2(s)(3) of the Rules of Professional Conduct.

(b) Program Application Deadlines and Fee Schedule.

(1) Program Application and Processing Fees. Program applications submitted by sponsors shall comply with the deadlines and Fee Schedule set by the board and approved by the council, including any additional processing fees for late or expedited applications.

(2) Free Programs. Sponsors offering programs without charge to all attendees, including non-members of any membership organization, shall pay a reduced application fee.

(3) Member Applications. Members may submit a program application for a previously unapproved program after the program is completed, accompanied by a reduced application fee.

(4) On-Demand CLE Programs. Approved on-demand programs are valid for three years. After the initial three-year term, programs may be renewed annually in a manner approved by the board that includes a certification that the program content continues to meet the accreditation standards in Rule .1519 and the payment of a program renewal fee.

(5) Repeat Programs. Sponsors seeking approval for a repeat program that was previously approved by the board within the same CLE year (March 1 through the end of February) shall pay a reduced application fee.

(c) Program Quality and Materials. The application and materials provided shall reflect that the program to be offered meets the requirements of Rule .1519 of this subchapter. Sponsors and active members seeking credit for an approved program shall furnish, upon request of the board, a copy of all materials presented and distributed at a CLE program. Any sponsor that expects to conduct a CLE program for which suitable materials will not be made available to all attendees may be required to show why materials are not suitable or readily available for such a program.

(d) Online and On-Demand CLE. The sponsor of an online or on-demand program must have an approved method for reliably and actively reliable method for recording and verifying attendance and reporting the number of credit hours earned by each participant. Applications for any online or on-demand program must include a description of the sponsor’s attendance verification procedure.

(e) Notice of Application Decision. Sponsors shall not make any misrepresentations concerning the approval of a program for CLE credit by the board. The board will provide notice of its decision on CLE program approval requests pursuant to the schedule set by the board and approved by the council. A program will be deemed approved if the notice is not timely provided by the board pursuant to the schedule. This automatic approval will not operate if the sponsor contributes to the delay by failing to provide the complete information requested by the board or if the board timely notifies the sponsor that the matter has been delayed.

(f) Denial of Applications. Failure to provide the information required in the program application will result in denial of the program application. Applicants denied approval of a program may request reconsideration of such a decision by submitting a letter of appeal to the board within 15 days of receipt of the notice of denial. The decision by the board on an appeal is final.

(g) Attendance Records. Sponsors shall timely furnish to the board a list of the names of all North Carolina attendees together with their North Carolina State Bar membership numbers in the manner and timeframe prescribed by the board.

(h) Late Attendance Reporting. Absent good cause shown, a sponsor’s failure to timely furnish attendance reports pursuant to this rule will result in (i) a late reporting fee in an amount set by the board and approved by the council, and (ii) the denial of that sponsor’s subsequent program applications until the attendance is reported and the late fee is paid.

Rule .15213, Noncompliance

(a) Failure to Comply with Rules May Result in Suspension. A member who is required to file a report of CLE credits and does not do so or who fails to meet the minimum requirements of these rules, including the payment of duly assessed penalties and attendee fees, may be suspended from the practice of law in the state of North Carolina.

(b) Late Compliance. Any member who fails to complete his or her required hours by the end of the member’s reporting period (i) shall be assessed a late compliance fee in an amount set by the board and approved by the council, and (ii) shall complete any outstanding hours within 60 days following the end of the reporting period. Failure to comply will result in a suspension order pursuant to Paragraph (c) below.

(bc) Notice of Suspension Order for Failure to Comply. Sixty days following the end of the reporting period, Tthe board council shall notify issue an order suspending any member who appears to have faileds to meet the requirements of these rules within 45 days after the service of the order, that the member will be suspended from the practice of law in this state, unless (i) the member shows good cause in writing why the suspension should not take effect; be made or (ii) the member shows in writing that he or she has complied with meets the requirements within the 30-days period after service of the notice order. The order shall be entered and served as set forth in Rule .0903(d) of this subchapter. Additionally, the member shall be assessed a non-compliance fee as described in Paragraph (d) below. Notice shall be served on the member by mailing a copy thereof by registered or certified mail or designated delivery service (such as Federal Express or UPS), return receipt requested, to the last known address of the member according to the records of the North Carolina State Bar or such later address as may be known to the person attempting service. Service of the notice may also be accomplished by (i) personal service by a State Bar investigator or by any person authorized by Rule 4 of the North Carolina Rules of Civil Procedure to serve process, or (ii) email sent to the email address of the member contained in the records of the North Carolina State Bar if the member sends an email from that same email address to the State bar acknowledging such service.

(d) Non-Compliance Fee. A member to whom a suspension order is issued pursuant to Paragraph (c) above shall be assessed a non-compliance fee in an amount set by the board and approved by the council; provided, however, upon a showing of good cause as determined by the board as described in Paragraph (g)(2) below, the fee may be waived. The non-compliance fee is in addition to the late compliance fee described in Paragraph (b) above.

(ce) Effect of Non-compliance with Suspension Order. Entry of Order of Suspension Upon Failure to Respond to Notice to Show Cause. If a member fails to meet the requirements during the 45-day period after service of the suspension order under Paragraph (c) above, the member shall be suspended from the practice of law subject to the obligations of a disbarred or suspended member to wind down the member’s law practice as set forth in Rule .0128 of Subchapter 1B. written response attempting to show good cause is not postmarked or received by the board by the last day of the 30-day period after the member was served with the notice to show cause upon the recommendation of the board and the Administrative Committee, the council may enter an order suspending the member from the practice of law. The order shall be entered and served as set forth in Rule .0903(d) of this Subchapter.

(df) Procedure Upon Submission of a Timely Response to a Notice to Show Cause Evidence of Good Cause.

(1) Consideration by the Board. If the member files a timely written response to the notice, suspension order attempting to show good cause for why the suspension should not take effect, the suspension order shall be stayed and the board shall consider the matter at its next regularly scheduled meeting. or may delegate consideration of the matter to a duly appointed committee of the board. If the matter is delegated to a committee of the board and the committee determines that good cause has not been shown, the member may file an appeal to the board. The appeal must be filed within 30 calendar days of the date of the letter notifying the member of the decision of the committee. The board shall review all evidence presented by the member to determine whether good cause has been shown. or to determine whether the member has complied with the requirements of these rules within the 30-day period after service of the notice to show cause.

(2) Recommendation of the Board. The board shall determine whether the member has shown good cause as to why the member should not be suspended. If the board determines that good cause has not been shown, the member’s suspension shall become effective 15 calendar days after the date of the letter notifying the member of the decision of the board. The member may request a hearing by the Administrative Committee within the 15-day period after the date of the board’s decision letter. The member’s suspension shall be stayed upon a timely request for a hearing. or that the member has not shown compliance with these rules within the 30-day period after service of the notice to show cause, then the board shall refer the matter to the Administrative Committee that the member be suspended.

(3) Consideration by and Recommendation of Hearing Before the Administrative Committee. The Administrative Committee shall consider the matter at its next regularly scheduled meeting. The burden of proof shall be upon the member to show cause by clear, cogent, and convincing evidence why the member should not be suspended from the practice of law for the apparent failure to comply with the rules governing the continuing legal education program. Except as set forth above, the procedure for such hearing shall be as set forth in Rule .0903(d)(1) and (2) of this Subchapter.

(4) Administrative Committee Decision. If the Administrative Committee determines that the member has not met the burden of proof, the member’s suspension shall become effective immediately. The decision of the Administrative Committee is final. Order of Suspension. Upon the recommendation of the Administrative Committee, the council may determine that the member has not complied with these rules and may enter an order suspending the member from the practice of law. The order shall be entered and served as set forth in Rule .0903(d)(3) of this Subchapter.

(e) Late Compliance Fee. Any member to whom a notice to show cause is issued pursuant to Paragraph (b) above shall pay a late compliance fee as set forth in Rule .1522(d) of this Subchapter; provided, however, upon a showing of good cause as determined by the board as described in Paragraph (d)(2) above, the fee may be waived.

(g) Reinstatement. Suspended members must petition for reinstatement to active status pursuant to Rule .0904(b)-(h) of this Subchapter.

Rule .15224, Reinstatement

[Deleted and incorporated into Proposed Rule .1521.] 

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