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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

  • Proposed administrative overhaul of the CLE rules and regulations

  • Proposed amendment to Rule 1.19, Sexual Relations with Clients Prohibited

Amendments PENDING SUPREME Court APPROVAL

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 amendment 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 Continuing Legal Education Program

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

The proposed amendments add “Diversity, Inclusion, and Elimination of Bias Training” to the definitions in Rule .1501 and, in Rule .1518, include such training in the 2022 CLE requirements for active members of the State Bar.   

Proposed Amendments to the Certification Standards for the Criminal Law Specialty

27 N.C.A.C. 1D, Section .2500, Rules Governing the Certification Standards for the Criminal Law Specialty

The proposed amendments adjust the criminal law specialty rules to recognize separate subspecialties in federal criminal law, state criminal law, and juvenile delinquency law. Currently, the rules recognize a combined federal/state criminal law specialty, a state criminal law subspecialty, and a juvenile delinquency law subspecialty. Specialists currently certified in the federal/state criminal law specialty will remain so until their next recertification when they will have to qualify for recertification in federal criminal law or state criminal law or in both subspecialties.

Proposed Amendments to the Rules of Professional Conduct

27 N.C.A.C. 2, Rules of Professional Conduct, Rule 0.1, Preamble

The proposed amendment adds a paragraph to the Preamble on equal treatment of all persons encountered when acting in a professional capacity.

27 N.C.A.C. 2, Rule 1.1, Competence

The proposed amendment to Rule 1.1 adds new comment [9] which states that awareness of implicit bias and cultural differences enhances a lawyer’s competency.

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.

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 April 22, 2022, the council voted to publish for comment the following proposed rule amendments:

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.

.0105, Appointment of Members; When; Removal

(a) ...

(b) Procedure for Nomination of Candidates for Paralegal Members.

(1) Composition of Nominating Committee. At least 60 days prior to a meeting of the council at which one or more paralegal members of the board are subject to appointment for a full three-year term, the board shall appoint a nominating committee comprised of seven certified paralegals as follows: selected by the board. The nominating committee should consist of active certified paralegals, including but not limited to representatives from paralegal and legal assistant associations, organizations, or divisions of legal organizations, as well as independent paralegals (not employed by a law firm, government entity, or legal department).

(i) A representative selected by the North Carolina Paralegal Association;

(ii) A representative selected by the North Carolina Bar Association Paralegal Division;

(iii) A representative selected by the North Carolina Advocates for Justice Legal Assistants Division;

(iv) Three representatives from three local or regional paralegal organizations to be selected by the board; and

(v) An independent paralegal (not employed by a law firm, government entity, or legal department) to be selected by the board.

(2) Selection of Candidates. The nominating committee shall meet within 30 days of its appointment to select at least two but no more than five certified paralegals as candidates for each paralegal member vacancy on the board for inclusion on the ballot to be mailed sent to all active certified paralegals.

(3) Vote of Certified Paralegals. At least 30 days prior to the meeting of the council at which a paralegal member appointment to the board will be made, a ballot shall be mailed or a notice of online voting shall be emailed or mailed to all active certified paralegals at each certified paralegal’s physical or email address of record on file with the North Carolina State Bar. vote on the list of candidates provided by the nominating committee shall be conducted of all active certified paralegals in a manner approved by the board. Notice of the vote shall be sent to all active certified paralegals using contact information on file with the North Carolina State Bar, shall contain instructions on how to participate in the vote, and shall state how many paralegal member positions on the board are subject to appointment and the names of the candidates selected by the nominating committee for each such position. The ballot or notice shall be accompanied by written instructions, and shall state how many paralegal member positions on the board are subject to appointment, the names of the candidates selected by the nominating committee for each such position, and when and where the ballot should be returned. If balloting will be online, the notice shall explain how to access the ballot on the State Bar’s paralegal website and the method for voting online. Write-in candidates shall be permitted and the instructions shall so state. Each ballot sent by mail shall be sequentially numbered with a red identifying numeral in the upper right hand corner of the ballot. Online balloting shall be by secure log-in to the State Bar’s paralegal website using the certified paralegal’s identification number and personal password. Any certified paralegal who does not have an email address on file with the State Bar shall be mailed a ballot. The board shall maintain appropriate records respecting how many ballots or notices are sent to prospective voters in each election as well as how many ballots are returned. Only original ballots will be accepted by mail. Votes cast or received after the deadline stated in the notice Ballots received after the deadline stated on the ballot or the email notice will not be counted. The names of the two candidates receiving the most votes for each open paralegal member position shall be the nominees submitted to the council.

...

.0108, Succession

Each member of the board shall be entitled to serve for one full three-year term and to succeed himself or herself for one additional three-year term. Each certified paralegal member shall be eligible for reappointment by the council at the end of his or her term without appointment of a nominating committee or vote of all active certified paralegals as would be otherwise required by Rule .0105 of this subchapter. Thereafter, no person may be reappointed without having been off of the board for at least three years.; provided, however, that any member who is designated chairperson at the time that the member’s second three-year term expires may serve one additional year on the board in the capacity of chair.

.0109, Appointment of Chairperson

The council shall appoint the chairperson of the board from among the lawyer members of the board. The term of the chairperson shall be one year. The chairperson may be reappointed thereafter during his or her tenure on the board. The chairperson shall preside at all meetings of the board, shall prepare and present to the council the annual report of the board, and generally shall represent the board in its dealings with the public.

Proposed Amendments to the Rules of Professional Conduct

27 N.C.A.C. 2, Rules of Professional Conduct, 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.

Rule 1.19 Sexual Relations Conduct With Clients Prohibited

(a) A lawyer shall not have engage in sexual relations activity with a current client of the lawyer. For purposes of this Rule, “sexual activity” means:

(1) sexual intercourse; or

(2) any touching of a person or causing such person to touch the lawyer for the purpose of arousing or gratifying the sexual desire of either party.

(b) A lawyer shall not engage in sexual communications with a client. For purposes of this Rule, “sexual communications” means:

(1) requesting or actively participating in sexually explicit conversation; or

(2) requesting or transmitting messages, images, audio, video, or other content that contain nudity or sexually explicit material.

Communications that contain nudity or sexually explicit content but are relevant to the client’s legal matter and are made in furtherance of the representation are not “sexual communications” for purposes of this Rule.

(b) Paragraph (a) shall not apply if a consensual sexual relationship existed between the lawyer and the client before the legal representation commenced.

(c) A lawyer shall not request, require, or demand sexual relations activity or sexual communications with a client incident to or as a condition of any professional representation.

(d) Scope.

(1) The prohibitions in this Rule apply to:

(A) current clients;

(B) an individual or a representative of an organization who is consulting with a lawyer about the possibility of forming a client-lawyer relationship, until the lawyer declines the representation; and

(C) representatives of a current client with whom the lawyer is authorized to communicate regarding the representation.

(2) Paragraph (a) shall not apply if a consensual sexual relationship existed between the lawyer and the person identified in (d)(1) before the legal representation or consultation commenced.

(3) Paragraph (b) shall not apply if the lawyer and the person identified in (d)(1) consensually engaged in sexual communications before the legal representation or consultation commenced.

(4)

For purposes of this rule, “sexual relations” means:

(1) Sexual intercourse; or

(2) Any touching of the sexual or other intimate parts of a person or causing such person to touch the sexual or other intimate parts of the lawyer for the purpose of arousing or gratifying the sexual desire of either party.

(e) For purposes of this rule, “lawyer” means any lawyer who assists in the representation of the client but does not include other lawyers in a firm who provide no such assistance.

Comment

[1] Rule 1.7, the general rule on conflict of interest, has always prohibited a lawyer from representing a client when the lawyer’s ability competently to represent the client may be impaired by the lawyer’s other personal or professional commitments. Under the general rule on conflicts and the rule on prohibited transactions (Rule 1.8), relationships with clients, whether personal or financial, that affect a lawyer’s ability to exercise his or her independent professional judgment on behalf of a client are closely scrutinized. The rules on conflict of interest have always prohibited the representation of a client if a sexual relationship with the client presents a significant danger to the lawyer’s ability to represent the client adequately. The present rule clarifies that a sexual relationship conduct with a client is damaging to the client-lawyer relationship and creates an impermissible conflict of interest that cannot be ameliorated by the consent of the client.

. . .

[3] A sSexual relationship conduct between a lawyer and a client may involve unfair exploitation of the lawyer’s fiduciary position. Because of the dependence that so often characterizes the attorney-client relationship, there is a significant possibility that a sexual relationship conduct with a client resulted from the exploitation of the lawyer’s dominant position and influence. Moreover, if a lawyer permits the otherwise benign and even recommended client reliance and trust to become the catalyst for a sexual relationship conduct with a client, the lawyer violates one of the most basic ethical obligations; i.e., not to use the trust of the client to the client’s disadvantage. . . . .

Impairment of the Ability to Represent the Client Competently

[4] A lawyer must maintain his or her ability to represent a client dispassionately and without impairment to the exercise of independent professional judgment on behalf of the client. The existence of a sSexual relationship conduct between lawyer and client, under the circumstances proscribed by this rule, presents a significant danger that the lawyer’s ability to represent the client competently may be adversely affected because of the lawyer’s emotional involvement. This emotional involvement has the potential to undercut the objective detachment that is demanded for adequate representation. A sSexual relationship conduct also creates the risk that the lawyer will be subject to a conflict of interest. . . . .

No Prejudice to Client

[5] The prohibition on upon representing a client with whom a sexual relationship conduct with a client develops applies regardless of the absence of a showing of whether it prejudices to the client and regardless of whether the relationship conduct is consensual.

Prior Consensual Relationship

[6] Sexual relationships conduct that predates the client-lawyer relationship are is not prohibited. Issues relating to the exploitation of the fiduciary relationship and client dependency are not present when the sexual relationship conduct exists prior to the commencement of the client-lawyer relationship. ...

No Imputed Disqualification

[7] The other lawyers in a firm are not disqualified from representing a client with whom the lawyer has become intimate engaged in sexual conduct. The potential impairment of the lawyer’s ability to exercise independent professional judgment on behalf of the client with whom he or she is having a engaging in sexual relationship conduct is specific to that lawyer’s representation of the client and is unlikely to affect the ability of other members of the firm to competently and dispassionately represent the client.

Proposed Amendments to Rules of the Standing Committee of the North Carolina State Bar

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

.1501  Scope, Purpose, and Definitions

(a) Scope.

Except as provided herein, these rules shall apply to every active member licensed by the North Carolina State Bar.

(b) Purpose.

The purpose of these 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 lawyers 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.

(c) Definitions.

(1) “Active member” shall include any person who is licensed to practice law in the state of North Carolina and who is an active member of the North Carolina State Bar.

(2) “Administrative Committee” shall mean the Administrative Committee of the North Carolina State Bar.

(3) “Approved program” shall mean a specific, individual educational program approved as a continuing legal education program under these rules by the Board of Continuing Legal Education.

(4) “Board” means the Board of Continuing Legal Education created by these rules.

(5) “Continuing legal education” or “CLE” is any legal, judicial or other educational program accredited by the bBoard. Generally, CLE will include educational programs designed principally to maintain or advance the professional competence of lawyers and/or to expand an appreciation and understanding of the professional responsibilities of lawyers.

(6) “Council” shall mean the North Carolina State Bar Council.

(7) “Credit hour” means an increment of time of 60 minutes which may be divided into segments of 30 minutes or 15 minutes, but no smaller.

(8) “Ethics” shall mean programs or segments of programs devoted to (i) professional responsibility, (ii) professionalism, or (iii) social responsibility as defined in Rules .1501(c)(14), (15), and (20) below.

(89) “Inactive member” shall mean a member of the North Carolina State Bar who is on inactive status.

(910)    “In-house continuing legal education” shall mean courses or programs offered or conducted by law firms, either individually or in connection with other law firms, corporate legal departments, or similar entities primarily for the education of their members. The board may exempt from this definition those programs which it finds

(A) to be conducted by public or quasi-public organizations or associations for the education of their employees or members;

(B) to be concerned with areas of legal education not generally offered by sponsors of programs attended by lawyers engaged in the private practice of law.

(1011) A “newly admitted active member” is one who becomes an active member of the North Carolina State Bar for the first time., has been reinstated, or has changed from inactive to active status.

(1112) “On demand” program shall mean an accredited educational program accessed via the internet that is available at any time on a provider’s website and does not include live programming.

(1213) “Online” program shall mean an accredited educational program accessed through a computer or telecommunications system such as the internet and can include simultaneously broadcast and on demand programming.

(13) “Participatory CLE” shall mean programs or segments of programs that encourage the participation of attendees in the educational experience through, for example, the analysis of hypothetical situations, role playing, mock trials, roundtable discussions, or debates.

(14) “Professional responsibility” shall mean those programs or segments of programs devoted to (ai) the substance, underlying rationale, and practical application of the Rules of Professional Conduct; (bii) the professional obligations of the lawyer to the client, the court, the public, and other lawyers; or (ciii) moral philosophy and ethical decision-making in the context of the practice of law.; and d) the effects of stress, substance abuse and chemical dependency, or debilitating mental conditions on a lawyer’s professional responsibilities and the prevention, detection, treatment, and etiology of stress, substance abuse, chemical dependency, and debilitating mental conditions. This definition shall be interpreted consistent with the provisions of Rule .1501(c)(4) or (6) above.

(15) “Professionalism” programs are programs or segments of programs devoted to the identification and examination of, and the encouragement of adherence to, non-mandatory aspirational standards of professional conduct which transcend the requirements of the Rules of Professional Conduct. Such programs address principles of competence and dedication to the service of clients, civility, improvement of the justice system, diversity of the legal profession and clients, advancement of the rule of law, service to the community, and service to the disadvantaged and those unable to pay for legal services.

(16) “Registered sponsor” shall mean an organization that is registered by the board after demonstrating compliance with the accreditation standards for continuing legal education programs as well as the requirements for reporting attendance and remitting sponsor fees for continuing legal education programs.

(1716) “Rules” shall mean the provisions of the continuing legal education rules established by the Supreme Court of North Carolina. (Section .1500 of this subchapter).

(1817) “Sponsor” is any person or entity presenting or offering to present one or more continuing legal education programs., whether or not an accredited sponsor.

(18) “Professional well-being and impairment” (PWI) is a program focused on the relationship between stressors inherent in the profession, impairment, competence, and professionalism. Topics may include the prevention, detection, treatment, and etiology of a range of substance use and mental health conditions, as well as resources available for assistance and strategies for improving resilience and well-being. Experiential exercises, practices, or demonstrations of tools for improving resilience and well-being are permitted provided they do not exceed a combined total of 20 minutes in any 60-minute presentation.

(19) “Technology training” shall mean a program, or a segment of a program, devoted to education on information technology (IT) or cybersecurity (see N.C. Gen. Stat. §143B-1320(a)(11), or successor statutory provision, for a definition of “information technology”), including education on an information technology product, device, platform, application, or other tool, process, or methodology. that is specific or uniquely suited to the practice of law. A technology training program must have the primary objective of enhancing a lawyer’s proficiency as a lawyer. To be eligible for CLE accreditation as a technology training program, the program must satisfy the accreditation standards in Rule .1519 and the course content requirements in Rule .1602(e) of this subchapter.

(20) “Year” shall mean calendar year.

(20) “Social responsibility” programs shall mean programs, directly related to the practice of law, devoted to education about diversity, inclusion, bias, or equal access to justice.

.1502  Jurisdiction: Authority

The Council of the North Carolina State Bar hereby establishes the Board of Continuing Legal Education (bBoard) as a standing committee of the cCouncil, which bBoard shall have authority to establish regulations governing a continuing legal education program and a law practice assistance program for attorneys lawyers licensed to practice law in this state.

.1503  Operational Responsibility

The responsibility for operating the continuing legal education program and the law practice assistance program shall rest with the bBoard, subject to the statutes governing the practice of law, the authority of the cCouncil, and the rules of governance of the bBoard.

.1504  Size of Board

The bBoard shall have nine members, all of whom must be attorneys lawyers in good standing and authorized to practice in the state of North Carolina.

.1505  Lay Participation

The bBoard shall have no members who are not licensed attorneys lawyers.

.1506  Appointment of Members; When; Removal

The members of the bBoard shall be appointed by the cCouncil. The first members of the board shall be appointed as of the quarterly meeting of the council following the creation of the board. Thereafter, members shall be appointed annually as of the same quarterly meeting. Vacancies occurring by reason of death, resignation, or removal shall be filled by appointment of the cCouncil 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 bBoard may be removed at any time by an affirmative vote of a majority of the members of the cCouncil in session at a regularly called meeting.

.1507  Term of Office

Each member who is appointed to the bBoard shall serve for a term of three years beginning as of the first day of the month following the date on which the appointment is made by the cCouncil. See, however, Rule .1508 of this Section.

.1508  Staggered Terms

It is intended that mMembers of the bBoard shall be elected to staggered terms such that three members are appointed in each year. Of the initial board, three members shall be elected to terms of one year, three members shall be elected to terms of two years, and three members shall be elected to terms of three years. Thereafter, three members shall be elected each year.

.1509  Succession

Each member of the bBoard shall be entitled to serve for one full three-year term and to succeed himself or herself for one additional three-year term. Thereafter, no person may be reappointed without having been off the bBoard for at least three years.

.1510  Appointment of Chairperson

The chairperson of the bBoard shall be appointed from time to time as necessary by the cCouncil. The term of such individual as chairperson shall be one year. The chairperson may be reappointed thereafter during his or her tenure on the bBoard. The chairperson shall preside at all meetings of the bBoard, shall prepare and present to the cCouncil the annual report of the bBoard, and generally shall represent the bBoard in its dealings with the public.

.1511  Appointment of Vice-Chairperson

The vice-chairperson of the bBoard shall be appointed from time to time as necessary by the cCouncil. The term of such individual as vice-chairperson shall be one year. The vice-chairperson may be reappointed thereafter during tenure on the bBoard. The vice-chairperson shall preside at and represent the bBoard in the absence of the chairperson and shall perform such other duties as may be assigned to him or her by the chairperson or by the bBoard.

.1512  Source of Funds

(a) Funding for the program carried out by the bBoard shall come from sponsor’s fees and attendee’s fees an annual CLE attendance fee and program application fees as provided below, as well as from duly assessed penalties for noncompliance and from reinstatement fees.

(1) Annual CLE Attendance Fee – All members, except those who are exempt from these requirements under Rule .1517, shall pay an annual CLE fee in an amount set by the Board and approved by the Council. Such fee shall accompany the member’s annual membership fee. Annual CLE fees are non-refundable. Registered sponsors located in North Carolina (for programs offered in or outside North Carolina), registered sponsors not located in North Carolina (for programs offered in North Carolina), and all other sponsors located in or outside of North Carolina (for programs offered in North Carolina) shall, as a condition of conducting an approved program, agree to remit a list of North Carolina attendees and to pay a fee for each active member of the North Carolina State Bar who attends the program for CLE credit. The sponsor’s fee shall be based on each credit hour of attendance, with a proportional fee for portions of a program lasting less than an hour. The fee shall be set by the board upon approval of the council. Any sponsor, including a registered sponsor, that conducts an approved program which is offered without charge to attendees shall not be required to remit the fee under this section. Attendees who wish to receive credit for attending such an approved program shall comply with paragraph (a)(2) of this rule.

(2) Program Application Fee – The sponsor of a CLE program shall pay a program application fee due when filing an application for program accreditation pursuant to Rule .1520(b). Program application fees are non-refundable. A member submitting an application for a previously unaccredited program for individual credit shall pay a reduced fee. The board shall fix a reasonably comparable fee to be paid by individual attorneys who attend for CLE credit approved continuing legal education programs for which the sponsor does not submit a fee under Rule .1512(a)(1) above. Such fee shall accompany the member’s annual affidavit. The fee shall be set by the board upon approval of the council.

(3) Fee Review – The Board will review the level of fees at least annually and adjust the fees as necessary to maintain adequate finances for prudent operation of the Board in a nonprofit manner. The Council shall annually review the assessments for the Chief Justice’s Commission on Professionalism and the North Carolina Equal Access to Justice Commission and adjust them as necessary to maintain adequate finances for the operation of the commissions.

(4) Uniform Application and Financial Responsibility – Fees shall be applied uniformly without exceptions or other preferential treatment for a sponsor or member.

(b) Funding for a law practice assistance program shall be from user fees set by the board upon approval of the council and from such other funds as the council may provide.

(c) No Refunds for Exemptions and Record Adjustments.

(1) Exemption Claimed. If a credit hour of attendance is reported to the board, the fee for that credit hour is earned by the board regardless of an exemption subsequently claimed by the member pursuant to Rule .1517 of this subchapter. No paid fees will be refunded and the member shall pay the fee for any credit hour reported on the annual report form for which no fee has been paid at the time of submission of the member’s annual report form.

(2) Adjustment of Reported Credit Hours. When a sponsor is required to pay the sponsor’s fee, there will be no refund to the sponsor or to the member upon the member’s subsequent adjustment, pursuant to Rule .1522(a) of this subchapter, to credit hours reported on the annual report form. When the member is required to pay the attendee’s fee, the member shall pay the fee for any credit hour reported after any adjustment by the member to credit hours reported on the annual report form.

.1513  Fiscal Responsibility

All funds of the bBoard shall be considered funds of the North Carolina State Bar and shall be administered and disbursed accordingly.

(a) Maintenance of Accounts: Audit. - The North Carolina State Bar shall maintain a separate account for funds of the bBoard such that such funds and expenditures therefrom can be readily identified. The accounts of the bBoard shall be audited on an annual basis in connection with the audits of the North Carolina State Bar.

(b) Investment Criteria. - The funds of the bBoard shall be handled, invested and reinvested in accordance with investment policies adopted by the cCouncil for the handling of dues, rents, and other revenues received by the North Carolina State Bar in carrying out its official duties.

(c) Disbursement. - Disbursement of funds of the bBoard shall be made by or under the direction of the sSecretary treasurer of the North Carolina State Bar pursuant to authority of the cCouncil. The members of the bBoard shall serve on a voluntary basis without compensation, but may be reimbursed for the reasonable expenses incurred in attending meetings of the bBoard or its committees.

(d) All revenues resulting from the CLE program, including fees received from attendees and sponsors, late filing penalties, late compliance fees, reinstatement fees, and interest on a reserve fund shall be applied first to the expense of administration of the CLE program including an adequate reserve fund; provided, however, that a portion of each sponsor or attendee fee, annual CLE fee and program application fee, in an amount to be determined by the cCouncil, shall be paid to the Chief Justice’s Commission on Professionalism and to the North Carolina Equal Access to Justice Commission for administration of the activities of these commissions. Excess funds may be expended by the cCouncil on lawyer competency programs approved by the cCouncil.

.1514  Meetings

The Board shall meet at least annually.annual meeting of the board shall be held in October of each year in connection with the annual meeting of the North Carolina State Bar. The bBoard by resolution may set regular meeting dates and places. Special meetings of the bBoard may be called at any time upon notice given by the chairperson, the vice-chairperson, or any two members of the bBoard. Notice of meeting shall be given at least two days prior to the meeting by mail, electronic mail, telegram, facsimile transmission or telephone. A quorum of the bBoard for conducting its official business shall be a majority of the members serving at a particular time.

.1515  Annual Report

The bBoard shall prepare at least annually a report of its activities and shall present the same to the cCouncil one month prior to its annual meeting.

.1516  Powers, Duties, and Organization of the Board

(a) The bBoard shall have the following powers and duties:

(1) to exercise general supervisory authority over the administration of these rules;

(2) to adopt and amend regulations consistent with these rules with the approval of the cCouncil;

(3) to establish an office or offices and to employ such persons as the bBoard deems necessary for the proper administration of these rules, and to delegate to them appropriate authority, subject to the review of the cCouncil;

(4) to report annually on the activities and operations of the bBoard to the cCouncil and make any recommendations for changes in the fee amounts, rules, or methods of operation of the continuing legal education program; and

(5) to submit an annual budget to the cCouncil for approval and to ensure that expenses of the bBoard do not exceed the annual budget approved by the cCouncil.;

(6) to administer a law office assistance program for the benefit of lawyers who request or are required to obtain training in the area of law office management.

(b) The bBoard shall be organized as follows:

(1) Quorum. Five members A majority of members serving shall constitute a quorum of the bBoard.

(2) The Executive Committee. - The Board may establish an executive committee. The executive committee of the bBoard shall be comprised of the chairperson, a the vice-chairperson, elected by the members of the board, and a member to be appointed by the chairperson. Its purpose is to conduct all necessary business of the bBoard that may arise between meetings of the full bBoard. In such matters it shall have complete authority to act for the bBoard.

(3) Other Committees. - The chairperson may appoint committees as established by the bBoard for the purpose of considering and deciding matters submitted to them by the bBoard.

(c) Appeals. - Except as otherwise provided, the bBoard is the final authority on all matters entrusted to it under Section .1500 and Section .1600 of this subchapter. Therefore, any decision by a committee of the bBoard pursuant to a delegation of authority may be appealed to the full bBoard and will be heard by the bBoard at its next scheduled meeting. A decision made by the staff pursuant to a delegation of authority may also be reviewed by the full bBoard but should first be appealed to any committee of the bBoard having jurisdiction on the subject involved. All appeals shall be in writing. The bBoard has the discretion to, but is not obligated to, grant a hearing in connection with any appeal regarding the accreditation of a program.

.1517  Exemptions

(a) Notification of Board. To qualify for an exemption, for a particular calendar year, a member shall notify the bBoard of the exemption induring 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. 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 bBoard 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 bBoard 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 bBoard 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 and State Bar Councilors. Members of the North Carolina Board of Law Examiners and councilors on the North Carolina State Bar Council 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 bBoard 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.

.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 1236 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 1236 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 and impairment 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) No Carryover Credit. Members may not carry over credit hours from one reporting period to the next reporting period.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 years. 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 induring 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.

(1) Content and Accreditation. The State Bar PNA Program shall consist of 12 hours of training in subjects designated by the State Bar including, but not limited to, professional responsibility, professionalism, and law office management. The chairs of the Ethics and Grievance Committees, in consultation with the chief counsel to those committees, shall annually establish the content of the program and shall publish the required content on or before January 1 of each year. To be approved as a PNA Program, the program must be provided by a sponsor registered under Rule .1603 of this subchapter and a sponsor must satisfy the annual content requirements, and submit a detailed description of the program to the board for approval at least 45 days prior to the program. A registered sponsor may not advertise a PNA Program until approved by the board. PNA Programs shall be specially designated by the board and no program that is not so designated shall satisfy the PNA Program requirement for new members.

(2) Timetable and Partial Credit. The PNA Program shall be presented in two six-hour blocks (with appropriate breaks) over two days. The six-hour blocks do not have to be attended on consecutive days or taken from the same provider; however, no partial credit shall be awarded for attending less than an entire six-hour block unless a special circumstances exemption is granted by the board. The board may approve an alternative timetable for a PNA program upon demonstration by the provider that the alternative timetable will provide an enhanced learning experience or for other good cause; however, no partial credit shall be awarded for attending less than the entire 12-hour program unless a special circumstances exemption is granted by the board.

(3) Online and Prerecorded Programs. The PNA Program may be distributed over the Internet by live web streaming (webcasting) but no part of the program may be taken online (via the Internet) on demand. The program may also be taken as a prerecorded program provided the requirements of Rule .1604(d) of this subchapter are satisfied and at least one hour of each six-hour block consists of live programming.

(d) Exemptions from Professionalism Requirement for New Members.

(1) Licensed in Another Jurisdiction. A 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 in the first annual report sent to the member pursuant to Rule .1522 of this subchapter.

(2) Inactive Status. A newly admitted member who is transferred to inactive status in the year of admission to the 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 year that the member is subject to the requirements set forth in paragraph (a) above unless the member qualifies for the exemption under paragraph (d)(1) of this rule.

(3) Exemptions Under Rule .1517. A newly admitted active member who qualifies for an exemption under Rule .1517 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 in the first annual report sent to the member pursuant to Rule .1522 of this subchapter. The member must complete the PNA Program in the year the member no longer qualifies for the Rule .1517 exemption or the next calendar year unless the member qualifies for the exemption under paragraph (d)(1) of this rule.

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

.1519  Accreditation Standards

The bBoard shall approve continuing legal education programs that meet the following standards and provisions.

(a) They shall have significant intellectual or practical content and the primary objective shall be to increase the participant’s professional competence and proficiency as a lawyer.

(b) They shall constitute an organized program of learning dealing with matters directly related to the practice of law, professional responsibility, professionalism, or ethical obligations of lawyers.

(c) Participation in an online or on-demand program must be verified as provided in Rule .1520(d).Credit may be given for continuing legal education programs where live instruction is used or mechanically or electronically recorded or reproduced material is used, including videotape, satellite transmitted, and online programs.

(d) Continuing legal education materials are to be prepared, and programs conducted, by an individual or group qualified by practical or academic experience. Credit shall not be given for any continuing legal education program taught or presented by a disbarred lawyer except a programs on professional responsibility (including a program on the effects of substance abuse and chemical dependency, or debilitating mental conditions on a lawyer’s professional responsibilities) and professional well-being and impairment programs taught by a disbarred lawyer whose disbarment date is at least five years (60 months) prior to the date of the program. The advertising for the program shall disclose the lawyer’s disbarment.

(e) Live continuing legal education programs shall be conducted in a setting physically suitable to the educational nature of the program. and, when appropriate, equipped with suitable writing surfaces or sufficient space for taking notes.

(f) Thorough, high quality, and carefully prepared written materials should be distributed to all attendees at or before the time the program is presented., unless These may include written materials printed from a website or computer presentation. A written agenda or outline for a program satisfies this requirement when written materials are not suitable or readily available for a particular subject. The absence of written materials for distribution should, however, be the exception and not the rule.

(g) A sponsor of an approved program must timely remit fees as required in Rule .1606 and keep and maintain attendance records of each continuing legal education program sponsored by it, which shall be timely furnished to the bBoard in accordance with Rule .1520(g). regulations. Participation in an online program must be verified as provided in Rule .1601(d).

(h) Except as provided in Rules .1523(d) .1501 and.1602(h) of this subchapter, in-house continuing legal education and self-study shall not be approved or accredited. for the purpose of complying with Rule .1518 of this subchapter.

(i) Programs that cross academic lines, such as accounting-tax seminars, may be considered for approval by the bBoard. However, the bBoard must be satisfied that the content of the program would enhance legal skills or the ability to practice law.

.1520  Requirements for Program Approval Registration of Sponsors and Program Approval

(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.

(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 a reliable method for recording and verifying attendance and reporting the number of credit hours earned by each participant.

(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.

(a) Registration of Sponsors. An organization desiring to be designated as a registered sponsor of programs may apply to the board for registered sponsor status. The board shall register a sponsor if it is satisfied that the sponsor’s programs have met the accreditation standards set forth in Rule .1519 of this subchapter and the application requirements set forth in Rule .1603 of this subchapter.

(1) Duration of Status. Registered sponsor status shall be granted for a period of five years. At the end of the five-year period, the sponsor must apply to renew its registration pursuant to Rule .1603(b) of this subchapter.

(2) Accredited Sponsors. A sponsor that was previously designated by the board as an “accredited sponsor” shall, on the effective date of paragraph (a)(1) of this rule, be re-designated as a “registered sponsor.” Each such registered sponsor shall subsequently be required to apply for renewal of registration according to a schedule to be adopted by the board. The schedule shall stagger the submission date for such applications over a three-year period after the effective date of this paragraph (a)(2).

(b) Program Approval for Registered Sponsors.

(1) Once an organization is approved as a registered sponsor, the continuing legal education programs sponsored by that organization are presumptively approved for credit; however, application must still be made to the board for approval of each program. At least 50 days prior to the presentation of a program, a registered sponsor shall file an application, on a form prescribed by the board, notifying the board of the dates and locations of presentations of the program and the sponsor’s calculation of the CLE credit hours for the program.

(2) The board shall evaluate a program presented by a registered sponsor and, upon a determination that the program does not satisfy the requirements of Rule .1519, notify the registered sponsor that the program is not approved for credit. Such notice shall be sent by the board to the registered sponsor within 45 days after the receipt of the application. If notice is not sent to the registered sponsor within the 45-day period, the program shall be presumed to be approved. The registered sponsor may request reconsideration of an unfavorable accreditation decision by submitting a letter of appeal to the board within 15 days of receipt of the notice of disapproval. The decision by the board on an appeal is final.

(c) Sponsor Request for Program Approval.

(1) Any organization not designated as a registered sponsor that desires approval of a program shall apply to the board. Applicants denied approval of a program for failure to satisfy the accreditation standards in Rule .1519 of this subchapter 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 disapproval. The decision by the board on an appeal is final.

(2) The board may at any time decline to accredit CLE programs offered by a sponsor that is not registered for a specified period of time, as determined by the board, for failure to comply with the requirements of Rule .1512, Rule .1519, and Section .1600 of this subchapter.

(d) Member Request for Program Approval. An active member desiring approval of a program that has not otherwise been approved shall apply to the board. Applicants denied approval of a program for failure to satisfy the accreditation standards in Rule .1519 of this subchapter may request reconsideration of such a decision by submitting a letter of appeal to the board within 15 days of the receipt of the notice of disapproval. The decision by the board on an appeal is final.

.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. 60 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, 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 30-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.

(f) Suspended members must petition for reinstatement to active status.

(dg) 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 bBoard 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 bBoard 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 bBoard shall determine whether the member has shown good cause as to why the member should not be suspended.If the bBoard 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.

.15242 Reinstatement

(a) Reinstatement Within 30 Days of Service of Suspension. Order

A member who is suspended for noncompliance with these rules governing the continuing legal education program may petition the sSecretary of the State Bar for an order of reinstatement of the member’s license at any time up to during the 30-days wind-down period of the member’s suspension. after the service of the suspension order upon the member. The sSecretary shall enter an order reinstating the member to active status upon receipt of a timely written request and satisfactory showing by the member that the member (i) cured the continuing legal education deficiency for which the member was suspended, and (ii) paid the reinstatement fee as set forth in Paragraph (c) below. Such member shall not be required to file a formal reinstatement petition. or pay a $250 reinstatement fee.

(b) Procedure for Reinstatement More thant 30 Days After Service of the Order of Suspension.

Except as noted below, the procedure for reinstatement more than 30 days after service of the order of suspension shall be as set forth in Rule .0904(c) and (d) of this subchapter, and shall be administered by the Administrative Committee.

(c) Reinstatement Petition

At any time more than 30 days after service of an order of suspension on a member, a member who has been suspended for noncompliance with the rules governing the continuing legal education program may seek reinstatement by filing a reinstatement petition with the secretary. The secretary shall transmit a copy of the petition to each member of the board. The reinstatement petition shall contain the information and be in the form required by Rule .0904(c) of this subchapter. If not otherwise set forth in the petition, the member shall attach a statement to the petition in which the member shall state with particularity the accredited legal education programs that the member has attended and the number of credit hours obtained in order to cure any continuing legal education deficiency for which the member was suspended.

(dc) Reinstatement Fee.

In lieu of the $125.00 reinstatement fee required by Rule .0904(c)(4)(A), the petition Reinstatements pursuant to paragraphs (a) and (b) above shall be accompanied by a reinstatement fee payable to the bBoard, in the an amount of $250.00 set by the Board and approved by the Council.

(d) Reinstatement by Secretary of the State Bar. At any time during the 12-month period after the effective date of a suspension order, the Secretary of the State Bar may reinstate a member who has petitioned for reinstatement upon finding that the suspended member has (i) cured the deficiency for which the member was suspended, and (ii) paid any outstanding fees. Reinstatement by the Secretary is discretionary. If the Secretary declines to reinstate the member, the member’s petition shall be transmitted to the Board for review before consideration by the Administrative Committee.

(e) Determination of Board; Transmission to Administrative Committee.

Within 30 days of the filing of the petition for reinstatement with the secretary, the board shall determine whether the deficiency has been cured. If the petition is referred to the Board, Tthe bBoard’s written determination recommendation and the reinstatement petition shall be transmitted to the sSecretary. within five days of the determination by the board. The sSecretary shall transmit provide a copy of the petition and the bBoard’s recommendation to each member of the Administrative Committee.

(f) Consideration by Administrative Committee.

The Administrative Committee shall consider the reinstatement petition and, together with the bBoard’s determination, recommendation pursuant to the requirements of Rule .0902(c)-(f) of this subchapter.

(g) Hearing Upon Denial of Petition for Reinstatement.

The procedure for hearing upon the denial by the Administrative Committee of a petition for reinstatement shall be as provided in Section .1000 of this subchapter.

.16021523 Course Content Requirements Credit for Non-Traditional Programs and Activities

(a) Professional Responsibility Programs on Stress, Substance Abuse, Chemical Dependency, and Debilitating Mental Conditions - Accredited professional responsibility programs on stress, substance abuse, chemical dependency, and debilitating mental conditions shall concentrate on the relationship between stress, substance abuse, chemical dependency, debilitating mental conditions, and a lawyer’s professional responsibilities. Such programs may also include (1) education on the prevention, detection, treatment and etiology of stress, substance abuse, chemical dependency, and debilitating mental conditions, and (2) information about assistance for chemically dependent or mentally impaired lawyers available through lawyers’ professional organizations. No more than three hours of continuing education credit will be granted to any one such program or segment of a program.

(ba) Law School Courses. - Courses offered by an ABA accredited law school with respect to which academic credit may be earned may be approved programs. Computation of CLE credit for such courses shall be as prescribed in Rule .1524.1605(a) of this subchapter. No more than 12 CLE hours in any year may be earned by such courses. No credit is available for law school courses attended prior to becoming an active member of the North Carolina State Bar.

(b) Service to the Profession Training. A program or segment of a program presented by a bar organization may be granted up to 3 hours of credit if the bar organization’s program trains volunteer lawyers in service to the profession.

(c) Teaching Law Courses.

(1) Law School Courses. If a member is not a full-time teacher at a law school in North Carolina who is eligible for the exemption in Rule .1517(e) of this subchapter, the member may earn CLE credit for teaching a course or a class in a quarter or semester-long course at an ABA accredited law school.

(2) Graduate School Courses. A member may earn CLE credit by teaching a course on substantive law or a class on substantive law in a quarter or semester-long course at a graduate school of an accredited university.

(3) Courses at Paralegal Schools or Programs. A member may earn CLE credit by teaching a paralegal or substantive law course or a class in a quarter or semester-long course at an ABA approved paralegal school or program.

(4) Other Law Courses. The Board, in its discretion, may give CLE credit to a member for teaching law courses at other schools or programs.

(5) Credit Hours. Credit for teaching described in this paragraph may be earned without regard to whether the course is taught online or in a classroom. Credit will be calculated according to the following formula:

(A) Teaching a Course. 3.5 hours of CLE credit for every quarter hour of credit assigned to the course by the educational institution, or 5.0 hours of CLE credit for every semester hour of credit assigned to the course by the educational institution. (For example: a 3-semester hour course will qualify for 15 hours of CLE credit.)

(B) Teaching a Class. 1.0 hour of CLE credit for every 50 – 60 minutes of teaching.

(c) Law Practice Management Programs - A CLE accredited program on law practice management must satisfy the accreditation standards set forth in Rule .1519 of this subchapter with the primary objective of increasing the participant’s professional competence and proficiency as a lawyer. The subject matter presented in an accredited program on law practice management shall bear a direct relationship to either substantive legal issues in managing a law practice or a lawyer’s professional responsibilities, including avoidance of conflicts of interest, protecting confidential client information, supervising subordinate lawyers and nonlawyers, fee arrangements, managing a trust account, ethical legal advertising, and malpractice avoidance. The following are illustrative, non-exclusive examples of subject matter that may earn CLE credit: employment law relating to lawyers and law practice; business law relating to the formation and operation of a law firm; calendars, dockets and tickler systems; conflict screening and avoidance systems; law office disaster planning; handling of client files; communicating with clients; and trust accounting. If appropriate, a law practice management program may qualify for professional responsibility (ethics) CLE credit. The following are illustrative, non-exclusive examples of subject matter that will NOT receive CLE credit: marketing; networking/rainmaking; client cultivation; increasing productivity; developing a business plan; improving the profitability of a law practice; selling a law practice; and purchasing office equipment (including computer and accounting systems).

(d) Skills and Training Programs- A program that teaches a skill specific to the practice of law may be accredited for CLE if it satisfies the accreditation standards set forth in Rule .1519 of this subchapter with the primary objective of increasing the participant’s professional competence and proficiency as a lawyer. The following are illustrative, non-exclusive examples of subject matter that may earn CLE credit: legal writing; oral argument; courtroom presentation; and legal research. A program that provides general instruction in non-legal skills shall NOT be accredited. The following are illustrative, non-exclusive examples of subject matter that will NOT receive CLE credit: learning to use software for an application that is not specific to the practice of law (e.g. word processing); learning to use office equipment (except as permitted by paragraph (e) of this rule); public speaking; speed reading; efficiency training; personal money management or investing; career building; marketing; and general office management techniques.

(e) Technology Training Programs – A technology training program must have the primary objective of enhancing a lawyer’s proficiency as a lawyer or improving law office management and must satisfy the requirements of paragraphs (c) and (d) of this rule as applicable. Such programs include, but are not limited to, education on the following: a) an IT tool, process, or methodology designed to perform tasks that are specific or uniquely suited to the practice of law; b) using a generic IT tool, process, or methodology to increase the efficiency of performing tasks necessary to the practice of law; c) the investigation, collection, and introduction of social media evidence; d) e-discovery; e) electronic filing of legal documents; f) digital forensics for legal investigation or litigation; g) practice management software; and h) a cybersecurity tool, process, or methodology specifically applied to the needs of the practice of law or law practice management. A program that provides general instruction on an IT tool, process, or methodology but does not include instruction on the practical application of the IT tool, process, or methodology to the practice of law shall not be accredited. The following are illustrative, non-exclusive examples of subject matter that will NOT receive CLE credit: generic education on how to use a tablet computer, laptop computer, or smart phone; training programs on Microsoft Office, Excel, Access, Word, Adobe, etc.; and instruction in the use of a particular desktop or mobile operating system. No credit will be given to a program that is sponsored by a manufacturer, distributor, broker, or merchandiser of an IT tool, process, or methodology unless the program is solely about using the IT tool, process, or methodology to perform tasks necessary or uniquely suited to the practice of law and information about purchase arrangements is not included in the accredited segment of the program. A sponsor may not accept compensation from a manufacturer, distributor, broker, or merchandiser of an IT tool, process, or methodology in return for presenting a CLE program about the IT tool, process, or methodology.

(f) Activities That Shall Not Be Accredited CLE credit will not be given for general and personal educational activities. The following are illustrative, non-exclusive examples of subject matter that will NOT receive CLE credit:

(1) courses within the normal college curriculum such as English, history, social studies, and psychology;

(2) courses that deal with the individual lawyer’s human development, such as stress reduction, quality of life, or substance abuse unless a course on substance abuse or mental health satisfies the requirements of Rule .1602(c);

(3) courses designed primarily to sell services or products or to generate greater revenue, such as marketing or advertising (as distinguished from programs dealing with development of law office procedures and management designed to raise the level of service provided to clients).

(g) Service to the Profession Training - A program or segment of a program presented by a bar organization may be granted up to three hours of credit if the bar organization’s program trains volunteer attorneys in service to the profession, and if such program or segment meets the requirements of Rule .1519(b)-(g) and Rule .1601(b), (c), and (g) of this subchapter; if appropriate, up to three hours of professional responsibility credit may be granted for such program or program segment.

(hd) In-House CLE and Self-Study. No approval will be provided for in-house CLE or self-study by attorneys lawyers, except, in the discretion of the Board, as follows:

(1) programs exempted by the board under Rule .1501(c)(9) of this subchapter to be conducted by public or quasi-public organizations or associations for the education of their employees or members; and

(2) programs to be concerned with areas of legal education not generally offered by sponsors of programs attended by lawyers engaged in the private practice of law; or

(23) live ethics programs on professional responsibility, professionalism, or professional negligence/malpractice presented by a person or organization that is not affiliated with the lawyers attending the program or their law firms and that has demonstrated qualification to present such programs through experience and knowledge.

(ie) Bar Review/Refresher Course. Programs designed to review or refresh recent law school graduates or attorneys lawyers in preparation for any bar exam shall not be approved for CLE credit.

(f) CLE credit will not be given for (i) general and personal educational activities; (ii) courses designed primarily to sell services; or (iii) courses designed to generate greater revenue.

.16051524 Computation of Credit

(a) Computation Formula - Credit CLE and professional responsibility hours shall be computed by the following formula:

Sum of the total minutes of actual instruction / 60 = Total Hours        

For example, actual instruction totaling 195 minutes would equal 3.25 hours toward CLE.

(b) Actual Instruction - Only actual education shall be included in computing the total hours of actual instruction. The following shall not be included:

(1) introductory remarks;

(2) breaks;

(3) business meetings;

(4) speeches in connection with banquets or other events which are primarily social in nature; and

(5) unstructured question and answer sessions at a ratio in excess of 15 minutes per CLE hour. and programs less than 30 minutes in length provided, however, that the limitation on question and answer sessions shall not limit the length of time that may be devoted to participatory CLE.

(c) Computation of Teaching Credit - As a contribution to professionalism, cCredit may be earned for teaching in an approved continuing legal education program or a continuing paralegal education program held in North Carolina and approved pursuant to Section .0200 of Subchapter G of these rules. Programs accompanied by thorough, high quality, readable, and carefully prepared written materials will qualify for CLE credit on the basis of these rules at a ratio of three 3 hours of CLE credit for per each thirty 30 minutes of presentation. Repeat programs qualify for one-half of the credits available for the initial program. For example, an initial presentation of 45 minutes would qualify for 4.5 hours of credit.

(d) Teaching Law Courses

(1) Law School Courses. If a member is not a full-time teacher at a law school in North Carolina who is eligible for the exemption in Rule .1517(b) of this subchapter, the member may earn CLE credit for teaching a course or a class in a quarter or semester-long course at an ABA accredited law school. A member may also earn CLE credit by teaching a course or a class at a law school licensed by the Board of Governors of the University of North Carolina, provided the law school is actively seeking accreditation from the ABA. If ABA accreditation is not obtained by a law school so licensed within three years of the commencement of classes, CLE credit will no longer be granted for teaching courses at the school.

(2) Graduate School Courses. Effective January 1, 2012, a member may earn CLE credit by teaching a course on substantive law or a class on substantive law in a quarter or semester-long course at a graduate school of an accredited university.

(3) Courses at Paralegal Schools or Programs. Effective January 1, 2006, a member may earn CLE credit by teaching a paralegal or substantive law course or a class in a quarter or semester-long course at an ABA approved paralegal school or program.

(4) Credit Hours. Credit for teaching described in Rule .1605(d)(1) – (3) above may be earned without regard to whether the course is taught online or in a classroom. Credit will be calculated according to the following formula:

(A) Teaching a Course. 3.5 Hours of CLE credit for every quarter hour of credit assigned to the course by the educational institution, or 5.0 Hours of CLE credit for every semester hour of credit assigned to the course by the educational institution. (For example: a 3-semester hour course will qualify for 15 hours of CLE credit).

(B) Teaching a Class. 1.0 Hour of CLE credit for every 50 – 60 minutes of teaching.

(5) Other Requirements. The member shall also complete the requirements set forth in Rule .1518(b) of this subchapter.

.1525 Confidentiality Professionalism Requirement for New Members (PNA)

(a) Content and Accreditation. The State Bar PNA program shall consist of 12 hours of training in subjects designated by the State Bar including, but not limited to, professional responsibility, professionalism, and law office management. The chairs of the Ethics and Grievance Committees, in consultation with the chief counsel to those committees, shall annually establish the content of the program and shall publish any changes to the required content on or before January 1 of each year. To be approved as a PNA program, the program must satisfy the annual content requirements, and a sponsor must submit a detailed description of the program to the Board for approval. A sponsor may not advertise a PNA program until approved by the Board. PNA programs shall be specially designated by the Board and no program that is not so designated shall satisfy the PNA program requirement for new members.

(b) Timetable and Partial Credit. The PNA program shall be presented in two 6-hour blocks (with appropriate breaks) over two days. The 6-hour blocks do not have to be attended on consecutive days or taken from the same provider; however, no partial credit shall be awarded for attending less than an entire 6-hour block unless a special circumstances exemption is granted by the Board. The Board may approve an alternative timetable for a PNA program upon demonstration by the provider that the alternative timetable will provide an enhanced learning experience or for other good cause; however, no partial credit shall be awarded for attending less than the entire 12-hour program unless a special circumstances exemption is granted by the Board.

(c) Online programs. The PNA program may be distributed over the internet by live streaming, but no part of the program may be taken on-demand unless specifically authorized by the Board.

(d) PNA Requirement. Except as provided in Rule .1517(1), each newly admitted active member of the North Carolina State Bar must complete the PNA program during the member’s first reporting period. It is strongly recommended that newly admitted members complete the PNA program within their first year of admission.

.1526  Effective Date Procedures to Effectuate Rule Changes

(a) The effective date of these Rules shall be January 1, 1988. Subject to approval by the Council, the Board may adopt administrative policies and procedures to effectuate the rule changes approved by the Supreme Court on [date], in order to:

(1) create staggered initial reporting periods;

(2) provide for a smooth transition into the new rules; and

(3) maintain historically consistent funding for the Chief Justice’s Commission on Professionalism and the Equal Access to Justice Commission.

(b) Active members licensed prior to July 1 of any calendar year shall meet the continuing legal education requirements of these Rules for such year.

(c) Active members licensed after June 30 of any calendar year must meet the continuing legal education requirements of these Rules for the next calendar year.

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