Ethics Opinion Articles - NC State Bar Journal

“Who You Gonna’ Call?” New Admittee’s FAQs

By Suzanne Lever

Welcome to the North Carolina State Bar! If you are reading this you are most likely a newly admitted North Carolina lawyer. You no doubt have (or will have) countless questions. This is especially true if you are one of the many brave new lawyers hanging out their own shingles. The good news is that the North Carolina State Bar is here to help.

The North Carolina State Bar (“Bar”) is the state agency responsible for regulating the practice of law in North Carolina. The Bar’s website, along with the North Carolina State Bar Journal, is a place to:

• learn more about the regulation of the legal profession in North Carolina;
• review proposed ethics opinions and proposed amendments to the rules and regulations of the Bar;
• research the existing rules, regulations and ethics opinions of the Bar; and
• catch up on the latest news and information from the Bar.

Not sure who to contact for the information you need? Check out our Bar Staff Contacts page: ncbar.gov/contacts/c_staff.asp.

To get you started, I have compiled a Q & A of the questions most frequently asked by new lawyers seeking advice from the Bar.

Membership

Q. What is the difference between the Bar (NCSB) and the North Carolina Bar Association (NCBA)?

The Bar is the regulatory body for the legal profession in the state, and membership is mandatory. Once you are licensed by the NC Board of Law Examiners, you automatically become a member of the Bar. To be entitled to practice North Carolina law, you must be an active member of the Bar. Also, you must take the oath of office and be sworn in as a lawyer before you may begin practicing law.

The NCBA is a voluntary association serving the needs of the legal profession with member services such as continuing legal education, legislative lobbying, practice sections, public service activities, and much more. The NCBA also has a foundation, which has the primary objective of funding worthy projects or activities of the association and the foundation, as well as funding other legally related needs in the community.

Q: What am I required to do to remain an active member of the Bar?

Pay the annual membership fees, fulfill the CLE and IOLTA requirements, and comply with the Rules of Professional Conduct. If you are a North Carolina resident, you must also maintain membership in the local district bar where you work or reside.

Q: How much are the mandatory annual membership fees?

For 2013 the annual fees are $375. This includes the membership dues ($300), the Client Security Fund assessment ($25), and the Judicial Surcharge ($50).

Q: When are the mandatory annual membership fees due?

An invoice for the subsequent calendar year is emailed to every active member of the Bar on or before December 1 of each year, followed by additional reminders. The completed invoice and payment are due January 1, but are not considered late if received/postmarked on or before June 30.

Q: Once I am licensed by the NC Board of Law Examiners when will I become a member of the Bar and owe membership fees for the first time?

Your membership with the Bar is automatic upon licensure. The membership fees are waived for the calendar year in which you are admitted by exam. You will owe membership fees for the calendar year following the year of your admission to the Bar and continuously on an annual basis as long as your membership status is “active.”

Q: Am I required to be a member of a local district bar?

Yes. Every active member of the State Bar who resides in North Carolina must be a member of the judicial district bar where he/she resides or works. The Bar automatically assigns you to a local district bar based on your address on record with the Bar unless you request a different district in a letter or email to the membership department. You can contact Beth McLamb at bmclamb@ncbar.gov or Kelly Beck at kbeck@ncbar.gov for assistance.

CLE Hours & Requirements

Q. How many CLE hours do I have to take each calendar year?

An active member of the Bar who does not qualify for an exemption must take 12 hours of approved CLE during each calendar year. Of the 12 hours, at least two must be devoted to the area of professional responsibility (ethics) or professionalism. At least once every three calendar years you must complete one hour on substance abuse awareness or debilitating mental conditions.

Lawyers licensed before July 1 are subject to all CLE requirements for that calendar year. Lawyers licensed on or after July 1 of any year do not have CLE hourly requirements until the next calendar year.

The CLE rules also require every active lawyer to file an annual written report of his/her CLE activity for the preceding year. To facilitate that filing, the CLE office mails each lawyer an Annual Report Form in January. The report includes a transcript of all the CLE activity for the previous calendar year reported to the Bar by CLE sponsors. It is the lawyer’s responsibility to review that transcript, make any necessary changes, verify the CLE activity, pay any outstanding attendee fees, and return the form to the Bar by the last day of February. You may contact Debra Holland at dholland@ncbar.gov for more information.

Professionalism for New Admittees

Q. Are there special CLE requirements for newly licensed lawyers?

Yes. If you are admitted on or after January 1, 2011, you must complete the 12-hour Professionalism for New Admittees program. To receive credit for the program, you must also complete a written evaluation provided by the sponsor.

Q. What is the content of the Professionalism for New Admittees program?

The program consists of 12 hours of training in subjects designated by the NCSB, including professional responsibility, professionalism, and law office management.

Q. Do the hours for the Professionalism for New Admittees program apply to the annual requirements?

Yes. Credit for the program is applied to the annual mandatory 12-hour requirement.

Q. If I am newly admitted to the North Carolina State Bar but am licensed in another state, do I have to complete the Professionalism for New Admittees program?

A lawyer 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 Professionalism for New Admittees program requirement and must notify the board of the exemption in the first CLE annual report form filed with the Bar.

Trust Accounts

For detailed trust accounting guidelines, you should refer to the State Bar’s Trust Account Handbook:ncbar.com/PDFs/Trust %20Account%20Handbook.pdf.

Members of the State Bar staff are also available to answer questions about maintaining a trust account. Contact Peter Bolac, trust accounting compliance counsel (pbolac@ ncbar.gov), or Tim Batchelor, staff auditor (tbatchelor@ncbar.gov), for assistance.

IOLTA (Interest on Lawyers’ Trust Accounts)

Q: What is IOLTA?

NC IOLTA works with lawyers and banks across the state to collect net interest income generated from lawyers’ general, pooled trust accounts for the purpose of funding grants to providers of civil legal services for the indigent and to programs that further the administration of justice.

Q: Which of my law practice accounts must be established and maintained as IOLTA accounts?

All general client trust accounts must be established and maintained as interest-bearing IOLTA accounts, interest from which is remitted to NC IOLTA at the State Bar. General client trust accounts are those accounts that hold nominal and short-term deposits of client funds.

Q: How do I comply with the NC State Bar rules regarding NC IOLTA?

All active members of the North Carolina State Bar who maintain general client trust accounts in North Carolina must ensure that all of their general client trust accounts are established as interest-bearing IOLTA accounts. Lawyers must certify annually (when paying their NC State Bar dues—either on the dues notice form or electronically) that all general client trust accounts maintained by the lawyer/law firm are IOLTA accounts, or that the lawyer is exempt from the requirement as no general trust accounts are maintained by the lawyer/law firm.

Lawyers must also inform NC IOLTA when opening or closing IOLTA accounts. The NC IOLTA Status Update Form should be used for this purpose. It should also be used to report employment or address changes. A copy of this form can be found on the IOLTA website, nciolta.gov.

As of July 1, 2010, lawyers may hold IOLTA accounts only at “eligible” banks that will agree to pay IOLTA accounts the highest rate available to that bank’s other customers when the IOLTA accounts meet the same minimum balance or other account qualifications. NC IOLTA maintains a list of eligible banks on its website. You may also contact iolta@ncbar.gov for more information.

Fee Dispute Resolution

Q: When is a lawyer required to participate in the State Bar’s fee dispute resolution program?

Rule 1.5(f) of the Rules of Professional Conduct requires a lawyer with a dispute with a client over a legal fee to notify the client of the North Carolina State Bar’s program of fee dispute resolution at least 30 days prior to initiating a legal proceeding to collect the disputed fee.

Q: When is a legal fee in “dispute?”

A fee is in dispute if the client questions or objects to the amount billed. Also, if a client fails to pay the bill, it is assumed that the fee is disputed unless the client affirms the obligation in writing or verbally. If a client pays by a check that is subsequently returned for insufficient funds, it is assumed that the client has affirmed the obligation and the lawyer is not required to notify the client of the fee dispute resolution program.

Q: What are the notification requirements to a client relative to the fee dispute resolution program prior to initiating suit to collect a legal fee?

The client must be notified of the right to participate in the fee dispute resolution program at least 30 days before filing suit against the client to collect the fee. See Rule 1.5(f) of the Rules of Professional Conduct. A sample notice letter may be found on the forms page of the State Bar’s website. You may also contact Luella Crane at lcrane@ncbar.gov for assistance.

Stay tuned. This is the first in a series of articles that will address questions frequently asked by lawyers seeking advice from the Bar.

Suzanne Lever is assistant ethics counsel for the North Carolina State Bar.

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