journal 23,1 Layout 1 - North Carolina State Bar · THE NORTH CAROLINA STATE BAR IN THIS ISSUE NC...

JOURNALSPRING

2018

THE NORTH CAROLINA STATE BAR

IN THIS ISSUE

NC Uniform Power of Attorney Act page 8Tying the Knot? Or Just Moving In? page 20

To Build a Courthouse page 22

NC PRO BONO REPORTINGDEADLINE: MARCH 31, 2018

NORTH CAROLINA

RESOURCE CENTERPRO BONO

CONNECTWITH US

ncprobono.org

twitter.com/ncprobonofacebook.com/ncprobono

919.890.1090

Raleigh, NC 27602PO Box 2448

HOW DO I REPORT?

WHY SHOULD I REPORT?

WHAT SHOULD I REPORT?The NC Pro Bono Reporting Form collects information about all the activities encouraged in NC Rule of Professional Conduct 6.1: pro bono legal service, legal service at a substantially reduced fee, activity that improves the law, the legal system, or the legal profession, non-legal community service, and financial support of legal service providers.

Visit ncprobono.org/volunteer/reporting and provide information about the activities included in NC Rule of Professional Conduct 6.1. You will need basic information about your number of pro bono hours, organizations through which you provided pro bono legal service, and types of pro bono legal services you provided. You will not need specific totals of hours or amounts for the other types of activities included in Rule 6.1. Finally, you will need your NC State Bar ID Number to submit your entry.

There are three major reasons to report your pro bono legal service: (1) it’s a way to showcase attorney volunteerism in NC -- we want to share the good work being done by the legal profession in our state; (2) it’s an opportunity to encourage your peers to grow their pro bono involvement by sharing about your own engagement; and (3) it’s an opportunity for recognition -- attorneys who report at least 50 hours of pro bono legal service in a year will be inducted into that year’s cohort of the NC Pro Bono Honor Society and receive a certificate from the Supreme Court of North Carolina recognizing their achievement.

DEADLINE: MARCH 31, 2018NC PRO BONO REPO

WHAT SHOULD I REPORT?

DEADLINE: MARCH 31, 2018NC PRO BONO REPO

WHAT SHOULD I REPORT?

DEADLINE: MARCH 31, 2018RNC PRO BONO REPO

DEADLINE: MARCH 31, 2018TINGRRT

number of pro bono hours, organizations through which you provided pro bono legal service, and Rule in NC included

ncprobono.org/volunteer/reportingVisit

and financial support of legal service providers.activity that improves the law, the legal system, or the legal profession, non-legal community service, of Professional Conduct 6.1: pro bono legal service, legal service at a substantially reduced fee,

Bono Reporting Pro The NC WHAT SHOULD I REPORT?

HOW DO I REPORT?

number of pro bono hours, organizations through which you provided pro bono legal service, and Conduct 6.1. You will Professional of

ncprobono.org/volunteer/reporting

and financial support of legal service providers.activity that improves the law, the legal system, or the legal profession, non-legal community service, of Professional Conduct 6.1: pro bono legal service, legal service at a substantially reduced fee,

collects information Form Bono Reporting WHAT SHOULD I REPORT?

HOW DO I REPORT?

number of pro bono hours, organizations through which you provided pro bono legal service, and need basic information about your Conduct 6.1. You will

and provide information about the activities ncprobono.org/volunteer/reporting

activity that improves the law, the legal system, or the legal profession, non-legal community service, of Professional Conduct 6.1: pro bono legal service, legal service at a substantially reduced fee,

about all the activities encouraged collects information

number of pro bono hours, organizations through which you provided pro bono legal service, and need basic information about your

and provide information about the activities

activity that improves the law, the legal system, or the legal profession, non-legal community service, of Professional Conduct 6.1: pro bono legal service, legal service at a substantially reduced fee,

in NC Rule about all the activities encouraged

own your about sharing in our state; (2) it’s an opportunity to encourage your peers to grow their pro bono involvement by attorney volunteerism in NC -- we want to share the good work being done by the legal profession There are three major reasons to report your pro bono legal service: (1) it’s a way to showcase

Number to submit your entry.for the other types of activities included in Rule 6.1. Finally, you will need your NC State Bar ID

legal pro bono of types number of pro bono hours, organizations through which you provided pro bono legal service, and


it’s (3) and engagement; own in our state; (2) it’s an opportunity to encourage your peers to grow their pro bono involvement by attorney volunteerism in NC -- we want to share the good work being done by the legal profession There are three major reasons to report your pro bono legal service: (1) it’s a way to showcase

Number to submit your entry.for the other types of activities included in Rule 6.1. Finally, you will need your NC State Bar ID

You provided. you services legal number of pro bono hours, organizations through which you provided pro bono legal service, and


recognition for opportunity an it’s in our state; (2) it’s an opportunity to encourage your peers to grow their pro bono involvement by attorney volunteerism in NC -- we want to share the good work being done by the legal profession There are three major reasons to report your pro bono legal service: (1) it’s a way to showcase

for the other types of activities included in Rule 6.1. Finally, you will need your NC State Bar ID totals of hours or amounts specific need not will You

number of pro bono hours, organizations through which you provided pro bono legal service, and

attorneys who recognition in our state; (2) it’s an opportunity to encourage your peers to grow their pro bono involvement by attorney volunteerism in NC -- we want to share the good work being done by the legal profession There are three major reasons to report your pro bono legal service: (1) it’s a way to showcase

for the other types of activities included in Rule 6.1. Finally, you will need your NC State Bar ID totals of hours or amounts

number of pro bono hours, organizations through which you provided pro bono legal service, and

WITH USCONNECT

Carolina recognizing their achievement.of the NC Pro Bono Honor Society and receive a certificate from the Supreme Court of North report at least 50 hours of pro bono legal service in a year will be inducted into that year’s cohort

own your about sharing

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facebook.com/ncprobono.com/ncprobono

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of the NC Pro Bono Honor Society and receive a certificate from the Supreme Court of North report at least 50 hours of pro bono legal service in a year will be inducted into that year’s cohort

recognition for opportunity an it’s

PO Box 2448Raleigh, NC 27602

919.890.1090

of the NC Pro Bono Honor Society and receive a certificate from the Supreme Court of North report at least 50 hours of pro bono legal service in a year will be inducted into that year’s cohort

attorneys who -- recognition

THENORTH CAROLINA

STATE BAR

JOURNALSpring 2018

Volume 23, Number 1

EditorJennifer R. Duncan

© Copyright 2018 by the North CarolinaState Bar. All rights reserved. Periodicalspostage paid at Raleigh, NC, and additionaloffices. Opinions expressed by contributorsare not necessarily those of the NorthCarolina State Bar. POSTMASTER: Sendaddress changes to the North Carolina StateBar, PO Box 25908, Raleigh, NC 27611.The North Carolina Bar Journal invites thesubmission of unsolicited, original articles,essays, and book reviews. Submissions maybe made by mail or email ([email protected]) to the editor. Publishing and edi-torial decisions are based on the PublicationsCommittee’s and the editor’s judgment ofthe quality of the writing, the timeliness ofthe article, and the potential interest to thereaders of the Journal. The Journal reservesthe right to edit all manuscripts. The NorthCarolina State Bar Journal (ISSN 10928626)is published four times per year in March,June, September, and December under thedirection and supervision of the council ofthe North Carolina State Bar, PO Box25908, Raleigh, NC 27611. Member rate of$6.00 per year is included in dues.Nonmember rates $10.73 per year. Singlecopies $5.36. The Lawyer’s Handbook$16.09. Advertising rates available uponrequest. Direct inquiries to Director ofCommunications, the North Carolina StateBar, PO Box 25908, Raleigh, NorthCarolina 27611, tel. (919) 828-4620.

ncbar.govFollow us at:

Twitter: @NCStateBarFacebook: facebook.com/NCStateBar

F E A T U R E S

8 The North Carolina Uniform Power ofAttorney Act: A Practical Introductionfor Real Estate PractitionersBy James E. Creekman

18 General Assembly Eliminates Accessto Civil Justice ActBy Jennifer M. Lechner

19 On the Way to the Courthouse—TheLaw of the LetterBy R. Michael Wells Sr.

20 Tying the Knot? Or Just Moving In?By Robert A. Mason

22 To Build a CourthouseBy G. Gray Wilson

25 New Pro Bono Regional CouncilsConveneBy Jared S. Smith

26 The Criminal Court System is the Theatre of the RealBy John G. Gehring

3THE NORTH CAROLINA STATE BAR JOURNAL

D E P A R T M E N T S

5 President’s Message

6 State Bar Outlook

28 The Disciplinary Department

30 Trust Accounting

31 Legislative Update

32 Legal Specialization

34 Lawyer Assistance Program

36 Pathways to Wellbeing

38 IOLTA Update

40 Legal Ethics

41 Proposed Ethics Opinions

45 Rule Amendments

B A R U P D A T E S

42 In Memoriam

51 Client Security Fund

52 Distinguished Service Award

53 Law School Briefs

OfficersJohn M. Silverstein, RaleighPresident 2017-2018

G. Gray Wilson, Winston-SalemPresident-Elect 2017-2018

C. Colon Willoughby Jr., RaleighVice President 2017-2018

L. Thomas Lunsford II, Chapel HillSecretary-Treasurer

Mark W. Merritt, Charlotte/Chapel HillPast-President 2017-2018

CouncilorsBy Judicial District1: C. Everett Thompson II, Elizabeth

City2: G. Thomas Davis Jr., Swan

Quarter3A: Charles R. Hardee, Greenville3B: Debra L. Massie, Beaufort4: Robert W. Detwiler, Jacksonville5: W. Allen Cobb Jr., Wilmington6: W. Rob Lewis II, Ahoskie7: Randall B. Pridgen, Rocky Mount8: C. Branson Vickory III, Goldsboro9: Paul J. Stainback, Henderson9A: Alan S. Hicks, Roxboro10: Heidi C. Bloom, Raleigh

Walter E. Brock Jr., RaleighNicholas J. Dombalis II, RaleighTheodore C. Edwards II, RaleighKatherine Ann Frye, RaleighRobert Rader, RaleighDonna R. Rascoe, RaleighWarren Savage, Raleigh

11A: Eddie S. Winstead III, Sanford11B: Marcia H. Armstrong, Smithfield12: Lonnie M. Player Jr., Fayetteville

13: Michael R. Ramos, Shallotte14: Dorothy Hairston Mitchell,

DurhamWilliam S. Mills, Durham

15A: Charles E. Davis, Mebane15B: Charles Gordon Brown, Chapel Hill16A: Terry R. Garner, Laurinburg16B: David F. Branch Jr., Lumberton16C: Richard Buckner, Rockingham17A: Matthew W. Smith, Eden17B: Thomas W. Anderson, Pilot

Mountain18: Barbara R. Christy, Greensboro

Stephen E. Robertson, Greensboro18H: Raymond A. Bretzmann, High

Point19A: Herbert White, Concord19B: Clark R. Bell, Asheboro19C: Darrin D. Jordan, Salisbury19D: Richard Costanza, Southern Pines20A: John Webster, Albemarle20B: H. Ligon Bundy, Monroe21: Michael L. Robinson, Winston-

SalemKevin G. Williams, Winston-Salem

22A: Kimberly S. Taylor, Taylorsville22B: Sally Strohacker, Mocksville23: John S. Willardson, Wilkesboro24: Andrea N. Capua, Boone25: M. Alan LeCroy, Morganton26: David N. Allen, Charlotte

Robert C. Bowers, CharlotteA. Todd Brown, CharlotteMark P. Henriques, CharlotteDewitt McCarley, CharlotteNancy Black Norelli, CharlotteEben T. Rawls, Charlotte

27A: Timothy L. Patti, Gastonia27B: Rebecca J. Pomeroy, Lincolnton28: Anna Hamrick, Asheville29A: H. Russell Neighbors, Marion29B: Christopher S. Stepp,

Hendersonville30: Gerald R. Collins Jr., Murphy

Public MembersThomas W. Elkins, RaleighDr. Joseph E. Johnson, GreensboroMohan Venkataraman, Morrisville

Executive DirectorL. Thomas Lunsford II

Assistant Executive DirectorAlice Neece Mine

CounselKatherine Jean

EditorJennifer R. Duncan

Publications Editorial BoardDarrin D. Jordan, ChairNancy Black Norelli, Vice ChairPhillip Bantz (Advisory Member)Richard G. BucknerAndrea CapuaMargaret Dickson (Advisory Member)John Gehring (Advisory Member)Ashley London (Advisory Member)Stephen E. RobertsonChristopher S. SteppJohn Webster

4 SPRING 2018

After a nearly 30-year tenure ina suburban office building,three years ago the worldheadquarters of my law firm,

Satisky & Silverstein, LLP, relocated to thetop floor of an older two-story building onHillsborough Street in an area near down-town Raleigh that is transitioning from aquiet neighborhood of small retail and officeuses to a prime destinationfor more intensive mixed-usedevelopments featuring highrise buildings with offices,restaurants, stores, and apart-ments. Before our move, Iargued with Howard Satisky,my partner of more than 40years, over who would occu-py the spacious office withlarge windows overlookingRaleigh’s gateway from thewest, Hillsborough Street,and who would be relegatedto the smaller office adjacent to venerable,but much sleepier, West Street. I lost; conse-quently, this article is being written from thelarge office with the sounds of traffic andtrain blasts as my inspiration.

One of the disadvantages of occupying alarge office is the necessity to cover the extraspace on the blank walls with pictures, art,and memorabilia. Like most, my walls fea-ture reminders of people and milestonesimportant to me and my career. One of thesmallest, but most significant, is a framedquote which has been in my possession formore than 30 years. It is just one line of printon white paper surrounded by a black back-ground in a slender chrome frame. Thequote is by British Prime Minister BenjaminDisraeli, who said in 1851, “Justice is truthin action.” But it is not the words that areimportant to me, it is the circumstances lead-ing to its acquisition that is the reason itremains on my wall.

In December, 1985 I received a call oneweekend asking me to come early the next

morning to a parking lot adjacent to a statepark. A car that belonged to an attorneyfriend had been discovered abandoned, and agroup of his friends was requested to meetthere to assist the law enforcement officerswho had been called in to investigate. Abouta dozen of us received instructions frompolice officers who would first enter the parkentrance near the vehicle, and then enlist our

assistance in a search if it wasneeded. We didn’t have towait long. The officersinformed us that they foundour friend’s body at a picnictable a few hundred feet intothe park. We shuffled ourfeet on the cold pavementnot wanting to stay or leaveas we struggled with our dis-belief at what we knew to betrue—our friend had com-mitted suicide at the age of40. I still wish there was

something I could have done, and somethingthat could have been done for him.

At his funeral we were advised not to tryto understand what led to this act, but to begrateful that we could not understand whathe did or why he did it. Those words werehelpful, but not comforting. Not long after-wards, my friend’s widow cleaned out his lawoffice and gave me a token of remembrancethat had been displayed in his office—theframed Disraeli quote. When I look at itnow, I still remember the surreal experienceof seeing his car, isolated in the parking lot,while waiting for the words we did not wantto hear, but knew would come.

Each year the officers and staff representa-tives of the State Bar visit four district bars toprovide an informational overview of the StateBar’s structure and activities. The final presen-tation is always the most interesting and com-pelling. It is delivered by a NC LawyerAssistance Program volunteer, and generallyincludes his or her honest and descriptivedetails of a difficult journey from personal

struggles to a better place through positivechanges. It is last on the agenda because thepresentation is so powerful that any subjectthat followed would lose its significance.

It is not the purpose of this article to dis-cuss the litany of issues that impair the well-being of lawyers, nor to address the signifi-cant number of practitioners who are directlyaffected. The impact of that impairment onour profession and the communities inwhich we practice is well documented. “ThePath to Lawyer Well-Being: PracticalRecommendations for Positive Change,”published by the National Task Force onLawyer Well-Being in August 2017, containsa comprehensive analysis of the challengeswe face as a profession and our potential forfinding better paths to follow. The reportcontains specific recommendations andstructural, institutional, and suggested rulechanges for stakeholders like state bar regula-tors, CLE, bar associations, law schools, thejudiciary, and law firms to help shift the cul-ture of the profession away from stigmatizinghelp-seeking behavior to creating a profes-sional landscape that encourages lawyers toseek help when they need it. In November2017 I attended the NCLAP annual meet-ing, and was impressed by the work of ourvolunteers and with their commitment toaddress the challenges identified by the taskforce. NCLAP Executive Director RobynnMoraites and her staff do an excellent job ofinteracting with North Carolina lawyers andcoordinating our volunteers. Our volunteersare dedicated to helping individuals, securein the knowledge that guiding them to betterpaths also helps their families, firms, andcommunities.

I am hopeful that the publication of theNational Task Force on Lawyer Well-Being willboth develop greater awareness of thecontinuing need to provide assistance toimpaired lawyers, and prompt key stakeholdersidentified in the report to implement the

C O N T I N U E D O N P A G E 2 4

The View from HereB Y J O H N M . S I L V E R S T E I N

T H E P R E S I D E N T ’ S M E S S A G E


My wife and I are theauthors of what webelieve to be the world’slongest Christmas letter.

This belief, though unsubstantiated by theGuinness Book, is almost certainly sharedby most, if not all, of the people who annu-ally receive it. Those lucky few, who consti-tute our list or “base,”would probably assign itother superlatives as well,like: most prolix, least nec-essary, most politicallyincorrect, least likely to becompletely read, and, ofcourse, most ecologicallyburdensome—owing to itspalpable and “pulpable”contribution to municipallandfills throughout NorthAmerica each January.Though small in compari-son to the holiday avalanche of Amazoniancardboard, our ten-page letters are, whenconsigned to the dust bin of history, quiteimpressive additions to the fossil record ofwhich our family can be justifiably proud.And yet, one wonders if there might be abetter and more socially responsible wayfor our words to “echo through eternity”?

All of this is by way of saying that I’vebeen thinking a lot about paper lately—itsvalue, its waste, its retention, and itsimportance in our personal and profession-al lives. Now, I understand that theLunsford Christmas Letter (the “LCL”),though an item of vast cultural significanceand near universal appeal, may not be anentirely useful metaphor for considerationof the State Bar and its reliance on paper.But there are commonalities that are com-pelling and instructive, especially when youcompare our merry missive with its regula-tory counterpart—the State Bar Journal.Although the composition of our mailinglists is different—the Journal is sent to

every active member of the State Bar andthe LCL is mailed only to people who havefoolishly expressed an interest in our fami-ly—the recipients of both publications arehardy perennials. In each case there arereally only two surefire ways to unsub-scribe—death and disbarment, and I’m nottoo sure about death. The publications also

share an affinity for tangiblemedia. To be sure, both canbe had and enjoyed in anelectronic format, but Iwould contend that theexperience of each is dimin-ished by device and digitiza-tion. Honestly, who candeny the pleasure and satis-faction of owning a reallyfine piece of Yuletide corre-spondence? And whowouldn’t rather thumb aglossy magazine than click

on a fleeting binary image? And yet, thecommon wisdom seems to be that most ofour readers—who are younger and morehip to technology with each passing year—prefer to consume their media, includingholiday greetings and professional periodi-cals, in cyberspace.

Last fall we decided to test that hypoth-esis, at least as far as the State Bar Journal isconcerned, by surveying the lawyers ofNorth Carolina. Among other things, ourmembers were asked in an emailed ques-tionnaire whether they would prefer toreceive the Journal in an electronic or hardcopy format. Participation in the surveywas decent, if not overwhelming. About14% of the membership responded. Themajority of those responding—about56%—expressed a preference for the hardcopy, as did 46% of the respondents underthe age of 40. Interestingly, about 62% ofthe younger group said that they would not“opt out” if given the choice to removethemselves from the Journal’s mailing list.

Now, it must be said that these questionswere asked in a sort of contextual vacuum.The cost of printing and mailing the mag-azine was, for instance, not mentioned inthe survey. As it happens, we expect tospend something in the neighborhood of$140,000 of your dues money this year tomake sure that you receive the thing itself,as opposed to its digital facsimile, which isessentially costless. That’s not chicken feed,to be sure, but it’s not a terribly significantcomponent of our operational budget ofabout $9,500,000. And, it’s not unmarriedto revenue. We annually receive about$40,000 of advertising income that offsetsthe expense of publication. So, while it isn’tcheap to be tangible, it’s a luxury we canprobably afford for the time being.

We learned a few other things from thesurvey. When important informationregarding the profession is time-sensitiveand can’t wait to be inked, it’s most wel-come in the form of email from the StateBar. Although we have been quite diligentin pushing out content through our socialmedia platforms, it appears that nothingbeats good old reliable email when it comesto a news flash from Raleigh. Otherinsights gleaned from your responses wereanecdotal rather than quantifiable. Itappears that many of you value the maga-zine as a kind of tangible representation ofyour affiliation with and connection to theprofession through the organized Bar.Whether it’s read or not, its presence on thecorner of your desk or even in your rest-room bespeaks your identification with usall. In a professional world where fragmen-tation seems to be accelerating, it is a rareshared symbol of what we still have—andhope to have—in common.

Of course, the Journal isn’t merely deco-rative. It is reasonably well read, accordingto your responses. The feature to whichmost of you turn inevitably—and first—is,naturally, the disciplinary page. Like

Saving PaperB Y L . T H O M A S L U N S F O R D I I

S T A T E B A R O U T L O O K

SPRING 20186

wrecks on Interstate 40 and wardrobe mal-functions during the Super Bowl’s half-timeshow, you just can’t bear to look away. Now,I must say that the information reportedtherein, and your Pavlovian response to it, isnothing to be ashamed of. Rather, it mirrorsthe experience of lawyers throughout thecountry. Everyone who occupies my officein our sister states reports the same phenom-enon. We all want to see who got “stung,”and we like to heave that collective sigh ofrelief in recognition of the fact that it wasn’tany of us. That experience of the discipli-nary page is, oddly enough, part of whatdefines and unifies lawyers, not just inNorth Carolina but across the entire coun-try. It is a good thing.

Although the data is unclear, it appearsthat an embarrassingly large number of youflee directly from the disciplinary page tothe executive director’s column. No oneknows why this should be so, but somehave said that the author’s characteristicdeparture from the norms of good legalwriting is perversely appealing, offeringthrills of the sort heretofore associatedmainly with wrecks and wardrobe malfunc-tions. Others readily admit that they sim-ply have an unhealthy appetite for irrever-ence, unsupported assertion, the passivevoice, and topics that are presumptivelyuninteresting. Whatever the cause, the factthat you’re guilty of reading this far into myarticle on the printed page can always beplausibly denied, if necessary. If, however,you arrived at this point by means of yourcomputer, the offending “click” has alreadybeen permanently recorded and we “knowwho you are.” You might as well confess.

Actually, confession is more of an issuein regard to the destruction of State Barpublications than their creation or con-sumption. Recently, our agency—likealmost every other organ of state govern-ment—became subject to new regulationsof byzantine complexity regarding the dis-position of public records. It has beenordained that a new “one size fits all”scheme of classifying public records willsupplant the old “retention schedules” thatwere customized over many years toaccommodate the vastly different kinds ofrecords generated by agencies as unlike asthe State Bar and the Department ofTransportation. Although the effort is nodoubt well-intentioned and the people incharge are just doing their jobs, our nascent

attempt to comply has been inordinatelytime-consuming and frustrating. Concernedthat some of our records don’t quite fit with-in the newly prescribed categories, and thatwe might “guess wrong” and prematurelydestroy records that turn out to have beenmisclassified, members of our staff havesought small amendments to the new “func-tional schedules” specific to the State Bar.Few accommodations have as yet beenallowed. Instead, the officials in charge haveresponded by assuring our people that viola-tions of the new law are “only misde-meanors.” Small comfort, that.

The retention and destruction of publicrecords is serious business. We have an obli-gation to handle such public property in aresponsible and lawful manner. In so doingwe must manage an incredible volume ofpaper, for which space can be reservedindefinitely only at great expense and con-siderable inconvenience. We need certaintyas to how to proceed. We also need rules ofreason. In that regard, we were recentlyadvised of the various ways in which publicdocuments that are properly subject todestruction can—and cannot—be lawfullydestroyed. Surprisingly, they cannot besimply “thrown away.” They must be oblit-erated. Allowable methods include, wewere told, burning, shredding, and immer-sion in acid vats. Regrettably, we were notadvertent to this when we were designingour new building a few years ago. Had weonly known, acid vats could have been eas-ily incorporated in our mail room where somuch unwanted paper tends to arrive atthe State Bar. As I understand it, the regu-lations requiring such draconian methodswere prompted a while back when some-body who had custody of records that wereripe for destruction thought it would be agood idea to just throw the stuff away. As ithappened, the material contained confi-dential information not suitable for thosewho like to do their reading at the landfill.In order to prevent this sort of thing fromhappening again, it was decreed thatdestructive technologies like those listedabove would be required in every case as akind of “Final Solution” to the paper prob-lem. That made good sense in regard tosensitive material not in the public domain.The State Bar’s investigative grievance files,for instance, ought never to see the light ofday. And no document bearing personalinformation like social security numbers

ought to be risked at the county dump.Still, the bulk of the State Bar’s paper issubject to disclosure under the PublicRecords Act. Whether or not it’s in thehands of the public at any given time, it iscertainly liable to be and is there for theasking. Why it can’t be placed in the “circu-lar file” when it’s due for destruction isbeyond me. And I don’t understand whythe lawyers of North Carolina must bearthe cost of acid vats and shredders. Thankgoodness people can still throw away theLunsford Christmas letter with a clear con-science. After all, it’s only a misdemeanor. n

L. Thomas Lunsford II is the executivedirector of the North Carolina State Bar.

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The North Carolina UniformPower of Attorney Act: APractical Introduction for RealEstate Practitioners

B Y J A M E S E . C R E E K M A N

Can we all agree that dealing with a power of

attorney in North Carolina has long been, at

best, a frustrating experience? Well, help is

on the way! On July 20, 2017, Governor

Cooper signed Senate Bill 569, “An Act to Adopt the Uniform Power of Attorney Act in this

State,” into law as Session Law 2017-153. It took effect on January 1, 2018, and if you

haven’t already done so, you need to read it if you practice real estate law or are called upon

to consider powers of attorney.

At the 10,000 foot level, the new lawrepeals or amends many of the existingstatutes dealing with powers of attorney andadopts the Uniform Power of Attorney Act asdrafted by the National Conference ofCommissioners on Uniform State Laws,albeit with a multitude of tweaks and modi-fications tailored specifically to our needs inNorth Carolina.

The effort to get the legislation intro-duced and passed was admirably undertakenby the Estate Planning and Fiduciary Law

Section of the North Carolina BarAssociation, which was very careful in itsdrafting efforts to invite comments, sugges-tions, and input from a wide variety of inter-ested groups, including the North CarolinaBankers Association, clerks of court, registersof deeds, advocates for the elderly, the NorthCarolina Department of Justice, and othersections of the North Carolina BarAssociation.

Just so we’re clear on terminology—forease of reference in this Article:

l The “Act” refers to the North CarolinaUniform Power of Attorney Act, codified asChapter 32C of the North Carolina GeneralStatutes.

l A “POA” is a power of attorney—thatis, a document signed by the principal thatappoints and empowers the attorney-in-fact.

l The “principal” is the individual whogrants authority to an attorney-in-fact in aPOA.

l The “agent” is the attorney-in-factnamed in a POA and authorized by the POA

SPRING 20188

©iStockphoto.com

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to act on behalf of the principal. “Agent” isthe term used throughout the Act in lieu of“attorney-in-fact.”

l The “existing law” refers to statutes cur-rently in effect regarding powers of attorney,many of which are amended or repealed andreplaced by the Act.

As happens with many complex pieces oflegislation, changes made to a bill during thelegislative process can result in minor incon-sistencies or incorrect cross-references in thebill as finally enacted. That happened here.As a result, minor technical corrections to theAct will likely be forthcoming, probably dur-ing next year’s legislative session.

No effort will be made here to provide adetailed analysis of the new law; delve intothe rights, duties, and obligations of an agentnamed in a POA; or identify needed techni-cal corrections. Instead, after a brief overviewof the Act, this article focuses on some criti-cal things that you as a real estate practitionerneed to know about the Act and its interfacewith existing law.

A Brief Overview of Organization andPurpose

As a practical matter, existing law pro-vides little more than a template for a NorthCarolina short form POA, rigid rules regard-ing durable POAs and an agent’s authority tomake gifts from the principal’s estate, andlimited guidance for third parties dealingwith an agent.

The Act covers much more territory. It isrationally organized, relatively straight-for-ward, and divided into four Articles:

l Article 1 contains definitions and gen-eral provisions covering the scope of the Act,when a POA is considered durable, therequirements for executing a POA, how thelaw that governs the meaning and effect of aPOA is determined, the relationship betweenan agent and a court-appointed fiduciary,when a POA becomes effective, how a POAmay be terminated, rules relating to theagent, guidance for third parties dealing withagents, and the relationship of the Act toother laws.

l Article 2 sets forth detailed descriptionsof an agent’s authority relating to specificsubjects such as “real property,” “tangiblepersonal property,” and “banks and otherfinancial institutions.” In addition, Article 2addresses concerns that an agent’s authoritymight be used to dissipate the principal’sproperty or alter the principal’s estate plan by

listing specific categories of authority thatcannot be implied from a grant of generalauthority—they can only be granted byexpress language in a POA.

l Article 3 offers three statutory forms:a statutory form POA, an agent’s certifica-tion, and a limited POA for real propertytransactions.

l Article 4 clarifies the relationship of theAct to other law and pre-existing powers ofattorney.

The Key Things You Need To Know1. Effective January 1, 2018, the existing

law is (mostly) out and the Act is (mostly)in.

While the transition from old to new isfairly smooth, it is not entirely seamless.Residuals of the existing law will continue ineffect even after being repealed and replaced.

Chapter 32A of the North CarolinaGeneral Statutes is the existing law that gov-erns POAs. Beginning January 1, 2018, onlyArticle 3 (Health Care Powers of Attorney)and Article 4 (Consent to Health Care forMinor) remained in effect—the rest ofChapter 32A was repealed and replaced bythe Act. Or so it seems.

According to new § 32C-4-403(a) of theAct:

l The Act applies to a POA createdbefore, on, or after January 1, 2018, unless(i) the POA contains a clear indication of acontrary intent, or (ii) the application of aparticular provision of the Act would sub-stantially impair the rights of a party.

l A rule of construction or presumptionprovided by the Act applies to POAs execut-ed before January 1, 2018, unless (i) thePOA contains a clear indication of a contraryintent, or (ii) the application of the rule ofconstruction or presumption would substan-tially impair the rights of a party createdunder North Carolina law in effect prior toJanuary 1, 2018, in which case the Act’s ruleof construction or presumption does notapply and the superseded rule of construc-tion or presumption applies.

In short, the Act (including the presump-tion of durability discussed below) applies toPOAs signed before January 1, 2018. So far,so good.

But there is one glaring exception to this:If you are dealing with a Statutory ShortForm POA signed before January 1, 2018,under the authority of existing § 32A-1, thennew § 32C-4-403(d) states that the authority

of the agent must be determined by referenceto the powers described in existing § 32A-2—not the much more broadly definedpowers contained in Article 2 of the Act. Asa practical matter, this means that when youevaluate the authority of an agent under aStatutory Short Form POA signed beforeJanuary 1, 2018, § 32A-1 is still alive andwell, and you must determine the agent’sauthority under existing § 32A-2, notChapter 32C.

2. The rules regarding durability havebeen greatly refined and turned topsy-turvy.

The Act redefines incapacity and changesthe rules regarding the durability of a POAand the requirements for registering a POA.

First a review of existing law:l An agent cannot act on behalf of a prin-

cipal after the principal becomes “incapaci-tated” or “mentally incompetent” unless thePOA is a “durable” POA. The terms “inca-pacitated” and “mentally incompetent” arenot defined, and, with one exception, there isno clear mechanism to determine whether aprincipal has become incapacitated or men-tally incompetent. The exception relates to aPOA that becomes effective only when theprincipal becomes incapacitated or mentallyincompetent (i.e., it is a “springing” POAtriggered by the principal’s subsequent inca-pacity or mental incompetence). In that case,existing § 32A-8 provides that, unless a thirdperson dealing with an agent has actualknowledge to the contrary, the third personcan rely on an affidavit executed by the agentsetting forth that such condition exists asconclusive proof that the principal is inca-pacitated or mentally incompetent.

l A POA is not a “durable” POA unless itsays it is, either by indicating it has beensigned pursuant to Article 2 of Chapter 32A,by including the phrase, “This power ofattorney shall not be affected by my subse-quent incapacity or mental incompetence,”or, “This power of attorney shall becomeeffective after I become incapacitated ormentally incompetent,” or by including sim-ilar words showing the principal’s intent thatthe authority conferred is exercisablenotwithstanding the principal’s subsequentincapacity or mental incompetence.

l Also, there are two separate but relatedrules under existing law regarding the regis-tration (i.e., recording) of a durable POA inthe office of the register of deeds:

l A durable POA can be registered in theregister of deeds office before or after the

principal becomes incapacitated or men-tally incompetent. However, a durablePOA that has not been registered ceasesto be valid when the principal becomesincapacitated or mentally incompetentunless (and until) it is duly registered inthe appropriate register of deeds office.l Once a durable POA has been duly reg-istered in the appropriate register of deedsoffice, then all acts performed thereafterby the agent pursuant to the durable POAduring any period of incapacity or mentalincompetence of the principal have thesame effect as, and are fully binding to thesame extent as, would be the case were theprincipal not incapacitated or mentallyincompetent.The practical implications of these two

existing rules are as follows:l As long as the principal is fully compe-

tent to act on the principal’s own behalf (i.e.,the principal is neither incapacitated normentally incompetent), a durable POA doesnot have to be registered.

l If a durable POA is duly registered inthe appropriate register of deeds officebefore the principal becomes incapacitatedor mentally incompetent, the agent can con-tinue to act without interruption after theprincipal becomes incapacitated or mentallyincompetent.

l If the durable POA has not been dulyregistered in the appropriate register ofdeeds office before the principal becomesincapacitated or mentally incompetent, theagent cannot act on behalf of the principalafter the principal becomes incapacitated ormentally incompetent unless and until thePOA is duly registered in the appropriateregister of deeds office. Once the POA isduly registered, the agent can resume actingon behalf of the principal. Stated more sim-ply, the authority of the agent to act is auto-matically suspended when the principalbecomes incapacitated or mentally incom-petent, but is restored from the date of reg-istration if the durable POA is subsequentlyproperly registered. However, actions takenby the agent during the period of suspensionare not validated by the subsequent registra-tion of the POA.

The rules regarding durable POAs areentirely different under the Act, and the Actis much cleaner and clearer in its approach todurability:

l A “durable” POA is defined in § 32C-1-102(2) as one in which the “incapacity of

the principal does not terminate” the POA.“Incapacity,” in turn, is precisely defined asfollows in § 32C-1-102(6):

Incapacity. – The inability of an individ-ual to manage property or business affairsbecause the individual has any of the follow-ing statuses:

1. An impairment in the ability to receiveand evaluate information or make orcommunicate decisions even with the useof technological assistance.2. Is missing, detained, including incar-cerated in a penal system, or outside theUnited States and unable to return.l According to § 32C-1-104, a POA is a

durable POA unless it “expressly providesthat it is terminated by the incapacity of theprincipal.” This is the complete opposite ofexisting law, which says a POA is not a“durable” POA unless it says it is.

However, as is the case under existing law, itis important to remember that if a POA isNOT a durable POA, the agent’s authority toact on the principal’s behalf automatically ter-minates when the principal becomes incapaci-tated.

l The Act does not require a POA(whether or not it is durable) to be registered(i.e., recorded) in the office of the register ofdeeds.

However, it is important to remember thatexisting G.S. 47-28 continues to require a POAinvolved in a real estate transaction to be regis-tered (i.e., recorded) in the office of the registerof deeds, regardless of whether or not it isdurable.

l If the POA is what is commonly knownas a “springing” or contingent POA—that is,one that becomes effective at a future date orupon the occurrence of a future event or con-tingency such as the principal’s incapacity—new § 32C-1-109(b) permits the principal toauthorize the agent or someone else to pro-vide written verification that the event orcontingency has occurred.

If the principal’s incapacity is the triggerfor a springing POA and the principal hasnot authorized anyone to make that determi-nation or the authorized person is unable orunwilling to make the determination, new §32C-1-109(c) provides a default mechanismfor each category of incapacity to verify theprincipal’s incapacity:

l Incapacity based on the principal’simpairment may be verified by two physi-cians or licensed psychologists after they havepersonally examined the principal.

l Incapacity based on the principal’sunavailability may be verified by an attorneyat law, a judge, or an appropriate governmen-tal official (such as an officer acting under theauthority of the US Department of State, amilitary officer, or a sworn federal or statelaw enforcement officer).

An agent’s authority to act on behalf of anincapacitated principal under a springingdurable POA does not automatically termi-nate when the principal regains capacity—the POA and the agent’s authority continuein effect until formally terminated.

3. The Act covers more than NorthCarolina POAs.

The Act is much broader in its scope thanexisting law—pursuant to § 32C-1-103, theAct covers all POAs (including POAs fromother states and foreign countries) except forthe following:

l A power to the extent it is coupled withan interest, including a power given to or forthe benefit of a creditor in connection with acredit transaction. A “power coupled with aninterest” frequently appears in loan agree-ments, security instruments, and other com-mercial contracts—these powers are not gov-erned by the Act.

l A power to make health care decisions.An effective health care POA must still com-ply with Article 3 of Chapter 32A, and aneffective consent to provide health care for aminor must still comply with Article 4 ofChapter 32A.

l A proxy or other delegation to exercisevoting rights or management rights withrespect to an entity. To give a simple exampleof this exception, assume the president of acorporation signs a general POA authorizinghis son to act as the president’s agent. Whilethe president can give broad authority to theson to act on behalf of the president as anindividual, the president cannot give anagent authority to act on president’s behalf aspresident of the company—only the compa-ny can confer that authority. Thus, the Actdoes not apply to the extent a POA purportsto delegate management rights with respectto an entity.

l A power created on a form prescribedby a government or governmental subdivi-sion, agency, or instrumentality for a govern-mental purpose.

4. The Act provides clarity regarding theexecution and validity of a POA.

Here are the basic rules regarding theexecution and validity of a POA according

10 SPRING 2018

to new § 32C-1-105 and § 32C-1-106 ofthe Act:

l A POA signed in North Carolina beforeJanuary 1, 2018, is valid if its execution com-plied with the North Carolina law in effect atthe time the POA was signed.

l A POA signed in North Carolina on orafter January 1, 2018, is valid if it is (i) signedby the principal or in the principal’s con-scious presence by another individual direct-ed by the principal to sign the principal’sname on the POA, and (ii) acknowledged(i.e., notarized).

These signing requirements are new andwarrant further comment. Without doubt,the principal must be legally competent atthe time the POA is signed. So here’s the rub:How do you actually have the principal signthe POA and have the principal’s signatureduly acknowledged when the principal,although mentally competent and not inca-pacitated, is physically unable to sign his orher name, but can either sign with a “mark”or direct someone to sign the principal’sname on the principal’s behalf? The answer isembedded in G.S. 10B-20(d) and (e):

(d) A notary may certify the affixation ofa signature by mark on a record presentedfor notarization if:

(1) The mark is affixed in the presenceof the notary;(2) The notary writes below the mark:“Mark affixed by (name of signer bymark) in presence of undersignednotary”; and(3) The notary notarizes the signatureby performing an acknowledgment,oath or affirmation, jurat, or verificationor proof.

(e) If a principal is physically unable tosign or make a mark on a record present-ed for notarization, that principal maydesignate another person as his or herdesignee, who shall be a disinterestedparty, to sign on the principal’s behalfpursuant to the following procedure:

(1) The principal directs the designee tosign the record in the presence of thenotary and two witnesses unaffected bythe record;(2) The designee signs the principal’sname in the presence of the principal,the notary, and the two witnesses;(3) Both witnesses sign their own namesto the record near the principal’s signa-ture;(4) The notary writes below the princi-

pal’s signature: “Signature affixed bydesignee in the presence of (names andaddresses of principal and witnesses)”;and(5) The notary notarizes the signaturethrough an acknowledgment, oath oraffirmation, jurat, or verification orproof.

If the POA will be signed by the principalby using a “mark” or by someone else onbehalf of the principal at the principal’s direc-tion, you need to pay careful attention to therequirements in G.S. 10B-20. If you don’t,you run the risk that the POA will be invalid.

l A POA signed outside North Carolinais valid in North Carolina if, when the POAwas executed, the execution complied witheither (i) the law of the jurisdiction thatdetermines the “meaning and effect” of thePOA (as discussed below), or (ii) the federalrequirements for a military POA.

Two final comments regarding theseissues are significant. First, a signature on aPOA is presumed to be genuine if the prin-cipal acknowledges the signature before anotary public or other individual authorizedby law to take acknowledgements. Second,unless there is a statute that provides other-wise, a photocopy or electronically transmit-ted copy of an original POA has the sameeffect as the original.

5. The Act clarifies which law controls.According to § 32C-1-107 of the Act,

the “meaning and effect” of a POA is deter-mined by (i) the law of the jurisdiction indi-cated in the POA, or (ii) in the absence ofany such indication, the law of the jurisdic-tion in which the POA was executed. TheOfficial Commentary to the Uniform Powerof Attorney Act contains the followingobservation:

The phrase, “the law of the jurisdictionindicated in the power of attorney,” isintentionally broad, and includes anystatement or reference in a power of attor-ney that indicates the principal’s choice oflaw. Examples of an indication of jurisdic-tion include a reference to the name ofthe jurisdiction in the title or body of thepower of attorney, citation to the jurisdic-tion’s power of attorney statute, or anexplicit statement that the power of attor-ney is created or executed under the lawsof a particular jurisdiction.The following examples may help illus-

trate this rule:l A POA identified as a “North Carolina

Statutory Short Form Power of Attorney” issigned by the principal and acknowledgedbefore a notary public. It doesn’t matterwhen or where the POA was signed andacknowledged. The meaning and effect ofthe POA will be determined by NorthCarolina law.

l A POA indicates that it is governed byKansas law. It doesn’t matter when or wherethe POA was signed and acknowledged. Themeaning and effect of the POA will be deter-mined by Kansas law.

l A POA makes no mention of any stateand is absolutely silent as to what law con-trols. The meaning and effect of the POAwill be determined by the law of the statein which the POA was signed and acknowl-edged.

6. The Act’s rules governing terminationof a POA are more comprehensive than inthe existing law.

The revocation of a POA under existinglaw is governed by § 32A-13. The correspon-ding provision in the Act is § 32C-1-110.Unlike under existing law, the Act draws aclear distinction between the termination ofa POA and termination of the agent’sauthority under the POA.

Under the Act, a POA terminates whenany of the following occur:

l The principal dies.l If the POA is not durable, the principal

becomes incapacitated.l The principal revokes the POA.l The POA provides that it terminates.l The purpose of the POA is accom-

plished.l The principal revokes the agent’s

authority or the agent dies, becomes incapac-itated, or resigns, and the POA does not pro-vide for another agent to act under the POA.

l A guardian of the principal’s estate orgeneral guardian terminates the POA.

Under the Act, an agent’s authority undera POA terminates when any of the followingoccur:

l The principal revokes the authority inwriting.

l The agent dies, becomes incapacitated,resigns, or is removed.

l The court enters a decree of divorcebetween the principal and the agent, unlessthe POA provides otherwise.

l The POA terminates.l A guardian of the principal’s estate or

general guardian terminates the agent’sauthority.

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There are also several ancillary “rules” in §32C-1-110 of the Act relating to terminationworthy of mention:

l A POA does not become “stale”—unless a POA provides for terminationupon a certain date or after the passage of aperiod of time, lapse of time since execu-tion is irrelevant to the POA’s validity. Thisprovision validates old POAs that have notbeen terminated.

l A new POA doesn’t automatically ter-minate an old POA. To effect a revocation, asubsequently executed POA must expresslyrevoke a previously executed POA or statethat all other POAs are revoked. The require-ment for express revocation prevents inad-vertent revocation when the principalintends for one agent to have limited author-ity that overlaps with broader authority heldby another agent.

Section 32C-1-110 of the Act has twovery important “savings” provisions:

l A termination event is not effective as tothe agent or any person dealing with theagent who, without actual knowledge of thetermination event, acts in good faith underthe POA.

l If the POA is a non-durable POA, theincapacity of the principal is not effective asto the agent or any person dealing with theagent who, without actual knowledge ofprincipal’s incapacity, acts in good faithunder the POA.

In either case, an act so performed, unlessotherwise invalid or unenforceable, binds theprincipal and the principal’s successors ininterest.

Section 32C-1-110(g) of the Act also pro-vides specific guidance as to how a principalmay revoke a POA:

l If the POA has been registered in anoffice of the register of deeds, the principalmust register an “instrument of revocation”in that office executed and acknowledged bythe principal while the principal is not inca-pacitated, together with proof of service onthe agent in the manner prescribed for serv-ice under Rule 5 of the North Carolina Rulesof Civil Procedure.

l If the POA has not been registered in anoffice of the register of deeds, it may berevoked by one of the following methods:

l A subsequent written revocatory docu-ment executed and acknowledged by theprincipal while the principal is not inca-pacitated.l Being burnt, torn, canceled, obliterated,

or destroyed, with the intent and for thepurpose of revoking it, by the principal orby another person in the principal’s pres-ence and at the principal’s direction, whilethe principal is not incapacitated.7. Section 32C-1-111 of the Act address-

es coagents and successor agents.A principal may (i) designate two or more

persons in a single POA to act as coagents,(ii) designate one or more successor agents toact if an agent resigns, dies, becomes incapac-itated, is for some reason not qualified to act,or declines to serve, and/or (iii) grant author-ity to designate one or more successor agentsto an agent or other person designated byname, office or functions.

l Unless the POA expressly requires coa-gents to act jointly, each coagent may exercisethe coagents’ authority independently with-out the knowledge, consent, or joinder ofany other coagent or coagents.

l Unless the POA provides otherwise, ifany one or more coagents resigns, dies,becomes incapacitated, or otherwise fails toact, the remaining agent or coagents maycontinue to act.

l Unless the POA provides otherwise, asuccessor agent has the same authority as thatgranted to the original agent. However, asuccessor agent may not act until all prede-cessor agents have resigned, died, becomeincapacitated, are no longer qualified toserve, or have declined to serve.

8. What are the “safe harbors” you canrely on when presented with a POA, andwhat can you request from the agent?

Article 5 of existing Chapter 32A (§ 32A-40 through § 32A-43) addresses the fre-quently encountered problem of personsrefusing to accept a POA. These issues areaddressed in considerable detail in § 32C-1-119 and § 32C-1-120 of the Act.

Section 32C-1-119(b) and (c) providetwo important safe harbor protections foryou if you accept a POA:

l If you in good faith accept an acknowl-edged (i.e., notarized) POA without actualknowledge that the principal’s signature isnot genuine, you may rely upon the pre-sumption that the principal’s signature isgenuine. This provision restates the safe har-bor that appears in § 32C-1-105 of the Act.

l If you in good faith accept a POA with-out actual knowledge that the POA is void,invalid, or terminated, that the purportedagent’s authority is void, invalid, or terminat-ed, or that the agent is exceeding or improp-

erly exercising the agent’s authority, (i) youmay rely upon the POA as being valid andstill in effect, the agent’s authority as beinggenuine, valid, and still in effect, and theagent as not having exceeded and havingproperly exercised the agent’s authority; and(ii) you will not be responsible for any breachof fiduciary duty by the agent, including anybreach of loyalty, any act of self-dealing, orany misapplication of money or other prop-erty paid or transferred as directed by theagent. This safe harbor applies withoutregard to whether or not you demand orreceive a certification from the agent (as dis-cussed below).

When you are asked to accept a POA,existing § 32A-40(b) permits you to requirean affidavit from the agent stating that theagent has no actual knowledge of the revoca-tion of the POA or facts that would cause theagent to question the authenticity or validityof the POA—in short, that the POA is validand in effect according to its terms. You areentitled to rely on that affidavit as long asyou are acting in good faith and have noactual knowledge to the contrary.

Section 32C-1-119(d) goes far beyondexisting § 32A-40(b). If you are presentedwith, and asked to accept, a POA, you mayrequest, and, as long as you are acting ingood faith and without actual knowledge tothe contrary, you may rely without furtherinvestigation upon, any one or more of thefollowing:

l A certification executed by the agent tothe effect that the agent did not have actualknowledge at the time of the POA is present-ed to you (i) that the POA is void, invalid, orterminated, (ii) that the agent’s authority isvoid, invalid, or terminated, or (iii) of factsthat would cause the agent to question theauthenticity or validity of the POA. A certi-fication meeting these requirements is suffi-cient proof to you that (i) the POA is authen-tic and valid and has not been terminated,(ii) the agent’s authority is valid and has notbeen terminated, and (iii) other factual mat-ters stated in the certification regarding theprincipal, agent, or POA are true.

If the exercise of the POA requires execu-tion and delivery of an instrument that isrecordable, you may require that the certifi-cation be prepared and executed so as to berecordable—i.e., acknowledged or in theform of an affidavit with an appropriatejurat. Section 32C-3-302 provides a statuto-ry form that, if used, satisfies the require-

ments for an agent’s certification.l An English translation of the POA if the

POA contains, in whole or in part, languageother than English.

l An opinion of counsel as to any matterof law concerning the POA if you provide ina writing or other record the reason for yourrequest. This provision may be particularlyuseful when a POA is presented to you thatis not a standard North Carolina POA. Forexample, when presented with a POA thatappears to be a Kansas POA, you mayrequest an opinion from a Kansas attorneyconfirming that (i) the POA was validly exe-cuted under Kansas law, (ii) the POA hasbeen properly acknowledged, (iii) the POA isa durable POA, and (iv) after describing oridentifying the transaction to be undertakenby the agent on the principal’s behalf, theagent has appropriate authority under thePOA and Kansas law to effect the transactionwithout exceeding or improperly exercisingthe agent’s powers.

The principal is responsible for theexpense of an English translation or an opin-ion of counsel requested under § 32C-1-120unless the request is made more than sevenbusiness days after the POA is presented foracceptance.

9. When may you be liable for refusingto accept a POA?

As is currently the case under existing §32A-41, a person who unreasonably refusesto accept a POA is exposed to potential lia-bility under § 32C-1-120(e) of the Act.Patterned in part after existing § 32A-42,new § 32C-1-120 contains a laundry list ofstatutory exceptions that permit you torefuse to accept a POA without incurringliability.

However, to avoid potential liability, thereare some timelines you need to observe care-fully when presented with a POA:

l No later than seven business days afterbeing presented with an acknowledged POAand being asked to accept it, you mustaccept the POA, refuse to accept the POAfor one of the reasons discussed below, orrequest a certification, a translation, or anopinion of counsel from the agent (as dis-cussed in #8 above).

l If you request a certification, a transla-tion, or an opinion of counsel, then withinfive business days after your receipt of therequested items in reasonably satisfactoryform, you must either accept the POA orrefuse to accept the POA for one of the rea-

sons discussed below. In addition, you are not authorized to

require an additional or different form ofPOA if the POA you are presented reason-ably appears to authorize the agent to con-duct the business the agent desires to con-duct.

You are not required to accept a POA ifany of the following circumstances exist, andyou are not exposed to liability if you refuseto accept it for one of the following reasons:

l The POA has not been duly acknowl-edged.

l You are not otherwise required toengage in a transaction with the principal inthe same circumstances.

l Engaging in a transaction with theagent or the principal in the same circum-stances would be inconsistent with applica-ble federal law.

l You have actual knowledge of the termi-nation of the agent’s authority or of the POAbefore exercise of the power.

l Your request for a certification, a trans-lation, or an opinion of counsel is refused.

l You did not receive a certification,

translation, or opinion of counsel yourequested in reasonably satisfactory formwithin a reasonable period of time.

l You believe in good faith that the POAis not valid or that the agent does not havethe authority to perform the act requested,whether or not you have requested or havebeen provided a certification, a translation,or an opinion of counsel.

l You have reasonable cause to questionthe authenticity or validity of the POA or theappropriateness of its exercise by the agent.

l The agent or principal has previouslybreached any agreement with you, whetherin an individual or fiduciary capacity.

l You make, or have actual knowledgethat another person has made, a report to thelocal adult protective services office or lawenforcement stating a good faith belief thatthe principal may be subject to physical orfinancial abuse, neglect, exploitation, orabandonment by the agent or a person actingfor or with the agent.

There are three additional grounds forrefusing to accept a POA that are specificallyintended to protect banks and other financial

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institutions, but which may apply to othersas well. A person asked to accept a POA isnot required to do any of the following:

l Open an account for a principal at therequest of an agent if the principal is not cur-rently a customer of the person asked toaccept the POA.

l Make a loan to the principal at therequest of the agent.

l Permit an agent to conduct business notauthorized by the terms of the POA, or oth-erwise not permitted by applicable statute orregulation.

If you are presented with a POA, youwill not be “deemed” to have unreasonablyrefused to accept the POA solely on thebasis of your failure to accept the POAwithin seven business days or, if you havepromptly requested a certification, a trans-lation, or an opinion of counsel, prior toyour receipt of requested items in reason-ably acceptable form.

10. How does the Act guard againstabuse on the part of an agent?

At the outset, it is important to rememberthat an agent appointed under a POA is afiduciary. According to § 32C-1-114 of theAct, the agent must always act (i) in accor-dance with the principal’s reasonable expec-tations to the extent actually known by theagent and, otherwise, in the principal’s bestinterest, (ii) in good faith, (iii) loyally for theprincipal’s benefit, (iv) only within the scopeof authority granted in the POA, and (v) ina manner so as not to create a conflict ofinterest that impairs the agent’s ability to actimpartially in the principal’s best interest.

In exchange for mandated acceptance ofan agent’s authority, the Act does not requirepersons dealing with an agent to investigatethe agent or the agent’s actions. However,safeguards against abuse by the agent are pro-vided by creating what is essentially a two-tier system when granting an agent authority.Section 32C-1-201 of the Act draws a sharpdistinction between acts that may be per-formed by an agent under a “general” grantof authority and acts that require a “specific”grant of authority.

General Grant of AuthorityLet’s talk first about what may be per-

formed by an agent under a “general” grantof authority. As noted earlier, Article 2 of theAct addresses the authority of an agent undera POA. More specifically, § 32C-2-203addresses general issues relating to authority,while § 32C-2-204 through § 32C-2-217

provide detailed descriptions of generalauthority relating to specific subjects such as“real property,” “tangible personal property,”and “banks and other financial institutions.”

Pursuant to § 32C-2-202, a principalmay incorporate any or all of the powers list-ed in § 32C-2-204 through § 32C-2-117 infull into the POA either by a reference to theshort descriptive term for the subject used inthe Act or to the section number. In addi-tion, § 32C-2-202 permits a principal tomodify any authority incorporated by refer-ence in a POA. If a POA grants to an agentauthority to do all acts that a principal coulddo, the agent has the general authoritydescribed in § 32C-2-204 through § 32C-2-216 (but not § 32C-2-217, which addressesthe agent’s authority to make gifts on behalfof the principal—as noted below, the author-ity to make gifts on behalf of the principalrequires specific authority).

Specific Grant of AuthorityNow let’s shift to acts that require a “spe-

cific” grant of authority. § 32C-2-201 pro-vides heightened requirements for grantingauthority for actions that could dissipate theprincipal’s property or alter the principal’sestate plan. More specifically, § 32C-2-201(a) lists the following specific categoriesof authority that cannot be implied fromany grant of general authority, but whichmay be granted only through express lan-guage in the POA:

l An agent may not do any of the follow-ing on behalf of the principal or with theprincipal’s property unless the POA expresslygrants the agent that authority:

l Make a gift. However, even if the agentis expressly authorized to make a gift, thatright is limited by § 32C-2-201(b) and(c) and by § 32C-2-217.l Create or change rights of survivorship.l Create or change a beneficiary designa-tion.l Delegate authority granted under thePOA.l Waive the principal’s right to be a bene-ficiary of a joint and survivor annuity,including a survivor benefit under aretirement plan.l Exercise fiduciary powers that the prin-cipal has authority to delegate.l Renounce or disclaim property, includ-ing a power of appointment.l Exercise authority over the content ofelectronic communication, as defined in18 U.S.C. § 2510(12), sent or received by

the principal.l In matters relating to revocable and

irrevocable trusts created by the principal assettlor, an agent may not do either of the fol-lowing unless the POA or the terms of thetrust expressly grants the agent that authority:

l Exercise the powers of the principal assettlor of a revocable trust in accordancewith G.S. 36C-6-602.1.l Exercise the powers of the principal assettlor of an irrevocable trust to consentto the trust’s modification or terminationin accordance with G.S. 36C-4-411(a).And here’s a related, but incredibly

important, rule against self-dealing thatappears in § 32C-2-201(c): Even if the POAauthorizes the agent to do any of the specificactions identified above, unless the POA pro-vides otherwise, the agent may not exercise“general” or “specific” authority under aPOA to create in the agent, or in an individ-ual to whom the agent owes a legal obliga-tion of support, any interest in the principal’sproperty, whether by gift, right of survivor-ship, beneficiary designation, disclaimer, orotherwise. This rule can be very important inreal estate transactions.

So what does all of this mean in practicalterms? When trying to determine whether anagent’s action will be within the scope of theagent’s authority and consistent with theagent’s fiduciary duty to the principal, hereare questions you need to consider:

l Is the proposed action within the scopeof the general authority granted to the agent?

l Is the proposed action one whichrequires specific authority? If so, does thePOA expressly grant that specific authority?

l Will the proposed action create in theagent, or in an individual to whom theagent owes a legal obligation of support,any interest in the principal’s property,whether by gift, right of survivorship, bene-ficiary designation, disclaimer, or other-wise? If so, does the POA expressly author-ize such self-dealing?

l Even if the proposed action is author-ized by the POA, is the proposed action con-sistent with the agent’s fiduciary duty to theprincipal?

11. So what are the categories of author-ity listed in Article 2 of the Act?

No attempt will be made here to discussin detail any of the categories of authoritylisted in Article 2 of the Act. For our purpos-es here, a listing of the section titles is suffi-cient:

14 SPRING 2018

§ 32C-2-204. Real property§ 32C-2-205. Tangible personal property§ 32C-2-206. Stocks and bonds§ 32C-2-207. Commodities and options§ 32C-2-208. Banks and other financial

institutions§ 32C-2-209. Operation of entity§ 32C-2-210. Insurance and annuities§ 32C-2-211. Estates, trusts, and other

beneficial interests§ 32C-2-212. Claims and litigation§ 32C-2-213. Personal and family main-

tenance§ 32C-2-214. Benefits from governmen-

tal programs or civil or military service§ 32C-2-215. Retirement plans§ 32C-2-216. Taxes§ 32C-2-217. Gifts authorized by general

authority§ 32C-2-218. Gifts authorized by court

order§ 32C-2-219. Certain acts authorized by

the courtReal estate practitioners will need to

become intimately familiar with the authori-ties listed in § 32C-2-204 (real property), §32C-2-205 (tangible personal property), and§ 32C-2-208 (banks and other financialinstitutions).

12. The new statutory short form POAwill be very useful.

Article 3 of the Act provides three statu-tory forms:

1. § 32C-3-301. Statutory form power ofattorney

2. § 32C-3-302. Agent’s certification3. § 32C-3-303. Limited power of attor-

ney for real property.The “North Carolina Statutory Short

Form Power of Attorney” in § 32C-3-301of the Act is the updated counterpart to theexisting § 32A-1 statutory short form gen-eral POA. It contains, in plain language,instructions to the principal and agent.Step-by-step prompts are given for designa-tion of the agent and successor agents andthe grant of general and specific authority.In the section of the form addressing gener-al authority, the principal must initial thesubjects for which the principal wishes todelegate general authority to the agent. Inthe section of the form addressing specificauthority, certain categories of specificauthority are listed, preceded by a warningto the principal about the potential conse-quences of granting such authority to anagent. The principal is instructed to initial

only the specific categories of actions thatthe principal intends to authorize.

As you review the new North CarolinaStatutory Short Form Power of Attorneyform, keep in mind that the POA is durable,effective immediately, and does not revokeany existing POAs.

Also, the section of the form addressingspecific authority very intentionally does notcover two trust-related matters: whether theagent can exercise the powers of the principalas settlor of a revocable trust in accordancewith G.S. 36-6-602.1, or the powers of theprincipal as settlor of an irrevocable trust toconsent to the trust’s modification or termi-nation in accordance with G.S. 36C-4-411(a). The drafters of the legislation proper-ly believed that these trust-related provisionsshould not be included in a “boiler-plate”statutory form, but rather should be includ-ed in a POA only after thoughtful consider-ation by the trust settlor with the advice ofcompetent counsel.

The introductory language in § 32C-3-301 indicates that the new form is a “nonex-clusive method to grant a power of attorney”and that a document “substantially” in theform of the one set forth in § 32C-3-301“may be used to create a statutory formpower of attorney that has the meaning andeffect prescribed by [Chapter 32C].” Thisleaves ample wiggle room for the short formPOA to be “tweaked.” It is not identical tothe statutory short form POA appearing in §32C-3-301.

13. The “Agent’s Certification” shouldbe routinely used in real estate transactions.

The second statutory form, the “Agent’sCertification as to the Validity of Power ofAttorney and Agent’s Authority,” appears in§ 32C-3-302. This form is patterned afterthe Affidavit of Attorney-in-Fact set forth inexisting § 32A-40(d). According to § 32C-1-119(d)(1), if you are asked to accept a POA,you may rely on the accuracy of the state-ments contained in the certification withoutfurther investigation if you are acting in goodfaith and have no actual knowledge to thecontrary. You should routinely require anAgent’s Certification in every real estatetransaction.

14. The new “Limited Power ofAttorney for Real Property” will prove veryuseful for real estate attorneys.

The third statutory form, “NorthCarolina Limited Power of Attorney forReal Property,” appears in § 32C-3-303.

There is no corresponding statutory formunder existing law.

This new form was the product of closecollaboration between the Estate Planningand Fiduciary Law Section of the NCBA, theReal Property Section of the NCBA, and theNorth Carolina Bankers Association to helpresolve a persistent problem: whether theauthority granted to the agent in a limitedPOA presented at or immediately before theclosing of a real estate transaction is suffi-ciently specific to the transaction and suffi-ciently broad in its scope, particularly whenfinancing is involved. The related question iscritical: Should the agent be permitted toexecute transaction-related documents onthe principal’s behalf?

The new statutory form will hopefully beused widely as a standard limited POA thatprovides great flexibility for an agent to han-dle real estate closings on behalf of the prin-cipal. The new form:

l Grants the agent full authority to acton behalf of the principal with respect tocertain identified real property, all tangiblepersonal property related to the property,and all financial transactions relating to theproperty.

l Incorporates by reference the generalauthority to act with respect to real propertyas set forth in § 32C-2-204, tangible person-al property as set forth in § 32C-2-205, andbanks and other financial institutions as setforth in § 32C-2-208.

l Specifically states the authority grantedto the agent may be exercised by the agenteven though the exercise of that authoritymay benefit the agent or a person to whomthe agent owes an obligation of support,thereby resolving the potential problem ofself-dealing.

Unless an expiration date is specified inthe POA, the authority of the agent auto-matically expires one year from the date ofthe POA. Actions taken by the agent whilethe POA remains in effect continue to bindthe principal even after the agent’s authorityexpires.

There is one small issue that may requireyour thoughtful attention. The introductorylanguage in the form’s Grant of Authorityauthorizes the agent to act for the principalwith respect to “all financial transactionsrelating to the Property,” and the authoritygranted expressly includes the authority toact with respect to banks and other financialinstitutions as set forth in § 32C-2-208.


SPRING 201816

That section applies only to dealing withbanks and other financial institutions.

The unresolved question is this: Is thegeneral language that authorizes the agent toact for the principal with respect to “allfinancial transactions relating to theProperty” sufficient to cover private financ-ing that does not involve a bank or otherfinancial institution?

If private financing is anticipated, youshould consider adding appropriate languageto the limited POA.

15. On the subject of self-dealing, here’sanother thing you need to think about.

Let’s assume that Ma signs a POAappointing Pa as her agent, granting Pa gen-eral authority to do all acts that Ma could do.The POA expressly authorizes Pa to makegifts (including to himself ) and to exerciseauthority that may benefit Pa. It’s a verybroad POA. Ma is now incapacitated and ina nursing home. Pa wants to borrow moneyfrom the bank and use the family home ascollateral. In the following scenarios, keep inmind new § 32C-1-114(d):

When exercising a power under thepower of attorney, an act by an agent that isin good faith for the best interest of the prin-cipal is not voidable and the agent is notliable solely because the agent also benefitsfrom the act or has an individual or conflict-ing interest in relation to the property oraffairs of the principal.

Now consider the following situations:Ma either owns the house or the house isowned by Ma and Pa as tenants by the entire-ty. Can Pa use the POA to sign Ma’s name toa deed of trust encumbering Ma’s house tosecure his debt to the bank?

Despite § 32C-1-114(d), this shouldcause you heartburn, particularly if Ma willnot derive any apparent benefit from theloan. However, if the purpose of the loan isto fix up the home or to help pay Ma’s nurs-ing homes bill, a strong argument can bemade that Pa can execute the deed of trust onMa’s behalf as her agent. That argumentbecomes even stronger if Ma is a co-borroweron the note.

Now let’s change the facts a bit. Thehome is titled in Pa’s name, which meansthat Ma has only an inchoate marital inter-est in the property. Let’s further assume thatMa will not derive any benefit from theproceeds of the loan. Can Pa use the POAto sign Ma’s name to a deed of trust encum-bering their home when Pa will be the only

one signing the promissory note to the bankand will be the only one benefitting fromthe loan?

Under the Act, the answer is apparently“yes.” New § 32C-204(10) was draftedexpressly to address this situation: Withrespect to any real property owned orclaimed to be owned by the principal’sspouse and in which the principal’s onlyinterest is a marital interest, [the agent may]waive, release, or subordinate the principal’sinchoate right pursuant to G.S. 29-30 toclaim an elective life estate in the real proper-ty, regardless of whether the waiver, release,or subordination will benefit the agent or aperson to whom the agent owes an obliga-tion of support.

16. Finally, let’s talk about “seal.”In years gone by, a deed was not a deed

unless it was “executed under seal.” Whilepurists may have blanched, others rejoicedwhen the requirement for a conveyance ofreal property to be executed under seal wasabolished in 1999 with the passage of G.S.39-6.5.

Unfortunately, G.S. 39-6.5 didn’t fullyresolve the seal issue, at least insofar as itinvolved an instrument signed by an agentunder the authority of a POA. Existing G.S.47-43.1 currently provides as follows:

When an instrument purports to be exe-cuted by parties acting through anotherby virtue of a power of attorney, it shall besufficient if the attorney or attorney-in-fact signs such instrument either in thename of the principal by the attorney orattorney-in-fact or signs as attorney orattorney-in-fact for the principal; and ifsuch instrument purports to be underseal, the seal of the attorney-in-fact shallbe sufficient. For such instrument to beexecuted under seal, the power of attor-ney must have been executed under seal.(Emphasis added)This statute, which is now almost 70

years old, has long harbored risk for realestate practitioners.

Consider, for example, a pre-printed deedor deed of trust form that indicates it is beingexecuted under seal and the word “seal”appears after the grantor’s name in the signa-ture block. If the deed or deed of trust says itis being executed under seal (even if it is nolonger required to be executed under seal), isthe signature of the agent on behalf of theprincipal sufficient if the POA was not exe-cuted by the principal under seal? According

to G.S. 47-43.1, the authority of the agentsigning a deed or deed of trust on behalf ofthe principal that purports to be under seal iscalled into question unless the POA was exe-cuted by the principal under seal.

Fortunately, SL 2017-153 fully resolvesthis issue:

l The Act does not require a POA to beexecuted under seal, and it is worth notingthat the statutory POA forms set forth in §32C-3-301and § 32C-3-303 of the Act donot indicate that they are under seal.

l Section 32C-2-203(3) expressly author-izes an agent to “[e]xecute, acknowledge,seal, deliver, file, or record any instrument orcommunication the agent considers desirableto accomplish a purpose of a transaction....”(Emphasis added)

l Section 2.3 of SL 2017-153 amendsG.S. 47-43.1 by changing the phrase “attor-ney-in-fact” to “agent” each time it appearsand by deleting the last sentence of thestatute. Effective January 1, 2018, G.S. 47-43.1 will read as follows:

§ 47-43.1. Execution and acknowledg-ment of instruments by attorneys orattorneys-in-fact.When an instrument purports to be exe-

cuted by parties acting through another byvirtue of a power of attorney, it shall be suf-ficient if the attorney or agent signs suchinstrument either in the name of the princi-pal by the attorney or agent or signs as attor-ney or agent for the principal; and if suchinstrument purports to be under seal, the sealof the agent shall be sufficient.

The elimination of the last sentence ofG.S. 47-43.1 permits an agent to sign aninstrument under seal on behalf of the prin-cipal as of January 1, 2018, regardless ofwhether the POA was signed by the principalunder seal.

A Parting ObservationDealing with POAs will still be difficult

and challenging, particularly in real estatetransactions. However, many of the frustra-tions we have endured in recent years willeventually evaporate, provided we take timeto become familiar with the Act and beginusing the new statutory forms, particularlythe new limited POA for real property trans-actions. Good luck! n

Prior to his recent retirement, James E.Creekman was with Ward and Smith, PA, inRaleigh.

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18 SPRING 2018

Leena and Ryan (names changed) divorcedyears ago and continued to co-parent their chil-dren. But when Ryan began using drugs, hisparanoia escalated. He began calling theirschool—and Leena’s home—at all hours, rant-ing about how the children were being hurt orkidnapped.

Then Leena discovered that during weekendvisits Ryan was giving the children knives beforethey went to sleep to “protect themselves.” Leenawas determined to keep her kids safe, but couldn’tafford an expensive custody battle. She also knewshe couldn’t navigate the legal system alone.

Leena won sole custody of the children withhelp from Pisgah Legal Attorney Sara Player.Leena smiles and says, “I loved Sara. She reallylistened to me and helped me understand exact-ly what I needed to do.”

Losing custody has been an important wake-up call for Ryan. “When I took full custody, herealized that I wasn’t playing around.” Ryan isnow working to stay clean and is getting mentalhealth treatment. Leena is cautiously optimisticand allows him supervised visits with the kidsat her home.

For 27 years the North CarolinaAccess to Civil Justice Act(ACJA) helped provide accessto justice for North Carolina’smost vulnerable citizens,

including seniors, homeless veterans, domes-tic violence victims, the poor, and the dis-abled. This act provided the mechanism forfunding from court filing fees to support thethree primary civil legal aid providers inNorth Carolina: Legal Aid of NorthCarolina, Charlotte Center for LegalAdvocacy (formerly Legal Services ofSouthern Piedmont), and Pisgah LegalServices. These organizations work to bridge

the “access to justice gap” for eligible NorthCarolinians—a lofty charge, given that themost recent report from the Legal ServicesCorporation on this topic documents that86% of the civil legal problems reported bylow-income Americans received inadequateor no legal help.

Currently, 23% of North Carolinians—2.2 million people—qualify for legal servic-es from these legal aid organizations. Thisvast amount of need for civil legal aid hasgrown 30% since 2008, while state fundinghas consistently decreased over that sametime period. At the height of state support,North Carolina directly appropriated ordedicated fees and fines totaling over $6.1million to support access to justice. In thispast legislative session, the North CarolinaGeneral Assembly repealed the Access toCivil Act and removed the allocation of$1.50 from civil and criminal fees that fundthe act, withdrawing approximately $1.7million in funding.

The new loss of the Access to Civil JusticeAct funds, which constitute over half of theremaining state funding, will result in a sig-

nificant reduction of service capacity andlegal representation for thousands of NorthCarolinians. This cut not only impacts ourcitizens, but also impairs judicial systemaccessibility, effectiveness, and efficiency. Todate, no stated policy goal has been articulat-ed for the repeal of the ACJA.

Upon indication that the Access to CivilJustice Act was under threat, the NC EqualAccess to Justice Commission unanimouslyadopted a resolution in support of the actand its funding. The North Carolina BarAssociation, the North Carolina Advocatesfor Justice, and other bar organizations andstakeholder groups advocated against therepeal and elimination of funding.Ultimately, however, the widespread supportfrom our legal profession for this essentialcore of our justice system did not meet suc-cess in the legislative session.

Nevertheless, attorneys continue torespond. Pro bono attorneys have stepped into help meet the needs that will continue to grow as a result of this loss of funding. Still,


General Assembly EliminatesAccess to Civil Justice Act

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It was just a letter, after all. But I came tosee I had it all wrong.

Years ago as a young lawyer I got a callfrom an older gentleman who had a problemwith a bill he had received. He was shakenthat he was getting past-due letters.

I wrote a letter as a courtesy to the serviceprovider to straighten out the facts, and itworked.

A quick conference and quick letter car-ried the day, and that was that. I brought nospecial skill or talent to the task. Just mytime, and my everyday sorting-out-the-factsexperience. The successful result would notget this matter spotlighted in NC LawyersWeekly, but I came to see its success was of adifferent kind.

My initial too-narrow view of the value Ihad rendered changed over the next sevendays. I received in rapid order a heartfeltvoicemail message from the older gentleman,another voicemail message from his onlychild in Richmond expressing deep thanksfor helping his growing-more-disorientedwidowed dad, and a following letter from theolder gentleman himself in his shaky hand-writing. The older gentleman was a productof the Great Depression, and his worrytouched the root of one of his bedrock val-ues: you pay your bills, and on time.

I never saw my pro bono client again, butI held on to his emotional letter of gratitudefor many years. When I braved to clean outmy desk’s center drawer I would read itagain. It served to remind me of thecharge—even in my active, swirling days as abusy lawyer—to find and give out the specialcurrency of kindness I carried with me,

much like the idle pocket change I carriedhome, unused, every day. And to appreciateagain the power of what I had for so longmistakenly viewed as an ordinary thing.

Sometimes the most ordinary of prob-lems contains any number of possible legalthreads. If you slip too far into gauging whatyou don’t know, you miss the chance to solvewhat you do know: the importance ofaddressing real problems with real people bysimply framing the basic facts and options,and lending them your sorting-out voice ofexperience. And volunteering to do whatmany callers would often not know to do ontheir own: writing a quick letter, making aneeded phone call, nudging another party tomake a matter right, or making sure a moretimid soul is not unfairly disadvantaged.

The solutions are often less about the let-ter of the law—knowing every little thingabout every little part—than about the lawof the letter: simply taking the time to offeryour experience as a calibrator of facts andoptions when you allow another’s real lifedilemma to catch your eye. And you do nothave to be a lawyer to do that.

If you are a lawyer, provide any appropri-ate disclaimers a rough summary of a set offacts may require. Who knows? A years-lateranswer to a small question penned by theNC Court of Appeals could be an importantone. But your most important task now islikely how you answer in the court of lifewhat a Nobel Laureate stated is life’s mostpersistent and urgent question: What are youdoing today for others?

What I’ve learned about life on the way tothe courthouse is this: You possess a deep and

valuable skill as a problem solver. You doyourself and others a disservice if you do notstep out a bit and take more chances on thelaw of the letter—a chance to help everydaycitizens shed the tug and pull of some of life’severyday problems, no matter how ordinaryand routine those problems may seem toyou. They certainly are not ordinary or rou-tine to them.

The busiest among us, whatever yourprofession, will tell you a call or letter hereand there in a full week of activity is notgoing impact adversely your ability to getyour other tasks done for your family andyour organization. And my, my, my, thegood you can do.

My sense from this and other experiencesis that you have no real idea of the value youcan render to others. Wordsworth calledthese “little unremembered acts of kindness.”You won’t get your name up in lights, butisn’t that the point? While some may not beamazed by your acts of kindness, try surpris-ing them anyway. Because kindness, especial-ly for discerners of facts and solutions, is cal-ibrated in different ways. And sometimes it’ssweetly measured out one letter at a time, inthe disguise of a seemingly ordinary thing. n

R. Michael Wells Sr. is a partner with WellsLaw, PLLC in Winston-Salem. He is a pastmember of the State Bar Ethics Committee andpast president of the North Carolina BarAssociation.

This article is from the blog On the Way tothe Courthouse, which can be found online atTothecourthouseblogspot.com, and is reprintedwith permission.

On the Way to theCourthouse—The Law of theLetter

B Y R . M I C H A E L W E L L S S R .

20 SPRING 2018

Tying the Knot? Or Just Moving In?

B Y R O B E R T A . M A S O N

When a client tells me that he or she is considering a sec-

ond marriage, for terribly unromantic reasons (I guess

I’m the anti-cupid...darn lawyer!) I recommend that

the client plan carefully—very carefully—before

going into a later-in-life second marriage. The religious prescription not to enter a marriage

“unadvisedly or lightly” applies in spades to a later marriage.

“Bob,” a client once asked, “are you sug-gesting we see an attorney before the preach-er?” My answer: “Yes.”

Here’s why.Some of the most spectacular legal messes

I have had to clean up have been after thedeath of a second spouse when there hadbeen no (or poor) advance planning.

Adult step-siblings (who may not evenknow or like each other) can be counted onto be looking out for whatever it is that theybelieve their natural parents accumulated forthem.

Most “planning” I have seen of late-mar-riers (is that a word?) consists of simple ver-bal agreements to the effect of “what is yoursis yours, and what is mine is mine.” Lawyersknow that won’t cut it. Most of the followingdifficulties can be addressed with a well-drafted prenuptial agreement.

All couples are different, but here is a par-tial list of issues that may be important to

consider in further detail.

Intestacy and Poorly Planned TestacyAs attorneys we might question the sanity

of any couple that enters into a late marriagewith no wills. It happens. The NorthCarolina Intestate Succession Act1 providesthat a surviving spouse is entitled to a share ofreal and personal property of a deceasedspouse depending upon how many children(and other descendants) survive the deceasedspouse (and whether any parents survive, butsince we’re discussing late-in-life second mar-riages, I’ll assume there are no surviving par-ents).2 If Dad dies intestate survived by his“precious bride” (Dad’s term of endearment)of just a few years, she will take the first$60,000 of his personal property and takeeither one-half or one-third of everythingover $60,000 depending upon whether Dadis survived by just one or more than onechild. If Dad had any real property, the “evil

witch” (that’s according to Dad’s survivingrelations) will be entitled either to half the realproperty (if Dad is survived by one child) orto one-third (if Dad is survived by more thanone child).

Fortunately, the right to an intestate shareis waivable.3

But perhaps love truly is blind, and thenewlyweds have downloaded snazzy, but sim-ple and inexpensive,4 “I love you wills” thatleave everything to the surviving spouse withthe understanding that she or he will “do theright thing.” The prior-marriage-children canbe your clients if you’re a litigator.

Even with wills that leave everything tothe children of the deceased spouse, theremay be problems with an “elective share”statute.

Elective Share and Year’s AllowanceStatutes

Like most other states, North Carolina

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has an “elective share” scheme.5 The electiveshare statute enables a surviving spouse to“elect” to receive a share of the deceasedspouse’s estate, the size of which dependsupon how long the couple was married. Amarriage of less than five years entitles thesurvivor to a total of 15% of the deceasedspouse’s estate. (For example, if Hilda leftHenry $10,000 pursuant to the terms of herwill, but had an estate of $1,000,000, Henrycould elect another $140,000). After fiveyears, the percentage pops to 25% of theestate, then to 33% after ten years, and to50% after 15 years.6

One interesting South Carolina case madewaves a few years ago.7

The deceased owner of Hooters (youknow, the restaurant famous for...large burg-ers and chicken wings) left $1 million a yearfor 20 years to his quite younger survivingspouse. She felt $20 million wasn’t enough, soshe elected for 1/3 of Mr. Hooter’s estate. Mr.Hooter’s son (not the widow Hooter’s son, bythe way) objected and claimed the SouthCarolina elective share statute (which is simi-lar to North Carolina’s) is unconstitutional.Yours truly believes that argument had asmuch chance as a hoot owl in, well, HorryCounty. Hooter Jr. and the widow Hootersettled for an undisclosed sum.

Notwithstanding the right of an electiveshare, a surviving spouse is entitled to a “year’sallowance” of $30,000 “off the top” of adeceased spouse’s estate.8 In other words, asurviving spouse is entitled to this subsis-tence-type allowance before any other credi-tors or heirs. This right, too, is waivable in aprenuptial agreement.

Powers of Attorney and Health CareAdvance Directives

Effective January 1, 2018, NorthCarolina has a new power of attorneystatute.9 Certain prohibitions on gifting,beneficiary designations, and the like makeexceptions for spouses and children. Powersof attorney are not “just forms” (althoughmany tend to treat them as such). In the caseof a late marriage, powers of attorney and thepowers granted (or withheld) in such aninstrument under the new statute should becarefully considered.

The subject of health care decision-mak-ing can cause a bit of squirming for the hap-pily engaged couple, especially after I explainthe “default rules” that apply in the absence ofa valid health care power of attorney.10 In the

absence of a guardian of the person or a validhealth care power of attorney, the spousestands atop the heap of decision-makers, fol-lowed by the children of the principal. Thismay not go over well with Mom’s childrengiven that the loser she’s marrying has hadthree earlier wives pass away under less thanclear circumstances.

The Family HomeNaturally the newlyweds do not want to

see the bride or groom evicted upon the deathof the other. On the other hand, children canbecome quite emotional over what may beperceived as “their home.” Chances are, put-ting the house in both spouse’s names is not agood idea. Advise a life estate or, perhaps bet-ter, a trust.

Some years ago I met with the children ofthe recently deceased Mrs. Jones. Mrs. Joneshad been living in her home for 45 years, thesame home in which she and the late Mr.Jones had raised their children. Mrs. Jonesmarried Burt five or six years prior to mymeeting with the children. Shortly after herremarriage, as the children had just discov-ered, Burt’s name “appeared on the deed” (asthe children described it). All admitted that,while Mom was a “free spirit,” she was per-fectly sane up until the fatal stroke. The attor-ney who had drafted the deed had done aneffective job of creating a tenancy by theentireties. It seems, however, the attorney didnot get Mrs. Jones to consider the wider ram-ifications. The children wanted to know whatI could do. My answer: “Not much.”

Social Security BenefitsRemarriage can affect the Social Security

benefits a newlywed had been receivingunder a deceased or divorced spouse’saccount. If you divorce after ten years ormore of marriage, you can collect retirementbenefits on your former spouse’s SocialSecurity record if you are at least age 62 andif your former spouse is entitled to or receiv-ing benefits. If you remarry before age 60,however, you generally cannot collect bene-fits on your former spouse’s record unlessyour later marriage ends (whether by death,divorce, or annulment).

Annuities and Survivors PensionPayments

Your client might be kissing a hefty sur-vivor’s pension (corporate or military) good-bye when he or she kisses a new spouse.

Advise checking those out before heading tothe altar.

Income and Transfer TaxesThere may be some tax planning advan-

tages to marrying if estate and gift taxes are aconcern, because many planning techniquesare available to married couples only. On theother hand, if their estates are large enough topose transfer tax issues after the recently enact-ed Tax Cuts and Jobs Act ($11.2 million foran individual and $22.4 million for a marriedcouple), any planning should be undertakenby sophisticated trusts and estates counsel.

Income taxes might also drop if onespouse is earning significantly more than hisor her new spouse.

Long Term Care (Nursing Home) orMedicaid Planning

This is a big consideration for older peopleconsidering remarriage. Medicaid rules andregulations do not recognize any plans orpromises a couple has made in a prenuptialagreement when it comes to Medicaid andnursing home benefits. A carefully draftedprenuptial agreement is worthless if theseissues arise. All Medicaid programs considerthe assets of the couple. While rare, somecouples have divorced within a few years ofmarriage when one spouse in declining health(usually the “poorer” spouse) has entered anursing home.

It may be sad to see, but some couples areelecting to do exactly what they would haveDIED seeing their children do 30 years ago...“living in sin.” n

Robert A. (“Bob”) Mason, owner of MasonLaw, PC, with offices in Asheboro andCharlotte, is a board certified specialist in elderlaw and serves as Chair of the Board of LegalSpecialization.

Endnotes1. N.C. Gen. Stat. Ch. 29.

2. N.C. Gen. Stat. § 29-14.

3. N.C. Gen. Stat. § 52B-4.

4. Of course, those “inexpensive” wills may turn out to bequite expensive.

5. N.C. Gen. Stat. Ch. 30 Art. 1A.

6. N.C. Gen. Stat. § 30-3.1.

7. Lisa Shidler, “Coby Brooks challenges widow’s bid forelective share of Hooters fortune,” InvestmentNews,Aug. 13, 2007, bit.ly/2m4ApIh.

8. N.C. Gen. Stat. § 30-15.

9. S.L. 2017-153, codified at N.C. Gen. Stat. Ch. 32C.

10. N.C. Gen. Stat. §90-21.13(c).


22 SPRING 2018

This is a story of what happens, asReinhold Niebuhr observed in Leaves fromthe Notebook of a Tamed Cynic, because peo-ple “seem never to realize how many of themiseries of mankind are due not to malicebut to misdirected zeal and unbalancedvirtue.” It is what happens when publicoffice becomes the refuge of lesser men andwomen because good and talented (i.e., wellqualified) citizens disdain the baggage of thecontentious media spotlight and the tediumof mindless, inefficient bureaucracy.

Every county in North Carolina has an

unfunded statutory mandate to provide acourthouse for its citizenry. The Hall ofJustice in downtown Winston-Salem wasdesigned and constructed in 1975 out ofavailable operating funds in the ForsythCounty coffers—a slapdash effort that endedbadly. The fortress-like structure reflects thearchitectural avant-garde of the time, knownas “brutalism” (I am not making this up).From the outset, the facility was an eyesoreand a functional disaster, but over time itbecame outdated, overburdened, and woe-fully inadequate to meet the growing needs

of the county to administer justice to all.Today, Forsyth is the only major urban coun-ty that lacks a modern, state-of-the-art court-house facility (Guilford County is a specialanimal, with two courthouses, but that isanother story). All mechanical, plumbing,and electrical structures are crumbling, thereis asbestos in the tile flooring, and blackmold, cockroaches, and mice are slowly tak-ing over the building. The courthouse hasnever been compliant with the federalAmericans with Disabilities Act, and eleva-tors and restrooms are not wheelchair friend-

To Build a CourthouseB Y G . G R A Y W I L S O N

This story does not have a

happy ending. It is about

much that is wrong with local,

and perhaps state and nation-

al, government in this country. It is not really about party

affiliation, political ideology, or demographic classifications,

although some speculation in these areas might occur. Nor is

it about good versus evil. No, this sad tale is about what happens in a democracy when the people elected to represent us lack the tools

to do so competently, resulting in misguided agendas that are driven not by greed or malevolence, but by well-intentioned, yet thoughtless,

mediocrity and an utter absence of vision.

Photo courtesy of the North C

arolina Judicial Branch


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ly. A number of services (e.g., Register ofDeeds) have been moved to other buildingsto accommodate the security stations addedto the first two floors, which neverthelesscannot handle the crowds that line the side-walks waiting to gain entry during high-vol-ume court days.

After 30 years, the county started to con-sider fixing or replacing a structure that hadreached the end of its useful life. But it was2009 before the county commissioned a“conceptual” study that resulted in a recom-mendation to renovate the existing court-house, with the addition of an adjacent towerto accommodate a few new courtrooms, at aprice tag under $100 million. The cost andinconvenience of trying to renovate a court-house while displacing judicial and otherfunctions to modular buildings was neverfactored in, although the cost alone of suchtemporary relocation efforts would havebeen astronomical, not to mention the atten-dant disruption of judicial and other opera-tions. Incredibly, the prospect of a newcourthouse was not even considered. Nor didthe county ever seek the advice of an archi-tect or engineer with courthouse expertise.Yet hundreds of thousands of dollars were

expended to eyeball this problem and pro-pose “conceptual” solutions.

Six years later in 2015, the county beganto make rumblings again, after forty 40,about addressing the courthouse dilemma,but still only with a renovation of the existingstructure. The Forsyth County BarAssociation, to its credit, mobilized its mem-bership to lobby for a new courthouse, whichwas received by some of the county commis-sioners with utter astonishment at first, thenoutright contempt from a couple of them.The suggestion that people who actuallyused and worked in the courthouse every daymight have some ideas about how to remedythe disaster at hand was simply incompre-hensible to several of the county representa-tives and administrators. The initial responseof a minority of commissioners was to ignorethe groups advocating for a new courthouse.When attorneys began to attend and moni-tor every open meeting of the commission,one representative voiced that he felt intimi-dated by our presence, which is impressivesince all we did was sit there and observe.

So we took our case to the people. At con-siderable expense, the bar association createda PowerPoint presentation complete with

videos of judicial and other officials pointingout the deficiencies of the existing court-house and the desirable features and optionsfor a new one. We made our pitch aroundtown and beyond—to civic, nonprofit andbusiness groups—and almost without excep-tion, everyone we spoke to agreed that it wastime for a new courthouse. The mayor ofWinston-Salem and the Winston-SalemBusiness Alliance were strong advocates onour behalf. Regrettably, the local chamber ofcommerce refused to take a stand. The localbar also enlisted the services of an actualcourthouse architect, the same one who haddesigned the new courthouse for DurhamCounty, which is now a showpiece in thisstate. This architect immediately recognizedthat the studies undertaken by ForsythCounty to date were badly flawed, and thatspace efficiencies and other design aspectscould be easily corrected so that a new facilitywould cost little more than a renovation. Thecounty refused to consider any suggestions inthat regard.

Eventually, after two years of meetingsand lobbying efforts, the county suddenlyabandoned the renovation option, finallyrecognizing that the existing courthouse was

24 SPRING 2018

an unfixable toilet. But here the story takes anew turn because of an update of the 2009study in 2016, which now offered two newoptions in lieu of a renovation. The first wasa nine-story, freestanding courthouse withsecure parking and access from the countyjail through an underground tunnel beneaththe intervening street. That design, whichthe local bar and courthouse personnel hadbeen pushing for a couple of years, carried aprojected cost of $146 million. Again, acourthouse architect quickly refigured thecost at no more than $136 million, but thecounty was not interested in any outsideinfluence. Despairing of the cost of a newfreestanding courthouse, one of the commis-sioners utilized the services of a county con-struction manager (who has never built a

courthouse) to come up with a less expensivemodel. Voila! The county unfurled yet a sec-ond two-building option that would place ashort courthouse tower on one side of adowntown street, with a second office build-ing on the other side, joined together by abridge at the third or fourth floor level, all ata projected cost of only $126 million.Hence, the actual difference between the twonew options was only $10 million. Therewas never any real question that either couldbe built with existing county funds or byissuance of limited obligation bonds, neitherof which would have raised the county’s fixeddebt ceiling.

You may be wondering how a courthousecould function with judges chambers, thedistrict attorney, public defender, and theclerk of court in an office building, with thecourtrooms where all the judicial work has totake place in another building across thestreet, accessible (without walking outsideand crossing the street and entering throughsecurity a second time) only through a singlegerbil tube several stories up. The challengeof requiring all of the judicial and othercourthouse personnel to expend untold manhours every day accessing the courtroomsthrough a bridge to another building appar-ently never occurred to anyone planning thisabomination, other than to check with anational database to compare this concept toexisting courthouses elsewhere—there werenone. Anyone wondering why no suchcourthouse configuration is common in thisor other jurisdictions has apparently pon-dered the empirical database for such a planbetter than some of the commissioners. So itwas no surprise when, the first time thecounty sent its posse over to showcase thisnew two-building option to the courthousestakeholders (which we were expresslyinformed did not include the practicing bar),the senior resident superior court judgebravely informed them that if they wanted topursue that option, not to do anything. Towhich the county responded that it wouldjust renovate the old courthouse.

To their lasting credit, the chair of thecounty commissioners and several of his col-leagues still voiced their desire for a new free-standing courthouse, not a two-buildingnightmare, but they were understandablyconcerned about building one on a 4-3 vote,especially when the allegedly cheaper two-building plan could pass 7-0. But these goodmen were saddled with a political dilemma

with no easy solution, given the obduracy ofthose commissioners opposed to any sem-blance of progress. So on August 17, 2017,42 years later, the county finally voted unan-imously to pursue a request for quotation tobe submitted to the private sector for bids.Amazingly, the county then passed a secondresolution, on a 5-2 vote, to allot only $120million for the new courthouse, apparentlyto dispel any notion that public funds wouldbe wasted on a Taj Mahal. That this newtwo-structure facility will constitute animprovement over the existing courthouse islike saying that a vegemite sandwich is betterthan dog food, but it still remains a bitter pillto swallow. All is not lost, however, because areal courthouse architect may yet design anoverstreet plaza or other configuration thatmight turn the proverbial sow’s ear into a silkpurse. In any event, Forsyth County will notbe the laughing stock of the state, because itwill reside in good company with many oth-ers that have similarly promoted expediencyover quality and efficiency. It will likely takeup to three years at a minimum to finish thisnew set of buildings. Then the commission-ers and bureaucrats who authored them willsurely take their bows at a ceremony dedicat-ing this edifice, which, as the Agrarian poetDonald Davidson once observed about theParthenon replica in Nashville, Tennessee,will stand as a martyr reared in homage totheir own ignorance. n

G. Gray Wilson, president-elect of the StateBar, is a partner with the Winston-Salem firmof Nelson Mullins Riley & Scarborough LLP.

17-151

President’s Message (cont.)recommendations. One benefit of doing so isthat the confidential services offered to ourmembers by LAP and its volunteers might bemore willingly utilized with less fear of stig-ma. We must all be cognizant of the symp-toms of impairment and be prepared tobecome involved when those symptoms arerecognized in a friend or colleague. It ismuch more satisfying to help a colleague findthe right path than to deal with the conse-quences of being too late. n

John Silverstein is a partner with theRaleigh firm of Satisky & Silverstein, LLP.


New Pro Bono RegionalCouncils Convene

B Y J A R E D S . S M I T H

“I do pro bono work because I work for afirm where providing public service, includ-ing doing pro bono legal work, is embeddedin the culture. I do it because the peoplearound me whom I admire do it, and I striveto emulate them.” With these words, JulianWright, Robinson Bradshaw attorney andco-chair of the NC Equal Access to JusticeCommission’s Pro Bono Committee, wel-comed firm representatives to the inauguralmeeting of the Triangle Area Pro BonoRegional Council, one of two newlylaunched councils in the state in 2017.Hosted by the NC Pro Bono ResourceCenter, these Pro Bono Regional Councilsoffer new spaces for private attorneys tocome together to discuss challenges, oppor-tunities, incentives, and best practices regard-ing pro bono work at the local level.

North Carolina has a strong tradition ofpro bono legal service provision. In our Rulesof Professional Conduct, adopted in 2010,attorneys are each encouraged to provide atleast 50 hours of pro bono legal services eachyear to those unable to pay, without expecta-tion of a fee. Pro Bono Regional Councilsprovide a venue for firms to share how theyare meeting needs in their own backyards,and how others may have policies or proce-dures to share to encourage an increase inthat good work. Sylvia Novinsky, director ofthe NC Pro Bono Resource Center, high-lighted the need for these local conversations:“When we say ‘pro bono is local,’ we meanthat developing strong, ongoing communityrelationships is essential for addressing gapsin access to justice for those around us. Theserelationships allow us to be responsive asadditional needs arise, and to tailor our workto provide services that are both engagingand meaningful for our attorneys.”

The first of these conversations took placein Greensboro in mid-September 2017. TheTriad Area Pro Bono Legal Council saw repre-sentatives from Greensboro and Winston-Salem come together to hear former NCSupreme Court Justice and Smith MooreLeatherwood Attorney Bob Edmunds shareabout the increasing need for pro bono legalservices, and Afi Johnson-Parris, Ward BlackLaw attorney and co-chair of the NC EqualAccess to Justice Commission’s Pro BonoCommittee, describe her personal commit-ment to pro bono legal service. The group thendiscussed the history of pro bono legal servicesin the area and opportunities for increasingattorney volunteerism moving forward.

The Triangle Area Pro Bono LegalCouncil came together at the NC State Barin early November 2017, hearing remarksfrom Chief Justice Mark Martin on the cur-rent state of access to justice in NC, andabout the role that the private bar can play insupporting those efforts. The group dis-cussed best practices in managing pro bonolegal service provision, such as appropriateconflict checks and limiting the scope ofservices, and shared policies regarding incen-tives encouraging attorney participation.Both groups also heard about reporting andrecognition efforts for pro bono legal servicesprovided in 2017, available at ncprobono.orgthrough March 31, 2018.

While initial conversations through theseregional councils focus on the current state ofpro bono legal service at the local level, and onassessing current challenges, opportunities,incentives, and structures for attorney volun-teerism, they will expand into venues for col-laboration on new pro bono initiatives toaddress unmet legal needs. These councilswill also help to inform statewide efforts sup-

porting access to justice for low incomeNorth Carolinians.

Additional area meetings are scheduledfor 2018, including a Charlotte Pro BonoRoundtable (an ongoing initiative fromthe Charlotte Center for Legal Advocacy)and a Coastal Area Pro Bono RegionalCouncil. Additional firm participation iswelcome at each of these councils. If youwould like your firm to be represented,please contact [email protected] formore information. n

Jared Smith is a communications specialistwith NC Equal Access to Justice.

Equal Access to Justice Act(cont.)

attorney volunteer efforts, while substantial,cannot replace the loss of core funding tosupport North Carolina’s legal aid providers.

You help bridge the justice gap by volun-teering as a pro bono attorney, making afinancial contribution, or contacting yourlegislators to voice your support. More infor-mation can be found on the NC EqualAccess to Justice Commission’s website atncequalaccesstojustice.org.

Children are usually assured that the“boogey man” isn’t real. But what if yourown dad told you instead that someone wascoming to get you, and gave you a knife toprotect yourself? n

Jennifer Lechner is the executive director ofthe North Carolina Equal Access to JusticeCommission.

26 SPRING 2018

We walked into federal court that after-noon, I dressed in a suit and Gary in his biboveralls with a dirty red cap affixed firmly tohis head. The first laughter, which wasdirected at us by those attending court, waswhen the bailiff yelled across the courtroomfor Gary to remove his cap. Then we wereface to face with the Honorable EugeneGordon, United States District Courtjudge.

“Where were you at 9 o’clock this morn-ing when your case was called for trial?” saidHis Honor, to which Gary replied that hewas in the field priming tobacco.

“Didn’t you get the letter from this court

directing you to appear this morning?” wasthe next question from the judge. Gary toldthe judge that he only got the letter thatmorning (although it was postmarked 25days prior). The court accepted Gary’sexplanation that he only went to his mail-box once a month when the power billcame, and that was when he found thecourt letter. This time the laughter from theonlookers was with Gary.

A new trial date was set and, before weleft the courtroom, Gary said, “It is good tosee you again, Your Honor.” That statementtold me there was more to my new clientthan met the eye—this case was going to be

interesting.The indictment accused Gary with the

production and selling of non-tax paidwhiskey, called by many names but mostcommonly known as “moonshine.” Upontalking with Gary, my knowledge of theworld of private enterprise increased. Ilearned that “priming” tobacco was the har-vesting of the leaves of the plant, that“homemade” whiskey was much preferredto the store bought type (at least in oursmall rural county), and that the distribu-tion network for the product extendedmany miles northward.

The producers were proud of their prod-

The Criminal Court System isthe Theatre of the Real

B Y J O H N G . G E H R I N G

“Hello, I’m Gary1 and I hear that you are

looking for me.” My answer was an

emphatic NO, I was not looking for

him, but that the United States mar-

shal was seeking to arrest him for his failure to appear in court that morning. This was my

introduction to Gary, and my introduction to certain aspects of the practice of law which are

not taught in law school. I learned that right may sometimes be wrong, that there are always

two or more sides to every case, and that humor and laughter, used properly, can help achieve a favorable judgment in many cases.

©iStockphoto.com

/KateJoanna


uct. Gary was uneducated in the familiarsense of the word, but was wise in the waysof the world; at least his world. My educa-tion, however, would continue throughoutthe trial.

Gary said, “I know that making liquor isagainst the law, but it is not wrong. Mygrandfather made liquor, and my fathermade liquor, and it is not wrong.” Wow,what a statement! Law school, and my lawlife thus far, had instilled in me the under-standing that the law is the law and thatbreaking the law is wrong. A new conceptshowed its face—the law can be wrong(remember miscegenation laws, school dis-crimination laws, etc).

“It’s all about the money and they (thegovernment) want part of the profits,” saidGary. I had never met a “moonshiner” anda “tax protester” before—Gary was the first.I find it funny that some 40 years later, theconcept of tax protesting has a huge follow-ing.

After the trial and the presentence phase,we were back in Judge Gordon’s court forsentencing. After approaching the bench, atJudge Gordon’s request, he told me that thiswas the fourth time that my client hadappeared before him on bootleggingcharges, and that an active sentence must behanded down this time.

“Please rise Mr. Gary. Do you have any-thing to say before sentence is pro-nounced?” asked His Honor. “Yes, YourHonor, it is good to see you again. Sincewinter is coming on and my firewood sup-ply is low, would you please sentence me toa prison in Florida where I will be warm?”Again the courtroom was full of laughter,and it seemed that everyone was rooting forGary. Even Judge Gordon was smiling.Gary was sentenced to Elgin Air Force Basein Florida for a term of one year. And this iswhere the last part of this case begins, andmy knowledge of what happened is basedsolely on hearsay. I do not know if the ElginAir Force Base narrative is true, but I do notthink that Gary made this up.

I was told that the prison administrator,in his wisdom, decided that Gary had a tal-ent for cooking and assigned him to work inthe kitchen. Apparently Gary, pursuant tohis kitchen duties, decided the best use forthe applesauce was to transform it into anew liquid product.

Gary was back in business!Lessons learned:

1. Humor, if of the heartfelt type, willmake everyone laugh. A laugh usually putsmost people at ease, even the judge.

2. Never make white liquor unless youhave a federal and state license. The govern-ment must always get a share of your money.

3. Never hesitate to make your wishesknown; it might mean you get to spend thewinter in Florida.

4. The law is the law, as they say, but doesthat mean the law is right? “I know that it isagainst the law, but it is not wrong,” says

Gary.5. Gary has been dead many years and I

still miss him. n

John Gehring, a former State Bar councilorand chair of the Publications Committee, isnow semi-retired, which means that he “worksless and enjoys it more.”

Endnote1. The client’s name has been changed.

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28 SPRING 2018

DisbarmentsJohnny S. Gaskins of Raleigh surren-

dered his law license and was disbarred bythe Wake County Superior Court. Gaskinsacknowledged that he forged signatures onthe back of a settlement check with theintent to defraud the bank, failed to depositthe check into a trust account, and embez-zled the proceeds of the check.

Mital M. Patel of Raleigh surrendered hislaw license and was disbarred by the councilat the October 2017 meeting. He acknowl-edged that he misappropriated entrustedfunds totaling at least $3,300.

Carlos B. Watson of Charlotte embezzledentrusted funds and violated multiple othertrust accounting rules. He was disbarred bythe Disciplinary Hearing Commission.

Suspensions & Stayed SuspensionsCowles Liipfert of Winston-Salem will-

fully failed to file state income tax returnsand to timely pay state tax obligations for2012, 2013, and 2014. The DHC suspend-ed him for two years. The suspension isstayed for two years upon compliance withnumerous conditions.

Darin P. Meece of Durham forged thename of a former client to a corrective deedand notarized his forgery of the signature.The DHC concluded that Meece’s conductwas dishonest and deceitful but that he actedwithout a selfish motive. He was suspendedfor one year.

Darnell Parker of Greenville violatedmultiple trust accounting rules. The DHCsuspended him for two years. The suspen-sion is stayed for two years upon compliancewith numerous conditions.

The Lincoln County Superior Court sus-pended Blair M. Pettis of Lincolnton untilfurther order of the court. The court con-cluded that Pettis did not comply with aConsent Interim Order and RecoveryProgram.

Judicial ActionCharles R. Gurley of Goldsboro was held

in contempt by the Wake County SuperiorCourt for failing to comply with the court’sorder to deliver trust account records to theState Bar. The court enjoined Gurley frompracticing law until he fully complies with allState Bar requests for information.

Interim SuspensionsThe chair of the DHC entered an interim

suspension of the law license of Matthew A.Smith of Raleigh. Smith was convicted inWake County of taking indecent libertieswith a child, a felony, in violation of N.C.Gen. Stat. § 14-202.1.

ReprimandsJohn Mansfield of Cary was reprimanded

by the Grievance Committee. He did notproperly safeguard entrusted funds and didnot supervise his nonlawyer staff.

Transfers to Disability Inactive StatusThe chair of the Grievance Committee

transferred Michael A. Schlosser ofGreensboro to disability inactive status.

ReinstatementsTracey Cline was the elected district

attorney of Durham County until she wasremoved from office pursuant to N.C. Gen.Stat. § 7A-66. In June 2015, Cline was sus-pended by the DHC for five years for filingpleadings containing false and outrageousstatements about a judge and making falserepresentations in court filings in an attemptto obtain confidential prison visitationrecords. After she served two years of the sus-pension, Cline was eligible to petition for astay of the balance upon demonstratingcompliance with enumerated conditions.Cline did not petition for a stay. She peti-tioned for reinstatement but did not appearat the hearing on that petition. The DHCdenied the petition.

Stayed Suspensions ActivatedIn January 2016 the DHC suspended

Nicholas S. Ackerman of Greensboro forone year. Ackerman did not communicate

with his client, did not respond promptly tothe Grievance Committee, and did not par-ticipate in mandatory fee dispute resolution.The suspension was stayed for two years. TheDHC concluded that Ackerman did notcomply with conditions of the stay relatingto a practice monitor, CLE requirements,communication with the State Bar, and pay-ment of costs and administrative fees of thedisciplinary action. The DHC lifted the stayand activated the suspension. After servingsix months of the suspension, Ackerman mayapply for a stay of the balance.

In July 2015 the DHC suspended RobertM. Gallant of Charlotte for two yearsbecause he did not timely file federal andstate income tax returns in 2007 through2013. The suspension was stayed for twoyears. In October 2017 the DHC concludedthat Gallant did not comply with conditionsof the stay requiring him to execute releasesauthorizing the IRS and NC Department ofRevenue to communicate with the State Bar,timely file tax returns, pay his 2015 tax liabil-ity, comply with treatment recommenda-tions of an evaluating mental health profes-sional, and fulfill State Bar membership andCLE requirements. The DHC lifted the stayand activated Gallant’s suspension.

In March 2015 the DHC suspendedDavid A. Lloyd of Spindale for three years.Lloyd violated trust accounting rules and didnot report misappropriation of entrustedfunds by his law practice associate. The sus-pension was stayed for three years. TheDHC concluded that Lloyd did not complywith conditions of the stay requiring him tofulfill CLE requirements, pay costs andadministrative fees of the disciplinary action,and engage a CPA to conduct semi-annualaudits of his trust account. The DHC liftedthe stay and activated the suspension.

In September 2015 the DHC suspendedJeffrey D. Smith of Charlotte for two yearsfor violating trust accounting rules. The sus-pension was stayed for three years. TheDHC concluded that Smith violated multi-ple conditions of the stay, including condi-tions requiring him to demonstrate proper

T H E D I S C I P L I N A R Y D E P A R T M E N T

Grievance Committee and DHC Actions


trust accounting procedures. The DHCimposed additional conditions and extendedthe length of the stay.

In December 2016 the DHC suspendedMichael S. Williamson of Goldsboro forthree years for violating trust accountingrules. The suspension was stayed for threeyears. The DHC concluded that Williamsonviolated several conditions of the stay,including requirements that he submit CPAaudits of his trust account and pay costs andadministrative fees of the disciplinary action.The DHC announced that it will lift the stayand activate the suspension.

Orders of Reciprocal DisciplineThe chair of the Grievance Committee

issued an order of reciprocal discipline cen-suring Kahiel R. Barlow of Huntsville,Alabama. He was censured by the Board ofProfessional Responsibility of the SupremeCourt of Tennessee in October 2016 forpracticing law while he was administrativelysuspended.

The chair of the Grievance Committeeissued an order of reciprocal discipline sus-pending Joel M. Bresler of Lakeland,Florida, for 91 days. The Supreme Court ofFlorida suspended Bresler for 91 days inJanuary 2015. Bresler was a witness in the

federal prosecution of his former employerand was granted immunity. Bresler drafted afalse promissory note for the former employ-er, destroyed his own bank records at thedirection of the former employer, and exag-gerated to law enforcement the extent of hisattorney/client relationship with the formeremployer.

Notices of Intent to SeekReinstatement

In the Matter of Theodore G. Hale Notice is hereby given that Theodore G.

Hale of Wilmington intends to file a petitionfor reinstatement before the DisciplinaryHearing Commission of The North CarolinaState Bar. Hale executed an affidavit of ten-der of surrender of license on October 13,2004, and he filed said affidavit in the officesof the State Bar on October 14, 2004. Basedon the affidavit, the chair found that Halehad misappropriated money from his formerlaw partner, charged and collected moneyfrom the parents of a criminal defendantwhom he was appointed to represent with-out telling them that he was obligated to rep-resent their son at State expense due to thecourt appointment, and represented awoman in a divorce/equitable distribution

case and collected and converted to his ownuse the proceeds of an annuity contract inthe amount of $15,287.09, most of whichbelonged to her. An Order of Disbarmentwas issued against Hale on October 14,2004, and was effective immediately.

In the Matter of James E. Ferguson III Notice is hereby given that James E.

Ferguson III intends to file a petition forreinstatement before the DisciplinaryHearing Commission of the North CarolinaState Bar. On July 28, 2005, Fergusonentered a plea of guilty in US Federal Courtto one count of conspiracy to commit secu-rities fraud, mail fraud, and wire fraud. Thisconviction provided the substance of a griev-ance filed against Ferguson by the GrievanceCommittee of the North Carolina State Bar.On or about August 23, 2005, Ferguson ten-dered an Affidavit of Surrender of his license.On October 21, 2005, the tender of the sur-render was accepted by the State Bar andFerguson was disbarred.

Individuals who wish to note their con-currence with or opposition to these peti-tions should file written notice with the sec-retary of the North Carolina State Bar, POBox 25908, Raleigh, NC, 27611, beforeMay 1, 2018 (60 days after publication). n

30 SPRING 2018

T R U S T A C C O U N T I N G

Reconciliations and ReviewsB Y P E T E R B O L A C , T R U S T A C C O U N T C O M P L I A N C E C O U N S E L

The following article is excerpted from theNorth Carolina State Bar’s Trust AccountHandbook. The Trust Account Handbook wasrevised in November 2017 and is available onthe State Bar’s website, ncbar.gov.

Monthly Reconciliation Rule 1.15-3(d)(2) requires a very basic

monthly reconciliation of each trust account.You cannot do a reconciliation for a monthuntil you are sure you have correct balances inall your client ledgers and in generalledger/checkbook register for the previousmonth. If you have not recently reconciledyour books, or if you are worried that they arewrong, you may want to bring in a bookkeep-er to straighten them out before you take onthe monthly and quarterly reconciliationsyourself.

Once you have correct balances for theprevious month, you are ready to reconcile.The steps required for this type of reconcilia-tion are not unlike those necessary to balancea personal checking account.

There are two main steps in reconcilingmonthly:

1. From the balance shown on the bankstatement for the monthly reporting period,subtract all outstanding checks. To thisamount, add all deposits that have not clearedthe bank. This is the current bank balance.

2. Confirm that the current bank balanceequals the total balance for the trust accountas shown on the lawyer’s records (if usingmanual accounting, this would include checkstubs or the account register).

The cut‐off date for the bank statementand the trust account balance must be thesame or the two balances may not reconcile.Note that the “Reconciliation Summary”produced by accounting software will typi-cally satisfy the monthly requirement to rec-oncile the current bank balance to the totaltrust account balance (a different softwarereport may be necessary for the quarterlyreconciliation).

All reconciliations—monthly and quar-

terly—must be signed and dated by a lawyer.Remember, nonlawyer employees who recon-cile the trust account may not be signatorieson trust account checks.

A reconciliation form is available inAppendix B13 of the Trust Account Handbook.

Quarterly Reconciliation Rule 1.15‐3(d)(1) states that each quarter

a report must be prepared that shows all ofthe following balances and verifies that theyare identical:

(A) the balance that appears in the generalledger as of the reporting date; (B) the total of all subsidiary ledger bal-ances in the general trust account, deter-mined by listing and totaling the positivebalances in the individual client ledgersand the administrative ledger maintainedfor servicing the account, as of the report-ing date; and (C) the adjusted bank balance, deter-mined by adding outstanding depositsand other credits to the ending balance inthe monthly bank statement and subtract-ing outstanding checks and other deduc-tions from the balance in the monthlystatement.Quarterly reconciliations promote accu-

rate accounting for client funds by ensuringthat the running balances for each client,when totaled, equal the total funds on depositin the trust account.

Remember that a three‐way reconciliationshould be conducted every quarter for everyclient trust account. It is recommended, how-ever, that three‐way reconciliations be per-formed monthly.

When completing the three‐way reconcil-iation, it is a good idea to use an addingmachine or other calculator that will producea printed record of the calculation you per-formed. That way, if your records do notmatch, you can easily check to see if the rea-son is a mathematical mistake made whileperforming the reconciliation.

Quarterly reconciliations must be signed

and dated by a lawyer, and you are required toretain these records and the reconciliationreports for six years to satisfy the recordkeep-ing requirement in Rule 1.15‐3(d).

You are permitted to retain electroniccopies of all reconciliation reports, as long asyou follow the requirements in Rule1.15‐3(j):

(1) the records otherwise comply withRule 1.15‐3, to wit: electronically createdreconciliations and reviews that are notprinted must be reviewed by the lawyerand electronically signed using a “digitalsignature” as defined in 21 CFR11.3(b)(5);(2) printed and electronic copies of therecords in industry‐standard formats canbe made on demand; and (3) the records are regularly backed up byan appropriate storage device.It is fine to hire a bookkeeper or the

equivalent, but you are still personallyresponsible for accounting to your clientsand to the State Bar for the money in yourclient trust accounts. Therefore, even if younever intend to do the reconciling, youshould understand the process. Even if it isyour bookkeeper’s mistake, if you bounce aclient trust account check, you are the oneyour client and the State Bar are going tocome to for an explanation. Remember, anonlawyer employee cannot be responsiblefor reconciling the trust account and be atrust account signatory.

Trust Account Reconciliation SheetThe State Bar has created a Trust Account

Reconciliation Sheet for lawyers to use whenreconciling trust accounts. A copy of thissheet can be found in Appendix B13 of theTrust Account Handbook, and a fillable form isavailable on the State Bar website, ncbar.gov.

Monthly ReviewRule 1.15‐3(i)(1) requires lawyers to review



The Legislative Update column is launch-ing in this edition of the Journal at the requestof North Carolina attorneys. In late 2017, theNorth Carolina State Bar conducted a surveyasking its members how they would like theState Bar to communicate with them, andwhat content would be of interest. Severalrespondents expressed an interest in beinginformed about legislative issues that affect thepractice of law and the Bar.

The following list contains new laws andbills of interest to the legal profession thatwere introduced in or considered by theGeneral Assembly in 2017. The informationis provided for informational purposes only,is not exhaustive, and does not constituteendorsement of or opposition to any partic-ular item. To find the full text of each law,search by Session Law at ncleg.net. To findthe full text of a bill, use the Bill Look-Upfunction at ncleg.net/gascripts/BillLookUp/BillLookUp.pl.

2017-2018 BudgetAppropriations Act of 2017 – S.L.

2017-57 Budget Technical Corrections – S.L.

2017-197Provides funding for the Judicial

Department (P.330), including the fundingof additional assistant district attorney posi-tions and judicial department pay raisesacross the state. The Appropriations Actalso provided funding for the JuvenileJustice Reinvestment Act (“Raise the Age”),and eliminated “Access to Civil Justice”funding. The governor’s veto of the budgetwas overridden.

Additional Bills that Became LawUniform Power of Attorney Act - S.L.

2017-153 adopts the North CarolinaUniform Power of Attorney Act (UPAA),largely replacing existing law governing thecreation, interpretation, and application ofpowers of attorney. For a more detailed

explanation of the UPAA provided by theNC Bar Association, go to bit.ly/2nCAFy4.

Restore Partisan Elections - S.L. 2017-3provides that elections of superior court anddistrict court judges are to be conducted ina partisan manner. The governor’s veto wasoverridden.

Reduce Court of Appeals to 12 Judges –S.L. 2017-7 reduces the court of appealsfrom 15 to 12 judges by abolishing the firstthree seats that become vacant on or afterJanuary 1, 2017, prior to expiration of theincumbent's term. Provides an appeal ofright directly to the North CarolinaSupreme Court from orders regarding classaction certification and orders terminatingparental rights or denying a motion or peti-tion to terminate parental rights. Permitsreview by the North Carolina SupremeCourt before determination by the court ofappeals when the subject matter is impor-tant in overseeing the jurisdiction andintegrity of the court system. The governor’sveto was overridden.

Criminal Law Changes – S.L. 2017-176makes various changes in the law relating tomotions for appropriate relief underChapter 15A of the General Statutes, andmakes clarifying and technical changes toG.S. 7A-451 regarding the entitlement of anindigent person to services of counsel. Thelaw makes clarifications to the habitual felonstatutes, habitual impaired driving statutes,and habitual breaking and entering statutes.The law also addresses fingerprinting defen-dants, Citizen’s Warrants, and the Sheriff ’sSupplemental Pension Fund.

Electoral Freedom Act of 2017 – Amongother electoral changes, S.L. 2017-214 elim-inates primary elections for all justices andjudges of the courts in 2018. The governor’sveto was overridden.

Workers’ Comp/Disputed Legal Fees –Among other changes, S.L. 2017-124requires the Industrial Commission to pro-vide notice to an injured worker’s currentand previous attorneys of record if there is a

dispute over the division of the fee betweenthe attorneys.

NCAOC Omnibus Bill - S.L. 2017-158makes numerous changes to law governingthe administration of the general courts ofjustice.

Various Clarifying Changes – Amongother changes, S.L. 2017-206 prohibits alawyer who serves as a trustee from repre-senting noteholders or borrowers while ini-tiating a foreclosure proceeding. The gover-nor’s veto (unrelated to this section) wasoverridden.

Expungement Process Modifications -S.L. 2017-195 makes modifications to thevarious expunction statutes.

Bills Eligible for Consideration in the2018 “Short Session”

Note: These bills are eligible for considera-tion in the 2018 short session. Inclusion on thislist does not imply that a bill will be consid-ered.

Judicial Redistricting and InvestmentAct (H717) – Passed House. The bill is cur-rently under consideration in the JointSelect Committee on Judicial Reform andRedistricting. H717 would revise judicialdistricts as shown in maps provided atncleg.net/Sessions/2017/h717maps/h717maps.html.

NOTE: The most recent judicial redis-tricting proposal from the Joint SelectCommittee on Judicial Reform andRedistricting can be found on the commit-tee’s website: ncleg.net/gascripts/DocumentSites/browseDocSite.asp?nID=376

Increase Voter Accountability of Judges(S698) – An act to amend the constitutionto create two-year terms of office for all jus-tices and judges.

Forfeiture of Retirement Benefits(H160) – Prohibits retirement benefits forjudges who have been impeached and con-victed or removed from office.


L E G I S L A T I V E U P D A T E

2017 Legislative Year in ReviewB Y P E T E R B O L A C , L E G I S L A T I V E L I A I S O N

32 SPRING 2018

The Privacy and Information SecurityLaw Specialty Committee of the State BarBoard of Legal Specialization is at the cuttingedge of a rapidly changing legal landscape.Committee members (see sidebar) are set tolaunch the new specialty certification in2018, building upon an existing national cer-tificate offered by the InternationalAssociation of Privacy Professionals (IAPP).IAPP offers a Certified Information PrivacyProfessional-US (CIIP/US) training programand exam to applicants throughout theUnited States and beyond. The NorthCarolina specialty will utilize the IAPP certifi-cate to qualify applicants for a short examthat will focus on state as well as the interpre-tation of federal and international law.

Rapidly evolving technologies affect manyNC companies, particularly those in special-ized fields like pharmaceuticals and sustain-able energy. As technology further advances,these companies face big challenges in pro-tecting their corporate and employee data. Wehave all seen the effects of massive databreaches over the last several years. Privacylawyers handle those unfortunate situations aswell as many other corporate technologicaland security issues on a daily basis. Lawyerswho are able to assist clients in successfullynavigating these fast moving business andlegal waters are in high demand. This newspecialty certification will help clients locatequalified counsel, and also provide all North

Carolina lawyers with referral options whenthe need arises.

The committee members were asked toshare their experience and perspectives onpracticing privacy and information securitylaw, and on how the new certification canbenefit lawyers throughout the state. Q: What sets this practice area apart?

Privacy law is a cutting edge area. It is con-stantly evolving and it impacts almost everyaspect of our lives. Every time we pick up oursmart phone we are implicating some aspectof privacy law. —F. Marshall WallQ; Did your interest in privacy law begin inlaw school?

My interest actually began with pre-lawschool employment in financial services wheredata privacy was engrained in the businessmodel. I learned that I really enjoyed helpingclients with cutting edge issues in a rapidlyevolving topic area. —Nathan StandleyQ: Have you already attained the IAPPCIPP/US certification? If so, why did youpursue that?

I became IAPP CIPP/US certified in 2015because I had been actively practicing privacyand information security law and I hoped thatthe CIPP/US certification would helpdemonstrate to clients and prospective clientsthat I was knowledgeable in the law, in tech-nology, and in customs relevant to privacy andinformation security. At the time, neither theABA nor any state bar recognized a specializa-

tion in privacy orinformation securitylaw, and there wasnot any other wide-ly-recognized, credi-ble certificationauthority. —Matthew CordellQ: Describe a typi-cal client or clientsituation.

The situations that our clients face varysignificantly. Currently we are seeing a fairnumber of clients with business email com-promise (BEC) or “spoofing” issues. Dataincidents involving the insertion of malwareinto a client’s system to scrape personal dataand data incidents involving employee error(such as a lost laptop) are not uncommon.But privacy and information security is muchmore than just cybersecurity and data breach-es. Clients face privacy issues in dealing withemployee and customer personal informa-tion, monitoring others, recording calls, send-ing documents containing social securitynumbers, conducting background checks anddrug testing, designing legally adequate datasecurity plans, and providing adequate noticeto consumers of collection and use of theirpersonal data. GDPR (the EU General Data

L E G A L S P E C I A L I Z A T I O N

Board of Legal Specialization Launches A NewSpecialty in 2018B Y D E N I S E M U L L E N , A S S I S T A N T D I R E C T O R O F L E G A L S P E C I A L I Z A T I O N

Cordell

Privacy and Information SecuritySpecialty Committee

Matthew A. Cordell, ChairElizabeth H. Johnson, Vice ChairAlicia A. GilleskiKarin M. McGinnisElizabeth E. SpainhourNathan E. StandleyF. Marshall WallClark C. Walton

Johnson McGinnis Standley Wall

Protection Regulation, which will beenforced beginning May 25, 2018) is a prior-ity for many companies right now. —KarinMcGinnisQ: What’s the most interesting/difficult/chal-lenging information security legal issue youhave handled?

The large-scale data security incidentresponses that I have worked on over theyears have consistently been the most chal-lenging, because there are so many applicablelaws, regulatory bodies, contract and insur-ance requirements, law enforcement con-cerns, and reputational risks, all of whichmust be handled in a very compressed time-frame. —Matthew Cordell Q: How has the practice changed in the pastfive years?

The biggest challenges in this practice arekeeping up with developments and conform-ing my advice to the needs of dynamic, fast-paced situations. When I started, my firmhad just handed out Blackberries for the firsttime, MySpace was making more news thanFacebook, and there were relatively few priva-cy laws. The practice changes weekly, notyearly, in terms of new technology, emergingsecurity threats, new case law, and new oramended statutes and regulations. To be suc-cessful in this practice, you must be willing todevote substantial time to maintainingexpertise because, even though the area ismaturing, it will never be static. On thispoint, having a team of devoted practitionersis a significant advantage.

Clients’ sophistication and knowledge ofthe subject matter also has increased signifi-cantly in the last five years. What has notchanged, and likely will never change, is theirexpectation that our advice will be clear, prac-tical, responsive, and actionable. In this prac-tice, when applicable laws may be out of datewith technology or must be applied to unan-ticipated situations, a depth and variety ofexperience is really critical to meet clientneeds and expectations, more so now thanfive or ten years ago. —Elizabeth H. Johnson Q: What gives you the most satisfactionabout practicing privacy and informationsecurity law?

I enjoy helping clients through what canbe an extremely stressful and difficult time,for example when a data breach hits and theclient needs quick and clear guidance on howto proceed. It is satisfying to see clients gainmore confidence that the situation can beresolved and that there is a team I can bring

to the table to help the current situation andhelp minimize the risk of future incidents. Ialso enjoy the challenge of staying on top ofchanges in the law and practicing in an areawhere the new legal theories are being devel-oped and tested, such as legal claims by con-sumers for data breach violations. It is neverboring or routine. —Karin McGinnisQ: Does a lawyer need to be technologicallyproficient to practice in this specialty area?

Not necessarily as there are numerousaspects to this practice area that do notinvolve technology; however, technologyprowess is always beneficial. —NathanStandleyQ: How do you keep up with the changes intechnology that affect your clients?

I subscribe to a number of blogs and emailupdates, follow industry leaders on socialmedia, and am a member of several technol-ogy associations that send updates about theindustry. —F. Marshall Wall

When I come across a technology I don’tunderstand, I set aside some time to dig intothe topic and educate myself about it—some-times by simply Googling it and reading foran hour or two. One of the benefits of beingan in-house lawyer at a large company withhundreds of technology professionals is that Ican call in one of my (internal) clients whohas some level of expertise in the technologyand ask them to explain it to me until I’mconfident that I understand the terminology,mechanics, and applications of the technolo-gy. —Matthew CordellQ: How do you envision the NC certifica-tion affecting your practice or career?

Certification should help differentiatethose who have knowledge and experience inthis area, which is very specialized andbecoming more so. I am excited to be one ofthose folks. —F. Marshall WallQ: What would you say to encourage otherlawyers to become board certified specialistsin this field?

One of my mentors told me many yearsago that in order to be a great lawyer, youmust love the law. I would say that if youwant to be a great privacy and data securitylawyer, you need to love both the law andcomputer technology. —Matthew Cordell

For more information on specialty certifi-cation in Privacy and Information SecurityLaw visit us online at nclawspecialists.gov/for-lawyers/certification-standards/privacy-and-information-security-law. Applicationdeadline: July 2, 2018. n


34 SPRING 2018

When I was a kid, it seemed pretty naturalto ask for help when I needed it. Admittedly, Iwas a stubborn kid, and quite often you wouldhear me say, “No, no, I got it.” Of course, mostof the time I had no problem asking someone“bigger” than me to help me out. That’s whatadults are for, right?

I’m not entirely sure when I stoppedthinking I could ask for help. Maybe it was inlaw school where competition made theperception of weakness something worthavoiding. Maybe it was in the practice of lawwhere my clients looked to me to be strong andcompletely self-sufficient. Maybe it was in trial,where saying, “I don’t know” did not seem likean option. Whatever it was and however ithappened, I stopped asking for help.

A wise friend once pointed out to me thatrefusing to ask for help was the height ofarrogance and ego. When I responded that mylack of asking for help might actually stemfrom low self-esteem or fear of being perceivedas weak, he flatly said, “Isn’t worrying aboutwhat other people think the height ofselfishness and ego?” Touché my friend, touché.

By this point, most readers may have

thought of someone they know who obviouslyneeds help. Possibly, that person is the reader,but probably not. We think of the person whois in obvious pain or obvious dysfunction—thelawyer who has “started to lose it.” But everylawyer currently riding the “lost it” bus stoodin the line for that bus for a long time,procrastinating about getting some help.

Let’s face it, most lawyers areprocrastinators. We have too much to do so wemake daily triage decisions. Triage is healthy,but when we get to the point that our triagecriteria is based upon our fear, then we are notmaking healthy decisions, especially if our fearis not based in facts but in emotions. What doI mean by that? Missing a looming statute oflimitations is a fact-based fear. Avoidingspeaking to a client because we have notcompleted promised work is a fact and anemotion-based fear. Not talking to anyone is afear born from emotions and internal conflict.It is not healthy.

I’m not a big fan of the word “blame,” butrecognize that at the heart of many lawyers’practices is assigning responsibility for harmsand seeking redress for those harms. It is natural

for lawyers to seek out the “causation” of ourissues and possibly assign “blame.” If weprocrastinate getting help for ourselves, it maywell stem from the fact that we self-imposeunrealistic expectations on ourselves. We can’tmake mistakes, we can’t admit weaknesses, andwe simply don’t have the time to deal with issuesoutside of our practices. There is just notenough time for “us.” Does that ring true?

Whether we like it or not, ignoring ourpersonal issues won’t make them go away.Typically, they just get worse. What starts outas a temporary coping mechanism can quicklybecome a deep-seated instinct or addiction. Ifwe do not take the time to address our issuesnow, it is quite likely our problems will rise upand strike back without asking our permissionto do so.

Early in my career I encountered a perfectstorm of bad news. My employer, withoutnotice, dissolved the law practice and I foundmyself without a job or financial resources.There were problems with my parents andfamily. My law school loans were oppressive andI had no real savings. I was in a panic and yet Ifound myself having trouble making decisions.Auto-pilot had kicked in, but I was flying anempty airplane with no flight plan, nodestination in sight, and low fuel.

Essentially, I froze with indecision becauseall of the personal choices I had to make seemedtoo overwhelming for me. For example, I was

A Kick in the AssB Y A N O N Y M O U S

L A W Y E R A S S I S T A N C E P R O G R A M

You don’t have to live under a bridge to need some help. Sadly,

some people have to lose enough to qualify to live under a

bridge before they ask for help. That does not have to be you.

I’ve been a lawyer for a decade and a half, though I am some-

times reminded that I’ve been on this earth a lot longer. For better or worse, becoming a

lawyer and practicing as a lawyer taught me some bad habits that affected my ability to

make healthy decisions.


not answering my phone. I could not bringmyself to talk to people. I’d return their calls butsometimes it would take days. Opening themail became torture. I felt like every letterwould hold bad news. I had to force myself toget the mail open. When there was no badnews, I started thinking that bad news was justgoing to arrive the next day. I would write aletter three times, unable to decide on thecontent. I would excruciate over legal pleadings,certain that I had forgotten some “magic word,”my case would be thrown out, and I would getsued by my client and be humiliated.Everything felt urgent, yet somehow I wasimmobile. Of course, I didn’t sit completely still,but “reorganizing my sock drawer”(my term forany seemingly helpful task that is not addressingthe real problem) was not providing muchforward momentum.

Had you known all of these things andasked me how I was doing, I would have toldyou, “I’m fine. I got it.”

I was fortunate that while I was perfectlywilling to BS myself into thinking that thingswere “ok,” some people I loved were not willingto let me. They told me, “You are depressed.You need to talk to someone.”

In that pivotal moment in my life, I waswilling to try something new. Not onlysomething new, but something that scared meand certainly threatened my idea of who I was.

Therapy was an amazing and positiveexperience. I wholeheartedly recommend it toanyone. I learned that my “immobility” was aresult of moderate depression brought on bysome difficult circumstances. Not a bigsurprise. I also learned that I had a lot of copingmechanisms from my life before law and myformative years that were not serving me wellanymore. These coping mechanisms weredeeply ingrained because they were originallydeveloped as survival mechanisms. I learnedthat those survival mechanisms were not onlynot helpful to me anymore, they were hurtfuland counterproductive. The good news wasthat I didn’t need them anymore. Therapyhelped me let go of those outdated instinctsand substitute healthy instincts.

If I had been left on my own, I’m sure Iwould have survived that difficult time in mylife, but I also know I would not have improvedmy inner-life. I would have simply “managed.”Managing is not a really good life plan. And forme, long-term “managing” always resulted inbad side effects when my outmoded survivalinstincts kicked in.

My doctor prescribed antidepressants for a

while. I really did not want to take them. Notmy style, I would have said. My doctor said, “IfI told you you were a diabetic and neededinsulin, would you tell me it’s ‘not your style’?”Touché doctor, touché.

The antidepressants kicked in after a fewweeks. I didn’t feel elated. I didn’t have a smileon my face all the time. In fact, I hardly felt allthat “up.” But what I did notice was thatdecisions that had seemed overwhelming to mea few weeks earlier suddenly became less “lifeor death” for me. I started sleeping better andI was able to wake up and actually look forwardto the day.

I had been wrong about the antidepressants.I had thought they would “boost” my mood.But what I came to realize was that depressionhad been hampering me, adding a lot ofunnecessary weight to my backpack of real lifeissues. Once the medication became effective,the extra “rocks” of depression were taken outof my backpack and I could march forward,stronger and better. Antidepressants andtherapy did not change who I was; they simplyreturned me to what I could be.

I’m still on my journey of being me. Eachday holds new challenges, but I have a firmfoundation upon which I can act. My careerhas been incredibly fulfilling since I came outof that dark place so many years ago.

I count myself as very lucky that I got helpearly. Other than a few irritated clients, therewere no long-term negative consequences tomy career because of my depression. I don’tknow if I would have sought help on my own.I needed a kick in the ass. I’m just glad it camebefore I started losing people and things I helddear. I never had to live under that bridge, andI don’t regret that for a moment.

Not everyone has someone who will reachout and encourage them to talk or get help. Ifyou don’t have that person and you can identifywith any of the feelings in this article, pleaseconsider this your kick in the ass. It is donewith kindness and love because you deserve tolive a fulfilling life. It can get better. n

The North Carolina Lawyer AssistanceProgram is a confidential program of assistance forall North Carolina lawyers, judges, and lawstudents, which helps address problems of stress,depression, alcoholism, addiction, or otherproblems that may impair a lawyer’s ability topractice. If you would like more information, go tonclap.org or call: Cathy Killian (western areas ofthe state) at 704-910-2310, or Nicole Ellington(for eastern areas of the state) at 919-719-9267.

Trust Accounting (cont.)

check images and bank statements for alltrust accounts and fiduciary accounts on amonthly basis. This review requirement can-not be delegated, so lawyers must make sureto look at bank statements and correspon-ding check images each month. Lawyersmust certify monthly that they have reviewedthese documents.

The reason for a monthly review of checkimages is so that the lawyer might see a checkmade out to an improper payee such as anemployee. If the lawyer never reviews can-celled check images, then the lawyer may notknow if someone has been stealing fundsfrom the trust account by voiding legitimatechecks and writing checks to themselves forthe same amount.

Quarterly ReviewRule 1.15‐3(j)(2) requires lawyers to

review a random sample of representativetransactions completed during the quarterto verify that the disbursements were prop-erly made. The transactions reviewed mustinvolve multiple disbursements unless nosuch transactions are processed through theaccount, in which case a single disburse-ment is considered a transaction for thepurpose of this paragraph. A sample ofthree representative transactions satisfiesthis requirement, but a larger sample maybe advisable.

To perform a proper quarterly review,the lawyer must select the random transac-tions and conduct the review herself. Thisreview requirement cannot be delegated toa nonlawyer.

The lawyer must examine each transac-tion’s source documents (settlement state-ment, closing document, etc.), client ledger,and cancelled checks to ensure that theamount and payee for each check was cor-rect and that the check actually cleared theaccount.

After conducting the review on at leastthree transactions, the lawyer must sign areport indicating that the review was com-pleted and attach the supporting documentsto the report.

The State Bar has developed a form tohelp lawyers complete this process, availablein Appendix B14 of the Trust AccountHandbook or online at ncbar.gov. n

36 SPRING 2018

I was delighted when Jennifer Duncan, theJournal’s editor, invited me to write an ongo-ing column on attorney wellbeing. As aresilience coach and a burnout preventionconsultant and trainer at Conscious LegalMinds LLC, I work across the state andaround the country educating lawyers aboutwellbeing. I hear first-hand from attorneysand judges about the impact that the stressesof law have on their physical, emotional, men-tal, and spiritual wellbeing. In this column, Iam eager to share the practical tips and appli-cable tools I teach in trainings and utilize withmy private clients. My hope is that the sugges-tions offered in this column support individ-ual lawyers and judges in upgrading their per-sonal wellbeing, and add momentum to thewellness efforts of law firms and professionalorganizations statewide, creating a ripple effectthat results in a more resilient Bar.

The stressors of legal practice are nothingnew—we are well aware of the demandsinherent in litigation, the challenges of dealingwith clients and difficult cases, the pressures ofbeing a new lawyer, the responsibility of pre-siding over a courtroom, the burdens associat-ed with running a law firm, and the concernsabout prospering financially, to name a few.The impact of lawyers’ professional stress,however, is just recently being evaluated. In2016 the Journal of Addiction Medicine pub-lished a landmark study (bit.ly/2GhpjI9) con-ducted by the ABA Commission on LawyerAssistance Programs and the Betty HazeldenFord Foundation. The study found thatlawyers have significantly elevated levels ofmental health distress including anxiety,depression, and chronic stress, as well as com-paratively higher rates of alcohol use disordersthan other professions, including physicians.

Similarly distressing findings were reportedabout law school student wellbeing in an arti-cle published in 2016 in the Journal of LegalEducation (bit.ly/2DBlf3H).

In response to these eye-opening reports,the ABA’s National Task Force on LawyerWell-Being published “The Path to LawyerWell-Being: Practical Recommendations forPositive Change” in August 2017(bit.ly/2i0KGW0), authored by a broadrange of stakeholders, including peer reviewby North Carolina State Bar LawyerAssistance Program Director RobynnMoraites. Even if you are not a lawyer well-ness aficionado, this 73-page report is a must-read; it is chock-full of constructive and feasi-ble recommendations that numerous stake-holders—including legal employers and barassociations—can take to promote wellbeingin our profession. The authors focus on five

Welcome to Our Newest Column Focused onLawyer WellbeingB Y L A U R A M A H R

P A T H W A Y S T O W E L L B E I N G

Pathways to Wellbeing is launching this year

at the request of North Carolina attorneys.

This column is the first of its kind to be

published in the Journal. In late 2017, the

North Carolina State Bar conducted a survey asking its members

how they would like the State Bar to communicate with them, and what content would be of interest. Numerous lawyers who responded

to the survey shared that they would like to read articles about how to manage the stress of working in the legal profession, how to better

deal with difficult situations, and how to achieve a better work/life balance.

main themes: (1) identifying stakeholdersand the role each of us can play in reducingthe level of toxicity in our profession, (2)eliminating the stigma associated with help-seeking behaviors, (3) emphasizing that well-being is an indispensable part of a lawyer’sduty of competence, (4) educating lawyers,judges, and law students on lawyer wellbeingissues, and (5) taking small, incremental stepsto change how law is practiced and howlawyers are regulated to instill greater wellbe-ing in the profession.

Even before the publication of the ABATask Force’s report, the North Carolina StateBar demonstrated leadership in issues relatedto lawyer wellbeing. The State Bar’s LawyerAssistance Program (LAP) is well-respectednationally for the depth and breadth of theservices provided, its robust volunteer net-work, its support group offerings around thestate, and for the scope of CLE topics offeredrelated to wellbeing. The State Bar lead theway in creating awareness about lawyer men-tal health when years ago it adopted a Rulerequiring a mental health CLE credit hourevery three years. Recognizing the importantand emerging field of lawyer wellness, theState Bar CLE Board approved the first six-week Mindfulness for Building Resilience toStress CLE course last March; I was honoredto create and teach this course for the 28thJudicial District. The article about the coursepublished in the Journal (bit.ly/2rEas3z)sparked interest in law firms, judicial districts,and bar practice groups across the state. Sincethen, Conscious Legal Minds and LAP havepartnered to bring similar mindfulness CLEsto other judicial districts around the state. Inaddition, LAP’s quarterly Sidebar newsletterlaunched a new column I author entitled“Mindful Moments” this past summer(bit.ly/2FhvmLB). The inception of“Pathways to Wellbeing” in the Bar’sJournal—and soon a page on the Bar’s web-site where attorneys can easily access eachquarter’s “Pathways to Wellbeing” column(look for it in the “For Lawyers” section)—isyet another concrete way the State Bar is pro-moting lawyer wellbeing, in alignment withthe ABA Task Force’s recommendation toemphasize wellbeing and eliminate the stigmaassociated with help-seeking.

This column will take the recommenda-tions of the ABA Task Force one step furtherand address specific things that we, as individ-uals, can do during the workday to cultivateour own wellbeing. I will share real-life exam-

ples of attorney stressors, and offer resilience-building tips and mindfulness and neuro-science-based tools that can be used to allevi-ate stress and foster greater wellbeing.

For example: Adley and Blaine have bothbeen feeling overwhelmed as they juggle clientcase work, run their small firm, and take timefor themselves. Adley skims this article, tossesit in the recycling, and goes back to work.Blaine reads this article and takes a moment towrite down a definition of wellbeing that res-onates, then makes a list of five small thingsthat cultivate wellbeing. Blaine then puts eachof the five things on the calendar for the weekand sends an invite to either a colleague,friend, or family member to join in for each.One of the things Blaine calendars is a walkwith Luca. When Luca and Blaine are walk-ing, Luca suggests an app that Blaine can useto fax and scan documents on a smartphone,which will save Blaine time and money. Blaineleaves the walk feeling happy to have connect-ed with Luca, invigorated from physical exer-cise, more relaxed having left the office for anhour, and inspired by the efficiency the newapp will offer. Blaine goes back to the office,cheerfully greets the law office support staff,and is relaxed and clear-headed in afternoonmeetings with clients. When Blaine checks inwith Adley at the end of the day, Adley isexhausted and frustrated, saying nothing gotaccomplished all day.

Try it for yourself: What does the term“wellbeing” mean to you?

Does this definition of “lawyer wellbeing”that the ABA Task Force uses in its report res-onate with you: “a continuous process where-by lawyers seek to thrive in each of the follow-ing areas: emotional health, occupationalpursuits, creative or intellectual endeavors,sense of spirituality or greater purpose in life,physical health, and social connections withothers”? If there’s a definition that would landmore than this one, take a moment now towrite down a more meaningful definition.Then read the definition slowly, imaginingupgrading your own wellbeing as you thinkabout the definition. Note: Neuroscienceresearch shows that our brains retain informa-tion that is personally meaningful. Using a def-inition of wellbeing that is meaningful to youwill make information on the subject moreengaging for you.

Now try this: Five Small Things 1. Make a list of five to ten small things

you can do to cultivate wellbeing this week.2. Read your list aloud a few times.

3. Notice which ones you feel the mostinspired to do.

4. Circle your top five.5. Calendar them (yes, right now!); invite

along someone you’d like to connect with, ifappropriate.

6. Enjoy doing each of your five smallthings.

Note: While the impact of doing one smallthing (or applying any mindfulness tip or tool)may not feel entirely effectual in a highly stressfulmoment, over time each small step creates acumulatively larger ripple in our lives towardgreater satisfaction and wellbeing, and may alsoextend into the lives of our friends, families, andcolleagues.

The timely concurrence of NorthCarolina lawyers saying “we need help” whenresearch statistics are saying “you need help,”and the ABA Task Force is saying, “please gethelp,” bodes well for the wellbeing trajectoryof our state’s lawyers. It inspires me that somany North Carolina lawyers requested toread articles about how to better cope withstress and how to improve work/life balance.What if North Carolina lawyers could leadthe way toward new pathways to wellbeingfor colleagues in this state and across thenation? It is my hope that this column ignitesconversations among attorneys, law schools,law firms, judicial districts, legal bars, withinthe courts—and among lawyers and theirfamilies and friends—about the topic oflawyer wellbeing. I aspire for the tips andtools that I share to make a difference in yourlife. Take what inspires and motivates you tolive the life you want to live. Put the rest inthe recycling. But most importantly, put onefoot in front of the other on your personalpathway to wellbeing. n

Laura Mahr is a NC lawyer and the founderof Conscious Legal Minds LLC, providing mind-fulness-based coaching, training, and consultingfor attorneys and law offices nationwide. Laura’scutting edge work to build resilience to burnout,stress, and vicarious trauma in the practice of lawis informed by 11 years of practice as a civil sex-ual assault attorney, two decades of experience asan educator and professional trainer, and 25years as a student and teacher of mindfulness andyoga, and a love of neuroscience. She is an advi-sory member of the newly formed 28th JudicialDistrict’s Wellness Committee and a provider onthe North Carolina Bar Association BarCARESpanel. Find out more about her work at con-sciouslegalminds.com.


38 SPRING 2018

I O L T A U P D A T E

Despite Stagnant Income, IOLTA Awards $2.9Million in Grants

IncomeAll 2017 IOLTA income from participat-

ing banks that hold IOLTA accounts will notbe received and entered until the end ofJanuary. Participant income throughNovember 2017 was up by 2% compared tothe same period in 2016. With the recentand anticipated increases in the target rangefor the federal funds rate, we eagerly awaitinterest rate increases and associated increasesin income.

GrantsOver the last nine years, IOLTA has con-

sistently relied on cy pres and other courtawards to support grantmaking during theeconomic downturn. Further, available grantfunds have been buoyed by reserve funds infive grant cycles since 2009. In 2018 theIOLTA trustees will continue to make use ofmonies from the Bank of America settlementreceived in 2015 and 2016 to support regularIOLTA grants.

At the November 30 grantmaking meet-ing, the IOLTA trustees approved 2018IOLTA grant awards. Regular 2018 IOLTAgrants totaled nearly $1.65 million:$1,272,875 to support providers of directcivil legal services, $279,930 to volunteerlawyer programs, and $97,185 to projects toimprove the administration of justice. Anadditional grant of $1,251,500 was made tothe Home Defense Project Collaborative tosupport foreclosure prevention legal servicesprovided by six organizations across the state.This grant was made with funds from thenational Bank of America settlement.

As year-end income allows, the IOLTAtrustees also committed to begin replenish-ing the reserve fund which is now at a low of$250,000 after many years of decreasingIOLTA revenues. Established in 1996, thereserve fund has allowed for a more gradualdecrease in grant funding during the eco-nomic downturn than would have been pos-sible otherwise.

State Funds In addition to its own funds, NC

IOLTA administers the state funding forlegal aid on behalf of the NC State Bar.During 2016-2017, $1.65 million in gen-eral legal services funding under the Accessto Civil Justice Act and nearly $1 million indomestic violence funding under theDomestic Violence Victim Assistance Actwas distributed. An additional $100,000was distributed for veterans’ legal services.

Grantee Spotlight: Custody AdvocacyProgram

Council for Children’s Rights (CFCR)stands up for every child’s right to be safe,healthy, and well-educated. Located inCharlotte, CFCR seeks to improve the livesof children in Mecklenburg County ages 0-18. CFCR was formed in 2006 upon themerger of the Council for Children (found-ed in 1979) and the Children’s Law Center(founded in 1987). The unified agencyoffers a comprehensive array of legal andadvocacy services.

Conflict within the home is one of the toppredictors of a child’s emotional wellbeing.Challenging, contentious custody battles canpotentially have a long-term adverse impactfor the children who are caught in the mid-dle. CFCR’s Custody Advocacy Program(CAP), supported by a grant from NCIOLTA, seeks to protect the best interests ofchildren in custody disputes.

CAP is appointed by MecklenburgCounty Family Court judges to represent chil-dren whose parents are engaged in a highlycontested custody case. Family Court judgesassess and label cases as “high conflict” whereparental alienation, substance abuse, physicaland emotional abuse, mental health issues,incarcerated parties, improper living condi-tions, and/or parental neglect are involved.

Each case that CAP handles is assigned toa team that includes a staff attorney, a volun-teer attorney, and a lay custody advocate.

This team works together to investigate thefacts of the case and make recommendationsto the court.

Last year the CAP team represented 273children in high conflict custody cases. 36%of contested cases settled outside of trial. Incases that went to trial, recommendations ofthe CAP team were either fully or partiallyaccepted by the court in 93% of cases. Inaddition to custody placement and visita-tion recommendations, the CAP team mayrecommend court-ordered assessments andtherapy for children, parents, or both, rulespertaining to parental communication andaccess to records, and instructions related toeducation.

The Custody Advocacy Program engagesboth volunteer attorneys and lay advocates intheir cases. Lay advocates interview clientsand witnesses, conduct home visits, andgather information. Volunteer attorneys con-duct settlement conferences, attend deposi-tions, draft motions, and prepare for andtake cases to trial if necessary. Last year CAPtrained more than 40 new volunteer attor-neys and advocates adding to its ranks of

more than 300 volunteers. In the same year,the volunteer attorneys contributed 1,960hours on custody cases, time valued at morethan $300,000.

Here are a few stories of the children whohave a voice in court as a result of the advoca-cy of their CAP teams:

• Siblings Ellie and Trey were caught inthe middle of a custody dispute. The chil-dren lived with their mother from birth,although custody was never formally deter-mined. Last year Ellie alleged abuse by hermother’s husband, resulting in a temporarycustody placement with her father. The CAPteam was appointed to represent the chil-dren. After several months of investigation,the allegations did not add up. Ellie lateradmitted to her team that their father hadencouraged them to tell the court that theywanted to live with him, and she actuallywanted to go back to her mother’s home.Ellie and Trey again live primarily with theirmother, but their custody order includesgenerous visitation with their father.

• Allison and Daisy, ages 7 and 5, livedwith their mother until a few years ago. Theirmother struggles with a mental health issueand poor relationship choices. She called theirfather to take the children after a series ofdangerous incidents in her home. The chil-dren moved to live with their father in Texasand were thriving in his care. Their motherlater filed for custody in NC and both parentsprepared for a court battle. CAP was appoint-ed and learned that, as much as the motherloved her daughters, she left her mentalhealth condition untreated. CAP also learnedabout the care the children were receivingwith their dad in a safer, more stable house-hold. Prior to trial, CAP recommended thatthe father maintain custody with visitationfor the mother and they were able to negoti-ate a settlement to avoid trial.

• Alex was 11 when his parents divorced.He wanted to be with his mother, but was leftwith his father who would become angry andhit Alex. The roof of the home leaked, cock-roaches were everywhere, and the trash piledup. CAP got involved and emergency cus-tody was granted to Alex’s mother. His fatherfought to get visitation. The CAP teamsought an evaluation for the father who wasdetermined to have ADHD. After months ofcontinued monitoring, the father decided tomove home with his family and start over.The court saw a difference in him and he wasawarded visitation. n


Legislative Update (cont.)GA Appoint for District Court

Vacancies (H240) – Shifts the authority tofill district court vacancies from the gover-nor to the General Assembly.

GA Appoint for Special Superior CourtJudges (H241) – Shifts the authority toappoint special superior court judges fromthe governor to the General Assembly.

Vacancies/NC Sup Ct/ Ct of App/Superior Ct/DAs (H335) – Clarifies themanner in which vacancies are filled forSupreme Court justices, judges of the courtof appeals and superior court, and districtattorneys.

Amend who can serve on a three judgepanel (H677) – Provides that district courtjudges may be appointed to serve on three-judge panels for actions challenging thevalidity of acts of the General Assembly.

Landlord/Tenant – Alias & PluriesSummary Ejectment (H706)

Amend Arson Law (H325)

Bills Introduced but that Did NotPass Either Body (“Did Not CrossOver”)

Note: These bills are not eligible for consid-eration in the 2018 short session; however, thesubstance of any of these bills could be inserted

into a bill that is eligible for consideration dur-ing the short session.

S605 – Attorney Options/ IOLTA FundsS633 – Reduce Annual State Bar FeesS250 – Judicial Standards Commission S617 – Eliminate Emergency Recall Judges

(Addressed in Budget) S636 – Increase Judicial Pay 20%S433 – Limit who may advertise/Adoption

LawsS457 – Amend Deferred Prosecution

StatuteS613 – Attorney’s Fees and Costs/State

PrevailsH126 – Conduct and Discipline for Mag-

istratesH674 – Independent Redistricting Com-

missionH675 – Clerk of Court notifies AOC if

court ends earlyH676 – Special Superior Court Judge As-

signmentsH122 – Discovery Not Disseminated to

DefendantH124 - Courts Commission Study Judicial

DistrictsH129 – NC LEAF FundsH645 – Legal Services Rendered for Non-

profitsH918 – Post Crime on Social Media/ En-

hanced Sentence n

Don’t Miss ImportantState Bar Communications

Log on to ncbar.gov to make surewe have your email address.

40 SPRING 2018

The news images are shocking. Whetherit is tornado damage in the Midwest orflooding after a hurricane in eastern NorthCarolina, disasters can strike at any timeand can come in many different forms.Hurricanes come with advanced warningallowing time to prepare; other disastershappen so quickly they are over before youhave time to think. No matter what type ofdisaster you face, careful planning can makesurviving more likely.

Proper leadership makes surviving a dis-aster easier. Avoiding or reducing the sever-ity of disasters begins with assessing therisks associated with location, and officeprocedures. Once risks are assessed, the dis-aster recovery plan can be developed so thatprocesses for minimizing damage andrecovering afterwards can be established.

Tips for RecoveryAfter the dust has settled, it’s time to get

to work putting the pieces back together.This is the time when the emergency leadertakes charge and puts your plan into action.Having the channels of communicationpre-planned and direction for how thingsshould be handled helps prevent mass panicbecause certain steps will be taken to reor-ganize the office.

Regrouping The basic starting point is assembling

your staff to begin working again as quicklyas possible. Establish a phone tree to con-tact employees. If it is necessary to operatefrom another location due to building dam-age, your disaster plan leader will make thearrangements and pass along the informa-tion. To speed up the process of choosingalternate operating locations, select a fewoptions before disaster strikes and keep theinformation with your disaster kit.Emergency locations can be outside thebox, such as a townhouse complex that

might have more availability options uponshort term notice.

Once available staff members cometogether, hold a debriefing meeting. Thepurpose is to give staff a clear picture of thestate of affairs for the firm. This will preventsome watercooler gossip and help establishthe operational procedures should there bedifferences due to changes in circumstances.Teamwork and communication should beprominent topics.

Part of regrouping is helping staff recov-er from the disaster. Some will cope betterthan others. For large scale events, consideroffering therapy sessions to alleviate post-traumatic stress disorder. Regardless of size,be aware that any major event can causesome personality types great distress andaffect their work habits.

Client communication should also be atop priority at this stage. Make everyattempt possible to contact your clients assoon as you have reestablished operations tolet them know you are available. If theyhave been affected by the disaster, this is oneless worry they have to deal with. If the dis-aster was not widespread, such as a fire inyour building, they will be relieved thattheir cases have not been thrown off trackby events.

Returning to Normalcy Although it will seem impossible when

disaster strikes, a well prepared firm willeventually return to normal operations.Files will be recreated from the electronicdocuments stored in computers. Your cal-endar will once again require a map to nav-igate for the untrained eye. Normalcy, how-ever, may not equal the same as it wasbefore. Changes in surroundings mayrequire changes in procedures. Necessitymay present a better way of doing things.Avoid the “this is the way it has always beendone” mentality if reasonable alternatives

present themselves.

Evaluating the Disaster Response Once things have settled down, review

the disaster response to determine the effec-tiveness of your strategy. Were there situa-tions you overlooked? Did certain strategiesprove ineffective and other methods have tobe used?

When going over the disaster response,be sure to give praise for the things that wentaccording to plan and were executed proper-ly. Letting the team know they did their partto keep the ball rolling boosts office morale.Having an office luncheon to celebrate sur-viving the disaster is another option. Havean open discussion with employees aboutwhat may have gone astray during imple-mentation of the disaster plan. Determine ifanyone felt unsure of their instructions or ifsomething was unclear to them. This is alsothe time to find out if part of the procedureseemed to be problematic and could havebeen done better.

Review the suggested improvements toyour disaster plan. Include anything you’venoted that should be added or changed.Make the necessary changes as soon as pos-sible. Make any other needed changes toyour disaster recovery kit. If another eventshould come your way, you’ll be even betterprepared the next time around. n

The preceeding is an excerpt from DisasterPlanning and Recovery, a handout fromNorth Carolina Lawyers Mutual that can beviewed online at bit.ly/2Fvyxj2. This handoutcontains information about how to develop aplan and recover from disaster, and includes adisaster recovery checklist and additional help-ful resources.

Samantha Cruff is the marketing commu-nications coordinator for Lawyers Mutual. Shecan be reached at [email protected] or 800-662-8843.

Risk Management and Disaster Planning: Tips forMaking Survival of Your Law Practice More LikelyB Y S A M A N T H A C R U F F

L E G A L E T H I C S


Council ActionsNo ethics opinions were adopted by the

State Bar Council this quarter.

Ethics Committee ActionsAt its meeting on January 25, 2018, the

Ethics Committee voted to return proposed2017 Formal Ethics Opinion 6,Participation in Platform for Finding andEmploying a Lawyer, to a subcommittee forfurther study. Proposed 2016 Formal EthicsOpinion 1, Contesting Opposing Counsel’sFee Request to Industrial Commission, con-tinues to be tabled pending the conclusion ofappellate action in a case that is relevant tothe proposed opinion. Four new proposedopinions were approved for publication andappear below.

Proposed 2018 Formal EthicsOpinion 1Participation in Website Directoriesand Rating Systems that IncludeThird Party ReviewsJanuary 25, 2018

Proposed opinion explains when a lawyermay participate in an online rating system, anda lawyer’s professional responsibility for the con-tent posted on a profile on a website directory.

Inquiry #1:May a lawyer “claim her profile” or set up

a profile on a website directory or businesslisting service such as Google’s My Business,LinkedIn, or Avvo and provide informationfor inclusion in the profile?

Opinion #1:Yes, if the information provided by the

lawyer and as presented in the profile istruthful and not misleading. Rule 7.1(a).

Inquiry #2:May a lawyer pay to be included in a web-

site directory of lawyers?

Opinion #2:Yes. A lawyer may pay the reasonable

costs of advertisements. Rule 7.2(b).

Inquiry #3:May a lawyer provide profile information

to a website that will use the information torate the lawyer in an online lawyer rating sys-tem?

Opinion #3:Yes, if the information provided by the

lawyer is truthful and not misleading. Rule7.1(a). In addition, no money may be paidby the lawyer for a rating and, before volun-tarily providing information to a rating sys-tem, the lawyer must determine that the rat-ing system uses objective standards that areverifiable and would be recognized by a rea-sonable lawyer as establishing a legitimatebasis for evaluating the lawyer’s services. See,e.g., 2003 FEO 3 and 2007 FEO 14.

Inquiry #4:If a lawyer participates in a website direc-

tory, is the lawyer professionally responsiblefor claims on the website about participatinglawyers such as statements that the partici-pating lawyers are “top rated,” “excellent,” or“the best”?

Opinion #4:The lawyer is professionally responsible

for statements or claims made specificallyabout the lawyer or the lawyer’s services andmay not participate in any communicationspecifically about the lawyer that is false ormisleading in violation of Rule 7.1.

Pursuant to Rule 7.1(a)(3), a communi-cation is false or misleading if it “comparesthe lawyer’s services with other lawyers’ serv-ices, unless the comparison can be factuallysubstantiated.” Further explanation of thisprohibition is set out in comment [3] to Rule7.1, which states that “[a]n unsubstantiatedcomparison of the lawyer’s services or fees

with the services or fees of other lawyers maybe misleading if presented with such speci-ficity as would lead a reasonable person toconclude that the comparison can be sub-stantiated.”

In this instance, the website is describingall of the lawyers who participate in thedirectory in these superlative terms withoutspecifically referencing any one lawyer. It isreasonable to conclude that online con-sumers understand that the use of suchsuperlatives is a subjective characterizationmade for advertising purposes. Moreover, thesuperlatives are not presented with suchspecificity as to lead a reasonable consumerto conclude that the comparison can be fac-tually substantiated. Therefore, a participat-ing lawyer is not professionally responsiblefor such claims or characterizations by thewebsite and is not prohibited from participa-tion on this basis alone. To the extent RPC135 (1992) is inconsistent with this opinion,it is overruled.

Inquiry #5:A website directory that permits lawyers

to “claim their profiles” also allows con-sumers—usually present and formerclients—to post “reviews” of a lawyer on thelawyer’s profile page. May a lawyer ask pres-

P R O P O S E D O P I N I O N S

Committee Publishes Proposed Opinion onParticipation in Online Directories and Rating Systems

Public Information The Ethics Committee’s meetings are

public, and materials submitted for con-sideration are generally NOT held inconfidence. Persons submitting requestsfor advice are cautioned that inquiriesshould not disclose client confidences orsensitive information that is not neces-sary to the resolution of the ethical ques-tions presented.

ent or former clients to post reviews on herprofile page?

Opinion #5:Yes, as long as there is no quid pro quo,

and the lawyer does nothing more than askthe client to post an honest review of herabilities and services. Rule 7.2(b) (a lawyershall not give anything of value to a personfor recommending the lawyer’s services).Under no circumstances may a lawyer solicit,

encourage, or assist in the posting of fake,false, or misleading reviews. Rule 8.4(c).

Inquiry #6:When a client is pleased with the lawyer

and her services, the client’s posted review onthe lawyer’s profile or webpage may containhyperbolic accolades such as the lawyer was“the best,” “awesome,” “the smartest,” “thetoughest,” etc. Rule 7.1(a)(2) and (3) pro-hibit a lawyer from engaging in misleading

communications that create unjustifiedexpectations or that compare a lawyer’s serv-ices with the services of other lawyers unlessthe comparison can be factually substantiat-ed. Is a lawyer required to monitor the con-tent of third party reviews on a website pro-file or listing that the lawyer has claimed andto seek the removal of any review that doesnot meet this standard?

Opinion #6:Most users of the Internet understand

that reviews by third parties generally con-tain statements of opinion, not fact. To theextent that a third party review is a statementof opinion about the lawyer or her services,the lawyer is not professionally responsiblefor the statement and does not have to dis-claim the review or take action to have thereview removed or redacted from the lawyer’sprofile or webpage. If a review contains amaterial misstatement of objective fact, how-ever, the lawyer must take action to have thereview removed or edited to delete the mis-statement, or to post a disclaimer. For exam-ple, the lawyer must take action to remove,redact, or disclaim a review that falsely statesthat the lawyer obtained a million dollar set-tlement for the reviewer.

Inquiry #7:Lawyer A, at the urging of a marketing

firm, initially claimed her website profile orset up business pages on a number of web-sites like Facebook. However, she tired ofposting to the profiles and pages, and soonceased to visit the majority of them altogeth-er. Most of the profiles and website pagesallow for third party reviews that Lawyer Ano longer reads.

Is Lawyer A responsible for the content ofthe reviews posted on these website profilesand pages?

Opinion #7:No, a lawyer is professionally responsible

only for third-party content about the lawyerof which the lawyer is aware or reasonablyshould be aware. The lawyer is not requiredto monitor online profiles or pages if thelawyer does not visit the website, post to thatwebsite, or otherwise actively participate inthe website. If a lawyer has abandoned a pro-file or webpage and the lawyer is unaware ofthe content of the reviews posted on the pro-file or webpage, the lawyer has no profession-al responsibility relative to that content.

42 SPRING 2018

In Memoriam

Robert Lars Andersen Charlotte, NC

Kenneth Furman Antley Atlanta, GA

Maurice Alvin Cawn Greensboro, NC

Barbara Ann Davis Asheville, NC

Michael James Denny Charlotte, NC

Farris Allen Duncan Goldsboro, NC

Geoffrey E. Gledhill Hillsborough, NC

John Brent Godwin Selma, NC

Marvin Kenneth Gray Charlotte, NC

Randolph James Hill Raleigh, NC

Robert Layne Hillman Raleigh, NC

Barbara Dale Hollingsworth Harrisburg, NC

Charles Edward Hubbard Roxboro, NC

Bynum M. Hunter Greensboro, NC

Michael David Lea Thomasville, NC

Robert Dobbins Lewis Asheville, NC

John Alexander MacKethan III Raleigh, NC

Bobby Gray Martin Winston-Salem, NC

Glenn M. Mattei Lutherville, MD

Henri Ronald Mazzoli Greensboro, NC

James Radcliffe Melvin Elizabethtown, NC

Wendell Clay Moseley Roanoke Rapids, NC

Josiah S. Murray III Durham, NC

Rebecca Ann Phillips Greensboro, NC

Walter Rand III Garner, NC

Jeffrey Neil Robinson Waxhaw, NC

Robert Worthington Spearman Chapel Hill, NC

William Lindsey Stafford Jr. Salisbury, NC

Daniel Wayne Sweat Greenville, NC

Rufus F. Walker Jr. Hickory, NC

Charles M. Williamson Greenville, NC

Arnold Terry Wood Greensboro, NC

James Fredrick Wood III Charlotte, NC

However, if the lawyer becomes aware, orreasonably should be aware, that materialmisstatements of fact are included in reviewsposted on her profile or webpage, the lawyeris professionally responsible and must takeaction to have the offensive content removedor an explanatory disclaimer posted.

Inquiry #8:A lawyer determines that third-party gen-

erated content on her profile on an onlinedirectory contains material misstatements offact and that she is professionally responsiblefor seeking to remove or disclaim the mis-statements. When she asks the website toremove the content or post an explanatorydisclaimer, the website refuses to do so. Whatshould the lawyer do?

Opinion #8:The lawyer must withdraw from partici-

pation in the website and seek to have thelawyer’s profile or page on the websiteremoved.

Inquiry #9:Is a lawyer required to seek the removal of

negative reviews that the lawyer perceives tobe false or misleading?

Opinion #9:Because there is no risk of creating unjus-

tified expectations, there is no duty to corrector seek removal of a negative review postedon a lawyer’s profile or website page.Nevertheless, the lawyer may seek removal ofnegative reviews to protect the lawyer’s repu-tation. Lawyers are cautioned to avoid dis-closing confidential client information whenresponding to a negative review. See Rule1.6(a).

Inquiry #10:For a monthly fee, a website offers a pre-

mium service called “Pro” that is promotedas enabling a lawyer to “upgrade” the lawyer’sprofile on the website. This service providesthe following benefits according to the web-site: no competitive ads will be shown on thelawyer’s profile page; the lawyer’s contactinformation is shown in a search result; thelawyer can see who is contacting her byphone, email, or on her website; the lawyercan select the best reviews and promote themat the top of the profile page; and the lawyercan write her own headline at the top of herprofile. In addition, under the lawyer’s

photo, whether it appears on the lawyer’sprofile page or in a search result, the word“Pro” appears. On search results, a sidebarstates that “Pro” indicates that information is“verified.” May a lawyer subscribe to thisservice?

Opinion #10:Yes, if the information on the profile page

continues to be truthful and not misleading.To avoid misleading users, if only selectedreviews can be read by a user, there must bean explanation that the lawyer has selectedthe best reviews to promote. If there is animplication that the selected reviews are theonly reviews that the lawyer has received or,if the lawyer has received unfavorable reviewsand the profile page falsely implies that the“promoted reviews” are typical, there mustbe an explanation.

If it is clear from the context that the“Pro” designation appears under thelawyer’s photo because the lawyer has pur-chased the premium service, the placementof this word under the lawyer’s photo is notmisleading. If it is not clear from the con-text, use of the designation implies thatlawyers in the directory who have not pur-chased the service are not “Pros.” This is acomparison of the lawyer’s services with theservices of other lawyers that cannot be fac-tually substantiated. An explanation postedby the participating lawyer or by the web-site is required.

Proposed 2018 Formal EthicsOpinion 2Duty to Disclose Adverse LegalAuthorityJanuary 25, 2018

Proposed opinion rules that a lawyer has aduty to disclose to a tribunal adverse legalauthority that is controlling as to that tribunalif the legal authority is known to the lawyer andis not disclosed by opposing counsel.

Inquiry:Rule 3.3(a)(2) provides that a lawyer shall

not knowingly “fail to disclose to the tribunallegal authority in the controlling jurisdictionknown to the lawyer to be directly adverse tothe position of the client and not disclosedby opposing counsel.”

Is the duty of disclosure set out in Rule3.3(a)(2) limited to appellate court decisionsin the relevant jurisdiction, or is a lawyer alsorequired to inform the tribunal of rulings

entered in lateral and lower courts?

Opinion:Rule 3.3, Candor Toward the Tribunal,

sets forth the duties of lawyers as officers ofthe court “to avoid conduct that underminesthe integrity of the adjudicative process.”Rule 3.3, cmt. [2]. Preserving the integrity ofthe adjudicative process is consistent with theprinciple of stare decisis.

As an officer of the court, a lawyer has aduty to assist the tribunal in fulfilling its dutyto apply the law fairly and properly.Therefore, a lawyer must not allow the tribu-nal to be misled by false statements of lawand “must recognize the existence of perti-nent legal authorities.” Rule 3.3, cmt. [4]. Asexplained in Rule 3.3, cmt. [4], the “under-lying concept is that legal argument is a dis-cussion seeking to determine the legal prem-ises properly applicable to the case.”

The comments to Rule 3.3 reference“pertinent legal authorities” and “legal prem-ises properly applicable” to the case. Thesephrases indicate that the lawyer’s duty is todisclose to the tribunal legal authority that iscontrolling as to that tribunal. Controllinglegal authority may be statutory or priorjudicial precedent.

Therefore, pursuant to Rule 3.3(a)(2), alawyer has a duty to disclose to a tribunalconsidering a matter legal authority that iscontrolling as to the tribunal if the authorityis directly adverse to the position of thelawyer’s client, is known to the lawyer, and isnot disclosed by opposing counsel. Thelawyer’s knowledge of the adverse authoritymay be inferred from the circumstances. SeeRule 1.0(g).

Proposed 2018 Formal EthicsOpinion 3Use of Suspended Lawyer’s Name inLaw Firm NameJanuary 25, 2018

Proposed opinion rules that it is false andmisleading for the name of a lawyer who isunder an active disciplinary suspension toremain in the firm name.

Inquiry #1:Lawyer is a named partner in a law firm.

Pursuant to an order issued by theDisciplinary Hearing Commission, Lawyer isactively suspended from the practice of law.Must Lawyer’s name be removed from thelaw firm name during the suspension period?


44 SPRING 2018

Opinion #1:Yes. Pursuant to Rule 7.5, a law firm “shall not

use a firm name, letterhead, or other profes-sional designation” that is false or misleading.A firm name is misleading if it contains amaterial misrepresentation of fact or omits afact necessary to make the firm name consid-ered as a whole not materially misleading.Rule 7.1(a).

The inclusion of the suspended lawyer’sname in the firm name materially misrepre-sents the lawyer’s status with the law firm.The presence of the suspended lawyer’s namesuggests to the public that the lawyer isauthorized to practice law with the firm.

A suspended lawyer may not be associat-ed with her former firm during the suspen-sion period. The Discipline and Disability ofAttorneys Rules of the State Bar require asuspended lawyer to withdraw from allpending matters before the effective date ofthe suspension. 27 N.C. Admin. Code 1B,Rule .0128(b). Moreover, Rule 5.5(g) pro-hibits a lawyer from employing a suspendedlawyer as a law clerk or legal assistant if thatindividual was associated with the law firmat any time on or after the date of the mis-conduct that resulted in suspension. See alsoRule 5.5(b) (a lawyer who is not admitted topractice law in North Carolina is not per-mitted to “hold out to the public or other-wise represent that the lawyer is admitted topractice law in this jurisdiction”).

It is false and misleading for a suspend-ed lawyer to be held out as authorized topractice law during a period of active sus-pension. Therefore, from the effectivedate of the active disciplinary suspensionuntil the active suspension ends, the sus-pended lawyer’s name must be removedfrom the firm name, firm signage, letter-head, all forms of advertisement, and thefirm website.

Inquiry #2:Does the answer to Inquiry #1 change if

Lawyer is under a stayed disciplinary sus-pension?

Opinion #2:Yes. If Lawyer’s disciplinary suspension is

stayed, she is permitted to practice law.Therefore, inclusion of Lawyer’s name in thefirm name, firm signage, letterhead, allforms of advertisement, and the firm web-site is not false or misleading in violation of

Rule 7.1, and does not violate other StateBar rules.

Should the suspension become activeand Lawyer is no longer permitted to prac-tice law, Lawyer’s name must be removedfrom the firm name, firm signage, letter-head, all forms of advertisement, and thefirm website. See Opinion #1.

Inquiry #3:Lawyer is administratively suspended for

failure to pay State Bar membership duesand/or failure to satisfy the continuing legaleducation (CLE) requirements of State Barmembership. Must Lawyer’s name beremoved from the firm name?

Opinion #3:Yes, if the administrative suspension con-

tinues for more than 45 days. Whenever a member of the North

Carolina State Bar fails to fulfill an adminis-trative obligation of membership in theState Bar, the member is subject to adminis-trative suspension. 27 N.C. Admin. Code1D, Rule .0903. However, unlike a discipli-nary suspension, administrative suspensionscan be cured within a relatively short periodof time. See 27 N.C. Admin. Code 1D,Rule .0904(f) (reinstatement by Secretary ofthe State Bar). As noted in the Scope sec-tion, the Rules of Professional Conduct arerules of reason. Rule 0.2, Scope. It would beimpractical and expensive for a firm toremove a lawyer’s name from the firm name,firm signage, letterhead, all forms of adver-tisement, and the firm website if the admin-istrative suspension is of limited duration.Therefore, provided Lawyer is reinstated toactive status within a reasonable period oftime, it is not a violation of Rule 7.1 or Rule7.5 for Lawyer’s name to remain in the firmname, firm signage, letterhead, all forms ofadvertisement, and the firm website. It ispresumed that a reasonable period of time,for the purposes of seeking and obtainingreinstatement from administrative suspen-sion, is 45 days or less.

Proposed 2018 Formal EthicsOpinion 4Offering Clients On-site Access toFinancial Brokerage Company forLegal Fee FinancingJanuary 25, 2018

Proposed opinion rules that a lawyer mayoffer clients on-site access to a financial bro-

kerage company as a payment option for legalfees so long as the lawyer is satisfied that thefinancial arrangements offered by the compa-ny are legal, the lawyer receives no considera-tion from the company, and the lawyer doesnot recommend one payment option overanother.

Inquiry:Lawyer would like to associate with a

financial brokerage company (Company)that would assist clients in obtaining legalfee financing. Company is not a lendinginstitution. Company would act as a bro-ker to find lenders willing to finance theclient’s legal fees. Company charges Lawyeran initial setup fee of $1,500 and a month-ly fee of $99 for maintaining the paymentwebpage and administration. Lawyer alsopays a merchant fee of 4.99 % on theamount of the financed legal fee. The loanbrokerage service would be explained toclients as a "payment option" along withany other options such as credit card,check, cash, etc.

Company provides a loan application forclients who wish to pursue a loan for legalfees. Approved clients receive offers fromcompeting banks, and are free to pick theoffer that works best for them, or to declineall offers. If the client accepts an offer, theloan amount is paid from a third-partylender directly to the client. The client paysthe fees to Lawyer in accordance with the feeagreement.

The company maintains that the pro-gram helps lawyers get paid and alsoremoves the cost barrier for clients who areseeking legal representation.

May Lawyer associate with Companyunder the proposed arrangement?

Opinion:Yes, under certain circumstances. Many

law firms currently accept credit card pay-ments for legal fees or offer in-house pay-ment plans. In 2000 FEO 4, the EthicsCommittee concluded that a lawyer mayrefer a client in need of money for livingexpenses to a finance company if the lawyeris satisfied that the company's financingarrangement is legal, the lawyer receives noconsideration from the financing companyfor making the referral, and, in the lawyer'sopinion, the referral is in the best interest of



Amendments Pending Supreme Court ApprovalAt its meetings on October 27, 2017, and

January 26, 2018, the North Carolina StateBar Council voted to adopt the followingrule amendments for transmission to theNorth Carolina Supreme Court for approval.(For the complete text of the proposed ruleamendments, see the Fall 2017 and Winter2017 editions of the Journal, except as specif-ically noted, or visit the State Bar website.)

Proposed Amendments to the Ruleson Meetings of the North CarolinaState Bar

27 N.C.A.C. 1A, Section .0500,Meetings of the North Carolina State Bar

The proposed amendments revamp themanner and method of giving notice of theannual meeting of the State Bar. The pro-posed amendments also clarify the mannerand method for calling a special meeting ofthe State Bar.

Proposed Amendments to the Ruleson Meetings of the State BarCouncil

27 N.C.A.C. 1A, Section .0600,Meetings of the Council

The proposed amendments revamp themanner and method for giving notice of

regular meetings of the State Bar Council.They also clarify the manner and methodfor calling a special meeting of the council,including allowing notice to be given byemail or other electronic means. The pro-posed amendments allow members to par-ticipate in special meetings by audio orvideo conferencing or other electronicmethod, and give the president authority toallow attendance at regular meetings byaudio or video conferencing on a discre-tionary basis.

Proposed Amendments to the Ruleon Standing Committees of theCouncil

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

The proposed amendments eliminate theTechnology and Social Media Committeeand establish the Communications Com-mittee as a standing committee of the StateBar Council. The proposed amendmentsalso eliminate a provision in the rule defin-ing the authority of the AdministrativeCommittee relative to a “PublicationsBoard.” The State Bar’s publications willfunction under the auspices of the Com-munications Committee going forward.

Proposed Amendments to the Rulesand Regulations Governing theContinuing Legal Education Program

27 N.C.A.C. 1D, Section .1500, RulesGoverning the Administration of theContinuing Legal Education Program; andSection .1600, Regulations Governing theAdministration of the Continuing LegalEducation Program

The proposed amendments replace thedesignation “accredited sponsor,” a designa-tion that is potentially misleading as to theextent to which such sponsors are vetted bythe Board of Continuing Legal Education,with the designation “registered sponsor” andreconcile the requirements for designation as aregistered CLE sponsor with current practice.

Proposed Amendments to the Rulesfor the Specialization Program

27 N.C.A.C. 1D, Section .1700, The Planof Legal Specialization; and Section .2300,Certification Standards for the EstatePlanning and Probate Law Specialty

A number of amendments are proposed toThe Plan of Legal Specialization. Proposedamendments to the rule on mandatory revoca-tion and suspension of certification due to pro-fessional discipline will provide for the auto-

On November 8, 2017, and December7, 2017, the North Carolina SupremeCourt approved the following amend-ments.

Amendments to the Rules GoverningAdmission to the Practice of Law

The comprehensive rewrite by theBoard of Law Examiners of the RulesGoverning the Admission to the Practice ofLaw includes amendments expressly adopt-ing the Uniform Bar Examination as theofficial bar examination for general appli-cants to the North Carolina bar. (For the

complete text see the Summer 2017 editionof the Journal, or visit the State Bar web-site.)

Amendment to The Plan forCertification of Paralegals

27 N.C.A.C. 1G, The Plan forCertification of Paralegals

A new rule creates a retired status forcertified paralegals subject to certain condi-tions. (For the complete text see the Spring2017 edition of the Journal, or visit theState Bar website.)

R U L E A M E N D M E N T S

Highlights· The CLE Board proposes the addi-tion of an hour of technology train-ing to the annual CLE requirements.· Proposed amendments to Rule ofProfessional Conduct 5.4, whichwould add an additional exemptionto the prohibition on fee-splitting,continues to be studied by the EthicsCommittee.

Amendments Approved by the Supreme Court

46 SPRING 2018

matic revocation of specialty certification if anypart of a disciplinary suspension is active; if theentire disciplinary suspension is stayed, certifi-cation is suspended and shall not be reinstateduntil the completion of the entire stayed disci-plinary suspension. For specialty certification tobe reinstated, the specialist must apply for andsatisfy all requirements for recertification.

Proposed amendments to the rule on areasof practice add specialties recently approved bythe Supreme Court to the list of recognizedspecialties and correct an oversight in the listrelative to the criminal law specialty.

Proposed amendments to the standards forthe estate planning and probate law specialtyallow service as a trust officer, gift planningofficer, or other employment that’s outside pri-vate practice to satisfy the substantial involve-ment standard for recertification, provided thespecialist’s work duties are primarily in the areaof estate planning or trust administration.

Proposed Amendments to the Plan forCertification of Paralegals

27 N.C.A.C. 1G, Section .0100, The Plan

for Certification of ParalegalsThe proposed amendments to the Plan

for Certification of Paralegals allow appli-cants for paralegal certification who holdnational certifications from qualified nation-al paralegal organizations (including theCLA/CP certification from the NationalAssociation of Paralegals and the PACE-Registered Paralegal Certification from theNational Federation of ParalegalAssociations) to sit for the certification examalthough the applicants have not satisfied theeducational requirement for certification.The proposed amendments also delete a pro-vision that allowed alternative qualificationsfor certification during the first two years ofthe program. Another proposed amendmentrequires certain qualified paralegal studiesprograms to include the equivalent of onesemester’s credit in legal ethics.

Proposed Amendments to the Rules ofProfessional Conduct

27 N.C.A.C. 2, The Rules of ProfessionalConduct

Proposed amendments to Rule 1.15,Safekeeping Property, and its subparts specifythat certain restrictions on the authority tosign trust account checks also apply to the ini-tiation of electronic transfers from trustaccounts. The proposed amendments define“electronic transfer” and make clear thatlawyers are permitted to sign trust accountchecks using a “digital signature” as defined inthe Code of Federal Regulations. Further pro-posed amendments to Rule 1.15 reduce thenumber of quarterly reviews of fiduciaryaccounts that must be performed by lawyerswho manage more than ten fiduciary accountson the assumption that the accounts are man-aged in the same manner and reviews of a ran-dom sample of the accounts is sufficient tofacilitate the early detection of internal theftand correction of errors.

A proposed comprehensive revision ofRule 3.5, Impartiality and Decorum of theTribunal, improves the clarity of the ruleoverall and provides better guidance on theprohibition on ex parte communicationswith a judge.

Proposed AmendmentsAt its meeting on January 26, 2018, the

council voted to publish the following pro-posed amendments to the governing rules ofthe State Bar for comment from the membersof the Bar:

Proposed Amendments to theRequirements for Reinstatement fromInactive Status and AdministrativeSuspension

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

The proposed amendments require alawyer petitioning for reinstatement to com-plete the mandatory CLE hours for the year inwhich the lawyer went inactive or was admin-istratively suspended if inactive or suspendedstatus was granted on or after July 1.

.0902 Reinstatement from Inactive Status(a) Eligibility to Apply for Reinstatement ...(c) Requirements for Reinstatement(1) Completion of Petition ...(2) CLE Requirements for Calendar YearBefore Inactive

Unless the member was exempt from suchrequirements pursuant to Rule .1517 ofthis subchapter or is subject to the require-ments in paragraph (c)(5) of this rule, themember must satisfy the minimum con-tinuing legal education requirements, as setforth in Rule .1518 of this subchapter, forthe calendar year immediately precedingthe calendar year in which the memberwas transferred to inactive status (the “sub-ject year”) if such transfer occurred on orafter July 1 of the subject year, includingany deficit from a prior calendar year thatwas carried forward and recorded in themember’s CLE record for the subject year.(3) Character and Fitness to Practice ...(4) Additional CLE Requirements.If more than 1 year has elapsed betweenthe date of the entry of the order transfer-ring the member to inactive status and thedate that the petition is filed, the membermust complete 12 hours of approved CLEfor each year that the member was inactiveup to a maximum of 7 years. The CLEhours must be completed within 2 years

prior to filing the petition. For each 12-hour increment, 6 hours may be takenonline and 2 hours must be earned byattending courses in the areas of profes-sional responsibility and/or professional-ism. If during the period of inactivity themember complied with mandatory CLErequirements of another state where themember is licensed, those CLE credithours may be applied to the requirementsunder this provision without regard towhether they were taken during the 2 yearsprior to filing the petition. (5) Bar Exam Requirement If Inactive 7 orMore Years ...(d) Service of Reinstatement Petition ...

.0904 Reinstatement from Suspension(a) Compliance Within 30 Days of Service

of Suspension Order...(d) Requirements for Reinstatement(1) Completion of Petition...(2) CLE Requirements for Calendar YearsBefore Suspended Unless the member was exempt from such


requirements pursuant to Rule .1517 ofthis subchapter or is subject to the require-ments in paragraph (d)(4) of this rule, themember must satisfy the minimum con-tinuing legal education (CLE) require-ments, as set forth in Rule .1518 of thissubchapter, for the calendar year immedi-ately preceding the year in which themember was suspended (the “subjectyear”) if such transfer occurred on or afterJuly 1 of the subject year, including anydeficit from a prior year that was carriedforward and recorded in the member’sCLE record for the subject year. The mem-ber shall also sign and file any delinquentCLE annual report form. (3) Additional CLE Requirements If more than 1 year has elapsed betweenthe effective date of the suspension orderand the date upon which the reinstatementpetition is filed, the member must com-plete 12 hours of approved CLE for eachyear that the member was suspended up toa maximum of 7 years. The CLE must becompleted within 2 years prior to filing thepetition. For each 12-hour increment, 6hours may be taken online and 2 hoursmust be earned by attending courses in theareas of professional responsibility and/orprofessionalism. If during the period ofsuspension the member complied withmandatory CLE requirements of anotherstate where the member is licensed, thoseCLE credit hours may be applied to therequirements under this provision withoutregard to whether they were taken duringthe 2 years prior to filing the petition.(4) Bar Exam Requirement If Suspended 7or More Years...(e) Procedure for Review of Reinstatement

Petition ...

Proposed Amendments to the AnnualCLE Requirements

27 N.C.A.C. 1D, Section .1500, RulesGoverning the Administration of theContinuing Legal Education Program; andSection .1600, Regulations Governing theAdministration of the Continuing LegalEducation Program

The proposed amendments provide a defi-nition of “technology training” and add onecredit hour in technology training to the annu-al CLE requirements. If adopted, the require-ment will go into effect in 2019. To improveconsistency, proposed amendments also substi-tute the word “program” for other descriptors

such as CLE “course” or “activity.”

.1501, Scope, Purpose, and Definitions(a) ...(c) Definitions:(1) ...(17) “Technology training” shall mean aprogram, or a segment of a program,devoted to education on informationtechnology (IT) or cybersecurity (seeN.C. Gen. Stat. §143B-1320(a)(11), orsuccessor statutory provision, for a defini-tion of “information technology”),including education on an informationtechnology product, device, platform,application, or other tool, process, ormethodology. To be eligible for CLEaccreditation as a technology trainingprogram, the program must satisfy theaccreditation standards in Rule .1519 ofthis subchapter: specifically, the primaryobjective of the program must be toincrease the participant’s professionalcompetence and proficiency as a lawyer.Such programs include, but are not limit-ed to, education on the following: a) anIT tool, process, or methodologydesigned to perform tasks that are specificor uniquely suited to the practice of law;b) using a generic IT tool process ormethodology to increase the efficiency ofperforming tasks necessary to the practiceof law; c) the investigation, collection,and introduction of social media evi-dence; d) e-discovery; e) electronic filingof legal documents; f) digital forensics forlegal investigation or litigation; and g)practice management software. See Rule.1602 of this subchapter for additionalinformation on accreditation of technolo-gy training programs.(18) (17) ...

.1518, Continuing Legal Education (a) Annual Requirement. Each active

member subject to these rules shall complete12 hours of approved continuing legal educa-tion during each calendar year beginningJanuary 1, 1988, as provided by these rulesand the regulations adopted thereunder.

Of the 12 hours:(1) at least 2 hours shall be devoted to theareas of professional responsibility or pro-fessionalism or any combination thereof;and(2) at least 1 hour shall be devoted totechnology training as defined in Rule

.1501(c)(17) of this subchapter, and fur-ther explained in Rule .1602(e) of thissubchapter; and(3) (2) effective January 1, 2002, at leastonce every three calendar years, each mem-ber shall complete an hour of continuinglegal education instruction on substanceabuse and debilitating mental conditionsas defined in Rule .1602 (a). This hourshall be credited to the annual 12-hourrequirement but shall be in addition to theannual professional responsibility/profes-sionalism requirement. To satisfy therequirement, a member must attend anaccredited program on substance abuseand debilitating mental conditions that isat least one hour long.(b) Carryover ...

.1602, Course Content Requirements(a) ...(c) Law Practice Management Courses Pro-

grams - A CLE accredited course program onlaw practice management must satisfy the ac-creditation standards set forth in Rule .1519of this subchapter with the primary objectiveof increasing the participant’s professional com-petence and proficiency as a lawyer. The subjectmatter presented in an accredited course pro-

CommentsThe State Bar welcomes your com-

ments regarding proposed amendmentsto the rules. Please send your writtencomments to L. Thomas Lunsford II,The North Carolina State Bar, PO Box25908, Raleigh, NC 27611.

The ProcessProposed amendments to the Rules

of the North Carolina State Bar are pub-lished for comment in the Journal. Theyare considered for adoption by the coun-cil at the succeeding quarterly meeting.If adopted, they are submitted to theNorth Carolina Supreme Court forapproval. Unless otherwise noted, pro-posed additions to rules are printed inbold and underlined; deletions areinterlined.

48 SPRING 2018

gram on law practice management shall bear adirect relationship to either substantive legalissues in managing a law practice or a lawyer’sprofessional responsibilities, including avoid-ance of conflicts of interest, protecting confi-dential client information, supervising subor-dinate lawyers and nonlawyers, feearrangements, managing a trust account, ethicallegal advertising, and malpractice avoidance.The following are illustrative, non-exclusive ex-amples of subject matter that may earn CLEcredit: employment law relating to lawyers andlaw practice; business law relating to the for-mation and operation of a law firm; calendars,dockets and tickler systems; conflict screeningand avoidance systems; law office disaster plan-ning; handling of client files; communicatingwith clients; and trust accounting. If appropri-ate, a law practice management course programmay qualify for professional responsibility(ethics) CLE credit. The following are illustra-tive, non-exclusive examples of subject matterthat will NOT receive CLE credit: marketing;networking/rainmaking; client cultivation; in-creasing productivity; developing a businessplan; improving the profitability of a law prac-tice; selling a law practice; and purchasing officeequipment (including computer and account-ing systems).

(d) Skills and Training Courses Programs -A course program that teaches a skill specificto the practice of law may be accredited forCLE if it satisfies the accreditation standardsset forth in Rule .1519 of this subchapter withthe primary objective of increasing the partic-ipant’s professional competence and proficien-cy as a lawyer. The following are illustrative,

non-exclusive examplesof subject matter thatmay earn CLE credit:

legal writing; oral argument; courtroom pres-entation; and legal research. A course programthat provides general instruction in non-legalskills shall NOT be accredited. The followingare illustrative, non-exclusive examples of sub-ject matter that will NOT receive CLE credit:learning to use software for an application thatis not specific to the practice of law (e.g. wordprocessing); learning to use office equipment(except as permitted by paragraph (e) of thisrule); public speaking; speed reading; efficien-cy training; personal money management orinvesting; career building; marketing; andgeneral office management techniques.

(e) Technology Training CoursesPrograms – A course on a specific informa-tion technology product, device, platform,application, or other technology solution (ITsolution) may be accredited for CLE if thecourse satisfies the accreditation standards inRule .1519 of this subchapter; specifically, theprimary objective of the course must be toincrease the participant’s professional compe-tence and proficiency as a lawyer. The follow-ing are illustrative, non-exclusive examples ofcourses that may earn CLE credit: electronicdiscovery software for litigation; documentautomation/assembly software; documentmanagement software; practice managementsoftware; digital forensics for litigation; anddigital security. A course program on theselection of an IT solution information tech-nology (IT) product, device, platform, appli-cation, web-based technology, or other tech-nology tool, process, or methodology, or theuse of an IT solution tool, process, ormethodology to enhance a lawyer’s proficien-cy as a lawyer or to improve law office man-agement may be accredited as technologytraining if the requirements of paragraphs (c)and (d) of this rule are satisfied. A course pro-gram that provides general instruction on anIT solution tool, process, or methodologybut does not include instruction on the prac-tical application of the IT solution tool,process, or methodology to the practice oflaw shall not be accredited. The following areillustrative, non-exclusive examples of subjectmatter that will NOT receive CLE credit:generic education on how to use a tablet com-puter, laptop computer, or smart phone; train-ing courses on Microsoft Office, Excel, Access,Word, Adobe, etc., programs; and instructionin the use of a particular desktop or mobileoperating system. No credit will be given to acourse program that is sponsored by a manu-facturer, distributor, broker, or merchandiser

of the an IT solution tool, process, ormethodology unless the course is solelyabout using the IT solution tool, process, ormethodology to perform tasks necessary oruniquely suited to the practice of law andinformation about purchase arrangements isnot included in the accredited segment of theprogram. A sponsor may not accept compen-sation from a manufacturer, distributor, bro-ker, or merchandiser of an IT solution tool,process, or methodology in return for pre-senting a CLE program about the an IT solu-tion tool, process, or methodology.Presenters may include representatives of amanufacturer, distributor, broker, or mer-chandiser of the IT solution but they may notbe the only presenters at the course and theymay not determine the content of the course.

(f) ...

Proposed Amendments to the RulesGoverning the Administration of theContinuing Legal Education Program

27 N.C.A.C. 1D, Section .1500, RulesGoverning the Administration of theContinuing Legal Education Program

Proposed amendments to Rule .1522 willspecify that members may file their annualreport forms online and will allow the StateBar to email notice to the membership thatthe forms have been posted to members’online records in lieu of mailing the forms.

.1522 Annual Report and CompliancePeriod

(a) Annual Written Report. Commencingin 1989, each active member of the NorthCarolina State Bar shall provide an annualwritten report to the North Carolina State Barin such form as the board shall prescribe byregulation concerning compliance with thecontinuing legal education program for thepreceding year or declaring an exemptionunder Rule .1517 of this subchapter. Theannual report form shall be corrected, if nec-essary, signed by the member, and promptlyreturned to the State Bar via mail or online fil-ing. Upon receipt via mail or online filing ofa signed annual report form, appropriateadjustments shall be made to the member’scontinuing legal education record with theState Bar...

(b) Compliance Period ...(c) Report. Prior to January 31 of each

year, the prescribed report form concerningcompliance with the continuing legal educa-tion program for the preceding year shall be

Lawyer’s

Handbook

Preorder

You can order ahard copy by submitting an order

form (found on the State Bar’s websiteat bit.ly/2ejzJwD) by March 21, 2018.The digital version will still be available

for download and is free of charge.


available on the State Bar’s CLE website anda notice of its posting shall be mailed oremailed to all active members of the NorthCarolina State Bar.

(d) Late Filing Penalty ...

Proposed Amendments to Rules forthe Paralegal Certification Program

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

Proposed amendments to The Plan forCertification of Paralegals allow an additionalone-year term for service as the chair of thecertification committee and establish a vicechair position for the committee. In addition,proposed amendments to Rule .0122 elimi-nate the rights of an applicant to review afailed examination and to request a review bythe board of a failed examination.

.0118 Certification Committee(a) The board shall establish a separate cer-

tification committee. The certification com-mittee shall be composed of seven membersappointed by the board, one of whom shall bedesignated annually by the chairperson of theboard as chairperson of the certification com-mittee. At least two members of the commit-tee shall be lawyers, licensed and currently ingood standing to practice law in this state, andtwo members of the committee shall be certi-fied paralegals. The remaining members of thecommittee shall be either lawyers, licensedand currently in good standing to practice lawin this state, or certified paralegals. The para-legals appointed to the inaugural committeeshall be exempt from the certification require-ment during their initial term but each suchmember shall be eligible, during the shorter ofsuch initial term or the alternative qualifica-tion period, for certification by the boardupon the board’s determination that the com-mittee member meets the requirements forcertification in [now repealed] Rule .0119(b).[Note that proposed amendments to Rule.0119 now pending the approval of theSupreme Court delete paragraph (b).]

(b) The chair of the Board of ParalegalCertification shall appoint one member ofthe committee to serve for a one-year term aschair of the committee and one member ofthe committee to serve for a one-year term asvice chair of the committee. The chair andvice chair may be reappointed to multipleterms in these positions.

(b) (c) Members shall hold office for threeyears, except those members initially appointed

who shall serve as hereinafter designated...(c) (d) ...

.0122 Right To Review And Appeal ToCouncil

(a) Lapsed Certification ...(c) Failure of Written Examination.

Within 30 days of the mailing of the noticefrom the board’s executive director that anindividual has failed the written examination,the individual may review his or her examina-tion upon the condition that the individualwill not take the examination again until suchtime as the entire content of the examinationhas been replaced. Review of the examinationshall be at the office of the board at a time des-ignated by the executive director. The individ-ual shall be allowed not more than three hoursfor such review and shall not remove theexamination from the board’s office or makephotocopies of any part of the examination.

(1) Request for Review by the Board.Within 30 days of individual’s review of hisor her examination, the individual mayrequest review by the board pursuant tothe procedures set forth in paragraph (c) ofthis rule. The request should set out indetail the area or areas which, in the opin-ion of the individual, have been incorrectlygraded. Supporting information may befiled to substantiate the individual’s claim.

Proposed Amendments to the RulesGoverning the Admission to thePractice of Law in North Carolina

NC Board of Law Examiners, Section.0500, Requirements for Applicants

The Board of Law Examiners has pro-posed an amendment to its rules that wouldprovide a time period within which a generalapplicant would be required to successfullycomplete the state-specific component of theUniform Bar Examination. See sidebar forfurther explanation.

.0501 Requirements for GeneralApplicants

As a prerequisite to being licensed by theBoard to practice law in the State of NorthCarolina, a general applicant shall:

(1) possess the qualifications of characterand general fitness requisite for an attorneyand counselor-at-law, and be of good moralcharacter and entitled to the high regard andconfidence of the public and have satisfied therequirements of Section .0600 of this Chapterat the time the license is issued;

(2) possess the legal educational qualifica-tions as prescribed in Section .0700 of thisChapter;

(3) be at least eighteen (18) years of age;(4) have filed formal application as a gen-

eral applicant in accordance with Section.0400 of this Chapter;

(5) pass the written bar examination pre-scribed in Section .0900 of this Chapter, pro-vided that an applicant who has failed toachieve licensure for any reason within threeyears after the date of the written bar examina-tion in which the applicant received a passingscore will be required to take and pass theexamination again before being admitted as ageneral applicant;

(6) have taken and passed the MultistateProfessional Responsibility Examination with-in the twenty-four (24) month period nextpreceding the beginning day of the written barexamination which applicant passes as pre-scribed above, or shall take and pass theMultistate Professional ResponsibilityExamination within the twelve (12) monthperiod thereafter; the time limits are tolled fora period not exceeding four (4) years for anyapplicant who is a service member as definedin the Service Members Civil Relief Act, 50U.S.C. Appx. § 511, while engaged in activeservice as defined in 10 U.S.C. § 101, andwho provides a letter or other communicationfrom the service member’s commanding offi-cer stating that the service member’s currentmilitary duty prevents attendance for theexamination, stating that military leave is notauthorized for the service member at the timeof the letter, and stating when the servicemember would be authorized military leave totake the examination.

(7) if the applicant is or has been a licensedattorney, be in good standing in each state, ter-ritory of the United Sates, or the District ofColumbia, in which the applicant is or hasbeen licensed to practice law and not underany charges of misconduct while the applica-tion is ending before the Board.

(a) For purposes of this rule, an applicant is“in good standing” in a jurisdiction if:

(i) the applicant is an active member ofthe bar of the jurisdiction and the juris-diction issues a certificate attesting to theapplicant’s good standing therein; or(ii) the applicant was formerly a memberof the jurisdiction and the jurisdictioncertifies the applicant was in good stand-ing at the time that the applicant ceasedto be a member; and

50 SPRING 2018

(b) if the jurisdiction in which the applicantis inactive or was formerly a member willnot certify the applicant’s good standingsolely because of the non-payment of dues,the Board, in its discretion, may waive suchcertification from that jurisdiction.(8) have successfully completed the State-

Specific Component, consisting of the coursein North Carolina law prescribed by theBoard., within the twenty-four (24) monthperiod next preceding the beginning day ofthe written bar examination which applicantpasses as prescribed above, or within thetwelve (12) month period thereafter; the timelimits are tolled for a period not exceedingfour (4) years for any applicant who is a serv-ice member as defined in the Service Mem-bers Civil Relief Act, 50 U.S.C. Appx. § 511,

while engaged in active service as defined in10 U.S.C. § 101, and who provides a letteror other communication from the servicemember’s commanding officer stating thatthe service member’s current military dutyprevents the service member from completingthe State-Specific Component within the 24month period next preceding the beginningday of the written bar examination whichapplicant passes as prescribed above, or withinthe 12 month period thereafter.

Proposed Amendments to the Rules ofProfessional Conduct Retained byEthics Committee for Further Study

27 N.C.A.C. 2, The Rules of ProfessionalConduct

In the Fall 2017 edition of the Journal, a

proposed new comment to Rule 1.15,Safekeeping Property, was published. The newcomment would explain the due diligencerequired if a lawyer uses an intermediary (suchas a bank, credit card processor, or litigationfunding entity) to collect a fee. Also publishedfor comment in the Fall Journal were pro-posed amendments to Rule 5.4, ProfessionalIndependence of Lawyer. These proposedamendments add an exception to the prohibi-tion on fee-sharing that allows a lawyer to paya portion of a legal fee to a credit card proces-sor, group advertising provider, or online plat-form for hiring a lawyer if the business rela-tionship will not interfere with the lawyer’sprofessional judgment. At the October 26,2017, meeting of the Executive Committee ofthe council, it was determined that both pro-posed rule amendments should be returned tothe Ethics Committee for further study. TheEthics Committee continues to study the pro-posed rule amendments. n

NCBLE Proposed Amendment to Rule .0501 of the Rules GoverningAdmission to the Practice of Law in North Carolina - Executive Summary

Proposed revisions to §.0501(8) of the Rules Governing Admission to the Practiceof Law in North Carolina were approved by the Board of Law Examiners at its October2017 meeting. Correcting an omission in the recent Rules revision, the proposedchange specifies a time frame for General Applicants to successfully complete the new“State-Specific Component,” which was added as a licensure requirement in the recent-ly approved revision to the Rules adopting the Uniform Bar Exam. (“GeneralApplicants” are those applicants who seek admission to practice in North Carolina bytaking the bar exam here, rather than by comity or by transferring a UBE scoreobtained in another jurisdiction.)

The State-Specific Component is a course of online instruction covering specificareas of North Carolina law which differ from the “general” law tested on the UBE. Itaddresses the likelihood that applicants will not have studied North Carolina-specificlaw in preparing to take the UBE. Applicants will view six separate training modules,dealing with six distinct areas of North Carolina law. At the end of each module, theywill have to answer—correctly—several “hurdle” questions, designed to confirm thatthe applicant paid attention to the content they were exposed to. For the State-SpecificComponent to serve its intended function of helping prepare applicants to practice inNorth Carolina, it is important that the course content be reasonably fresh in the appli-cant’s mind at the time of licensure.

To accomplish this, the board adopted the same procedure used in the existinglicensing requirement for General Applicants regarding the Multistate ProfessionalResponsibility Exam (MPRE). General Applicants have been required to pass theMPRE within the 24 months preceding their passage of the North Carolina bar examor within 12 months thereafter. The 24-month period accommodates the possibilitythat, while applicants will likely have taken the MPRE before sitting for our bar exam,they may not pass our exam on their first try. The 12-month period gives someone whohas passed our bar exam, but not yet taken and passed the MPRE, a reasonable oppor-tunity after passing our bar exam to pass the MPRE. The proposed amendment wouldsimilarly require General Applicants to successfully complete the State-SpecificComponent within 24 months before passing the UBE in our jurisdiction, or within12 months thereafter. The proposed new language tracks the language in §.0501 (6)regarding the MPRE.

Proposed Opinions (cont.)the client. The lawyer may not allow his ownfinancial interests to interfere with his dutyto act in the best interests of his client. Rule1.7(a) (concurrent conflict exists if represen-tation of client is materially limited by per-sonal interest of lawyer). For example, in2006 FEO 2, the Ethics Committee con-cluded that a lawyer may not refer a client toa company that pays a cash lump sum to aclient in exchange for the client’s interest in astructured settlement merely as a means ofpaying the lawyer for his legal services.

A lawyer does not put his own financialinterests ahead of those of his client by pro-viding payment options to a client whorequires financial assistance in paying thelawyer’s legal fees. However, given thelawyer’s self interest in being paid in full forhis services, the lawyer may not recommendone payment option over another.Therefore, Lawyer may offer clients on-siteaccess to Company as a payment option forLawyer’s legal fees—along with any otherpotential payment options—so long asLawyer is satisfied that the financial arrange-ments offered by Company are legal, Lawyerreceives no consideration from Company,and Lawyer does not recommend one pay-ment option over another. n


B A R U P D A T E S

Client Security Fund Reimburses Victims

At its January 25, 2018, meeting, the NorthCarolina State Bar Client Security Fund Boardof Trustees approved payments of $308,795.48to 16 applicants who suffered financial lossesdue to the misconduct of North Carolinalawyers.

The payments authorized were:1. An award of $840 to a former client of

Gary M. Ballance of Warrenton. The boarddetermined that Ballance was retained in 2012to dispose of several outstanding 2009 traffictickets in several counties for a client. Ballancehandled some of the cases in 2012 and at-tempted to refer the client to attorneys in theother counties for the others. The client soughtBallance’s help with handling the remainingtickets in 2015. The client paid Ballance forthose services in 2016 after his disbarment.Ballance failed to provide, and could not pro-vide, any valuable legal services for the fee paid.Ballance was disbarred on November 13, 2015.The board previously reimbursed 13 other Bal-lance clients a total of $19,806.

2. An award of $46,500 to an applicantwho suffered a loss because of Dee W. Bray Jr.of Fayetteville. The board determined that Braywas retained to represent the applicant’s sonwho was charged with first degree murder andother serious felonies. The applicant made pay-ments towards the quoted $45,000 flat fee,knowing the fee would go up to $70,000 if thecharge became a capital crime. When the DAadvised Bray that the murder charge would bea capital case, Bray demanded full payment ofthe non-capital fee plus payments on the capitalfee. The client paid Bray $46,500. Bray wasplaced on disability inactive status by the seniorresident judge prior to performing any mean-ingful legal services for the applicant’s son. Braywas placed on disability inactive status on Feb-ruary 2, 2017. The board previously reimbursedten other applicants a total of $53,600.

3. An award of $6,400 to a former client ofDee W. Bray Jr. The board determined thatBray was retained to represent a client on afirearm felony charge, a misdemeanor offense,a DWI, a DWLR, and other related charges.The client made payments towards the $8,500

quoted fee. Because the client was indicted infederal court on the firearm felony, the statedropped the state charges against him. Brayprovided no meaningful services on the statecharges that were dropped or the federal chargeprior to being placed on disability inactive status.

4. An award of $25,500 to a former clientof Dee W. Bray Jr. The board determined thatBray was retained to represent a client chargedwith murder and other serious felonies. Theclient’s brother made payments towards Bray’squoted fee. Bray failed to provide any mean-ingful legal services for the client prior to beingplaced on disability inactive status.

5. An award of $17,500 to a former clientof Dee W. Bray Jr. The board determined thatBray was retained to defend a client chargedwith serious felonies. The client made paymenttowards the quoted fee. Bray was placed on dis-ability inactive status without providing anymeaningful legal services on the client’s behalf.

6. An award of $4,500 to a former client ofDee W. Bray Jr. The board determined thatBray was retained to defend a client chargedwith first degree murder and another felony.The client’s family made payments towardsBray’s quoted fee. Bray failed to provide anymeaningful legal services for the client prior tobeing placed on disability inactive status.

7. An award of $10,000 to a former clientof Dee W. Bray Jr. The board determined thatBray was retained to represent a client on seriouscriminal charges. The client paid the entire feequoted. Bray was placed on disability inactivestatus prior to performing any meaningful legalservices on the client’s behalf.

8. An award of $1,550 to a former client ofDee W. Bray Jr. The board determined thatBray was retained to represent a client on drugfelonies. The client made payments towardsthe $7,500 quoted fee. Bray failed to provideany meaningful services for the client prior tobeing placed on disability inactive status.

9. An award of $1,675 to former client ofPaige C. Cabe of Sanford. The board deter-mined that Cabe was retained to represent aclient in obtaining full custody of her grandsonand in obtaining a passport for her grandson.

The client paid Cabe’s $1,500 fee plus $175 incosts. Cabe failed to provide any meaningfullegal services and failed to file anything on theclient’s behalf. The board previously reimbursedone other Cabe client a total of $275.

10. An award of $1,000 to a former clientof Michael S. Eldredge formerly of Lexington.The board determined that Eldredge was re-tained to represent a client in a custody/do-mestic violence matter and later also retainedto handle the client’s traffic citation. Eldredgeprovided no meaningful legal services for theclient prior to being disbarred. Eldredge wasdisbarred August 17, 2017. The board previ-ously reimbursed three other Eldredge clientsa total of $69,090.

11. An award of $5,000 to a former clientof Michael S. Eldredge. The board determinedthat Eldredge was retained to represent a client’sson’s estate in recovering damages for his fatalinjuries sustained in an accident. Eldredge re-ceived a settlement check from the insurancecompany, forged the client’s signature as per-sonal representative on the check, and depositedthe funds into his trust account. Eldredge failedto pay any of the funds to the estate. Due tomisappropriation, Eldredge’s trust account bal-ance is insufficient to cover his client obligations.

12. An award of $100,000 to an applicantwho suffered a loss caused by H. Trade Elkinsof Hendersonville. The board determined thatthe applicant filed a partition proceedingagainst her brother to sell property they inher-ited. The parties agreed to sell the property atpublic auction and Elkins was the appointedcommissioner. The applicant’s brother was thehighest bidder and paid his half of the saleprice plus half of the expenses of the sale toElkins. Elkins failed to distribute to the appli-cant her share of the sale proceeds. Due tomisappropriation, Elkins’ trust account balancewas insufficient to pay all his client obligations.

13. An award of $65,271.60 to an applicantwho suffered a loss caused by H. Trade Elkins.The board determined that the applicant andhis sister sold property they inherited at public


52 SPRING 2018

B A R U P D A T E S

Judge Gary Lynn LocklearJudge Gary Lynn Locklear was presented

with the John B. McMillan DistinguishedService Award at the Annual Buck Harris Din-ner on December 8, 2017. The award waspresented by North Carolina State Bar Presi-dent John Silverstein.

Judge Locklear received his undergraduatedegree from the University of North Carolinaat Pembroke and his master’s in business andeconomics from Appalachian State University.He graduated from UNC Law School in 1979.

Upon graduation, Judge Locklear returnedto Robeson County and worked for the Dis-trict Attorney’s Office for three years. He leftthe DA's Office and worked in private practicefor six years before becoming a district courtjudge in 1988. During his tenure on the dis-trict court bench he served as chief districtcourt judge for five years. In 2002 he was ap-pointed to the superior court bench and re-mained there until he retired in 2009.

Judge Locklear has served as the chief justiceof the Lumbee Tribe, and he currently serves asthe town attorney for the town of Pembroke.

Especially noteworthy among Judge Lock-lear’s accomplishments during his professionallife is the implementation of and emphasisplaced upon Law Day and Law Day activitiesfor the Robeson County Bar. Since 2000 theRobeson Bar, under the leadership and guid-ance of Judge Locklear, has performed serviceprojects each and every Law Day. As a part ofthe Law Day activities, Judge Locklear enlistedthe assistance of the local probation and paroleoffice, the sheriff ’s department, the police de-partment, and the local state highway patrolin order to send a message that the judicial sys-tem and all the law enforcement agencies deeplycare about the welfare of those in the commu-nity. Judge Locklear’s visionary leadershipgreatly improved the working relationshipamong all of these entities that are vital to thejudicial system, and greatly enhanced race re-lations in the Robeson County community.

Judge Locklear’s contributions to the localbar, the legal profession, and the community

as a whole make him a most worthy recipientof the Johns B. McMillan Distinguished Serv-ice Award.

Joseph G. MaddreyAttorney Joseph G. Maddrey received the

John B. McMillan Distinguished ServiceAward on Thursday December 7, 2017, at thePennrose Country Club in Reidsville, NC.The award was presented by North CarolinaState Bar President John Silverstein.

Mr. Maddrey graduated from Wake ForestUniversity in 1964 with a degree in historyand political science. He received his JD fromWake Forest Law School in 1967. His legalcareer was put on hold while he served in theUnited States Army in Vietnam. Uponreturning to North Carolina in 1969, Mr.Maddrey joined the Secretary of State’s Officeunder Thad Eure. He later moved to Eden,NC, to begin his private practice, and ulti-mately became a certified specialist in the areaof residential real property.

Mr. Maddrey has devoted many hours ofservice to the North Carolina State Bar. Heserved as the State Bar councilor for JudicialDistrict 17A for five terms. He also served as amember of the State Bar’s DisciplinaryHearing Commission for six years. Mr.Maddrey also serves on numerous boards inhis community and generously donates hislegal services to Habitat for Humanity, theEden Chamber of Commerce, and manychurches and nonprofits.

Mr. Maddrey has contributed greatly to hiscountry, his colleagues, his profession, and hiscommunity. He is a most deserving recipientof the John B. McMillan DistinguishedService Award.

Nominations SoughtMembers of the Bar are encouraged to

nominate colleagues who have demonstratedoutstanding service to the profession. Thenomination form is available on the State Bar’swebsite, ncbar.gov. Please direct questions toSuzanne Lever, [email protected]. n

John B. McMillan Distinguished Service Award

Client Security Fund (cont.)auction in a partition proceeding. Elkins was the appointed commissioner. The applicantwas the highest bidder and paid his half of thesale price plus half of the expenses of the saleto Elkins. After taking his commissioner fee,Elkins failed to distribute the remaining saleproceeds as shown on the final report of thesale. Elkins gambled away the sale proceeds.The court entered an order disgorging Elkins’commission. The applicant’s reimbursementwill be distributed to the recipients listed inthe report of sale and the order of disgorgement.

14. An award of $20,233.88 to a formerclient of Johnny S. Gaskins of Raleigh. Theboard determined that Gaskins was retainedto handle a client’s personal injury claim. Gask-ins settled the client’s matter without his knowl-edge or consent, forged his client’s signatureon the settlement check, and embezzled thefunds. Gaskins pled guilty to forgery and em-bezzlement and was ordered to pay criminalrestitution. Gaskins was disbarred on December2, 2017. Steps will be taken to ensure that theclient’s restitution will be redirected to theClient Security Fund.

15. An award of $1,500 to a former clientof Christopher E. Greene of Charlotte. Theboard determined that Greene was retainedto handle a client’s immigration matter. Beforethe client could finish making payments to-wards the retainer and provide the necessaryinformation to get a deportation waiver,Greene surrendered his law license. Greenewas disbarred on February 11, 2017. Theboard previously reimbursed five other Greeneclients a total of $12,810.

16. An award of $1,325.00 to a formerclient of Christopher E. Greene. The boarddetermined that Greene was retained to get aclient a new visa before hers expired. The clientpaid Greene’s fee plus the visa application filingfee. Greene failed to file the application orprovide any meaningful legal services for thefee paid. n


B A R U P D A T E S

Law School Briefs

Campbell University School of LawCampbell Law student advocates take

moot court regional title—A trio ofCampbell Law student advocates collectedthe championship title at the NationalMoot Court Competition Fourth CircuitRegional. Chris Moore, Morgan Pierce, andEllen Williams won in the finals, punchingtheir ticket to the national finals in NewYork City in late January. The team alsoreceived the award for best brief.

Campbell Law professors named toBusiness NC Legal Elite—Assistant ClinicalProfessor Allegra Collins and Practitioner inResidence Matt Sawchak have been namedto Business North Carolina’s 2018 LegalElite. The annual list is composed from apoll of North Carolina attorneys. Collinsand Sawchak were both honored in theAppellate category.

Campbell Law admissions dean namedto SAPLA Board—Assistant Dean ofAdmissions Dexter Smith has been appoint-ed to the Southern Association of Pre-LawAdvisors Board of Directors. Smith, whowill serve a two-year term, will stand as oneof four law school representatives on theboard.

Campbell Law registrar named toAACRAO committee—Registrar Dr.Connie Shipman has been elected to serveon a committee within the AmericanAssociation of Collegiate Registrars &Admissions Officers. Shipman will stand asvice chair elect on the 2018-19 nominationsand elections committee.

Campbell Law Review hosted springsymposium on February 2—Campbell LawReview hosted its spring symposium onFebruary 2, ten years after the SupremeCourt’s landmark but controversial decisionin District of Columbia v. Heller, which rec-ognized that the Second Amendment pro-tects an individual’s right to keep and beararms for self-defense. “Heller After TenYears” will examine a wide range of issuesfacing the lower courts since Heller.

Duke Law SchoolThe Duke Endowment establishes distin-

guished dean’s chair at Duke Law—A $5million grant from The Duke Endowmenthas established a named chair for the dean’sposition at Duke Law School. The firstJames B. Duke and Benjamin N. DukeDean of the School of Law is David F. Levi,who has served as Duke Law’s dean and aprofessor of law since 2007. Levi plans tostep down as dean on June 30 and the uni-versity is conducting a search for his succes-sor, who will subsequently occupy theendowed chair. The chair honors DukeUniversity Founder James B. Duke, whoseindenture created The Duke Endowment,and his brother, Benjamin N. Duke, the pri-mary benefactor of the university and itspredecessor, Trinity College.

Duke announces new summer institutein The Hague—Duke Law School is part-nering with Leiden University in theNetherlands on a new four-week residentialsummer program in The Hague, a center ofinternational law and home to theInternational Criminal Court, thePermanent Court of Arbitration, and theinternational organization that regulateschemical weapons. The Duke-LeidenInstitute in Global and Transnational Lawwill run from June 17 to July 17 at Leiden’scampus in The Hague, with students livingin hotel-style accommodations nearby. Theprogram, featuring courses on such mattersas trade, criminal law, and human rights, isopen to applicants from any country whohave completed at least one year of legaleducation, including JD students from USlaw schools, prospective LLM students withprior law degrees from foreign institutions,and working lawyers, and is required forstudents pursuing Duke’s dual JD/LLM ininternational and comparative law. CurtisBradley, the William Van Alstyne Professorof Law and Professor of Public PolicyStudies and co-director of Duke Law’sCenter for International and ComparativeLaw, directs the institute.

Elon University School of LawChief Justice Mark Martin addresses

graduates at first Elon Law December grad-uation—Elon Law marked a milestonewhen it graduated the Class of December2017, the first 111 students to complete anew curriculum that emphasizes practicaltraining in a seven-trimester, 2.5-year pro-gram. The commencement on December16, 2017, was the first time a NorthCarolina Supreme Court chief justiceaddressed an Elon Law graduating class,which was notable in another regard: Nearlya quarter of graduates were African-American and, when combined with othersin the class who identify as racial minorities,represent the most diverse class in the histo-ry of the school.

Elon Law Review symposium exploresmany roles of mediation—More than 90people registered in October for an ElonLaw Review symposium that provided anupdate on recent case law and advisoryopinions in mediation and arbitration.With a theme of “Alternative DisputeResolution,” the 2017 symposium offeredcutting-edge discussions on mediator ethicsand standards across all areas and practicesof law. It also featured insights into the wayclients make decisions and how a greaterunderstanding of that process can be bene-ficial to attorneys.

Elon Law scholar elected to AmericanLaw Institute—An Elon Law professor witha distinguished history of First Amendmentscholarship has been elected to a highlyselective national organization that supportslegal research with the potential of reshap-ing the practice of law. Enrique Armijo,associate dean for academic affairs and anassociate professor of law, formally joinedthe The American Law Institute followingan October vote by its governing council.Armijo is the fourth Elon Law faculty mem-ber elected to the ALI, a list that includesDean Luke Bierman, Associate Dean SteveFriedland, and Professor Henry Gabriel.

54 SPRING 2018

North Carolina Central School ofLaw

On October 18, 2017, North CarolinaCentral University School of Law’s(NCCU) Intellectual Property LawInstitute (IPLI) launched the Post GrantPro Bono Project. The project purpose is toprovide minority law students with immer-sive, hands-on training in prosecuting postgrant matters. This first-of-its-kind pro-gram was created to encourage true innova-tion, support a more diverse bar, and pro-vide minority law students with valuableskills that have broad applicability fortoday’s employers.

Experienced post-grant practitionersfrom Fish, Jones Day, and SAS shared theirin-depth experience with NCCU law stu-dents and provided direct training in post-grant proceedings before the Patent Trialand Appeals Board (PTAB) during the“Post-Grant Clinic and Practice” course.Members of NCCU’s Board of Trustees andalumni supporters were present.

On November 4, 2017, The IntellectualProperty Law Institute hosted a mini-con-ference for lawyers, professionals, entrepre-neurs, inventors, students, artists, and writ-ers. The workshop featured seminars on allthings intellectual property. The CopyrightLaw for Artists, Writers, Musicians, &Performers lecturers provided a detailedexplanation of the parameters of copyrightlaw, including the rights of a copyright,length of protection, types of copyrightableworks, and infringement. Lecturers provid-ed a detailed explanation of the parametersof copyright law, including the rights of acopyright, length of protection, types ofcopyrightable works, and infringement. Thepresenters were: Shaunette Stokes, manag-ing martner, Stokes Law Group; and

Edward L. Timberlake Jr., trademark andcopyright lawyer, Forrest Firm, PC. Themoderator was: Marcus Shields, assistantpublic defender for the state of NorthCarolina.

Other session topics included: cryptocur-rency and cybersecurity; inventorship andpatent requirements for science and technol-ogy; trademarks and branding for businessowners; start-ups in the trenches: fundingand commercializing your business; mone-tizing your copyright: music and art licens-ing; and patents, innovation & entrepre-neurship. The conference included a varietyof cutting edge artist, and performancesfrom talented entertainers.

University of North Carolina School of Law

Earn CLE credit at The ABCs of BankingLaw, Charlotte, March 21; The BankingInstitute, Charlotte, March 22-23; and J.Nelson Young Tax Institute, Chapel Hill,April 26-27. Visit law.unc.edu/cle.

Students succeed in moot court team com-petitions—With the end of the Fall 2017competition season, UNC School of Law’sHolderness Moot Court continued to repre-sent the school with the same types of successthat it marked in the Fall of 2016:

• Finalist Award and Second PlaceOverall at the 10th annual National LatinoLaw Student Association Moot CourtCompetition by the Hispanic Latino/LatinaLaw School Association Appellate AdvocacyTeam, composed of Taylor Festa 3L andMartin Hodgins 3L.

• Sweet Sixteen Appearance at EmoryUniversity's National Civil Rights and CivilLiberties Moot Court Competition by oneof Holderness’ Julius Chambers Civil RightsAppellate Advocacy Teams, composed ofAustin Braxton 3L, Matthew Taylor 3L andAlexandra Snow 3L.

• Final Four Appearance and 3rd PlaceOverall at the William & Mary NegotiationsCompetition by one of Holderness’ 2LNegotiation Teams, composed of BraxtonReyna 2L and Jasmine Plott 2L.

• Elite Eight Appearance at the NYCBANational Moot Court Regional Competitionat the Fourth Circuit Court of Appeals byone of Holderness’ National AppellateAdvocacy Teams, composed of Rachel Rice3L, Rachel VanCamp 3L and Peter Kelly 3L.

• First Place in Preliminary Rounds, FinalFour Appearance and 4th Place Overall at

the ABA Arbitration Competition byHolderness’ newest team, the ArbitrationTeam, composed of Blake Benson 2L, SheriDickson 2L, Nicolas Eason 2L, and RebeccaFloyd 2L.

Carolina Law’s competitive squads werecoached and advised by more than fourdozen faculty members, practicing attorneys,and fellow students.

Wake Forest School of Law Wake Forest School of Law has

announced it will accept the GraduateRecord Exam (GRE), the most widely usedgraduate school exam, as an alternative to theLSAT for its JD admissions process begin-ning Fall 2018.

It is the first and only law school in theCarolinas to accept the LSAT.

The decision to accept the GRE as anadditional valid and reliable admission test inthe JD admissions process follows WakeForest School of Law’s role as one of the firstthree law schools in the nation—along withthe University of Arizona James E. RogersCollege of Law and the University ofHawaii’s Richardson Law School—to havestarted a validation study of the GRE test incollaboration with Educational TestingService (ETS). The Wake Forest School ofLaw study revealed that GRE scores werepredictive of first-year law school grades,which correlate to students’ overall success inlaw school.

The next generation of physician assis-tants (PAs) now have the ability to earn acompetitive edge through a new partner-ship—the first of its kind in the US—estab-lished by Wake Forest University’s School ofLaw online master of studies in law (MSL)program and School of Medicine PhysicianAssistant (PA) Program.

The new cross-disciplinary initiative isdesigned to develop PA leaders who are pre-pared to transform the delivery of healthcarewhile navigating a complex legal market-place.

The Emerging Leaders Program in Law(ELP-Law) graduates will earn a master ofstudies in law (MSL) and master of medicalscience (MMS) in physician assistant studies.

The 36-month sequential degree pro-gram begins accepting applications in April2018; accepted ELP-Law students begintheir first year in May 2019 with online MSLcoursework, moving to their PA studies inMay 2020. n

Thank You to OurMeeting Sponsors

Thank you to these companies forsponsoring the State Bar’s

Quarterly Meeting.

Lawyers Mutual Liability Insurance Company

Old Republic National Title Insurance Company

The North Carolina State BarPO Box 25908Raleigh, NC 27611

Spring 2018

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