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Professional Responsibility and Ethics
Terms in this set (59)
Bar Admission and Disciplinary Matters:
An applicant for admission to the bar, or a lawyer in connection with a bar admission application or in connection with a disciplinary matter, shall not:
(a) knowingly make a false statement of material fact; or
(b) fail to disclose a fact necessary to correct a
misapprehension known by the person to have arisen
in the matter, or knowingly fail to respond to a lawful
demand for information from an admissions or
disciplinary authority, except that this rule does not
require disclosure of information otherwise protected
by Rule 1.6
Reporting Professional Misconduct
• (a) A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects, shall inform the North Carolina State Bar or the court having jurisdiction over the matter.
• (b) A lawyer who knows that a judge has committed a violation of applicable rules of judicial conduct that raises a substantial question as to the judge's fitness for office shall inform the North Carolina Judicial Standards Commission or other appropriate authority.
• (c) This Rule does not require disclosure of information otherwise protected by Rule 1.6.
• (d) A lawyer who is disciplined in any state or federal court for a violation of the Rules of Professional Conduct in effect in such state or federal court shall inform the secretary of the North Carolina State Bar of such action in writing no later than 30 days after entry of the order of discipline.
• (c) A lawyer who is serving as a mediator and who is subject to the North Carolina Supreme Court Standards of Professional Conduct for Mediators (the Standards) is not required to disclose information learned during a mediation IF the Standards do not allow the disclosure. IF disclosure is allowed by the Standards, the lawyer is required to report professional misconduct consistent with the duty to report set forth in paragraph (a).
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Rules of Professional
Misconduct, knowingly assist or induce another to do
so, or do so through the acts of another;
(b) commit a criminal act that reflects adversely on the
lawyer's honesty, trustworthiness, or fitness as a
lawyer in other respects;
(c) engage in conduct involving dishonesty, fraud, deceit,
(d) engage in conduct that is prejudicial to the
administration of justice;
(e) state or imply an ability to influence improperly a
government agency or official;
(f) knowingly assist a judge or judicial officer in conduct
that is a violation of applicable rules of judicial conduct
or other law; or
(g) intentionally prejudice or damage his or her client
during the course of the professional relationship,
except as may be required by Rule 3.3.
Responsibilities of Partners, Managers, and Supervisory Lawyers
• (a) A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority, shall make reasonable efforts to ensure that the firm or organization has in effect measures giving reasonable assurance that all lawyers in the firm or the organization conform to the Rules of Professional Conduct.
• (b) A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.
• (c) A lawyer shall be responsible for another lawyer's violation of the Rules of Professional Conduct IF:
o (1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or
o (2) the lawyer is a partner or has comparable managerial authority in the law firms in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action to avoid the consequences.
Responsibilities of a Subordinate Lawyer
• (a) A lawyer is bound by the Rules of Professional Conduct notwithstanding that the lawyer acted in good faith at the direction of another person.
• (b) A subordinate lawyer does not violate the Rules of Professional Conduct IF that lawyer acts in accordance with a supervisory lawyer's reasonable resolution of an arguable question of professional duty.
Responsibilities Regarding Nonlawyer Assistants
With respect to a nonlawyer employed or retained by or associated with a lawyer:
o (a) a partner, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm or organization shall make reasonable efforts to ensure that the firm or organization has in effect measures giving reasonable assurance that the nonlawyer's conduct is compatible with the professional obligations of the lawyer;
o (b) a lawyer having direct supervisory authority over the Nonlawyer shall make reasonable efforts to ensure that the nonlawyer's conduct is compatible with the professional obligations of the lawyer; and
o (c) a lawyer shall be responsible for conduct of such a nonlawyer that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer IF:
(1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or
(2) the lawyer is a partner or has comparable managerial authority in the law firm or organization in which the person is employed, or has direct supervisory authority over the nonlawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action to avoid the consequences.
Professional Indpendence of a Lawyer
(a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
o (1) an agreement by a lawyer with the lawyer's firm,
partner, or associate may provide for the payment
of money, over a reasonable period of time after
the lawyer's death, to the lawyer's estate or to one
or more specified persons;
o (2) a lawyer who purchases the practice of a deceased,
disabled, or disappeared lawyer may, pursuant to
the provisions of Rule 1.7, pay to the estate or
other representative of that who lawyer the
agreed-upon purchase price;
o (3) a lawyer who undertakes to complete unfinished
legal business of a deceased lawyer or a disbarred
lawyer may pay to the estate of the deceased
lawyer or to the disbarred lawyer that portion of
the total compensation that fairly represents the
services rendered by the deceased lawyer or the
o (4) a lawyer or law firm may include nonlawyer
employees in a compensation or retirement plan
even though the plan is based in whole or in part
on a profit-sharing arrangement; and
o (5) a lawyer may share court-awarded legal fees with
a nonprofit organization that employed, retained,
or recommended employment of the lawyer in the
(b) A lawyer shall not form a partnership with a nonlawyer IF ANY of the activities of the partnership consist of the practice of law.
(c) A lawyer shall not permit a person who recommends, engages, or pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services.
(d) A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, IF:
o (1) a nonlawyer owns ANY interest therein, except
that a fiduciary representative of the estate of a
lawyer may hold the stock or interest of the lawyer
for a reasonable time during the administration; or
o (2) a nonlawyer has the right to direct or control the
professional judgment of a lawyer.
Unauthorized Practice of Law
(a) A lawyer shall not practice law in a jurisdiction where
doing so violates the regulation of the legal profession in that jurisdiction.
(b) A lawyer who is not admitted to practice in this jurisdiction shall not:
o (1) except as otherwise authorized by these Rules or
other law, establish an office or other systematic
and continuous presence in this jurisdiction for
the practice of law; or
o (2) hold out to the public or otherwise represent that
the lawyer is admitted to practice law in this
(c) A lawyer admitted to practice in another jurisdiction, but not in this jurisdiction, does not engage in the unauthorized practice of law in this jurisdiction IF the lawyer's conduct is in accordance with these Rules and:
o (1) the lawyer is authorized by law or order to appear
before a tribunal or administrative agency before
a tribunal or administrative agency in this
jurisdiction or is preparing for a potential
proceeding or hearing in which the lawyer
reasonably expects to be so authorized; or
o (2) other than engaging in conduct governed by
(A) the lawyer provides legal services to the lawyer's
employer or its organizational affiliates and the
services are not services for which pro hac vice
admission is required; a lawyer acting pursuant to
this paragraph is not subject to the prohibition in
(B) the lawyer acts with respect to a matter that
arises out of or is otherwise reasonably related to
the lawyer's representation of a client in a
jurisdiction in which the lawyer is admitted to
(C) the lawyer acts with respect to a matter that is
in or is reasonably related to a pending or potential
arbitration, mediation, or other alternative dispute
resolution proceeding in this or another
jurisdiction, IF the services arise out of or are
reasonably related to the lawyer's representation of
a client in a jurisdiction in which the lawyer is
admitted to practice and are not services for which
pro hac vice admission is required;
(D) the lawyer is associated in the matter with a
lawyer admitted to practice in this jurisdiction who
actively participates in the representation; or
(E) the lawyer is providing services limited to
federal law, international law, the law of a foreign
jurisdiction or the law of the jurisdiction in which
the lawyer is admitted to practice.
(F) the lawyer is the subject of a pending
application to the North Carolina State Bar by
comity, having never previously been denied
admission to the North Carolina State Bar for any
(i) is licensed to practice law in a state with
which North Carolina has comity in regard to
admission to practice law;
(ii) is a member in good standing in every
jurisdiction in which the lawyer is licensed to
(iii) has satisfied the educational and
experiential requirements prerequisite to
comity admission to the North Carolina State
(iv) is domiciled in North Carolina;
(v) has established a professional relationship
with a North Carolina law firm and is actively
supervised by at least one licensed North
Carolina attorney affiliated with that law
(vi) gives written notice to the secretary of the
North Carolina State Bar that the lawyer
intends to begin the practice of law pursuant
to this provision, provides the secretary with
a copy of the lawyer's application for
admission to the State Bar, and agrees that
the lawyer is subject to these rules and the
disciplinary jurisdiction of the North Carolina
A lawyer acting pursuant to this provision is not
subject to the prohibition in Paragraph (b)(1), may
not provide services for which pro hac vice
admission is required, and shall be ineligible to
practice law in this jurisdiction immediately upon
being advised that the lawyer's application for
comity admission has been denied.
(d) A lawyer shall not assist another person in the unauthorized practice of law.
(e) A lawyer or law firm shall not employ a disbarred individual or suspended lawyer as a law clerk or legal assistant IF that individual was associated with such lawyer or law firm at any time on or after the date of the acts which resulted in disbarment or suspension through and including the effective date of disbarment or suspension.
(f) A lawyer or law firm employing a disbarred or suspended lawyer as law clerk or legal assistant shall not represent any client represented by the disbarred or suspended lawyer or by any lawyer with whom the disbarred or suspended lawyer practiced during the period on or after the date of the acts which resulted in disbarment or suspension through and including the effective date of disbarment or suspension.
Restrictions on Right to Practice
A lawyer shall not participate in offering or making:
o (a) a partnership, shareholders, operating,
employment, or other similar type of agreement
that restricts the right of a lawyer to practice after
termination of the relationship, except an
agreement concerning benefits upon retirement; or
o (b) an agreement in which a restriction on the
lawyer's right to practice is part of the settlement
of a controversy between private parties.
Responsibilities Regarding Law-Related Services
(a) A lawyer shall be subject to the Rules of Professional Conduct with respect to the provision of law-related services, as defined in paragraph (b), IF the law-related services are provided:
o (1) by the lawyer in circumstances that are not
distinct from the lawyer's provision of legal
services to clients; or
o (2) by a separate entity controlled by the lawyer
individually or with others IF the lawyer fails to
take reasonable measures to assure that a person
obtaining the law-related services knows that the
services of the separate entity are not legal services
and that the protections of the client-lawyer
relationship do not exist.
(b) The term "law-related services" denotes services that might reasonably be performed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer.
A lawyer shall not handle a legal matter that the lawyer knows or should know he or she is not competent to handle without associating with a lawyer who is competent to handle the matter. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.
Scope Of Representation and Allocation of Authority
between Client and Lawyer
(a) Subject to paragraphs (c) and (d), a lawyer shall abide by a client's decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation.
o (1) A lawyer shall abide by a client's decision whether
to settle a matter. In a criminal case, the lawyer
shall abide by the client's decision, after
consultation with the lawyer, as to a plea to be
entered, whether to waive jury trial and whether
the client will testify.
o (2) A lawyer does not violate this rule by acceding to
reasonable requests of opposing counsel that do
not prejudice the rights of a client, by being
punctual in fulfilling all professional
commitments, by avoiding offensive tactics, or by
treating with courtesy and consideration all
persons involved in the legal process.
o (3) In the representation of a client, a lawyer may
exercise his or her professional judgment to waive
or fail to assert a right or position of the client.
(b) A lawyer's representation of a client, including representation by appointment, does not constitute an endorsement of the client's political, economic, social or moral views or activities.
(c) A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances.
(d) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
A lawyer shall act with reasonable diligence and promptness in representing a client.
(a) A lawyer shall:
(1) promptly inform the client of any decision or
circumstance with respect to which the client's
informed consent, as defined in Rule 1.0(f), is
required by these Rules;
(2) reasonably consult with the client about the
means by which the client's objectives are to be
(3) keep the client reasonably informed about the
status of the matter;
(4) promptly comply with reasonable requests for
(5) consult with the client about any relevant
limitation on the lawyer's conduct when the lawyer
knows that the client expects assistance not
permitted by the Rules of Professional Conduct or
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
Client With Diminished Capacity
(a) When a client's capacity to make adequately considered decisions in connection with a representation is diminished, whether because of:
o mental impairment; or
o some other reason
the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client.
(b) When the lawyer reasonably believes that the client:
o has diminished capacity;
o is at risk of substantial physical, financial, or other
harm unless action is taken; and
o cannot adequately act in the client's own interest,
then the lawyer may take reasonably protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem or guardian.
(c) Information relating to the representation of a client with diminished capacity is protected by Rule 1.6. When taking protective action pursuant to paragraph (b), the lawyer is impliedly authorized under Rule 1.6(a) to reveal information about the client, but only to the extent reasonably necessary to protect the client's interests
Declining or Terminating Representation
(a) Except as stated in paragraph (c), a lawyer shall not represent a client or, where representation has commenced, shall withdraw from representation of a client IF:
(1) the representation will result in violation of law of
the Rules of Professional Conduct;
(2) the lawyer's physical or mental condition
materially impairs the lawyer's ability to represent
the client; or
(3) the lawyer is discharged.
(b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client IF:
(1) withdrawal can be accomplished without material
adverse effect on the interests of the client; or
(2) the client knowingly and freely assents to the
termination of the representation; or
(3) the client persists in a course of action involving
the lawyer's services that the lawyer reasonably
believes is criminal or fraudulent; or
(4) the client insists upon taking action that the
lawyer considers repugnant, imprudent, or
contrary to the advice and judgment of the lawyer,
or with which the lawyer has a fundamental
(5) the client has used the lawyer's services to
perpetrate a crime or fraud; or
(6) the client fails substantially to fulfill an obligation
to the lawyer regarding the lawyer's services and
has been given reasonable warning that the lawyer
will withdraw unless the obligation is fulfilled; or
(7) the representation will result in an unreasonable
financial burden on the lawyer or has been
rendered unreasonably difficult by the client; or
(8) the client insists upon presenting a claim or
defense that is not warranted under existing law
and cannot be supported by good faith argument
for an extension, modification, or reversal of
existing law; or
(9) other good cause for withdrawal exists.
(c) A lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation. When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation.
(d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law.
The Five C's
THE FIVE C'S: Client Communicates Confidentially with Counsel to obtain Counsel
• General rule: the same confidentiality provisions apply to prospective clients as apply to actual clients
Duties to Prospective Client
(a) A person who discusses with a lawyer the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client.
(b) Even when no client-lawyer relationship ensues, a lawyer who has had discussions with a prospective client shall not use or reveal information learned in the consultation, except as Rule 1.9 would permit with respect to information of a former client.
(c) A lawyer subject to paragraph (b) shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter IF the lawyer received information from the prospective client that could be significantly harmful to that person in the matter, except as provided in paragraph (d). IF a lawyer is disqualified from representation under this paragraph, no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such matter, except as provided in paragraph (d).
(d) Representation is permissible IF both the affected client and prospective client have given informed consent, confirmed in writing, or:
(1) the disqualified lawyer is timely screened from any
participation in the matter; and
(2) written notice is promptly given to the prospective
Confidentiality of Information
(a) A lawyer shall not reveal information acquired during the professional relationship with a client unless:
-the client gives informed consent,
-the disclosure is impliedly authorized in order to
carry out the representation; or
-the disclosure is permitted by paragraph (b).
(b) A lawyer may reveal information protected from disclosure by paragraph (a) to the extent the lawyer reasonably believes necessary:
(1) to comply with the Rules of Professional Conduct,
the law or court order;
(2) to prevent the commission of a crime by the client;
(3) to prevent reasonably certain death or bodily
(4) to prevent, mitigate, or rectify the consequences of
a client's criminal or fraudulent act in the
commission of which the lawyer's services were
COMPARE: ABA Model Rule 1.6(b)(2)
(2) to prevent the client from committing a crime or
fraud that is reasonably certain to result in
substantial injury to the financial interests or
property of another and in furtherance of which
the client has used or is using the lawyer's services;
(5) to secure legal advice about the lawyer's
compliance with these Rules;
(6) to establish a claim or defense on behalf of the
lawyer in a controversy between the lawyer and
the client; to establish a defense to a criminal
charge or civil claim against the lawyer based upon
conduct in which the client was involved; or to
respond to allegations in any proceeding
concerning the lawyer's representation of the
(7) to comply with the rules of a lawyers' or judges'
assistance program approved by the North
Carolina State Bar or the North Carolina Supreme
(c) The duty of confidentiality described in this Rule encompasses information received by a lawyer then acting as an agent of a lawyers' or judges' assistance program approved by the North Carolina State Bar or the North Carolina Supreme Court regarding another lawyer or judge seeking assistance or to whom assistance is being offered. For the purposes of this Rule, "client" refers to lawyers seeking assistance from lawyers' or judges' assistance programs approved by the North Carolina State Bar or the North Carolina Supreme Court.
Five-part test to determine whether the attorney-client privilege applies to a particular communication
(1) the attorney-client relationship existed a the time
the communication was made
(2) the communication was made in confidence
(3) the communication relates to a matter about
which the attorney is being professionally
(4) the communication was made in the course of
giving or seeking legal advice for a proper purpose,
although litigation need not be contemplated; and
(5) the client has not waived the privilege
If any one of these five elements is not present in any portion or an attorney-client communication, that portion of the communication is not privileged. For example, pursuant to the second prong, if it appears that a communication was not regarded as confidential or that the communication was made for the purpose of being conveyed by the attorney to others, the communication is not privileged.
Voluntary Pro Bono Public Service
• Every lawyer has a professional responsibility to provide legal services to those unable to pay. A lawyer should aspire to render at least 50 hours of pro bono public legal services per year. In fulfilling this responsibility, the lawyer should:
(a) provide a substantial majority of the 50 hours of legal services without fee or expectation of fee to:
(1) persons of limited means;
(2) charitable, religious, civic, community,
governmental and educational organizations in
matters that are designed primarily to address the
needs of persons of limited means; or
(3) individuals, groups, or organizations seeking to
secure or protect civil rights, civil liberties or
public rights, or charitable, religious, civic,
community, governmental, and educational
organizations in matters in furtherance of the
their organizational purposes, where the payment
of standard legal fees would significantly deplete
the organization's economic resources or would
be otherwise inappropriate.
(b) provide any additional services through:
(1) the delivery of legal services described in
paragraph (a) at a substantially reduced fee; or
(2) participation in activities for improving the law,
the legal system, or the legal profession.
In addition, a lawyer should voluntarily contribute financial support to organizations that provide legal services to persons of limited means.
(a) A lawyer shall not make an arrangement for, charge, or collect an illegal or clearly excessive fee or charge or collect a clearly excessive amount for expenses. The factors to be considered in determining whether a fee is clearly excessive include the following:
(1) the time and labor required, the novelty and
difficulty of the questions involved, and the skill
requisite to perform the legal service properly;
(2) the likelihood, IF apparent to the client, that the
acceptance of the particular employment will
preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for
similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, and ability of the
lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.
(b) When the lawyer has not regularly represented the client, the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation.
(c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial, or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, IF there is a recovery, showing the remittance to the client and the method if its determination.
(d) A lawyer shall not enter into an arrangement for, charge, or collect:
(1) a contingent fee for representing a defendant in a
criminal case; however, a lawyer may charge and
collect a contingent fee for representation in a
criminal or civil asset forfeiture proceeding if not
otherwise prohibited by law; or
(2) a contingent fee in a civil case in which such a fee
is prohibited by law.
(e) A division of a fee between lawyers who are not in the same firm may be made ONLY IF:
(1) the division is in proportion to the services
performed by each lawyer or each lawyer assumes
joint responsibility for the representation;
(2) the client agrees to the arrangement, including the
share each lawyer will receive, and the agreement
is confirmed in writing; and
(3) the total fee is reasonable.
(f) Any lawyer having a dispute with a client regarding a fee for legal services must:
(1) make reasonable efforts to advise his or her client
of the existence of the North Carolina State Bar's
program of fee dispute resolution at least 30 days
prior to initiating legal proceedings to collect the
disputed fee; and
(2) participate in good faith in the fee dispute
resolution process if the client submits a proper
Rule 1.15 Safekeeping Property - This rule has three subparts: Rule 1.15-1, Definitions; Rule 1.15-2, General Rules; and Rule 1.15-3, Records and Accountings. The subparts set forth the requirements for preserving client property, including the requirements for preserving client property in a lawyer's trust account. The comment for all three subparts as well as the annotations appear after the text for Rule 1.15-3.
• (a) Entrusted Property. All entrusted property shall be identified, held, and maintained separate from the property of the lawyer, and shall be deposited, disbursed, and distributed only in accordance with this Rule 1.15.
• (b) Deposit of Trust Funds. All trust funds received by or placed under the control of a lawyer shall be promptly deposited in either a general trust account or a dedicated trust account of the lawyer. Trust funds placed in a general account are those which, in the lawyer's good faith judgment, are nominal or short-term. General trust accounts are to be administered in accordance with the Rules of Professional Conduct and the provisions of 27 NCAC Chapter 1, Subchapter D, Sections .1300.
• (c) Deposit of Fiduciary Funds. All fiduciary funds received by or placed under the control of a lawyer shall be promptly deposited in a fiduciary account or a general trust account of the lawyer.
• (d) Safekeeping of Other Entrusted Property. A lawyer may also hold entrusted property other than fiduciary funds (such as securities) in a fiduciary account. All entrusted property received by a lawyer that is not deposited in a trust account or fiduciary account (such as a stock certificate) shall be promptly identified, labeled as property of the person or entity for whom it is to be held, and placed in a safe deposit box or other suitable place of safekeeping. The lawyer shall disclose the location of the property to the client or other person for whom it is held. Any safe deposit box or other place of safekeeping shall be located in this state, unless the lawyer has been otherwise authorized in writing by the client or other person for whom it is held.
• (e) Location of Accounts. All trust accounts shall be maintained at a bank in North Carolina or a bank with branch offices in North Carolina except that, with the written consent of the client, a dedicated trust account may be maintained at a bank that does not have offices in North Carolina or at a financial institution other than a bank in or outside of North Carolina. A lawyer may maintain a fiduciary account at any bank or other financial institution in or outside of North Carolina selected by the lawyer in the exercise of the lawyer's fiduciary responsibility.
• (f) Segregation of Lawyer's Funds. No funds belonging to a lawyer shall be deposited in a trust account or fiduciary account of the lawyer except:
o (1) funds sufficient to open or maintain an account, pay any bank service charges, or pay any tax levied on the account; or
o (2) funds belonging in part to a client or other third party and in part currently or conditionally to the lawyer.
• (g) Mixed Funds Deposited Intact. When funds belonging to the lawyer are received in combination with funds belonging to the client or other persons, all of the funds shall be deposited intact. The amounts currently or conditionally belonging to the lawyer shall be identified on the deposit slip or other record. After the deposit has been finally credited to the account, the lawyer may withdraw the amounts to which the lawyer is or becomes entitled. If the lawyer's entitlement is disputed, the disputed amounts shall remain in the trust account or fiduciary account until the dispute is resolved.
• (h) Items Payable to Lawyer. Any item drawn on a trust account or fiduciary account for the payment of the lawyer's fees or expenses shall be made payable to the lawyer and shall indicate on the item the client balance on which the item is drawn. Any item that does not capture this information may not be used to withdraw funds from a trust account or a fiduciary account for payment of the lawyer's fees or expenses.
• (i) No Bearer Items. No item shall be drawn on a trust account or fiduciary account made payable to cash or bearer and no cash shall be withdrawn from a trust account or fiduciary account by means of a debit card.
• (j) No Personal Benefit. A lawyer shall not use or pledge any entrusted property to obtain credit or other personal benefit for the lawyer or any person other than the legal or beneficial owner of that property.
• (k) Bank Directive. Every lawyer maintaining a trust account or fiduciary account with demand deposit at a bank or other financial institution shall file with the bank or other financial institution
a written directive requiring the bank or other institution to report to the executive director of the North Carolina State Bar when an instrument drawn on the account is presented for payment against insufficient funds. No trust account or fiduciary account shall be maintained in a bank or other financial institution that does not agree to make such reports.
• (l) Notification of Receipt. A lawyer shall promptly notify his or her client of the receipt of any entrusted property belonging in whole or in part to the client.
• (m) Delivery of Client Property. A lawyer shall promptly pay or deliver to the client, or to third persons as directed by the client, any entrusted property belonging to the client and to which the client is currently entitled.
• (n) Property Received as Security. Any entrusted property or document of title delivered to a lawyer as security for the payment of a fee or other obligation to the lawyer shall be held in trust in accordance with this Rule 1.15 and shall be clearly identified as property held as security and not as a completed transfer of beneficial ownership to the lawyer. This provision does not apply to property received by a lawyer on account of fees or other amounts owed to the lawyer at the time of receipt; however, such transfers are subject to the rules governing legal fees or business transactions between a lawyer and client.
• (o) Duty to Report Misappropriation. A lawyer who discovers or reasonably believes that entrusted property has been misappropriated or misapplied shall promptly inform the North Carolina State Bar.
• (p) Interest on Deposited Funds. Under no circumstances shall the lawyer be entitled to any interest earned on funds deposited in a trust account or fiduciary account. Except as authorized by Rule .1316 of subchapter 1D of the Rules and Regulations of the North Carolina State Bar, any interest earned on a trust account or fiduciary account, less any amounts deducted for bank service charges and taxes, shall belong to the client or other person or entity entitled to the corresponding principal amount.
• (q) Abandoned Property. If entrusted property is unclaimed, the lawyer shall make due inquiry of his or her personnel, records and other sources of information in an effort to determine the identity and location of the owner of the property. If that effort is successful, the entrusted property shall be promptly transferred to the person or entity to whom it belongs. If the effort is unsuccessful and the provisions of G.S. 116B-53 are satisfied, the property shall be deemed abandoned, and the lawyer shall comply with the requirements of Chapter 116B of the General Statutes concerning the escheat of abandoned property.
Records and Accountings
• (a) Check Format. All general trust accounts, dedicated trust accounts, and fiduciary accounts must use business-size checks that contain an Auxiliary On-Us field in the MICR line of the check.
• (b) Minimum Records for Accounts at Banks. The minimum records required for general trust accounts, dedicated trust accounts and fiduciary accounts maintained at a bank shall consist of the following:
o (1) all records listing the source and date of receipt of any funds deposited in the account including, but not limited to, bank receipts, deposit slips and wire and electronic transfer confirmations, and, in the case of a general trust account, all records also listing the name of the client or other person to whom the funds belong;
o (2) all canceled checks or other items drawn on the account, or printed digital images thereof furnished by the bank, showing the amount, date, and recipient of the disbursement, and, in the case of a general trust account, the client balance against which each item is drawn, provided, that:
(A) digital images must be legible reproductions of the front and back of the original items with no more than six images per page and no images smaller than 1-3/16 x 3 inches; and
(B) the bank must maintain, for at least six years, the capacity to reproduce electronically additional or enlarged images of the original items or records related thereto upon request within a reasonable time;
o (3) all instructions or authorizations to transfer, disburse, or withdraw funds from the trust account (including electronic transfers or debits), or a written or electronic record of any such transfer, disbursement, or withdrawal showing the amount, date, and recipient of the transfer or disbursement, and, in the case of a general trust account, also showing the name of the client or other person to whom the funds belong;
o (4) all bank statements and other documents received from the bank with respect to the trust account, including, but not limited to notices of return or dishonor of any item drawn on the account against insufficient funds;
o (5) in the case of a general trust account, a ledger containing a record of receipts and disbursements for each person or entity from whom and for whom funds are received and showing the current balance of funds held in the trust account for each such person or entity; and
o (6) any other records required by law to be maintained for the trust account.
• (c) Minimum Records for Accounts at Other Financial Institutions. The minimum records required for dedicated trust accounts and fiduciary accounts at financial institutions other than a bank shall consist of the following:
o (1) all records listing the source and date of receipt of all funds deposited in the account including, but not limited to, depository receipts, deposit slips, and wire and electronic transfer confirmations;
o (2) a copy of all checks or other items drawn on the account, or printed digital images thereof furnished by the depository, showing the amount, date, and recipient of the disbursement, provided, that the images satisfy the requirements set forth in Rule 1.15-3(b)(2);
o (3) all instructions or authorizations to transfer, disburse, or withdraw funds from the account (including electronic transfers or debits) or a written or electronic record of any such transfer, disbursement, or withdrawal showing the amount, date, and recipient of the transfer or disbursement;
o (4) all statements and other documents received from the depository with respect to the account, including, but not limited to notices of return or dishonor of any item drawn on the account for insufficient funds; and
o (5) any other records required by law to be maintained for the account.
• (d) Reconciliations of General Trust Accounts.
o (1) Quarterly Reconciliations. At least quarterly, the individual client balances shown on the ledger of a general trust account must be totaled and reconciled with the current bank statement balance for the trust account as a whole.
o (2) Monthly Reconciliations. Each month, the balance of the trust account as shown on the lawyer's records shall be reconciled with the current bank statement balance for the trust account.
o (3) The lawyer shall retain a record of the reconciliations of the general trust account for a period of six years in accordance with Rule 1.15-3(g).
• (e) Accountings for Trust Funds. The lawyer shall render to the client a written accounting of the receipts and disbursements of all trust funds (i) upon the complete disbursement of the trust funds, (ii) at such other times as may be reasonably requested by the client, and (iii) at least annually if the funds are retained for a period of more than one year.
• (f) Accountings for Fiduciary Property. Inventories and accountings of fiduciary funds and other entrusted property received in connection with professional fiduciary services shall be rendered to judicial officials or other persons as required by law. If an annual or more frequent accounting is not required by law, a written accounting of all transactions concerning the fiduciary funds and other entrusted property shall be rendered to the beneficial owners, or their representatives, at least annually and upon the termination of the lawyer's professional fiduciary services.
• (g) Minimum Record Keeping Period. A lawyer shall maintain, in accordance with this Rule 1.15, complete and accurate records of all entrusted property received by the lawyer, which records shall be maintained for at least the six (6) year period immediately preceding the lawyer's most recent fiscal year end.
• (h) Audit by State Bar. The financial records required by this Rule 1.15 shall be subject to audit for cause and to random audit by the North Carolina State Bar; and such records shall be produced for inspection and copying in North Carolina upon request by the State Bar.
a deposit by the client of money that will be billed against, usually on an hourly basis, as legal services are provided; not earned until legal services are rendered; deposited in the trust account; unearned portion refunded upon the termination of the client-lawyer relationship.
consideration paid at the beginning of a representation to reserve the exclusive services of a lawyer but not used to pay for actual representation; generally used when corporate or business clients have a specific need to consult a lawyer on a regular basis; earned upon payment; paid to lawyer or deposited in firm operating account; some or all of the retainer is subject to refund if clearly excessive under the circumstances as determined upon the termination of the client-lawyer relationship.
Flat Fee or Prepaid Flat Fee
fee paid at the beginning of a representation for specified legal services on a discrete legal task or isolated transaction to be completed within a reasonable amount of time; fee pays for all legal services regardless of the amount of time the lawyer expends on the matter; if client consents, treated as earned immediately and paid to the lawyer or deposited in the firm operating account; some or all of the flat fee is subject to refund if clearly excessive under the circumstances as determined upon the termination of the client-lawyer relationship.
fee paid at the beginning of a representation that is in part a general retainer or a flat fee and in part an advance payment to secure the payment of fees yet to be earned; one portion of the fee is earned immediately and the other remains the client's property on deposit in the trust account; client must consent and agree to the portion that is a flat fee or a general retainer and earned immediately; unearned portion of the advance payment refunded upon termination of the client-lawyer relationship; flat fee/general retainer portion subject to refund if clearly excessive under the circumstances as determined upon the termination of the client-lawyer relationship.
Concurrent: Conflicts of Interests
between a current client on one hand and another person or interest on the other
--arise whenever a lawyer is unable to give 100% loyalty to one side because the lawyer is loyal to a potentially adverse interest--
EX: lawyer represents Client A; Client B walks in seeking to sue Client A
Conflict with an outside entity (prospective client asks you to sue a neighbor, family member, the church the lawyer attends, etc.)
If you cannot be 100% loyal to your client, it is best to decline representation
Successive: conflicts of interest
--conflicts between a former client and current/prospective client--
A former client can waive a conflict, unless the lawsuit involves the same matter in which the lawyer represented the former client
The former client never has a veto over being sued by someone you represent, unless the matter of the lawsuit is substantially related (i.e., it is expected that the lawyer would have acquired confidential information)
can't represent both sides suing each other
--Direct, or materially-limiting--
8 events that can trigger conflicts
1. New clients
2. New matters
3. New parties
4. New issues
5. New attorneys (e.g., moving to a new firm)
6. New relationships (e.g., the lawyer gets married)
7. New witnesses
8. A lawyer needing to testify in a particular situation
"substantially related" is key when it comes to conflicts with former clients
How courts deal with motions to disqualify: they will view it through the prism of what it is best for the client, but may be initially hesitant to grant because it makes litigation less efficient
Conflict of Interest: Current Clients
(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists IF:
(1) the representation of one client will be directly adverse to the another client; or
(2) the representation of one or more client may be materially limited by the lawyer's responsibilities to another client, a former client, or a third person, or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in writing.
Conflict of Interest: Current Clients: Specific Rules
(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest directly adverse to a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction.
(b) A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules.
(c) A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient of the gift is related to the client. For purposes of this paragraph, related person include a spouse, child, grandchild, parent, grandparent, or other relative or individual with whom the lawyer or the client maintains a close, familial relationship.
(d) Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate an agreement giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation.
(e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
(1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
(f) A lawyer shall not accept compensation for representing a client from one other than the client unless:
(1) the client gives informed consent;
(2) there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and
(3) information relating to representation of a client is protected as required by Rule 1.6.
(g) A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.
(h) A lawyer shall not:
(1) make an agreement prospectively limiting the lawyer's liability to a client for malpractice unless the client is independently represented in making the agreement; or
(2) settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith.
(i) A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:
(1) acquire a lien authorized by law to secure the lawyer's fee or expenses, provided that the requirements of Rule 1.8(a) are satisfied; and
(2) contract with a client for a reasonable contingent fee in a civil case, except as prohibited by Rule 1.5.
(j) While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a) through (i), that applies to any one of them shall apply to all of them.
Sexual Relations with Clients Prohibited
(a) A lawyer shall not have sexual relations with a current client of the lawyer.
(b) Paragraph (a) shall not apply IF a consensual sexual relationship existed between the lawyer and the client before the legal representation commenced.
(c) A lawyer shall not require or demand sexual relations with a client incident to or as a condition of any professional representation.
(d) For purposes of this rule, "sexual relations" means:
(1) Sexual intercourse; or
(2) Any touching of the sexual or other intimate parts of a person or causing such person to touch the sexual or other intimate parts of the lawyer for the purpose of arousing or gratifying the sexual desire of either party.
(e) For purposes of this rule, "lawyer" means any lawyer who assists in the representation of the client but does not include other lawyers in the firm who provide no such assistance.
Duties to Former Clients
(a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.
(b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client:
(1) whose interests are materially adverse to that person; and
(2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing.
(c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:
(1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or
(2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.
Imputation of Conflicts of Interest
(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless the prohibition:
--is based on a personal interest of the prohibited lawyer, including a prohibition under Rule 6.6; and
--does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.
(b) When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless:
(1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and
(2) any lawyer remaining in the firm has information protected by Rules 1.6 and 1.9(c) that is material to the matter.
(c) When a lawyer becomes associated with a firm, no lawyer associated in the firm shall knowingly represent a person in a matter in which that lawyer is disqualified under Rule 1.9, unless:
(1) the personally disqualified lawyer is timely screened from an participation in the matter; and
(2) written notice is promptly given to any affected former client to enable it to ascertain compliance with the provisions of this Rule.
(d) A disqualification prescribed by this Rule may be waived by the affected client under the conditions stated in Rule 1.7.
(e) The disqualification of lawyers associated in a firm with former or current government lawyers is governed by Rule 1.1.
Three main things: lawyer in firm, left firm, coming to firm.
Organization as Client
(a) A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.
(b) If a lawyer for an organization knows that an officer, employee, or other person associated with the organization is engaged in action, intends to act or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law which reasonably might be imputed to the organization, and is likely to result in substantial injury to the organization, the lawyer shall proceed as is reasonably necessary in the best interest of the organization. Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization as determined by applicable law.
(c) IF, despite the lawyer's efforts in accordance with paragraph (b), the highest authority that can act on behalf of the organization insists upon action, or a refusal to act, that is clearly a violation of law and is likely to result in substantial injury to the organization, the lawyer may reveal such information outside the organization to the extent permitted by Rule 1.6 and may resign in accordance with Rule 1.16.
(d) Paragraph (c) shall not apply with respect to information relating to a lawyer's representation of an organization to investigate an alleged violation of law, or to defend the organization or an officer, employee, or other constituent associated with the organization against a claim arising our of an alleged violation of law.
(e) A lawyer who reasonably believes that he or she has been discharged because of the lawyer's actions taken pursuant to paragraphs (b) or (c), or who withdraws under circumstances that permit the lawyer to take action under these Rules, shall proceed as the lawyer reasonably believes necessary to assure that the organization's highest authority is informed of the lawyer's discharge or withdrawal.
(f) In dealing with an organization's directors, officers, employees, members, shareholders, or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing.
(g) A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders, or other constituents, subject to the provisions of Rule 1.7. IF the organization's consent to the dual representation is required by Rule 1.7, the consent shall be given by an appropriate official of the organization other than the individual who is to be represented, or by the shareholders.
Sale Of A Law Practice
• A lawyer or a law firm may sell or purchase a law practice, or an area of law practice, including good will, if the following conditions are satisfied:
(a) The seller ceases to engage in the private practice of law, or in the area of practice that has been sold, from an office that is within a one-hundred (100) mile radius of the purchased law practice, except the seller may work for the purchaser as an independent contractor and may provide legal representation at no charge to indigent persons or to members of the seller's family;
(b) The entire practice, or the entire area of practice, is sold to one or more lawyers or law firms;
(c) Written notice is sent to each of the seller's clients regarding:
(1) the proposed sale, including the identity of the purchaser;
(2) the client's right to retain other counsel and to take possession of the client's files prior to the sale or at any time thereafter; and
(3) the fact that the client's consent to the transfer of the client's files and legal representation to the purchaser will be presumed if the client does not take any action or does not otherwise object within thirty (30) days of receipt of the notice.
(d) If the seller or the purchaser identifies a conflict of interest that prohibits the purchaser from representing the client, the seller's notice to the client shall advise the client to retain substitute counsel.
(e) If a client cannot be given notice, the representation of that client may be transferred to the purchaser only upon entry of an order so authorizing by a court having jurisdiction. The seller may disclose to the court in camera information relating to the representation only to the extent necessary to obtain an order authorizing the transfer of a file. In the event the court fails to grant a substitution of counsel in a matter, that matter shall not be included in the sale and the sale otherwise shall be unaffected.
(f) The fees charged clients shall not be increased by reason of the sale.
(g) The seller and purchaser may agree that the purchaser does not have to pay the entire sales price for the seller's law practice in one lump sum. The seller and purchaser may enter into reasonable arrangements to finance the purchaser's acquisition of the seller's law practice without violating Rules 1.5(e) and 5.4(a). The seller, however, shall have no say regarding the purchaser's conduct of the law practice.
Special Conflicts of Interest for Former and Current
Government Officers and Employees
(a) Except as law may otherwise expressly permit, a lawyer who has formerly served as a public officer or employee of the government:
(1) is subject to Rule 1.9(c); and
(2) shall not otherwise represent a client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency gives its informed consent, confirmed in writing, to the representation.
(b) When a lawyer is disqualified from representation under paragraph (a), no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter unless:
(1) the disqualified lawyer is timely screened from any participation in the matter; and
(2) written notice is promptly given to the appropriate government agency to enable it to ascertain compliance with the provisions of this rule.
(c) Except as law may otherwise expressly permit, a lawyer having information that the lawyer knows is confidential government information about a person acquired when the lawyer was a public officer or employee, may not represent a private client whose interests are adverse to that person in a matter in which the information could be used to the material disadvantage of that person. As used in this Rule, the term "confidential government information" means information that has been obtained under governmental authority and which, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose and which is not otherwise available to the public. A firm with which that lawyer is associated may undertake or continue representation in the matter only if the disqualified lawyer is timely screened from any participation in the matter.
(d) Except as law may otherwise expressly permit, a lawyer currently serving as a public officer or employee:
(1) is subject to Rules 1.7 and 1.9; and
(2) shall not:
(A) participate in a matter in which the lawyer participated personally and substantially while in private practice or nongovernmental employment, unless the appropriate government agency gives its informed consent, confirmed in writing; or
(B) negotiate for private employment with any person who is involved as a party or as lawyer for a party in a matter in which the lawyer is participating personally and substantially, except that a lawyer serving as a law clerk to a judge, other adjudicative officer or arbitrator may negotiate for private employment as permitted by Rule 1.12(b) and subject to the conditions stated in Rule 1.12(b).
(e) As used in this Rule, the term "matter" includes:
(1) any judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, investigation, charge, accusation, arrest or other particular matter involving a specific party or parties, and
(2) any other matter covered by the conflict of interest rules of the appropriate government agency.
Former Judge, Arbitrator, Mediator or Other Third-Party Neutral
(a) Except as stated in paragraph (d), a lawyer shall not represent anyone in connection with a matter in which the lawyer participated personally and substantially as a judge or other adjudicative officer or law clerk to such a person or as an arbitrator, mediator or other third-party neutral, unless all parties to the proceeding give informed consent, confirmed in writing.
(b) A lawyer shall not negotiate for employment with any person who is involved as a party or as lawyer for a party in a matter in which the lawyer is participating personally and substantially as a judge or other adjudicative officer or as an arbitrator, mediator or other third-party neutral. A lawyer serving as law clerk to a judge or other adjudicative officer may negotiate for employment with a party or lawyer involved in a matter in which the clerk is participating personally and substantially, but only after the lawyer has notified the judge or other adjudicative officer.
(c) IF a lawyer is disqualified by paragraph (a), no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in the matter unless:
(1) the disqualified lawyer is timely screened from any participation in the matter; and
(2) written notice is promptly given to the parties and any appropriate tribunal to enable them to ascertain compliance with the provisions of this rule.
(d) An arbitrator selected as a partisan of a party in a multimember arbitration panel is not prohibited from subsequently representing that party.
Candor Toward the Tribunal
(a) A lawyer shall not knowingly:
(1) make a false statement of material fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;
(2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or
(3) offer evidence that the lawyer knows to be false. IF a lawyer, the lawyer's client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter, that the lawyer reasonably believes is false.
(b) A lawyer who represents a client in an adjudicative proceeding and who knows that a person intends to engage, is engaging or has engaged in criminal or fraudulent conduct related to the proceeding shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal.
(c) The duties stated in paragraphs (a) and (b) continue to the conclusion of the proceeding, and apply even if compliance requires disclosure of information otherwise protected by Rule 1.6.
(d) In an ex parte proceeding, a lawyer shall inform the tribunal of all material facts known to the lawyer that will enable the tribunal to make an informed decision, whether or not the facts are adverse.
(a) A lawyer who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement that the lawyer knows or reasonably should know will be disseminated by means of public communication and will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.
(b) Notwithstanding paragraph (a), a lawyer may state:
(1) the claim, offense, or defense involved and, except when prohibited by law, the identity of the persons involved;
(2) the information contained in a public record;
(3) that an investigation of a matter is in progress;
(4) the scheduling or result of any step in litigation;
(5) a request for assistance in obtaining evidence and information necessary thereto;
(6) a warning of danger concerning the behavior of a person involved, when there is reason to believe that there exists the likelihood of substantial harm to an individual or to the public interest; and
(7) in a criminal case, in addition to subparagraphs (1) through (6):
(A) the identity, residence, occupation and family status of the accused;
(B) if the accused has not been apprehended, information necessary to aid in apprehension of that person;
(C) the fact, time, and place of arrest; and
(D) the identity of investigating and arresting officers or agencies and the length of the investigation.
(c) Notwithstanding paragraph (a), a lawyer may make a statement that a reasonable lawyer would believe is required to protect a client from the substantial undue prejudicial effect of recent publicity not initiated by the lawyer or the lawyer's client. A statement made pursuant to the paragraph shall be limited to such information as is reasonably necessary to mitigate the recent adverse publicity.
(d) No lawyer associated in a firm or government agency with a lawyer subject to paragraph (a) shall make a statement prohibited by paragraph (a).
(e) The foregoing provisions of this rule do not preclude a lawyer from replying to charges of misconduct publicly made against the lawyer or from participating in the proceedings of legislative, administrative, or other investigative bodies.
Special Responsibilities of a Prosecutor
• The prosecutor in a criminal case shall:
(a) refrain from prosecuting a charge that the prosecutor knows is not supported by probable cause;
(b) make reasonable efforts to assure that the accused has been advised of the right to, and the procedure for obtaining, counsel and has been given reasonable opportunity to obtain counsel;
(c) not seek to obtain from an unrepresented accused a waiver of important pretrial rights, such as the right to a preliminary hearing;
(d) after reasonably diligent inquiry, make timely disclosure to the defense of all evidence or information required to be disclosed by applicable law, rules or procedure, or court opinions including all evidence or information known to the prosecutor that tends to negate the guilt of the accused or mitigates the offense, and, in connection with sentencing, disclose to the defense and to the tribunal all unprivileged mitigating information known to the prosecutor, except when the prosecutor is relieved of this responsibility by a protective order of the tribunal;
(e) subpoena a lawyer in a grand jury or other criminal proceeding to present evidence about a past or present client, or participate in the application for the issuance of a search warrant to a lawyer for the seizure of information of a past or present client in connection with an investigation of someone other than the lawyer, unless:
(1) the information sought is not protected from disclosure by any applicable privilege;
(2) the evidence sought is essential to the successful completion of an ongoing investigation or prosecution; and
(3) there is no other feasible alternative to obtain the information;
(f) except for statements that are necessary to inform the public of the nature and extent of the prosecutor's action and that serve a legitimate law enforcement purpose, refrain from making extrajudicial comments that have a substantial likelihood of heightening public condemnation of the accused and exercise reasonable care to prevent investigators, law enforcement personnel, employees or other persons assisting or associated with the prosecutor in a criminal case from making an extrajudicial statement that the prosecutor would be prohibited from making under Rule 3.6 or this Rule.
Truthfulness in Statements to Others
• In the course of representing a client a lawyer shall not knowingly make a false statement of material fact or law to a third person.
Communications Concerning a Lawyer's Services
(a) A lawyer shall not make a false or misleading communication about the lawyer or lawyer's services. A communication is false or misleading IF it:
(1) contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading;
(2) is likely to create an unjustified expectation about results the lawyer can achieve, or states or implies that the lawyer can achieve results by means that violate the Rules of Professional Conduct or other law; or
(3) compares the lawyer's services with other lawyer's services, unless the comparison can be factually substantiated.
(b) A communication by a lawyer that contains a dramatization depicting a fictional situation is misleading unless it complies with paragraph (a) above and contains a conspicuous written or oral statement, at the beginning and the end of the communication, explaining that the communication contains a dramatization and does not depict actual events or real persons.
(a) Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through written, recorded or electronic communication, including public media.
(b) A lawyer shall not give anything of value to a person for recommending the lawyer's services except that a lawyer may
(1) pay the reasonable costs of advertisements or communications permitted by this Rule;
(2) pay the usual charges of a not-for-profit lawyer referral service that complies with Rule 7.2(d), or a prepaid or group legal services plan that complies with Rule 7.3(d); and
(3) pay for a law practice in accordance with Rule 1.17.
(c) Any communication made pursuant to this rule, other than that of a lawyer referral service as described in paragraph (d), shall include the name and office address of at least one lawyer or law firm responsible for its content.
(d) A lawyer may participate in a lawyer referral service subject to the following conditions:
(1) the lawyer is professionally responsible for its operation including the use of a false, deceptive, or misleading name by the referral service;
(2) the referral service is not operated for a profit;
(3) the lawyer may pay to the lawyer referral service only a reasonable sum which represents a proportionate share of the referral service's administrative and advertising costs;
(4) the lawyer does not directly or indirectly receive anything of value other than legal fees earned from representation of clients referred by the service;
(5) employees of the referral service do not initiate contact with prospective clients and do not engage in live telephone or in-person solicitation of clients;
(6) the referral service does not collect any sums from clients or potential clients for use of the service; and
(7) all advertisements by the lawyer referral service shall:
(A) state that a list of all participating lawyers will be mailed free of charge to members of the public upon request and state where such information may be obtained; and
(B) explain the method by which the needs of the prospective client are matched with the qualifications of the recommended lawyer.
Direct Contact with Potential Clients
(a) A lawyer shall not by in-person, live telephone or real-time electronic contact solicit professional employment from a potential client when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain, unless the person contacted:
(1) is a lawyer; or
(2) has a family, close personal, or prior professional relationship with the lawyer.
(b) A lawyer shall not solicit professional employment from a potential client by written, recorded or electronic communication or by in-person, telephone or real-time electronic contact even when not otherwise prohibited by paragraph (a), IF:
(1) the potential client has made known to the lawyer a desire not to be solicited by the lawyer; or
(2) the solicitation involves coercion, duress, harassment, compulsion, intimidation, or threats.
(c) Targeted Communications. Unless the recipient of the communication is a person specified in paragraphs (a)(1) or (a)(2), every written, recorded, or electronic communication from a lawyer soliciting professional employment from a potential client known to be in need of legal services in a particular matter shall include the statement, in capital letters, "THIS IS AN ADVERTISEMENT FOR LEGAL SERVICES" (the advertising notice) subject to the following requirements:
(1) Written Communications. Written communications shall be mailed in an envelope. The advertising notice shall be printed on the front of the envelope, in a font that is as large as any other printing on the envelope. The front of the envelope shall contain no printing other than the name of the lawyer or law firm and return address, the name and address of the recipient, and the advertising notice. The advertising notice shall also be printed at the beginning of the body of the letter in a font as large as or larger than any other printing contained in the letter.
(2) Electronic Communications. The advertising notice shall appear in the "in reference" block of the address section of the communication. No other statement shall appear in this block. The advertising notice shall also appear, at the beginning and ending of the electronic communication, in a font as large as or larger than any other printing in the body of the communication or in any masthead on the communication.
(3) Recorded Communications. The advertising notice shall be clearly articulated at the beginning and ending of the recorded communication.
(d) Notwithstanding the prohibitions in paragraph (a), a lawyer may participate with a prepaid or group legal service plan subject to the following:
(1) Definition. A prepaid legal services plan or a group legal services plan ("a plan") is any arrangement by which a person, firm, or corporation, not otherwise authorized to engage in the practice of law, in exchange for any valuable consideration, offers to provide or arranges the provision of legal services that are paid for in advance of any immediate need for the specified legal service ("covered services"). In addition to covered services, a plan may provide specified legal services at fees that are less than what a non-member of the plan would normally pay. The North Carolina legal services offered by a plan must be provided by a licensed lawyer who is not an employee, director or owner of the plan. A prepaid legal services plan does not include the sale of an identified, limited legal service, such as drafting a will, for a fixed, one-time fee.
(2) Conditions for Participation.
(A) The plan must be operated by an organization that is not owned or directed by the lawyer;
(B) The plan must be registered with the North Carolina State Bar and comply with all applicable rules regarding such plans;
(C)The lawyer must notify the State Bar in writing before participating in a plan and must notify the State Bar no later than 30 days after the lawyer discontinues participation in the plan;
(D) After reasonable investigation, the lawyer must have a good faith belief that the plan is being operated in compliance with the Revised Rules of Professional Conduct and other pertinent rules of the State Bar;
(E) All advertisements by the plan representing that it is registered with the State Bar shall also explain that registration does not constitute approval by the State Bar; and
(F) Notwithstanding the prohibitions in paragraph (a), the plan may use in-person or telephone contact to solicit memberships or subscriptions provided:
(i) The solicited person is not known to need legal services in a particular matter covered by the plan; and
(ii) The contact does not involve coercion, duress, or harassment and the communication with the solicited person is not false, deceptive or misleading.
(e) For purposes of this rule, a potential client is a person with whom a lawyer would like to form a client-lawyer relationship.
Communication of Fields of Practice and Specialization
(a) A lawyer may communicate the fact that the lawyer does or does not practice in particular fields of law.
(b) A lawyer shall not state or imply that the lawyer is certified as a specialist in a field of practice unless:
(1) the certification was granted by the North Carolina State Bar;
(2) the certification was granted by an organization that is accredited by the North Carolina State Bar; or
(3) the certification was granted by an organization that is accredited by the American Bar Association under procedures and criteria endorsed by the North Carolina State Bar; and
(4) the name of the certifying organization is clearly identified in the communication.
Firm Names and Letterheads
(a) A lawyer shall not use a firm name, letterhead, or other professional designation that violates Rule 7.1. A trade name may be used by a lawyer in private practice if it does not imply a connection with a government agency or with a public or charitable legal services organization and is not false or misleading in violation of Rule 7.1. Every trade name used by a law firm shall be registered with the North Carolina State Bar for a determination of whether the name is misleading.
(b) A law firm with offices in more than one jurisdiction may use the same name or other professional designation in each jurisdiction, but identification of the lawyers in an office of the firm shall indicate the jurisdictional limitations on those not licensed to practice in the jurisdiction where the office is located.
(c) A law firm maintaining offices only in North Carolina may not list any person not licensed to practice law in North Carolina as a lawyer affiliated with the firm unless the listing properly identifies the jurisdiction in which the lawyer is licensed and states that the lawyer is not licensed in North Carolina.
(d) The name of a lawyer holding a public office shall not be used in the name of a law firm, or in communications on its behalf, during any substantial period in which the lawyer is not actively and regularly practicing with the firm, whether or not the lawyer is precluded from practicing law.
(e) Lawyers may state or imply that they practice in a partnership or other professional organization only when that is the fact.
A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established.
Fairness to Opposing Party and Counsel
• A lawyer shall not:
(a) unlawfully obstruct another party's access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act;
(b) falsify evidence, counsel or assist a witness to testify falsely, counsel or assist a witness to hide or leave the jurisdiction for the purpose of being unavailable as a witness, or offer an inducement to a witness that is prohibited by law;
(c) knowingly disobey or advise a client or any other person to disobey an obligation under the rules of a tribunal, except a lawyer acting in good faith may take appropriate steps to test the validity of such an obligation;
(d) in pretrial procedure,
(1) make a frivolous discovery request,
(2) fail to make a reasonably diligent effort to comply with a legally proper discovery request by an opposing party, or
(3) fail to disclose evidence or information that the lawyer knew, or reasonably should have known, was subject to disclosure under applicable law, rules of procedure or evidence, or court opinions;
(e) in trial, allude to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence, assert personal knowledge of facts in issue except when testifying as a witness, ask an irrelevant question that is intended to degrade a witness, or state a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant, or the guilt or innocence of an accused; or
(f) request a person other than a client to refrain from voluntarily giving relevant information to another party unless:
(1) the person is a relative or a managerial employee or other agent of a client; and
(2) the lawyer reasonably believes that the person's interests will not be adversely affected by refraining from giving such information.
Impartiality and Decorum of the Tribunal
(a) A lawyer shall not:
(1) seek to influence a judge, juror, prospective juror, or other official by means prohibited by law;
(2) communicate ex parte with a juror or prospective juror except as permitted by law;
(3) communicate ex parte with a judge or other official except:
(A) in the course of official proceedings;
(B) in writing, if a copy of the writing is furnished simultaneously to the opposing party;
(C) orally, upon adequate notice to opposing party; or
(D) as otherwise permitted by law;
(4) engage in conduct intended to disrupt a tribunal, including:
(A) failing to comply with known local customs of courtesy or practice of the bar or a particular tribunal without giving opposing counsel timely notice of the intent not to comply;
(B) engaging in undignified or discourteous conduct that is degrading to a tribunal; or
(C) intentionally or habitually violating any established rule of procedure or evidence; or
(5) communicate with a juror or prospective juror after discharge of the jury if:
(A) the communication is prohibited by law or court order;
(B) the juror has made known to the lawyer a desire not to communicate; or
(C) the communication involves misrepresentation, coercion, duress or harassment.
(b) All restrictions imposed by this rule also apply to communications with, or investigations of, members of the family of a juror or a prospective juror.
(c) A lawyer shall reveal promptly to the court improper conduct by a juror or a prospective juror, or by another toward a juror, a prospective juror or a member of a juror or a prospective juror's family.
Lawyer as a Witness
(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship on the client.
(b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer's firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9.
Communication with Person Represented by Counsel
(a) During the representation of a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order. It is not a violation of this rule for a lawyer to encourage his or her client to discuss the subject of the representation with the opposing party in a good-faith attempt to resolve the controversy.
(b) Notwithstanding section (a) above, in representing a client who has a dispute with a government agency or body, a lawyer may communicate about the subject of the representation with the elected officials who have authority over such government agency or body even if the lawyer knows that the government agency or body is represented by another lawyer in the matter, but such communications may only occur under the following circumstances:
(1) in writing, IF a copy of the writing is promptly delivered to opposing counsel;
(2) orally, upon adequate notice to opposing counsel; or
(3) in the course of official proceedings.
Dealing with Unrepresented Person
In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not:
(a) give legal advice to the person, other than the advice to secure counsel, IF the lawyer knows or reasonably should know that the interests of such person are or have a reasonable possibility of being in conflict with the interests of the client; and
(b) state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer's role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding.
Respect for Rights of Third Persons
(a) In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.
(b) A lawyer who receives a writing relating to the representation of the lawyer's client and knows or reasonably should know that the writing was inadvertently sent shall promptly notify the sender.
In representing a client, a lawyer shall exercise independent, professional judgment and render candid advice. In rendering advice, a lawyer may refer not only to law, but also to other considerations such as moral, economic, social, and political factors that may be relevant to the client's situation.
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