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Perhaps the only thing an attorney fears more than a certified letter from the State Bar is notice of a formal complaint.  If you have received such a formal complaint, you may feel that your life, professionally and personally, has been turned upside down.  You also may be wondering how the formal process works, what are the potential results and whether you need to hire an attorney or law firm experienced in defending State Bar matters.  We regularly represent attorneys in defending State Bar formal complaints.  In the sections below, we attempt to address some of your questions about the formal process and possible results.

Disciplinary Hearing Commission and General Procedures

Formal complaints are heard before the Disciplinary Hearing Commission (DHC).  The DHC is an independent tribunal that hears all contested disciplinary cases brought by the State Bar.  The DHC is composed of twelve lawyers appointed by the State Bar Council and eight non-lawyers appointed by the Governor and the General Assembly.  In addition to disciplinary cases, the DHC also hears cases involving contested allegations that a lawyer is disabled and petitions from disbarred or suspended lawyers seeking reinstatement.

The DHC sits in panels of three — two lawyers and one non-lawyer — to decide each case.  These DHC panels are generally referred to as the Hearing Committee for a particular matter.

In general, proceedings before the DHC follow the procedures contained in the North Carolina Rules of Civil Procedure, with minor exceptions.   Discovery procedures are available to both parties.  Both parties have the right to compel the production of documents and the attendance of witnesses by subpoena.  DHC complaints and other documents filed in the proceeding are public records and are posted on the Bar’s website.  DHC formal evidentiary hearings or trials are open to the public and generally are conducted according to the North Carolina Rules of Evidence.  Generally, DHC proceedings typically last between six months to a year on average and can last longer in some cases.

Answering a State Bar Complaint, Representation by Counsel and Potential Settlements

The State Bar’s complaint must allege the charges with sufficient precision to clearly apprise the defendant of the conduct which is the subject of the complaint.

The defendant attorney must file an answer within 20 days of service of the complaint.  An answer must be filed or the attorney is subject to default, as in civil proceedings.  This requirement is different than in disciplinary proceedings before many other professional boards under the Administrative Procedure Act, which do not require an answer or response.

Defendants in DHC cases are entitled to be represented by counsel and many elect to have counsel experienced before the State Bar and DHC defend them.

Unlike in defending a State Bar grievance, generally a defendant attorney or his or her counsel may attempt to resolve a formal complaint through a negotiated consent order.  Our firm works with attorney clients to comprehensively and objectively evaluate the case before the DHC.  If our client directs or consents, our firm then makes determined, good faith efforts to resolve DHC matters pursuant to an acceptable consent order based on this comprehensive case evaluation.  All negotiated consent orders are subject to review by the DHC panel, which can either accept or reject the proposed order.   If the proposed order ultimately is rejected by the DHC, the case must proceed to a formal hearing.

DHC Hearing Process, Decisions and Appeals

Hearings are divided into two phases.  The process is somewhat similar to a bifurcated liability and damages civil trial or to the guilt/innocence and sentencing phases in a criminal case, except that the DHC phases are done immediately after one other.

  1. Phase one is the “violations phase.”  The State Bar has the burden of proving by clear, cogent and convincing evidence that the defendant attorney violated the Rules of Professional Conduct.  If the State Bar fails to carry its burden of proof in phase one, the case is dismissed and there is no second phase.  If the Hearing Committee finds that the State Bar has proven some or all of the alleged violations, phase two begins immediately after the panel announces its decision.  Our firm works with attorney clients with matters pending before the DHC to comprehensively and objectively evaluate the case and aggressively defend against the State Bar allegations when no resolution is feasible or warranted.
  2. Phase two is the “disciplinary phase.”  At this phase, the DHC panel hears evidence relevant to the discipline to be imposed, determines the existence of factors pertinent to discipline, and determines the appropriate discipline.  Our firm coordinates with our clients to develop persuasive mitigating evidence concerning the appropriate discipline and present it to the DHC panel in cases where violations are uncontested or are found to have occurred in phase one.
  3. DHC Decision:  The DHC panel verbally announces its decision at the conclusion of each phase and then must issue a written order containing its findings of fact and conclusions of law from both phases of the trial.

The DHC panel can dismiss the charges or can admonish, reprimand, or censure the defendants, which discipline is explained in the section concerning defending a grievance.  The DHC also can suspend an attorney’s license for up to five years or disbar an attorney for a minimum of five years.  The Hearing Committee can stay all or part of a suspension upon compliance with stated conditions.  It also can impose conditions precedent to reinstatement of a suspended or disbarred lawyer.  A disbarred lawyer is technically eligible to apply for reinstatement five years after the effective date of disbarment but reinstatement from disbarment is exceptionally difficult.

Either the defendant attorney or the State Bar can appeal an order issued by the DHC panel.  The appeal is heard directly by the North Carolina Court of Appeals.  Disbarments and suspensions exceeding eighteen months are not stayed on appeal unless the appellate court issues a writ of supersedeas upon request of the defendant attorney.  All other discipline imposed by the DHC is automatically stayed on appeal.  Our firm’s attorneys have experience in handling appeals of State Bar disciplinary matters.

If you have received a certified letter from the North Carolina State Bar containing a Letter of Notice from the Authorized Practice of the North Carolina State Bar, you may have been surprised or shocked at allegations that you allegedly have violated state law and committed criminal violations.  You may wonder about the procedures, what the possible results are, what decisions have been made in prior similar cases, whether you may be prosecuted criminally, among other questions.  Our firm routinely represents clients like you in responding to and defending complaints of the unauthorized practice of law filed with the Authorized Practice Committee of the North Carolina State Bar.  In the sections below, we attempt to address some of your potential questions and explain the general process, procedures and possible outcomes of this complaint.

Authorized Practice Committee and General Procedures

The Authorized Practice Committee of the North Carolina State Bar investigates and pursues allegations concerning the unauthorized practice of law in North Carolina.  The Committee consists of approximately 35 members, most of whom are elected State Bar councilors and attorneys, along with several advisory members and one public member.  The Committee meets quarterly in conjunction with the State Bar’s regular meetings to consider and decide complaints of the unauthorized practice of law.  All complaints concerning the unauthorized practice of law filed with the North Carolina State Bar must come before and be decided by the Authorized Practice Committee at one of its quarterly meetings.  Attorneys with the State Bar’s Office of Counsel serve as counsel for and staff liaisons to the Committee.

Authorized practice complaints, the response and any documentation obtained in connection with the complaint are matters of public record and not confidential.  Meetings of the Authorized Practice Committee generally are open to the public.  Historically, the Committee also has provided notice to respondents against whom complaints have been filed about the meeting at which the Committee will consider the complaint against them.  If requested, respondents or their counsel generally are given a brief opportunity to address Committee in person.   Authorized Practice complaints typically take anywhere from six months to a year, or longer in some cases, before the State Bar makes a final decision.

Responding to a Complaint Concerning the Unauthorized Practice of Law

If you have received a Letter of Notice from the Authorized Practice Committee of the North Carolina State Bar, this generally means that its staff counsel has reviewed a complaint filed against you and made an initial determination that the allegations, if true, state a violation of the statutes concerning the unauthorized practice of law.

The deadline to submit a written response is within 15 days from receipt of the Letter of Notice by certified mail.  It is important that you know the date that the letter was received.  The State Bar typically grants an initial extension of time to respond upon request.  Although you can obtain a copy of the original complaint, which is generally advisable, it also is important to remember that the staff attorney already has made determinations about what allegations s/he thought were pertinent.

In drafting a response to the letter of notice, it is important for you to include all information and documentation necessary to respond to the allegations but equally important for you to include only the pertinent information and documentation.  Our firm helps our clients make these judgments and determinations from an objective standpoint and with knowledge and experience of the process in defending complaints involving the unauthorized practice of law.  We also work with clients to comprehensively and objectively evaluate the complaint, the best response, and the potential outcomes, based on approximately 15 years of experience with the Committee.

After receiving the response, the staff attorney may request additional follow-up information from you or otherwise conduct an additional investigation.  Whether additional information and investigation is necessary and how much needs to be collected varies depending on the types of cases.  For example, allegations involving assisting in real estate closings often involve either additional follow-up requests or investigation and sometimes both.

Authorized Practice Committee Decisions and Possible Results

After the staff attorney determines that all necessary information has been obtained, s/he prepares a report of counsel to the Authorized Practice Committee.  This report summarizes the complaint, response, evidence, and makes a recommended resolution.  This report and recommendation also results in the complaint being placed on the Committee’s agenda at its next quarterly meeting either for full Committee discussion or on the consent agenda with a proposed disposition.

At the Committee’s quarterly meeting, the complaint is considered on the written record, consisting of the complaint with any attachments, the response(s) with any attachments, the results of any additional investigation conducted by the Office of Counsel, and the Report of Counsel.  Live testimony is not received and the respondent and his or her counsel is at most given a brief opportunity to address the Committee.

Complaints considered at the quarterly meetings are resolved by the Authorized Practice Committee taking one of the following actions:

  • Dismiss the complaint if the committee finds that there is no probable cause to believe that the respondent violated the unauthorized practice of law statutes.
  • Take no action, which typically occurs when the Committee is unable to locate the respondent or otherwise unable to obtain sufficient information to make a determination.
  • Issue a letter of caution finding that the respondent committed a violation of the unauthorized practice of law statutes but take no further action at that time.  (For respondents who are out of state attorneys, the Committee on occasion has referred the matter or sent a copy of the letter of caution to the Bar for the State in which the lawyer is licensed to practice)
  • Issue a cease and desist letter finding that the respondent committed a violation of the unauthorized practice of law, directing the respondent to cease such activities and provide confirmation that respondent has done so.
  • Refer the matter to a local district attorney and request that respondent be prosecuted criminally for violations of the unauthorized practice of law and possibly other statutes.
  • Recommend that the State Bar file and pursue civil injunctive proceedings against respondent.  Either the State Bar Executive Committee or its governing Council must adopt the Committee’s recommendation before the State Bar can pursue civil injunctive proceedings.

Generally, the State Bar does not provide an opportunity to reject its findings and conclusions and also does not provide an opportunity for an evidentiary hearing for respondents who disagree with the Committee’s decision.  However, the State Bar must file a civil action to pursue injunctive relief against a respondent.  In such a proceeding, the State Bar has the burden of proving that the respondent committed a violation of the unauthorized practice of law statutes and that injunctive relief is warranted.  Respondents generally have the same rights and opportunities afforded to any defendant in a civil case in such proceedings.  Our firm strives to prevent the State Bar from filing such actions and seeking such relief against our clients.

We often receive requests to submit ethics inquiries to the State Bar from attorneys, law firms and other clients working with lawyers.  The State Bar attorneys will ordinarily answer routine ethics questions over the telephone or by email.  However, novel ethics questions are referred to the Ethics Committee for determination.

As the proceedings of the Ethics Committee are public, there are instances in which an inquiring attorney would rather not be identified.  In those circumstances, we prepare and submit a written inquiry to the ethics staff, which includes written argument for the attorney’s position.  If the attorney does not want to be identified, we simply state that we are inquiring on behalf of a client.

Based upon this written inquiry, the State Bar ethics staff then prepares a proposed opinion for submission to the Ethics Committee.  The Ethics Committee will discuss the proposed opinion at its next quarterly meeting.  At that time, our firm will be given an opportunity to present oral argument at the Ethics Committee meeting.  The Ethics Committee can then vote to adopt the staff proposed opinion as written, it can refer the matter to subcommittee for further study, or it can modify the proposed opinion during the current Committee session.  We typically also attend subcommittee meetings for clients to obtain information and provide input into the subcommittee’s recommendations.

If the Ethics Committee votes to both approve and publish the proposed opinion, it will be published in the next State Bar Journal as a proposed formal opinion.  If no comment is received from attorneys in the intervening quarter following publication, then the opinion typically becomes a Formal Ethics Opinion, which will ultimately be published in the State Bar Lawyer’s Handbook.  If the State Bar receives even one comment on the opinion, it is placed back on the Ethics Committee agenda for the following quarter for further discussion and this process can repeat itself until the Committee votes to recommend adoption of the opinion by the State Bar Council.  The process for the State Bar to issue a formal ethics opinion typically takes from six months to occasionally several years before the Bar adopts a final opinion.

There are also instances where the inquiring attorney would prefer that the final adopted opinion not be published.  We can formulate the request that the opinion not be published and request instead that the opinion be adopted as an Ethics Decision.  There are several factors the State Bar uses in determining whether or not the opinion is published, such as interest to other members of the bar.  Ethics Decisions are kept on record at the State Bar but are not published in the State Bar Journal or on its website and are not included in the State Bar Lawyer’s Handbook.

We also work with numerous clients to provide ethics advice and coordinate with law firm clients to obtain informal ethics opinions from the State Bar.   For example, our firm regularly pre-screens proposed advertising and marketing materials, provides advice on compliance, and works with our clients and State Bar ethics staff to ensure full compliance with the Bar’s very detailed sometimes extremely technical ethics rules, opinions and interpretations in this area.  This informal State Bar process is significantly shorter than obtaining a formal ethics opinion or an ethics decision, typically ranging from a few days to weeks or sometimes longer before an opinion is issued.  Our firm strives to provide our response and advice within 24 hours.

Recently Republished in the Campbell Law Observer:
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Recently Republished in the Campbell Law Observer:
Inadvertent Disclosure of Privileged Information: Major Headache or Minor Hiccup?

You are going through the discovery materials that opposing counsel sent you when you come across a document that is marked “Privileged.” How do you handle this situation? What are your duties? Download PDF

Ethical Considerations and Quick Reference Guide for Opening and Running
A Law Practice

This publication is a summary and quick reference for some of the most important and recurring ethical issues involved with establishing and running a law practice and law firm. Download PDF

Tips for Safeguarding Client Trust Funds

Here are some easy-to-implement and smart accounting practices to safeguard your trust account and your law license. Download PDF

Turning Out The Lights Without Leaving Your Clients In The Dark

Exit planning is a hot topic in North Carolina although we are certainly not the first state to tackle these issues. The president of the North Carolina State Bar in 2013, called for the Bar to re-examine and improve our approach to both the beginning and the end of law practice. Download PDF

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