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State Bar Ethics Committee Report: July 2025
Below are the most pressing items addressed at the latest Ethics Committee meeting of the State Bar, as well as a new amendment to the North Carolina Rules of Appellate Procedure. I am including links to the proposed ethics amendments and opinions, which also include the mailing address and email address to provide comments if you choose to do so. Feedback is open until Oct. 10.
Proposed Rules Amendments Open for Comment Until Oct. 10, 2025:
27 N.C.A.C. 03, Rules Governing the Admission to the Practice of Law in the State of North Carolina: There are several proposed amendments relating generally to Bar Exam requirements and grading, as well as procedures for application for admission by servicemembers and their spouses. As to the Bar Exam, the proposed rules specifically acknowledge the NextGen UBE as part of the Uniform Bar Exam, require a new North Carolina State-Specific Component Examination on trusts and estates, and revise procedures related to grading and score disclosures to applicants (including that exams “will not” be regraded).
Amendments Pending Supreme Court Approval:
Several of the proposed amendments discussed in the previous Ethics Update have now been adopted by the State Bar and are awaiting approval by the Supreme Court. They include the following:
27 N.C.A.C. 1D, Section .1500, Rules Governing Continuing Legal Education Program: Requirement that CLE sponsors (not lawyers) provide approval applications for all online programs (not just on-demand programs).
27 N.C.A.C. 1B, Section .0100, Rules Governing Discipline and Disability of Attorneys: Continuing to implement the suggestions of the State Bar Grievance Review Committee, this proposal would prevent complainants from receiving notice when attorneys receive private discipline or warning. Instead, such a complainant would be informed that the matter “has been resolved privately, either by dismissal, deferral, or private action.” This is intended to prevent complainants from publicizing discipline that is intended to be private.
27 N.C.A.C. 1D, Section .1400, Rules Governing the Administration of the Client Security Fund of the North Carolina State Bar: The proposal makes several changes to the Client Security Fund (CSF). Notably, it allows the CSF to receive funds from attorney trust accounts frozen due to trust account violations, where it cannot be determined to whom the funds properly belong. In addition, CSF would be allowed to reimburse claimants who sustain losses due to mismanagement that does not necessarily rise to the level of dishonesty, and in cases in which attorneys accept fees but fail to perform services.
27 N.C.A.C. 02, Section .0100, Rules of Professional Conduct: Replaces references to the position Trust Account Compliance Counsel, as that position has been eliminated. References are now to the Trust Account Compliance Department.
There are currently no proposed ethics opinions open for public comment. Updates on other pending matters are as follows:
Recently Adopted Opinions:
Proposed 2025 Formal Ethics Opinion 2, Negotiating Licensure Reporting Capability During Mediation: The State Bar has now adopted this opinion, which was discussed in detail in the last Ethics Update. The opinion restricts parties and mediators from participating in settlement agreements designed to limit the ability of a lawyer or party to report unethical attorney conduct.
Matters Referred to Subcommittee for Further Study:
Proposed 2025 Formal Ethics Opinion 3, Client Consent to Annual Rate Increase: The proposed opinion, discussed in detail in the last Ethics Update, addresses five (5) separate inquiries related to attorneys increasing their rates during the course of representation. Based on comments received by the Bar, the matter has been referred to subcommittee.
In addition to that proposed opinion, the State Bar has referred several additional matters to subcommittee, including inquiries related to conflicts of interest for public defenders, whether a real estate lawyer can refer a client to a law partner’s title company, and the inclusion of non-disparagement clauses in fee agreements or fee dispute settlements.
In addition to these State Bar matters, please be aware that the Supreme Court has adopted an amendment to the Rules of Appellate Procedure which will be effective Sept. 2, 2025. The order approving this amendment can be found here: Order Amending RAP 36 (Approved 20 August 2025).pdf. The only rule amended is Rule 36, which governs what trial judges can take judicial action in pending appeals. Specifically, Rule 36(b) governs the procedure when such an action can only be taken by a specific trial judge, but that judge is unavailable by reason of “death, mental or physical incapacity, or absence from the state.” The Supreme Court amended Rule 36(b) to include “retirement” among the potential reasons for unavailability. This amendment brings the Rule in line with a recent change by the General Assembly to N.C.G.S. § 1-283, which governs the empowerment of a trial judge to settle the record on appeal.
