Members Present Judge Michael Sturdevant, Chair Judge Dann Greenwood Kara Johnson Petra Mandigo Hulm Dianna Kindseth Michael McGinniss Alex Reichert Justice Dale Sandstrom Nikki Schmaltz Dan Ulmer Pat Ward
Members Absent George Ackre Sandra Keller Jason Vendsel
Staff Jim Ganje Bill Neumann
Paul Myerchin, ND Association of Criminal
Defense Lawyers Brent Edison, Ass’t Disciplinary Counsel Travis Finck, Bismarck attorney John Ward, Bismarck attorney
Chair Sturdevant called the meeting to order at 12:15 p.m. and welcomed Nikki Schmaltz,
appointed by Chief Justice VandeWalle, and Alex Reichert, appointed by the SBAND Board of
Governors, as new members of the Committee. He then drew Committee members’ attention to the
minutes of the September 14, 2012, meeting.
It was moved by Pat Ward, seconded by Dan Ulmer, and carried that the minutes be
Emeritus Status for Lawyers - Supreme Court Referral of Minnesota Rule
Chair Sturdevant drew attention to Attachment C (June 5, 2013) - Supreme Court referral of
a rule and related amendments recently adopted by the Minnesota Supreme Court which permits
provision of pro bono legal services by retired lawyers who are given “emeritus” status. He also
noted North Dakota Admission to Practice Rule 3.1, which permits provision of pro bono legal
services by lawyers not currently admitted to practice but who are associated with an approved legal
services organization. He said the referral asks that the Committee review the Minnesota rule
provisions with Rule 3.1 for purposes of possible amendments to Rule 3.1. He said the referral also
requests consideration of the inclusion of a mentoring component.
Staff summarized notable differences between the Minnesota rule and Rule 3.1: “Emeritus” Status: Minnesota - applying lawyer must be admitted to practice in Minnesota, must file
a Retirement Affidavit and is placed on Restricted Status (voluntary non-compliance with CLE requirements.
Rule 3.1 - applying lawyer is or has been licensed to practice law in any state for at
least 5 years.
Application process: Minnesota - applying lawyer submits affidavit outlining approved CLE courses
attended in 90 days immediately preceding submission. The lawyer must affirm that
any necessary training will be obtained.
Rule 3.1 - applying lawyer submits application with certifications that the lawyer
has been or is licensed to practice law for at least 5 of the 10 years preceding
application, that there are no disciplinary proceedings pending against the lawyer
and no license restrictions. A statement from an approved legal services
organization must be submitted which indicates the lawyer will be volunteering with
the organization. The applicant must affirm that the Rules of Professional Conduct
have been read and that the lawyer submits to Supreme Court jurisdiction for
purposes of discipline.
Relationship to legal organization: Minnesota - applying lawyer must provide pro bono legal services in matters
referred to the lawyer by an approved organization.
Rule 3.1 - applying lawyer is affiliated with an approved legal services organization
as an unpaid volunteer subject to the organization’s supervision.
Length of status: Minnesota - three years with possible renewal. Rule 3.1 - no time limitation, but status ends when the lawyer ceases to be
supervised as an unpaid volunteer.
Judge Sturdevant observed that under the Minnesota rule a lawyer could provide legal
services in a matter referred to the lawyer by a state court or federal court program. Referrals, he
said, are not limited to those made by an approved legal services organization, which may be an
Kara Johnson noted that Rule 3.1 requires a relationship with the legal services organization
and wondered whether not having that relationship might pose concerns regarding malpractice
Alex Reichert observed that Rule 3.1 [Section D] exempts a lawyer providing services under
the rule from CLE requirements. That, he said, may be problematic if the lawyer fails to maintain
competency in areas in which services are provided. He said the Minnesota rule requires the lawyer,
if renewing emeritus status after three years, to identify attendance at relevant CLE programs. Dan
Ulmer noted that Rule 3.1does require the lawyer to fulfill any CLE requirements that may be
directed by the legal services organization with which the lawyer is affiliated.
In response to a question from Justice Sandstrom, Bill Neumann said Jim Fitzsimmons,
Executive Director of Legal Services of North Dakota, indicated that there is only one lawyer
providing services with his organization under the rule. Additionally, he observed that SBAND’s
Volunteer Lawyer Program might be considered an approved organization under the rule.
Pat Ward said there appears little demand for services under the rule and limited interest. He
said imposing more stringent CLE requirements may discourage broader participation.
Justice Sandstrom said there is a demonstrated need for more legal services in the state,
particularly with respect to kinds of cases that are more difficult, such as family law cases, and for
which there are too few lawyers practicing in the area. Bill Neumann noted that of the approximately
600 applications for volunteer or reduced fee legal services received by the Bar Association, most
are related to family law.
Pat Ward suggested one alternative may be to enable an increase in the number of legal
services organizations that can offer services in the state.
Mike McGinniss said there may be enhanced status related to the simple designation of
“emeritus” as there is a kind of cultural imprimatur attached to reference.
In response to a question from Judge Sturdevant, Kara Johnson said she currently serves as
chair of a Bar Association mentoring taskforce that is designing a program to provide mentoring for
Justice Sandstrom suggested that linking mentoring to emeritus status may be helpful and
worth considering as a way of meeting the unmet need for legal services.
Alex Reichert suggested the possibility of allowing an emeritus status lawyer to provide legal
services for a reduced fee.
Judge Greenwood asked whether any particular rule changes could be devised that would
make it more likely that lawyers, retired or otherwise, would participate. Additionally, he wondered
if there was a way to determine what actually might motivate retired lawyers to participate in the
Judge Sturdevant suggested the Committee review information concerning the number of
retired or inactive lawyers in the state.
With respect to the scope of unmet legal needs and possible responses, Bill Neumann
suggested the Committee might want to review the report of the SBAND Pro Bono Taskforce and
the work of the Taskforce Implementation Committee.
Special Fee Arrangements - Criminal Cases - Cont’d Discussion
Chair Sturdevant next drew attention to Attachment B (June 5, 2013) - preliminary draft
amendments to Rule 1.5, Rules of Professional Conduct, regarding special fee arrangements.
Staff explained that the draft amendments [new paragraphs (f), (g), and (h)] followed from
the September 2012 meeting discussion and are a hybrid of the Colorado and Louisiana rules
reviewed at the September meeting and which are also included in Attachment B. He said the draft
amendments generally would disallow nonrefundable retainers, would allow advance payment of
a flat fee in whole or in part, and would require any fees in dispute to be placed in the lawyer’s trust
account. He said the draft amendments also would require deposit in the trust account of the portion
of the advance payment above a, yet to be determined, certain amount, with fees then withdrawn
from the trust account upon a showing that the fee has been earned. He noted that draft comment
language was not prepared as any additions to the comment would depend on the structure of any
rule amendments finally considered satisfactory. Note: following references to page and line
numbers are with respect to Attachment B.
In response to a question from Chair Sturdevant, Paul Myerchin said discussion with other
criminal defense lawyers about the draft amendments elicited a tentative conclusion that the
amendments address issues discussed at previous meetings. He said the draft language would provide
some level of certainty and guidance with respect to permissible fee arrangements in criminal cases. With respect to the unidentified amount of advance fees to be deposited in the trust account, he said
$10,000, for example, would be on the low side with respect to a criminal case.
With respect to the unidentified fee amount to be deposited in the trust account (p.3, line 6),
Judge Sturdevant emphasized that the requirement would pertain to only the fee amount and not to
funds received by the lawyer for expenses such as expert witness costs.
With respect to draft paragraph (g)(4) [p.3, lines 11-13]regarding refund of unearned fees,
Bill Neumann wondered whether the requirement would apply to a fixed fee received by the lawyer
under paragraph (g)(2).
Alex Reichert asked how the determination of whether a fee is “unearned” would be made.
He posed the example of $20,000 fee for a drug case, of which 25% ($5,000) is an availability
retainer that the lawyer takes immediately. He asked whether that portion is “earned” on the first day
representation begins and, therefore, not subject to refund under paragraph (g)(4). He further
explained that perhaps another 25% is taken at the preliminary hearing stage as “earned” even though
the lawyer may have worked a minimal number of hours on the case. He asked whether the
determination is that the lawyer has “earned” the fees taken or whether it is a matter of the lawyer
and client having agreed that at particular stages of the proceeding a certain amount is taken by the
lawyer. He suggested that the description of a fee as “unearned” may be problematic.
Staff noted that the description of a fee or portion of a fee as “unearned” is related to the
refund requirement under paragraph (g)(4) in situations in which the lawyer becomes unavailable
or the lawyer-client relationship is ended before the fee is earned.
Brent Edison said the distinction between unearned and earned fees is a critical consideration
that should be retained. He said if a fee is unearned, then the simple consequence is that the lawyer
cannot keep the fee. In that regard, he said Comment  in the Colorado rule is a helpful
Paul Myerchin agreed Colorado Comment  provides useful guidance regarding how fee
arrangements can be structured.
Petra Hulm observed that it is not possible to craft rules to address all the situations that
might arise in a given case. She said there is currently no guidance in the rule regarding permissible
fee arrangements and amendments, while not comprehensive, would provide more structure than is
Pat Ward suggested redrafting paragraphs (g)(2) and (3) into one paragraph to include the
dollar reference and direction that fees may be transferred from the trust account to the operating
account when certain agreed-upon benchmarks are met.
Mike McGinniss noted that Rule 1.15 of the Rules of Professional Conduct, which generally
governs trust account deposits, and recent court opinions suggest that until the lawyer has provided
a service to the client or conferred a benefit, fees are not the lawyer’s property. He noted as well the
importance of a written fee agreement between the client and lawyer at the outset which clearly sets
out how fees are to be paid and earned.
Brent Edison observed that Minnesota Rule 1.5 requires a written fee agreement if a flat fee
arrangement is involved. He suggested it would be worthwhile to consider a similar requirement in
North Dakota’s rule.
Judge Greenwood said the basic objective is to identify what happens to a fee when the
lawyer cannot or does not perform the work agreed upon by the lawyer and client or the client
terminates representation, which entails a determination of unearned versus earned and a possible
refund. He said while “nonrefundable” fees may be desired, the Supreme Court in its opinions has
indicated that there can be no “nonrefundable” fee.
Alex Reichert asked whether the reference in paragraph (g)(2) to a fee becoming the lawyer’s
“property” and the required refund in paragraph (g)(4) are in conflict. He said it should be clear that
the refund applies to the amount that has not been earned according to the fee agreement or that
lawyer obligations have not been met according to the agreement. Otherwise, he said, a client may
assert that, while a certain agreed-upon benchmark had been reached, the fee was not earned by the
lawyer. Additionally, he suggested possibly modifying paragraph (g)(1) and (2) to refer to the fees
having been “earned”, rather than becoming the “lawyer’s property”,when received. That, he said,
may avoid confusion about what is considered “unearned” for purposes of the refund under
Petra Hulm observed that a client can always dispute whether a fee was earned, with or
without an agreement.
Mike McGinniss noted the language in paragraph (g)(1) and (2) which provides that fees
become the lawyer’s property and “may be” deposited in the lawyer’s operating account. He
suggested revising the reference to indicate the fee “must be” deposited in the operating account,
which would avoid any confusion regarding proper disposition of the fee.
Following further discussion, Chair Sturdevant said the draft amendments and possible
alternative amendments would be reviewed further at the September meeting.
Alex Reichert noted that the indigent defense bar will meet in the next few weeks. He said
comments could be solicited from indigent defense attorneys and shared at the next meeting.
ABA Commission on Ethics 20/20 - Rule Proposals - Referral
Chair Sturdevant next drew attention to Attachment E (June 5, 2013) - the Supreme Court’s
referral of rule amendments and model rules recommended by the ABA Commission on Ethics
Staff drew attention to and briefly reviewed the separately distributed bound material
consisting of the ABA Commission’s rule amendments and new rules and related North Dakota
rules. He said the bound material will be the Committee’s primary source document for the rule
Chair Sturdevant said the Committee will begin its review of the various rule changes at the
There being no further discussion, the meeting was adjourned at 2:20 p.m.