Members Present Judge Michael Sturdevant, Chair George Ackre Judge Dann Greenwood Kara Johnson Michael McGinniss Justice Dale Sandstrom Nick Thornton Dan Ulmer
Members Absent Judge Paul Jacobson Alex Reichert Nikki Schmaltz Jason Vendsel
Also Present Kelly Armstrong, ND Association of
Criminal Defense Lawyers Al Austad, ND Association for Justice John Olson, Chair, Lawyer Assistance
Committee Lawrence King, Board of Law Examiners Penny Miller, Secretary-Treasurer, Board of
Law Examiners; Secretary, Disciplinary
Staff Jim Ganje Tony Weiler
Chair Sturdevant called the meeting to order at 10:00 a.m. and drew Committee members’
attention to Attachment B (March 6, 2014) - minutes of the December 6, 2013, meeting. It was noted
that Alex Reichert should have been reflected as present and Nikki Schmaltz should have been
reflected as absent.
It was moved by Kara Johnson, seconded by Dan Ulmer, and carried that the minutes,
as corrected, be approved.
Special Fee Agreements - Criminal Cases - Cont’d Discussion
Chair Sturdevant reviewed the Committee’s approval of proposed amendments to Rule 1.5,
Rules of Professional Conduct, to address nonrefundable retainers and other special fee arrangements
in criminal cases and submission of the amendments to the SBAND Board of Governors for
comment. He said the Board’s response is reflected in the March 4, 2014, letter from Nancy Morris,
SBAND President -Attachment C (March 6, 2014). The letter indicates the Board’s general
agreement with proposed paragraph (f) of Rule 1.5, which would disallow nonrefundable fees and
retainers and would recognize the client’s right to terminate presentation. The Board, however,
unanimously opposed language in proposed paragraph (g) which would provide that fixed fees
received by the lawyer “become the lawyer’s property when paid”. The Board concluded there was
a basic conflict between paragraphs (f) and (g). The Board also expressed concern with proposed
language allowing the lawyer to deposit a fixed advance fee in the lawyer’s operating account, which
may then risk the fee amount not being available in the event a refund is required. The Board
concluded that advance fees should be deposited in the lawyer’s trust account until the fee is earned.
Staff noted that Alex Reichert could not attend due to airline delays but had sent an email
suggesting further consideration of the issue be held over to the Committee’s June meeting. He said
Judge Jacobson, a new member of the Committee, could not attend due to an ongoing trial but had
sent an email indicating he agreed with the Board of Governors’ response.
Chair Sturdevant then requested Committee discussion of the Board’s response to the
In response to a question from Justice Sandstrom, Tony Weiler said the Board of Governors
did not discuss the option of allowing the lawyer to deposit an identified portion of an advance fee
in the operating account, with any excess amount deposited in the trust account. He said the Board
only evaluated the amendments proposed and submitted to it by the Committee.
In response to a question from Dan Ulmer regarding fees paid to lawyers who serve as
lobbyists, John Olson said he, when serving as a lobbyist, does not deposit the fee in his trust
In response to a question from Justice Sandstrom concerning how lawyer-lobbyists are paid,
Mr. Olson said some lawyer-lobbyists are in-house counsel for the particular entity. Others, he said,
are contract lobbyists and the most common method of compensation is a monthly payment, which
increases slightly during the legislative session. He said other lawyer-lobbyists are on retainer for
the entire legislative session.
In response to a further question from Justice Sandstrom, Mr. Olson said he would regard
it as unethical for a lawyer-lobbyist to receive compensation based on the success of the lobbying
With respect to the Board of Governors’ response to the proposed amendments, Kelly
Armstrong said the response was wholly unsatisfactory. He noted that in his criminal defense work
the normal practice involves $3,000 to $5,000 flat fee transactional billing. He said about ninety
percent of his clients are in that category. He said ten and thirty day deadlines are common in the
many of the cases he handles (DUI administrative and criminal hearings). He said even though he
and the client may, for some reason, want to discontinue his representation, the decision to allow him
to leave the case is still made by the court. He said if he were required to deposit fees in the trust
account and only withdraw when the fee is “earned” it would create enormous problems for his
practice. He said knowing at what point a portion of the fee may have been earned is very difficult
given the compressed timeframes for the kinds of cases he normally handles.
Mike McGinniss said he sympathizes with the concerns expressed by the Board of
Governors. He said rather than describing an advance fee as the lawyer’s property, which could be
deposited in the operating account, an alternative in relatively small fee situations may be to allow
deposit in the operating account of a certain portion of the fee. He said in compressed
timeframe/small fee situations such as those described, it may be possible to use the fee agreement
to establish triggering events, e.g., starting work or first appearance, that identify when a portion, or
all, of the fee is earned.
In response to a question and observation by Nick Thornton, Mike McGinniss agreed that
even with triggering events the fees would remain subject to the reasonableness standard under
Nick Thornton said another concern is the commingling of funds that occurs when a flat fee,
as the lawyer’s property, is deposited in the lawyer’s trust account and commingled with client
property. Conversely, he said, if the fee is deposited in the operating account but is unearned and,
therefore, remains client property, then there is likewise an issue of commingling funds. He said the
Committee’s proposed amendments provide specific guidance on the commingling issue. He said
his frustration as a young lawyer is that the fee issue remains confused after the Supreme Court’s
several opinions discussing fee arrangements and direct guidance by rule would be very helpful.
In response to a question from Justice Sandstrom regarding lawyer/lobbyists, Mike
McGinniss said there are suggestions in caselaw and ethics opinions that when a lawyer serves as
a lobbyist there is a element of the practice of law involved. Consequently, he said the safer, perhaps
more conservative, approach would be treat most work done in the capacity of a lawyer/lobbyist as
being work done by a lawyer. In response to a question from Dan Ulmer, he said if the lawyer is
paid a fee, works for a law firm, and serves as a lobbyist, the better course may be to treat the activity
as if it were governed by the Rules of Professional Conduct, which would mean the fee should be
deposited in the lawyer’s trust account.
Chair Sturdevant explained that before the meeting he had exchanged messages with Tom
Dickson, a Bismarck criminal defense attorney, in which Mr. Dickson indicated an effort would be
made to meet with the Board of Governors and explain the criminal defense bar’s position regarding
the rule amendments and the fee issue generally.
Tony Weiler said a letter had been received from the Association of Criminal Defense
Lawyers asking that the Board reconsider its decision regarding the proposed amendments and
requesting time at the next Board meeting to discuss the issue. He said the Board will discuss the
matter further at its April 26 meeting.
After further discussion, it was moved by Nick Thornton and seconded by Dan Ulmer
that the Committee postpone action on the proposed amendments until after the Board of
Governors’ April meeting.
Justice Sandstrom suggested the Committee may want to consider a middle approach, such
as treating disposition of the advance fee based on amount. Dan Ulmer observed that if fee
disposition is based on a particular dollar amount, then the amount would have to be revisited
repeatedly. He said maybe a percentage approach would be more flexible.
George Ackre observed that the Hoffman opinion does provide some useful guidance
regarding fee arrangements. However, he said it appears there is an expectation that the law practice
is to micro-manage fees, which ostensibly could only be done on the basis of time since such factors
as experience, reputation, local custom, and other non-time considerations are not part of the
calculation. That position, he said, apparently would never accept the use of a flat fee arrangement,
nor would it consider review by the Disciplinary Board of the merit of the fee arrangement.
The motion carried.
Lawyer Assistance Program - Proposed Amendments
Chair Sturdevant next drew Committee members’ attention to Attachment D (March 6,
2014)-proposed amendments regarding operation of the Lawyer Assistance Program (LAP)
submitted by the Lawyer Assistance Committee and referred to the Committee by the Supreme
Court. He called on John Olson, Chair of the Lawyer Assistance Committee, for comments regarding
Mr. Olson summarized the letter to the Supreme Court submitting the proposed amendments
and the background information reviewed by the Lawyer Assistance Committee. He said proposed
amendments to Administrative Rule 49, which governs the LAP, would include law students
attending the UND School of Law among those who could seek assistance from the program. He
said a number of jurisdictions have taken this approach. He said the proposed amendments to Rule
2 of the Admission to Practice Rules would address how the Board of Law Examiners could respond
to the fact that a law student received LAP services while in law school. The amendments, he said,
are based on amendments recently adopted by the Arkansas Supreme Court [included in Attachment
C]. He said the overriding importance and purpose of the proposed amendments is to provide a
mechanism by which law students who may be struggling with mental health or substance abuse
issues can obtain assistance and services to address the issues. Such assistance, he said, could aid
in ensuring that the student becomes a productive, functioning member of the legal profession.
With respect to confidentiality and the proposed amendments to Rule 2, Judge Sturdevant
asked how the Board of Law Examiners would become aware that a student had received LAP
Lawrence King, Board of Law Examiners member, said there are no questions on the present
admissions application which ask for information related to assistance a student may have received.
He said the LAP is a valuable resource and the Board on occasion has encouraged or required
applicants to seek assistance through the program. He said the Board is concerned that Arkansas
apparently is the only jurisdiction that has adopted amendments similar to those set out as proposed
amendments to Rule 2. He said the Board, when reviewing an application for admission, considers
an applicant’s insight, approach, and treatment, if any, with respect to a mental health or substance
abuse issue. If the applicant is seeking assistance, he said, then that is taken into account by the
Board. Additionally, he said there is some concern with the language of the amendments with respect
to rehabilitation, i.e., successful rehabilitation “shall be” considered favorably by the Board, but
failure to complete a treatment program “may be” considered adversely by the Board. He said the
mandatory language related to successful rehabilitation set against the permissive language related
to failure to complete a program is considered too limiting. He noted that the Board’s principal
charge is protection of the public, while the LAP goal is, rightfully, to assist and protect the person.
Penny Miller said the preamble to questions on the current application regarding mental
health issues explains that the information will be treated as confidential, that the information is
solicited to determine the current fitness of the applicant to practice law, and that the mere fact of
treatment for mental health problems or addictions is not, by itself, a reason for which an applicant
is denied admission. A lack of candor or an inability to function in a manner relevant to the practice
law may be a basis for denying admission.
In response to a question from Nick Thornton, Mr. King said the Board’s basic position is
that it is not opposed to the proposed amendments to Administrative Rule 49, but does not support
the proposed amendments to Rule 2 of the Admission to Practice Rules.
In response to a question from Judge Sturdevant regarding whether the AR49 amendments
should apply to a student attending any law school, Mr. Olson said the preference is to focus on
students attending UND School of Law. It was noted that a lawyer assistance program open to law
students may not be available in a particular jurisdiction.
Tony Weiler explained that the Board of Governors had previously discussed the proposed
amendments to Administrative Rule 49 and supports the amendments.
Following further discussion, it was moved by Justice Sandstrom, seconded by Dan
Ulmer, and carried that the proposed amendments to Administrative Rule 49 be approved and
recommended to the Supreme Court for its consideration.
Committee members then turned to further discussion of the proposed amendments to Rule2
of the Admission to Practice Rules.
Mr. Olson said there does not appear to be anything in the proposed amendments that
necessarily conflicts with the preamble language recited by Ms. Miller. Ms. Miller responded that
the principal concern is with the mandatory phrasing of the amendments.
Mr. Olson said the main focus is the ease and freedom for law students in seeking assistance
for mental health or addiction problems. He said a student may be very wary of seeking assistance while in law school if it were known that it would be a subject of discussion later when applying for
licensure. He asked whether the fact that someone has sought assistance is truly relevant if there are
no other issues related to admission.
Mike McGinniss agreed there may be a chilling effect if there is risk associated with a student
seeking assistance. He said the amendments appear focused on the student seeking assistance. He
said behavior that could affect the practice of law could still be considered.
In response to a question from Nick Thornton, Ms. Miller said if the questions related to
mental health or substance abuse issues are not answered the applicant will receive a letter. She
noted that the questions are written in light of the Americans with Disabilities Act and, therefore,
are subjective in nature.
Following further discussion, it was moved by Justice Sandstrom and seconded by
George Ackre that the proposed amendments to Rule 2 be modified as follows: “4. Seeking counsel from the State Bar Association of North Dakota Lawyer
Assistance Program (LAP) for mental health or substance abuse issuesproblems
that might impactaffect law practice administration or compromise professional
competence shallmay not be considered adversely by the Board in its evaluation.
Further, shouldIf the applicant choosechooses to participate in a program designed
for the applicant by LAP and successfully completecompletes that program by the
time of graduation, the evidence of such rehabilitation and recovery shallmay be
considered favorably by the Board when evaluating the applicant’s character and
fitness. The applicant’s failure to complete a treatment program may be considered
adversely by the Board.”
Mr. King said the Board of Law Examiners had devised changes to the proposed amendments
that are similar to those suggested in the motion. Ms. Miller noted that the Board was uncertain of
the meaning of “seeking counsel” in the first line. It was thought, she said, that “contact with” might
be a better phrase.
Justice Sandstrom noted that the first proposed change from “shall not” to “may not” in the
motion is intended to reflect proper legislative drafting style, which is that “may not” indicates that
the action is not permissive. He said the second proposed change from “shall” to “may” would
indicate a change from mandatory to permissive.
Kara Johnson asked whether the Rule 2 amendments are too narrowly tailored to only UND
law students. Nick Thornton suggested the possibility of inserting “or equivalent program” after
“(LAP)” in the first line as a way of broadening the focus.
Judge Greenwood disagreed and said there may be no reliable way of determining whether
the program is equivalent to North Dakota’s LAP. Dan Ulmer agreed.
In response to a question from Dan Ulmer, Ms. Miller said the preference would be to at least
initially limit the focus of the proposal to UND law students.
After discussion, the motion carried.
It was moved by Justice Sandstrom, seconded by George Ackre, and carried that the
proposed amendments to Rule 2, Admission to Practice Rules, as further amended, be
approved for submission to the Board of Governors for review and, in the absence of any
Board comment requiring Committee action, be approved for submission to the Supreme
Court for its consideration.
ABA Commission on Ethics 20/20 - Cont’d Review of Amendments to Model Rules of Professional
Conduct - Proposed Model Rules Rule 8.5 - Jurisdiction. Chair Sturdevant drew attention to amendments to Model Rule8.5
and comments, which the Committee initially discussed at the December 2013 meeting but deferred
further discussion to this meeting. Staff explained that the Model Rule is titled “Disciplinary
Authority; Choice of Law” and paragraph (a) of the model rule is essentially similar to North Dakota
Rule 8.5(a). He said the significant difference is paragraph (b) of the model rule and related
comments, which add a choice of law provision regarding which professional conduct rules will
apply in certain situations.
Mike McGinniss recalled the December meeting discussion and the question of whether the
model rule amendments add anything significant to the rule. He said the choice of law addition
would be a benefit to a lawyer reviewing conduct when the lawyer is licensed in more than one
jurisdiction. For example, he said conduct that may be permissible in one jurisdiction may not be
permissible in another. He said the choice of law provision would aid the lawyer in understanding
which rules would apply in a given situation. Additionally, he said the safe harbor provision in
paragraph (2) is an important addition.
Kara Johnson noted current language in Rule 5.5(b)(4), which establishes a safe harbor
provision when a lawyer is associated with a matter “in or substantially related to this jurisdiction”.
She wondered whether the reference in paragraph (a) of Rule 8.5 to “in this jurisdiction” (Model
Rule, p. 139, lines 9-10) should be modified to reflect similar language.
Mike McGinniss said “offers to provide legal services” related to the noted “in this
jurisdiction” on lines 9-10 is most often tied in with advertising. Additionally, he noted that
Minnesota has adopted a choice of law provision.
Staff noted that the referenced part of Model Rule 8.5(a) is not included in current ND
Rule8.5(a). Additionally, with respect to the Model Rule Comments he noted new language in
Comment, which includes references to “written” agreement and “informed” consent. He said
previous Committee considerations of Model Rule amendments declined to follow a writing
requirement, preferring “preferably in writing”, and declined to require “informed” consent.
Following discussion, it was moved by Mike McGinniss, seconded by Kara Johnson, and
carried that MR Comment  be modified to replace “a written agreement” with “an
agreement, preferably in writing” and replace “informed consent” with “consent” and that
North Dakota Rule 8.5 be amended to include paragraph (b) of Model Rule 8.5 and associated
Comments, as modified, related to choice of law.
Committee members next reviewed a series of proposed ABA Model Rules and their North
ABA Model Rule on Practice Pending Admission
Staff explained that the model rule seeks to establish a framework that would permit a lawyer
licensed in another jurisdiction to practice law in a new jurisdiction while pursuing admission in that
jurisdiction. The general objective is to avoid instances in which the lawyer may be engaged in the
unauthorized practice of law due to delays or other issues relating to the admission process. He noted
that North Dakota had adopted Rule 6.1 of the Admission to Practice Rules, which likewise enables
a lawyer seeking admission to practice law in the state on a temporary basis.
Ms. Miller explained that North Dakota is one of a few jurisdictions that has adopted a rule
allowing for the temporary practice of law pending admission and there are now several similarities
between the North Dakota rule and the model rule. Consequently, she said, it is likely not necessary
to adopt the model rule. She noted that North Dakota Rule 6.1 is more liberal than the model rule
in that it does not require that the applying lawyer must have been engaged in the practice of law for
three of the last five years. She explained further that the model rule, in Section 1(b), provides that
the applying lawyer is not eligible to practice law in the jurisdiction if the lawyer has been denied
admission in the jurisdiction or has failed the jurisdiction’s bar examination. She said North Dakota
Rule 6.1 does not include the first condition, but does provide that an applicant is ineligible if the
lawyer has failed the North Dakota bar examination within three years preceding application
[Rule6.1(A)(2)]. She said North Dakota’s rule does not include the model rule’s requirement for
notices to disciplinary counsel and the admission authority by the applying lawyer [MR
Section1(b)]. But, she said, the Board of Law Examiner’s is the admission authority in North Dakota
and her involvement with the Board and the Disciplinary Board likely lessens the need for the formal
notice requirement. She noted also that the model rules provision regarding foreign legal consultants
(MR Section 2) is not included in North Dakota Rule 6.1.
With respect to the general operation of Rule 6.1, Ms. Miller said temporary practice under
the rule is limited to six months and an extension of time is not permitted under the rule. She said
the Board of Law Examiners has averaged approximately six months in completing the licensing
process. She said there has recently been a notable increase in requests for temporary licensure,
which might contribute to a delay in completing the process. However, she said if there is a delay
beyond six months in completing the application review there may be an issue regarding the
applicant that has required further consideration or additional information.
In summary, Ms. Miller said North Dakota was ahead of the ABA and other jurisdictions in
adopting a temporary licensure rule and adopting the model rule is likely unnecessary at this point.
Following discussion, it was moved by Mike McGinniss, seconded by Dan Ulmer, and
carried that the Committee not recommend adoption of the Model Rule on Practice Pending
With respect to temporary licensing, Chair Sturdevant noted that he had received a letter from
a member of Inquiry Committee Southeast which discussed problems that have arisen with the six
month time period expiring before the lawyer is admitted to practice. He said the process for bringing
issues before the Committee, either through the Board of Governors or through Supreme Court
referral, was explained. He said the issue may be presented to the Committee at some point in the
ABA Model Rule on Admission by Motion
Staff noted that the ABA Model Rule shares several of the provisions set out in current North
Dakota Rule 7 (Admission by Motion) of the Admission to Practice Rules.
Ms. Miller said North Dakota Rule 7 is more stringent in requiring that a lawyer applying for
admission on motion has been actively engaged in the practice of law for four of the last five years
preceding application. The Model Rule, she said, requires practice for three of the last five years. She
said North Dakota’s rule does not include a detailed provision similar to Model Rule Section2,
which identifies activities considered to be the “active practice of law”. However, she said several
of the activities listed in the model rule are also listed in North Dakota Rule 7(A)(1)( c). She said
North Dakota Rule 7 does not include a provision similar to Model Rule Section 3, which excludes
from the active practice of law any work that would constitute the unauthorized practice of law. She
said it is uncertain that the model rule provision is needed. She said there is an ongoing discussion
between the Board of Law Examiners and the Inquiry Committees regarding what constitutes the
unauthorized practice of law. Consequently, she said it is unclear how a provision similar to Model
Rule Section 3 could be applied. With respect to the model rule generally, she said she is not aware
of any jurisdiction that has adopted a model rule on admissions. She said jurisdictions tend to craft
their own admission rules to reflect local considerations.
Following discussion, it was moved by George Ackre, seconded by Nick Thornton, and
carried that the Committee not recommend adoption of the Model Rule on Admission by
ABA Model Rule for Registration of In-House Counsel
Staff noted that North Dakota Rule 3B of the Admission to Practice Rules is the general
counterpart to the Model Rule. Ms. Miller said it may be unnecessary to replace North Dakota’s rule with the model rule. She
said there have been approximated three lawyers who have registered as in-house counsel under North
Dakota Rule 3B. She noted that the model rule includes foreign lawyers as being able to register as
in-house counsel, while North Dakota Rule 3B does not. She said the current rule is limited to lawyers
licensed in another state or the District of Columbia. She said if the rule were expanded to include
registration of foreign lawyers, one consideration may be whether the Board of Law Examiners has
sufficient staff to handle the additional activity associated with the registration process. She said there
has been very little contact, up to this point, from foreign lawyers inquiring about registration. She
said most of the revisions to the model rule are with respect to adding foreign lawyers. She noted that
the Ethics 20/20 discussion of the model rule suggests the foreign lawyer issue was a contentious
After discussion, it was moved by Mike McGinniss, seconded by Kara Johnson, and
carried that the Committee not recommend adoption of the Model Rule for Registration of In-House Counsel.
ABA Model Rule on Pro Hac Vice Admission
Staff noted that North Dakota Rule 3A of the Admission to Practice Rules is the general
counterpart to the Model Rule.
Ms. Miller noted that a significant portion of changes to the model rule reflect the inclusion
of foreign lawyers as eligible for admission in a particular proceeding. She observed that the model
rule, in Section I(D)(2), does provide for an objection from disciplinary counsel to a lawyer’s
application for pro hac vice admission. As a general matter, she said, the model rule provisions do
not appear to be necessary improvements to North Dakota’s current rule.
Judge Sturdevant said the model rule does appear to provide some added structure to
consideration of the pro hac vice application process. He said a judge likely has the authority to deny
the application but the process is unclear. He noted that the model rule does not specify a timeframe
within which an objection must be filed.
Justice Sandstrom said there may be an advantage to allowing disciplinary counsel to object
to an application.
Kara Johnson said there is, however, some concern with a time limit for filing the objection
and how quickly a response to the objection is expected to occur.
Ms. Miller explained that under the current rule the pro hac vice application must be filed
within forty-five days of filing an action. A copy must be provided to the Board of Law Examiners.
Judge Greenwood said the provision for objection by disciplinary counsel appears to be the
one arguably good element in the model rule. He suggested the possibility of reviewing the current
rule for any changes rather than simply adopting the model rule.
Following further discussion, it was moved by Judge Greenwood, seconded by Nick
Thornton, and carried that the Committee not recommend adoption of the Model Rule on Pro
Hac Vice Admission.
Ms. Miller said judges could be surveyed about the pro hac vice process if the Committee is
interested in pursuing consideration of the current rule and possible structural improvements.
There being no further discussion, the meeting was adjourned at 1:00 p.m.