President’s Message Regarding HB 436

To the membership of the NCBA,

As your president, I believe it is important for me to communicate to the full membership the actions of the North Carolina Bar Association (NCBA) as it relates to House Bill 436 (“HB 436”) (copy attached). HB 436 would change the definition of the practice of law to add consumer protections for North Carolinians using Internet legal service providers.

Right now, while HB 436 is not yet law, legal information and services are being provided over the Internet without regulation, except for the ones contained in the Consent Order entered in Business Court between the North Carolina State Bar (NCSB) and LegalZoom. (A copy of the consent order is attached.)

Last summer, the NCSB requested that the NCBA support HB 436. The Legislative Advisory Committee (LAC) of the NCBA reviewed the bill and recommended that the NCBA support it. The NCBA Executive Committee then met and voted to support the bill. Because of the impending end of the legislative session, a decision was necessary before the October meeting of the entire Board of Governors (BOG). Accordingly, pursuant to BOG policy, the NCBA supported the bill based on the recommendations of both the LAC and the EC. I communicated that information to our entire membership through e-bar last September.

HB 436 passed the Senate on September 24, 2015, but it went to the House with less than a week to go and did not pass the House during the long session. Since it crossed over from one legislative chamber to the other, it is ripe for a vote by the House during the short session, which began yesterday.

Because the full BOG had not been able to vote on the NCBA’s support of this bill, we put it back through our full process during the months between the legislative sessions. A meeting of the LAC was set for February 15, 2016, at which we invited input from all NCBA sections, committees and divisions. At that meeting, the Estate Planning & Fiduciary Law Section requested that we oppose the bill and set up a task force to further study the bill. The Elder & Special Needs Law Section and the Solo, Small Firm and General Practice Section supported the Estate Section’s request in writing. The Real Property Section requested that we oppose the bill and offered a revised bill for consideration. The LAC decided to delay action.

On March 22, 2016, the NCBA held an Unauthorized Practice of Law Forum at the Bar Center. We invited the BOG, all section chairs and vice chairs, the LAC, the NCSB leadership, and lawyer legislators to attend, explain respective positions and viewpoints, and ask questions of each other. Approximately 45 people participated, including four attorney members of the General Assembly. The Forum lasted approximately two hours and was very informative. It can be viewed on our website at: https://www.youtube.com/watch?v=qPJ_tR2rFGk&feature=youtu.be

After the Forum, the LAC met again on March 28, 2016. It voted unanimously to recommend to the Executive Committee and the BOG that the NCBA continue to support HB 436. The LAC discussion included a proposal that the NCBA appoint a task force to study this issue and work on future consumer protections, as recommended by the Estate Planning & Fiduciary Law Section and supported by the Elder & Special Needs Law Section and the Solo, Small Firm & General Practice Section. On March 31, 2016, the Executive Committee reviewed the LAC’s recommendation and voted to recommend that the BOG continue the NCBA’s support of HB 436.

The BOG met on April 15, 2016. Before the meeting, in addition to the Forum and input from the Sections, the members of the BOG received direct communications from members asking the BOG to support, oppose, or take no action on HB 436. At the meeting, BOG members, section chairs, and members of the LAC engaged in a full discussion and debate over approximately two hours. The BOG voted 15 to 5 to continue NCBA support of HB 436, and added an express statement that this bill does not go far enough to protect NC consumers (four members exited the room while the issue was addressed, and a fifth member abstained from the discussion and vote).

I am happy to report that Afi Johnson-Parris has agreed to chair a task force to study the regulation of Internet legal providers and all of the issues surrounding the unauthorized practice of law, as more and more Internet providers continue to offer services to North Carolinians. I will be contacting each section of the NCBA to provide me with the names of two people who would be willing to serve on this task force.

The leadership of the NCBA understands that this is a delicate issue for our members and this Association. Internet providers have been in the legal market since 2007 and are not going away. Therefore, we need to begin the process of putting regulations on these providers to protect consumers, and to continue advocating for even more protections in the years ahead. Serving the public is a part of the mission of the NCBA, and consumer protection strikes at the very heart of that objective. The NCBA must provide leadership on this issue.

If you have comments, please feel free to direct them to me. I look forward to the work of the task force and the NCBA’s continued work to protect consumers.

With every good wish, I remain,
Sincerely yours,

 

Shelby Benton, President
North Carolina Bar Association