North Carolina Administrative Code › Title 27 - STATE BAR › Chapter 02 - RULES OF PROFESSIONAL CONDUCT OF THE NORTH CAROLINA STATE BAR › Section 02 RULE 5.01 - RESPONSIBILITIES OF PRINCIPALS, MANAGERS, AND SUPERVISORY LAWYERS

Current through Register Vol. 39, No. 2, July 15, 2024
(a) A principal in a law firm, and a lawyer
			 who individually or together with other lawyers possesses comparable managerial
			 authority, shall make reasonable efforts to ensure that the firm or the
			 organization has in effect measures giving reasonable assurance that all
			 lawyers in the firm or the organization conform to the Rules of Professional
			 Conduct.
(b) A lawyer having direct
			 supervisory authority over another lawyer shall make reasonable efforts to
			 ensure that the other lawyer conforms to the Rules of Professional
			 Conduct.
(c) A lawyer shall be
			 responsible for another lawyer's violation of the Rules of Professional Conduct
			 if:
(1) the lawyer orders or, with knowledge
			 of the specific conduct, ratifies the conduct involved; or
(2) the lawyer is a principal or has
			 comparable managerial authority in the law firm in which the other lawyer
			 practices, or has direct supervisory authority over the other lawyer, and knows
			 of the conduct at a time when its consequences can be avoided or mitigated but
			 fails to take reasonable remedial action to avoid the consequences.
Comment
[1] Paragraph
			 (a) applies to lawyers who have managerial authority over the professional work
			 of a firm or legal department of an organization. See Rule 1.0(d). This
			 includes members of a partnership, the shareholders in a law firm organized as
			 a professional corporation, and members of other associations authorized to
			 practice law; lawyers having comparable managerial authority in a legal
			 services organization or a law department of an enterprise or government
			 agency; and lawyers who have intermediate managerial responsibilities in a
			 firm. Paragraph (b) applies to lawyers who have supervisory authority over the
			 work of other lawyers in a firm or organization.
[2] Paragraph (a) requires lawyers with
			 managerial authority within a firm or organization to make reasonable efforts
			 to establish internal policies and procedures designed to provide reasonable
			 assurance that all lawyers in the firm or organization will conform to the
			 Rules of Professional Conduct. Such policies and procedures include those
			 designed to detect and resolve conflicts of interest, identify dates by which
			 actions must be taken in pending matters, account for client funds and property
			 and ensure that inexperienced lawyers are properly supervised.
[3] Other measures that may be required to
			 fulfill the responsibility prescribed in Paragraph (a) can depend on the firm's
			 or organization's structure and the nature of its practice. In a small firm of
			 experienced lawyers, informal supervision and periodic review of compliance
			 with the required systems ordinarily will suffice. In a large firm or
			 organization, or in practice situations in which difficult ethical problems
			 frequently arise, more elaborate measures may be necessary. Some firms, for
			 example, have a procedure whereby junior lawyers can make confidential referral
			 of ethical problems directly to a designated principal or special committee.
			 See Rule 5.2. Firms and organizations, whether large or small, may also rely on
			 continuing legal education in professional ethics. In any event, the ethical
			 atmosphere of a firm or organization can influence the conduct of all its
			 members and the principals and managing lawyers may not assume that all lawyers
			 associated with the firm or organization will inevitably conform to the
			 rules.
[4] Paragraph (c) expresses
			 a general principle of personal responsibility for acts of another. See also
			 Rule 8.4(a).
[5] Paragraph (c)(2)
			 defines the duty of a principal or other lawyer having comparable managerial
			 authority in a law firm, as well as a lawyer who has direct supervisory
			 authority over performance of specific legal work by another lawyer. Whether a
			 lawyer has such supervisory authority in particular circumstances is a question
			 of fact. Principals and lawyers with comparable authority have at least
			 indirect responsibility for all work being done by the firm, while a principal
			 or manager in charge of a particular matter ordinarily also has supervisory
			 responsibility for the work of other firm lawyers engaged in the matter.
			 Appropriate remedial action by a principal or managing lawyer would depend on
			 the immediacy of that lawyer's involvement and the seriousness of the
			 misconduct. A supervisor is required to intervene to prevent avoidable
			 consequences of misconduct if the supervisor knows that the misconduct
			 occurred. Thus, if a supervising lawyer knows that a subordinate misrepresented
			 a matter to an opposing party in negotiation, the supervisor as well as the
			 subordinate has a duty to correct the resulting misapprehension.
[6] Professional misconduct by a lawyer under
			 supervision could reveal a violation of Paragraph (b) on the part of the
			 supervisory lawyer even though it does not entail a violation of Paragraph (c)
			 because there was no direction, ratification or knowledge of the
			 violation.
[7] Apart from this rule
			 and Rule 8.4(a), a lawyer does not have disciplinary liability for the conduct
			 of a principal, associate or subordinate. Moreover, this rule is not intended
			 to establish a standard for vicarious criminal or civil liability for the acts
			 of another lawyer. Whether a lawyer may be liable civilly or criminally for
			 another lawyer's conduct is a question of law beyond the scope of these
			 rules.
[8] The duties imposed by
			 this rule on managing and supervising lawyers do not alter the personal duty of
			 each lawyer in a firm to abide by the Rules of Professional Conduct. See Rule
			 5.2(a).