IOLTA Rules

I object to the proposed rule that would force all attorneys to participate in IOLTA.
1. The proposed rule will have a greater impact on solo practioners. The bigger Salt Lake firms won’t have any problem complying–they already have accountants, office administrators, etc., to take care of these things. But this is simply one more burden on solo practitioners.
2. I investigated interest-bearing accounts four (4) years ago. At that time, the fees the financial institutions charged would have exceeded the amount of interest the monies held in my account would ever have generated. The net result is that I would have incurred additional expenses to participate in IOLTA.
3. I have always taken to heart my obligation to make attorneys more accessible to low income clients. One way I did that, in addition to discounting my rates, was to allow clients to make payments in lieu of paying a retainer up front. The proposed rule would punish me financially because of my willingness to allow clients to make payments. Great way to motivate attorneys to give low-income clients a break!
I suppose under the proposed rules I could apply for an exemption and would receive it. But why should I have to take the extra step to make myself exempt? Isn’t it enough that I’m already assisting the low-income by setting up payment plans?
4. Why is the Bar so intent on forcing its members to participate in IOLTA? Some attorneys are willing to contribute financially to the “causes” IOLTA funds, but others would prefer to support other causes. Although we never could designate how IOLTA funds generated from our accounts were used, at least we could choose whether to support the causes by opting in or out. The proposed rule will remove that choice. Essentially, every member of the Bar will be forced to support every cause that IOLTA funds support, whether we agree with that cause or not.
Of all members of society, attorneys should cherish and vigorously protect the 1st amendment–including allowing members to choose to support or not, the causes that IOLTA funds are used for. The proposed rule essentially restricts attorneys’ 1st amendment rights. Whether or not we want to affiliate with certain causes or groups, we will be forced to support them by enrolling in IOLTA.
Continue with the current system. Allow each attorney to choose to opt in, instead of being dragooned in. If an attorney has been found to be violating the rules concerning his/her trust fund–then, perhaps, require that specific attorney to enroll in IOLTA. But don’t take that choice away from the rest of us.

I oppose the proposed new rule governing IOLTA. To justify my opposition, I should first note that I am constantly being solicited to contribute to many non-profit causes. I contribute to some and not to others. Fortunately, up to this point when someone asks me to contribute, I can always say no – for whatever reason. So why is IOLTA different? Why does the Bar now propose that I have to undertake a burdensome and costly effort to benefit someone I may choose not to benefit? The others who have commented about the proposed new rule are correct in saying that the banks will charge my firm a fee for us to have an interest bearing trust account. What ever happened to the issue of choice? I have already grumbled about having to formally “opt out” of the IOLTA program every year, making me look like a scrooge. Does anyone from the Bar ever ask about all of my other contributions to what I consider worthy causes? No. They only care about their program. And now they want the right to require the money from me and my firm – at an expense of time and money to me and my firm. Therefore, I strongly oppose the proposed new rule.

For the well-expressed reasons set forth below, I respectfully object to the adoption of the compulsory IOLTA rule. I have no doubt that the implementation of this rule will have the a chilling effect on the very class it purports ot assist. I’m quite confident that a backlash of less pro-bono work will be a side effect, and the very least.

The making of this rule mandatory is highly objectionable and may well be unconstitutional. Please direct me to information/directives that show that other professionals are forced against their will to comply with this kind of administrative burden and ulawful diversion of funds: i.e. Doctors, Psychiatrists, Accountants/Accounting firms, Banks, Trust departments, Real estate agents/firms etc. To my knowledge, those persons/groups have no such requirement.
Please also inform me whether or not Dennis Haslam and/or the Bar Foundation will be planning on reimbursing the cost of the time, professional and/or clerical that will be necessary to administer the program – Expecially for small and/or one man firm practices.
This is a workable plan for firms that handle sufficient client funds and whom are large enough to absorb the cost of administration of the plan. It is an absolute abomination for the small firm that does not have the resources of a larger firm and which is involved in the day to day struggle for financial existance.
I’m sure that if the individuals who are promoting the proposal to make the program manditory are identified, they are not the small practioner and earn substantially more than the meager average attorney’s annual income.
It is bad enough that after having gone through the deception that was foisted on the bar membership when the Law and Justice Center was built (i.e. that the doubling or more of annual Bar dues was temporary and which dues would be reduced once the building was paid for – which reduction did not occur and which dues now are proposed to be increased.)that additional burdens are to be imposed.
The Bar keeps on adding to and increasing the bureaucracy, and the cost thereof. No other proffession seems to do this. (No wonder my son believes that becoming a lawyer and entering into the practice of law is self inflicted injury.)
I’m also convinced that I am not the only practitioner who is extremely weary of having these type of periodic burdens forced on me.

I oppose replacing the current “opt-out” program with a mandatory IOLTA participation program for the following reasons.
First, I believe the current system is adequate and appropriately balances the need to safeguard client funds — without the attorney’s collecting the interest — with the bookkeeping and record-keeping burden IOLTA accounts require. For solo attorneys like myself, particularly since I infrequently take large retainers or receive client funds that are not earned (I usually bill for my work after it is completed), it is preferable (and, I believe, ultimately worthwhile to my clients in terms of keeping my rates lower) to use a non-interest bearing account for most of the retainers I receive, except when interest would exceed the costs of the account.
Second, the increased reporting requirements will be especially burdensome for solo and small practitioners who must administer the accounts themselves, rather than hiring an account administrator as larger firms can. The proposed rule will unduly add considerable time and reporting requirements, interfering with actually providing services to clients.
Finally, rather than encouraging lawyers to take work for clients who might not pay by allowing them to collect a retainer in advance, this rule change will discourage lawyers from dealing with such clients, preferring instead to focus on corporate or institutional clients with a proven payment record.
While the opportunity to participate in the IOLTA program should be available to those who can afford and wish to set up and monitor the account as it requires, it should NOT be mandatory. Otherwise, it would only be perceived as using the position of Bar and Foundation administrators to impose an additional burden on attorneys to fund social causes, regardless of whether or not they share the same goals as the promoters of those causes or agree with the means and methods by which those goals are being advanced.

The Disability Law Center supports the participation of all firms – including our small non profit – in the IOLTA program. We have been proud to have a small account and to contribute what we can.
Fraser Nelson

I support the proposed change, and I do not believe the administrative burden will be as onerous as some of my colleagues suppose.
First, the Bar Foundation has been successful in working with Utah banks on this issue, so most of them will waive all service fees on IOLTA accounts. No administrative expense there.
Second, the bank sends the year-end 1099 directly to the Bar Foundation, and the attorney need not have any involvement. (Unlike what happens with a non-IOLTA client trust account.) No administrative expense there.
Third, the bank itself calculates and remits all interest earned directly to the Bar Foundation. The attorney doesn’t have to do anything.No administrative expense there.
The bottom line is that there is NO additional administrative hassle or expense.
Mandatory IOLTA is nothing novel- more than thirty states have mandatory IOLTA right now and five more are in the process changing to it. That, of course, doesn’t mean we necessarily have to join the herd, but it should suggest that the majority of other lawyers, people whom we can presume to be thoughtful, have decided this is a good way to go.
I don’t see this as any sort of forced feel-good charitable contribution. There is no money earned anyway on short-term non-interest bearing trust accounts now. Not a penny is being taken away from a lawyer who donates to other desirable charities; this is unpaid interest that otherwise would benefit no one but the bankers.
This “found money” goes to very worthwhile organizations: the Community Legal Center, Utah Law Related Education, Utah Legal Services, the Legal Aid Society of Salt Lake, the Disability Law Center, the DNA People’s Legal Services, and the Multi-Cultural Legal Center, among others.
Our profession is under increasing attack in the state legislature for failing to provide services at reasonable cost. Our courts are increasingly burdened with pro se litigants unable to retain help. This is good neither for society or our profession.
This program funds many low-income programs, and I cannot but believe that is in the long term interest of our profession, something well worth any minor and short-term administrative changes.
FJC