The Interest On Lawyers Trust Accounts program helps fund civil legal services

The Disability Rights Center-New Hampshire recently received $53,925 in funding from the New Hampshire Bar Association’s IOLTA grants program.

For those in the legal community, IOLTA is a familiar acronym that stands for Interest On Lawyers Trust Accounts. For those who are unfamiliar with it, here’s how it works.

In 1982, the New Hampshire Supreme Court adopted Rule 50 establishing the IOLTA program in New Hampshire.

The program takes interest earned on lawyers’ trust accounts that are either too nominal or held for too short a time to warrant establishment of a separate client account and then forwards the interest to the New Hampshire Bar Foundation to be used for charitable purposes.

The establishment of IOLTA in the United States followed changes to federal banking laws passed by Congress in 1980, which allowed some checking accounts to bear interest. Prior to 1981 lawyers were required to place money from their clients in a non-interest-bearing account.

IOLTA programs currently operate in 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

In fiscal year 2020-21, the Bar Foundation awarded grants totaling $950,000 to civil legal services programs raised from an IOLTA program.

Jack Middleton, senior member of McLane Middleton’s Litigation Department, played a pivotal role in bringing the IOLTA Program to New Hampshire in the early ‘80s.

It was at a conference for the association of bar delegates over forty years ago where Middleton says he first heard about IOLTA accounts from the chief justice of Florida.

“Frankly, it sounded very good to me and I thought New Hampshire could benefit from a program like that,” Middleton says. “That IOLTA program has been enormously helpful for New Hampshire citizens. It has raised well over $30 million for those in need of legal services.”

In New Hampshire, over 50 financial institutions participate in the IOLTA program, including banks and credit unions that offer 1% to 2% on IOLTA accounts and waive service charges.

IOLTA grants fund nonprofit organizations, like DRC-NH, that provide free or reduced-fee civil legal services.

Stephanie Patrick, executive director of DRC-NH, said the IOLTA funds are a critical part of supporting the legal work her organization does on behalf of disabled citizens in New Hampshire.

And the important thing about IOLTA, she added, is that, unlike federal grants, which come with restrictions, this money can be used to respond to a variety of disabilities, often addressing emergency and unexpected needs.

In 2020-21, Patrick said DRC-NH primarily used the IOLTA funding to expand services for people with developmental disabilities, including inappropriate use of guardianship, critical eligibility cases and access to services for those who are 18-21 years old.

“This support helps us to assist people with disabilities to access community-based services and fight discrimination,” said Patrick.

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IOLTA grants fund nonprofit organizations that provide free or reduced-fee civil legal services.