More idle funds to boost legal aid funding
|NASHVILLE, July 8, 2009 -- More idle client funds will be put to work at higher rates to assist low-income Tennesseans under a plan adopted today by the Tennessee Supreme Court.
The plan, recommended by the Tennessee Bar Association (TBA), Tennessee Bar Foundation (TBF), Tennessee Association for Justice (TAJ) and Tennessee Alliance for Legal Services (TALS), requires all client funds held by a lawyer for a short time, or which are small in amount, to be placed in a special account at the bank with the interest going to the Interest On Lawyers' Trust Accounts (IOLTA) Program of the Tennessee Bar Foundation. To qualify as a depository for the money, financial institutions will have to agree to new standards, which assure that they pay rates comparable to non-IOLTA accounts.
"Keeping client funds held by lawyers safe is always our first objective," TBA President Gail Vaughn Ashworth said. "This program assures that safety, while earning funds to meet the growing need for funding for legal services for the poor."
The new rule grew out of the 4ALL initiative of TBA Immediate Past President Buck Lewis. That initiative included efforts to educate the public; statutory and rules changes to encourage pro bono service by lawyers; a special public service day on April 4; and this joint effort with the TBF, TAJ and TALS to enhance IOLTA funding of legal services for low-income Tennesseans.
Commenting on the adoption of the plan, Riney Green, chair of the TBF Board of Trustees, said, "While success was attained because of the selfless contributions of many dedicated lawyers and judges who participated in developing, endorsing and adopting the IOLTA rules, there is no greater or more resolute champion than Buck Lewis. He deserves a special salute."
In a separate release, Janice Holder, Chief Justice of the Tennessee Supreme Court said, "Thousands of Tennesseans have benefited from the legal assistance and scholarships that are made possible through IOLTA grants. These amendments will bolster funding for the IOLTA grants and ensure that more Tennesseans have access to essential legal services."
Since adoption of the program, the Tennessee IOLTA program has made more than $15.8 million in grants, including $1.4 million this year. The program takes advantage of the pooling of client funds held by lawyers, which could not otherwise earn interest, and assigns that interest to the benefit of organizations that improve the administration of justice.
Throughout the implementation period, between now and the Jan. 1, 2010, effective date, the Tennessee Bar Foundation will work with the Tennessee Bankers Association, the bar and the legal community to implement the new standards for IOLTA accounts. The TBA has scheduled a web cast continuing legal education seminar on "Implementing the New IOLTA Rules" for Tuesday, Aug. 11 at 12 noon CDT.