What are attorneys required to tell their clients?
Attorneys are required to notify a client that funds have been received, to maintain records concerning the funds and to pay to the client promptly any funds in the attorney’s possession. As before IOLTA, attorneys are required to open separate accounts for clients when the client could earn more interest than it would cost to open, maintain and close the account. When this occurs, the clients are asked where to direct any net interest earned on funds the client deposits with the lawyer. Where the client would not earn interest, the funds are placed into a pooled account. As before IOLTA, the lawyer is not required to but may tell the client that the money goes into a pooled account. In summary: Although IOLTA creates income, lawyers satisfy their ethical and fiduciary duty to place client funds in a secure account; there is on-demand access to the client’s money; and, as in the past, the client realizes no interest income because the nominal or short term clients’ funds that are poole
