What is the effect of the IOLTA program on the typical lawyer or law office? For example, what trust accounts must be maintained?
For the typical lawyer or law firm which maintains one account for pooled client funds, the rules require that the account be used only for client or third person deposits which are of nominal amount or expected to be held for a short period of time (Rules of Professional Conduct, Rule 1.15(e)), and that it bear interest payable to the Lawyer Trust Account Board established by the Minnesota Supreme Court. Under IOLTA, if a client’s funds are not nominal in amount or are not to be held for a short period of time, the lawyer should establish a separate trust account paying interest to the client. As the Supreme Court pointed out in its opinion, opening individual accounts in these cases is a standard (and sound) practice in many Minnesota law offices. IOLTA will not change this practice. How does a lawyer or law firm decide which client funds should go into the general pooled trust account with interest payable to the Board, and which should go into separate accounts with interest payabl
