Rule change is reminder of importance of IOLTA program.

 
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Byline: David C. Henderson

Few lawyers had reason to reflect on the Supreme Judicial Court's recent amendment of its Rule 3:15 to increase the pro hac vice registration fee in Massachusetts from $301 to $351.

But that increase in fees, effective Jan. 1, will be important to the continued success of the Massachusetts Interest on Lawyers' Trust Accounts program.

It also can be a reminder for some of us to re-examine other parts of the IOLTA program, because the other parts are important to the Massachusetts legal community in general, as well as crucial to an attorney who handles client funds or litigates a class action.

The key IOLTA points include the following.

The IOLTA program requires that client funds be handled in a structured manner that collaterally serves the greater wellbeing of the commonwealth.

The SJC established the Massachusetts IOLTA Committee and the IOLTA program in 1985 to receive and distribute certain funds in an ethical way that collaterally will improve the administration of justice and deliver critical civil legal aid services to those who cannot afford them. Those objectives continue to guide the IOLTA program today, more than three decades later.

The seminal rule is that lawyers holding client funds must place them in either an account paying interest to the client or an IOLTA account. An IOLTA account can be used when the client funds are so modest in amount, or the funds are to be held for a period so short, that accumulating interest will be less than the cost of establishing and maintaining an individual account for the client's benefit.

The accumulated interest on the IOLTA account then is paid to the IOLTA Committee, where it is joined not only by interest paid on the multitude of similar IOLTA accounts throughout the commonwealth, but also by pro hac vice fees paid by out-of-state attorneys, Access to Justice fees paid voluntarily by Massachusetts lawyers, and certain residual funds remaining from class actions or bankruptcies.

Ultimately, the SJC's IOLTA Committee distributes the accumulated funds to three organizations the Massachusetts Legal Assistance Corp., Massachusetts Bar Foundation and Boston Bar Foundation so that those organizations can use the funds as grants to improve the administration of justice and deliver critical civil legal aid services to those who cannot afford them.

There thus is no question that the IOLTA program serves an important public need. It functions as one of two major...

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