Mandatory IOLTA Resolution Adopted
Article Date: Saturday, April 14, 2007
Written By: Russell Rawlings
The Board of Governors of the North Carolina Bar Association, convening April 13-14 at the new Mecklenburg County Courthouse in Charlotte, adopted a resolution in support of the N.C. State Bar’s efforts to make IOLTA participation mandatory.
The NCBA resolution denotes the current 75 percent participation rate among eligible N.C. attorneys in the State Bar’s IOLTA (Interest on Lawyers’ Trust Accounts) plan. Contrasted with recent studies revealing that only 20 percent of the legal needs of poor Americans are being met, support for the State Bar initiative is a natural fit for the NCBA.
“In addition to our longstanding commitment to public service,” NCBA President Clark Smith said, “the mandatory IOLTA proposal also meshes perfectly with our new strategic plan, Momentum 2010. Our commitment to providing legal aid to persons of disadvantaged circumstances has never been greater, nor has our need to do so.”
The State Bar will take up the matter this week when it convenes at the Sheraton Capital Center in Raleigh. Having approved the concept of mandatory IOLTA in principle last January, the State Bar is presently considering what must be done to implement the program.
In that regard, the State Bar Council is expected to receive an opinion from its legal counsel that it is presently without authority to impose the requirement, and a recommendation that an order be sought from the N.C. Supreme Court creating the obligation.
If a decision is made to so petition the Supreme Court, and a favorable order is entered, the State Bar’s leadership hopes that new proposed administrative rules to implement the program can be published for comment this summer in anticipation of final State Bar Council action and Supreme Court approval after the State Bar’s annual meeting next October. This scenario contemplates that mandatory IOLTA could be in effect in 2008.
The NCBA resolution reads:
Resolution to the North Carolina State Bar Regarding
North Carolina Bar Association’s Support for Mandatory IOLTA
WHEREAS, the North Carolina Bar Association (NCBA) represents the interests of attorneys as professionals in the state of North Carolina, touting “service to the public” by our members as part of its mission statement;
WHEREAS, the NCBA highly values the contributions of the members of our profession in the delivery of pro bono legal services and the funding of access to justice initiatives in our state, which are reflected in our strategic plan, Momentum 2010;
WHEREAS, according to American Bar Association information, North Carolina compares unfavorable in the funding of civil legal services to the poor;
WHEREAS, a recent Legal Services Corporation (LSC) legal needs assessment study reports that only 20% of the legal needs of the poor in our country are being met;
WHEREAS, there are approximately two million poor people in North Carolina who are eligible for free legal services;
WHEREAS, IOLTA is among the three major funders for Legal Aid of North Carolina—the other two are LSC and our state government;
WHEREAS, IOLTA administered $3.7 million dollars in grants for 2007 using funds generated from the interest on pooled client trust accounts, and since its inception has granted more than $50 million;
WHEREAS, 75% of eligible attorneys in North Carolina currently participate in IOLTA;
WHEREAS, according to the American Bar Association Commission on IOLTA, states moving to mandatory IOLTA participation have experienced increased average monthly income by more than 60%;
WHEREAS, IOLTA participation allows attorneys to contribute to their communities without expenditure of any time or money while at the same time providing additional funding for IOLTA grantmaking;
NOW, THEREFORE BE IT RESOLVED THAT THE NORTH CAROLINA BAR ASSOCIATION SUPPORTS AND ENCOURAGES THE NORTH CAROLINA STATE BAR TO ADOPT A PLAN FOR IMPLEMENTING MANDATORY IOLTA FOR ELIGIBLE ATTORNEYS WITH GENERAL POOLED CLIENT TRUST ACCOUNTS IN NORTH CAROLINA.
This the 14th day of April, 2007.
D. Clark Smith, Jr.