Maine's IOLTA Proposal: A Source of Supplemental Funding for Legal Services

Lawyers often hold certain client funds for short periods of time. Generally, those funds must be kept separate from funds belonging to the lawyer or law firm. Occasionally the clients' funds are deposited in individual, interest bearing accounts and the interest generated is credited to the particular client, but more often the amount or length of the deposit does not warrant the opening of an individual account and the funds are aggregated in a general, noninterest bearing trust account. A number of states have implemented programs, commonly referred to as Interest on Lawyers' Trust. Accounts (IOLTA), which allow attorneys to place these otherwise unproductive commingled trust funds in interest bearing accounts. The interest generated funds various public law-related programs. In June, 1982, the Maine State Bar Association (MSBA) proposed an amendment to Maine Bar Rule 3.6(f) to implement an IOLTA program in Maine. The amendment permits lawyers to generate interest from certain client funds to be used to provide civil legal services for the poor of Maine. The Maine Supreme Judicial Court rejected the proposed amendment without articulating its reasons. The court's decision was contrary to the majority of jurisdictions which have considered similar plans. The principal issues raised by IOLTA programs are 1) whether an IOLTA program involves an unconstitutional "taking" of private property under the fifth and fourteenth amendments, 2) whether an IOLTA program constitutes a violation of the professional responsibility of lawyers to handle clients' funds properly, and 3) whether the possible appearance of improper use of client funds damages the public image of the legal profession. A critical analysis of these objections reveals that they should not prevent the implementation of an IOLTA program in Maine. An IOLTA program is not the entire solution to providing sufficient funding for legal services to Maine. The relatively high percentage of the state's population which qualifies for legal assistance coupled with cutbacks in traditional funding sources creates need greater than an IOLTA program can satisfy. Nor should an IOLTA program be confused with the collective responsibility of lawyers to ensure that legal services are available to those unable to pay for them. An IOLTA program is, however, a valid source of supplemental funding for legal aid and a positive response to the problem of making the judicial system accessible to those unable to pay for it.