Stephanie Libhart hopes a newly-revamped website will help draw attention to what she considers one of the Pennsylvania legal profession’s best-kept secrets: The Interest On Lawyers Trust Accounts, or IOLTA.
“It’s a clever program that creates revenue where it never existed,” said Ms. Libhart, executive director of the nonprofit Pennsylvania IOLTA fund.
It works like this: Whenever a lawyer handles a client’s money for a short period of time, say, an unearned retainer, the lawyer has to segregate the funds from his own money. The funds go into a short-term, interest-bearing account at an approved financial institution. The interest is then disbursed in the form of grants to pro bono organizations, Pennsylvania’s eight law schools and the state’s 35 legal services organizations with the goal of helping fund civil legal services for low-income people.
“In civil cases where basic human needs are at stake, we believe someone should be there to help you work through the rules,” Ms. Libhart said.
Under U.S. law, if a person is accused of a crime, he or she has the right to an attorney under the 1963 Gideon ruling (“If you cannot afford an attorney, one will be provided for you”). No such provision exists for civil cases such as foreclosures or child custody matters.
A growing movement is seeking a “civil Gideon” provision, and the Pennsylvania Civil Legal Justice Coalition, comprised of legal professionals and stakeholders across the state, released a report earlier this year recommending the creation of an Access to Justice Commission to further explore the matter.
All 50 states, the District of Columbia and the U.S. Virgin Islands operate some kind of IOLTA program; in Pennsylvania, it operates under the oversight of the state Supreme Court.
Obviously when interest rates are higher, the fund’s benefit to legal aid services is greater. In 2007, the Pennsylvania fund generated $12 million, Ms. Libhart said. But interest rates have sunk and in the last fiscal year, the fund generated $3 million.
The Downtown-based Neighborhood Legal Services Association and Uniontown-based Southwestern Pennsylvania Legal Aid Society each received a grant for the 2014-2015 fiscal year from IOLTA for $37,400. University of Pittsburgh School of Law and Duquesne University School of Law each received $125,000.
Ms. Libhart said the organization encourages attorneys to bank at institutions that it has identified as “platinum leader banks,” which offer the highest interest yields on IOLTA funds.
“We used to spend a lot of time complaining about how low interest rates were, but we realized we had an opportunity to suggest attorneys support these banks,” she said. “If we can get attorneys to bank with them, it would improve the revenue.”
She said the previous website was too difficult to navigate, and she had been hoping to revamp it since she started at IOLTA five years ago.
The new website was designed with both attorneys and potential grantees in mind. “We wanted to be better public servants, and to make sure people could get the information they need about the program,” Ms. Libhart said.
On the web: https://www.paiolta.org/
Kim Lyons: email@example.com or 412-263-1241. Twitter: @SocialKimly