THE IOLTA CONCEPT

The Interest on Lawyers' Trust Accounts (IOLTA) Program is a simple concept that allows Pennsylvania lawyers to raise $6 million dollars annually for the provision of civil legal services to the Commonwealth's poor and disadvantaged and is operated by a nine member board appointed by the Supreme Court of Pennsylvania. It operates similar to IOLTA programs establish in every other state in the nation.

Clients and others frequently transfer moneys to attorneys to hold. When the amount is large or if the funds will be held for an extended period of time, attorneys invest them for the benefit of the client. But when the funds are small or expected to be held for a short time, they cannot practically be invested to benefit the client.

Pennsylvania Rule of Professional Conduct 1.15 requires attorneys to decide which fiduciary funds can practically yield net economic benefit to the client. When not invested to benefit the client, the Rule allows attorneys to combine nominal and short term fiduciary funds in interest-bearing IOLTA accounts.

The attorney's bank transfers the interest earned on IOLTA accounts, no less frequently than quarterly, to the Pennsylvania Interest on Lawyers Trust Account Board. Upon approval by the Supreme Court of PA, the Board distributes the IOLTA funds raised to non-profit organizations, law school administered clinics, and administration of justice projects that provide civil legal services free of charge to the poor and disadvantaged.

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