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Judicial Branch, State of New Hampshire

Laura Kiernan
Communications Director
603-271-2646 ext 2359


All Eligible Lawyers Now Required to Participate in IOLTA

Funds from program support civil legal services

CONCORD, January 12—The New Hampshire Supreme Court has adopted amendments to court rules, effective March 1, that will require all eligible New Hampshire lawyers to participate in the state "IOLTA" program which is the largest source of funding for civil legal services and pro bono programs. New Hampshire now joins 40 other states around the country that require all lawyers to maintain client funds in interest-bearing trust accounts which generate funds for IOLTA grants to non-profit organizations.

The rule change was recommended by the Supreme Court Advisory Committee on Rules, after conducting a public hearing and accepting written comments. A Supreme Court order adopting the amendments is posted on the Judicial Branch website.

The proposal to make IOLTA participation mandatory was first made by the New Hampshire Access to Justice Commission in response to a dramatic reduction in IOLTA revenue since 2009 as interest rates declined and fewer client funds were deposited.The New Hampshire Bar Foundation, which administers the IOLTA fund, awarded $830,000 in grants to non-profit organizations in 2010, compared to $1.7 million in grants in 2007.

"The NH Bar has a proud record of stepping up to help those who need a lawyer and that commitment is even more important in these tough economic times," Senior Associate Supreme Court Justice James E. Duggan, co-chair of the Access to Justice Commission, said. "We need to use every available resource if we are going to provide access to justice for all citizens, not just those who can afford to pay for it," Duggan said.

Almost 90 percent of eligible New Hampshire lawyers who hold client funds currently participate in the state's IOLTA program. Revenue from IOLTA (Interest on Lawyers Trust Accounts) funds two of New Hampshire's major sources of civil legal aid: New Hampshire Legal Assistance, which has offices statewide; and the New Hampshire Bar Association's Pro Bono Referral Program, which connects low income clients with lawyers who donate their services.

IOLTA revenue is generated by small or short-term amounts of client funds that lawyers deposit in pooled interest-bearing trust accounts. The client funds are too small to generate interest on their own and ethical rules prohibit lawyers from gaining any financial benefit from client funds. Through IOLTA, lawyers have access to the funds, as needed for their clients; the banks send the interest earned on the accounts to the state IOLTA program. All 50 states have IOLTA programs, according to the American Bar Association.