IOLTA And Trust Accounts
Arnold & Clifford LLP, is a Columbus, Ohio, law firm that also serves the Cleveland, Cincinnati and Dayton areas. We focus on trial practice for both individuals and corporate clients, in both state and federal courts, including IOLTA and trust account cases.
Through Interest on Lawyers Trust Accounts (IOLTA) in Ohio, pooled funds belonging to clients earn interest. These pooled funds also earn collective interest that is used to provide legal aid to low-income people. An IOLTA account must be kept separate from law firm business accounts. The sources of IOLTA account funds include:
- Retainers paid by clients
- Filing fees paid in advance by clients
- Settlement money from personal injury lawsuits
IOLTA account funds are considered client funds. There should be no commingling of client funds and an attorney’s funds. Certain rules dictate when lawyers may withdraw money from IOLTA accounts and what kinds of records must be kept.
IOLTA accounts become of interest to disciplinary counsel when it is discovered a lawyer has been misusing funds or mismanaging accounts. This sometimes happens when banks report negative balances, as they are required to do by law. Arnold & Clifford LLP, advocates on behalf of clients accused of mishandling IOLTA accounts. Sometimes an investigation turns up a bank error as the cause; this may lead to a very successful defense. Sometimes a lawyer’s accounting error is to blame. Law firms that commingle IOLTA funds and personal funds may be headed for further investigation.
Occasionally we encounter an attorney who was admittedly taking funds from an IOLTA. An apology and restitution may be a favorable outcome in some circumstances. If alcohol abuse or mental health issues played a role, submitting to appropriate treatment may bring about the desired outcome.