IOLTA as a Funding Source

The Interest on Lawyers' Trust Accounts (IOLTA) program is an innovative way to supply cost-free services to the public. Lawyers who place client funds in IOLTA accounts do so under the authority of the New Jersey Supreme Court. Client funds that are too small in amount or held for too short a period to earn interest net of bank charges or administrative fees are placed in a pooled, interest bearing trust account. Alternatively, if a client's deposit is large enough or held for a long enough time to earn interest after fees and charges, then the funds may be placed in a non-IOLTA client trust account.

Promoting Equal Access to Justice

In New Jersey, IOLTA grants are used to fund the provision of civil legal services for the poor, improvements in the administration of justice and law-related education initiatives. IOLTA was first implemented in 1979 in Florida. Today, IOLTA programs operate in all 50 states, the District of Columbia, Puerto Rico and US Virgin Islands.

Administration

New Jersey's IOLTA program was initiated by the NJ State Bar Association and started operating in 1988. A board of nine trustees administers the IOLTA Fund of the Bar of New Jersey. The New Jersey Supreme Court appoints the trustees. Representatives from the NJ State Bar Association, the New Jersey State Bar Foundation and Legal Services of New Jersey, Inc. also serve as ex officio members of the board. A small staff reports to the Board of Trustees.

Disbursement of Funds

The IOLTA Fund Of the Bar of New Jersey disburses its funds according to guidelines established by the New Jersey Supreme Court in Court Rule 1:28-A.

• Legal Services of New Jersey Inc. receives not less than 75 percent of the funding to provide legal assistance to indigents in civil matters.
• The New Jersey State Bar Foundation receives not less than 12.5 percent of the funds to provide a variety of free law-related educational programs to students, professionals, senior citizens, and the public.
• The IOLTA Fund awards the remaining portion of its net revenue in annual discretionary grants, ranging from $5,000 to $136,264 in 2019, for legal aid to the poor, improvements in the administration of justice, and education of lay-persons in legal and justice-related areas.

In 2019, the IOLTA Fund disbursed $14.5 million in grants; Legal Services received $11.4 million, the New Jersey State Bar Foundation received $1.9 million, and $1.9 million was awarded in the 2019 Discretionary Grant cycle from the program funds accrued in 2018 and prior years.

Since its inception in 1988, almost $464 million has been collected by the IOLTA Fund for these grant programs.

How IOLTA Money is Used

• Legal Services of New Jersey, Inc.

  LSNJ coordinates the state's system of free legal representation and assistance for low-income people with civil legal problems. A portion of the LSNJ award is distributed to the five legal services programs throughout the state based upon the poverty-level population in each of the geographic areas. A full range of legal assistance is available, from brief advice and counsel to full representation. Help is often provided to individuals facing eviction, victims of domestic violence, parents seeking custody or visitation rights, workers with employment problems, senior citizens with consumer law matters and people seeking public benefits such as social security or health care coverage. LSNJ uses IOLTA funding for internal operations, as well as statewide functions including research, advocacy, training, technical assistance and special projects. Legal information, materials, and counsel are also provided through telephone hotlines, publications, a website, and public education.

• New Jersey State Bar Foundation

  The New Jersey State Bar Foundation reaches out to all segments of the population--from children to senior citizens--to educate and promote awareness of the law. The Foundation's school-based learning initiatives help teachers familiarize students with the fundamentals of the justice system. Mock trial competitions, conflict resolution training, workshops, publications, videos, and curriculum development projects are among the many services available to schools. The Legal Eagle and Respect newsletters reach thousands of elementary, middle, and high school students annually. In addition, the Foundation offers a range of free publications designed to answer common questions about the law in such areas as disability law and consumer rights.

• Discretionary Grants

  In 2019, 40 community-based and statewide non-profit agencies received discretionary grants. These grants supported programs to provide legal assistance and representation as well as information about the law and court system. Those served by these organizations included income-eligible families and individuals with problems concerning housing, welfare, Social Security, health care programs, veterans’ benefits, public education, family court matters, consumer credit, immigration and foreclosure. Disabled adults, victims of domestic violence, low-income workers with wage and hour or other job-related complaints, senior citizens, tenants in unsafe apartments and homeless families were among the many low-income New Jersey residents served by IOLTA grant recipients.