News Releases

State Bar's Effort to Maximize Legal Aid Grant Revenue Helps Boost Fund to Record Level

A State Bar effort to maximize revenue in the Interest on Lawyers’ Trust Accounts (IOLTA) fund—a major source of legal aid grants—will help boost those funds to a projected record of $39 million in 2019. 

“Our staff’s work to increase interest rates on IOLTA accounts is a great example of how we are doubling down on our mission of access, diversity, and inclusion, even in a time of great financial challenge,” said Leah T. Wilson, Executive Director. “This work will result in a 450 percent increase in IOLTA revenue over two years.”

Since 1984, approximately 58 percent of State Bar legal aid grant funds have come from IOLTA. The State Bar receives interest from pooled attorney bank accounts that hold nominal or short-term client funds. Average daily balances for IOLTA accounts in 2018 totaled almost $4.8 billion. The State Bar distributes the interest revenue to legal aid programs throughout California.

IOLTA revenue depends on interest rates, which plunged in 2008 and remained low for 10 years. Under statute, attorneys are required to place IOLTA accounts in banks that pay IOLTA interest rates comparable to those paid to other depositors.

The State Bar closely monitors bank remittances from IOLTA accounts. In 2018, State Bar staff began recertifying the nearly 200 eligible financial institutions that offer IOLTA accounts. Staff reviewed IOLTA products to ensure that those interest rates comply with the requirements.  

These efforts, combined with rising interest rates, have yielded significant income growth: from a low of $5 million in 2013 to $19 million in 2018—and a projected $39 million in 2019.

Along with IOLTA funds, the State Bar disburses contributions from the state General Fund, court filing fees, and voluntary contributions. Grants totaling over $62 million in 2019—up from $50 million in 2018—will go to nearly 100 legal services organizations who provide free legal aid to low-income Californians.

There is still significant unmet need for legal aid in California. The State Bar’s California Justice Gap Study being conducted in 2019 will measure this need for the first time. 

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The State Bar of California's mission is to protect the public and includes the primary functions of licensing, regulation and discipline of attorneys; the advancement of the ethical and competent practice of law; and support of efforts for greater access to, and inclusion in, the legal system.