The Nevada Bar Foundation and 29 local financial institutions are working together to support organizations that provide legal services to the more than 1 million state residents who qualify for legal assistance during a legal crisis.
Last year, the foundation distributed more than $2.8 million in grants to legal services providers, which assisted more than 23,000 households throughout the state. The funds are available through the Interest on Lawyer Trust Account program. Through July, the foundation had received more than $1.4 million in IOLTA program contributions, according to Lisa Dreitzer, deputy executive director of the State Bar of Nevada. The state bar helps the Nevada Bar Foundation administer the program.
“For years IOLTA has provided critical revenue to support legal aid organizations in their effort to provide legal services to the poor and underprivileged who, like many in society, have substantial legal needs,” said Nevada Supreme Court Justice James Hardesty. “Central to the IOLTA programs success is the participation of the banking and financial industries. …
“The Nevada Supreme Court revamped its rules that stabilized interest rates with the participation and cooperation of the banking and financial institutions. The net result was to increase IOLTA revenue from approximately $500,000 annually to about $2.4 million. I cannot begin to thank the financial industry enough for their support and dedication to this meaningful effort.”
Attorneys routinely receive and hold funds from clients or third parties for future use. If these funds are large or will be held for a long period of time, the attorney makes them productive for the client by depositing those funds into an interest-bearing account in the name of and for the benefit of the client. However, for small deposits or short-term durations, it is impractical to establish separate accounts because of administration costs, bank charges and IRS Form 1099, according to the bar foundation.
In 2008, the Nevada Supreme Court required lawyers — or their firms — to establish and hold these funds in IOLTA accounts. The banks send the interest earned from the IOLTA accounts directly to the Nevada Bar Foundation, which distributes that money to pro bono legal services providers, which help the most vulnerable Nevada citizens. Whether facing eviction, emergency medical situations, domestic violence or predators who steal savings from unwary seniors, legal assistance from legal services organizations and the pro bono attorneys who volunteer with them can be the difference between life and death, according to the bar foundation.
The banks that partner with the Nevada Bar Foundation range from large national chains such as Bank of America and US Bank to local state banks such as Bank of Nevada, Meadows Bank and Nevada State Bank.
“We are very fortunate in our state because our banks pay an interest rate higher than other states, and we’ve had some grants that have really been able to help a lot of people in Nevada,” said Connie Akridge, president of the Nevada Bar Foundation. “We appreciate the banks’ participation in the IOLTA program. We partner with them and try to communicate to them about the results, effects and good community enrichment that are the result of their funds. We congratulate them for those efforts and their partnership with us.”
Setting the rates
The interest rates on IOLTAs are set twice each year by the Nevada Supreme Court Access to Justice Commission. In addition to the consideration of economic conditions, including federal interest rates and comparable rates on local bank products, the bar foundation seeks and considers feedback from all IOLTA participating financial institutions at the biannual rate review.
All information is reviewed by the commission and a determination of the rate going forward is established in May and November of each year. The current rate set by the commission is .70 percent.
Randy Boesch, head of The Private Bank with Nevada State Bank, said his organization is happy to be a part of the IOLTA program. The bank also benefits as it helps with Nevada State Bank’s obligations as part of the Community Reinvestment Act, which encourages financial institutions to help meet the credit needs of the communities where they operate, including low- and moderate-income neighborhoods.
“We know how important (IOLTA) is because of our involvement in the legal community, and we give back in terms of paying higher interest rates for these IOLTA accounts,” Boesch said. “We have relationships with many of the law firms that have IOLTA accounts with us, and because of those relationships and we know the funds will be used wisely by the Nevada Bar Foundation, it just makes sense to be a participant.
“There are several organizations that receive these IOLTA funds that service the needs of people in need, such as senior citizens in need of legal services who cannot afford them and foster children that have nowhere to turn for legal help when the need arises. It just makes sense for a community-based bank like Nevada State Bank to help people in need in the community.”
According to the bar foundation’s 2015 annual report, the top three self-reported legal needs in the state were:
■ Financial — consumer protection, collection practices, creditors.
■ Family — domestic violence, child custody.
■ Housing — landlord/tenant, foreclosure, discrimination.
In order to meet those needs, the bar foundation has distributed more than $12 million in IOLTA grants over the past 10 years to organizations such as:
■ Legal Aid Center of Southern Nevada.
■ Nevada Legal Services.
■ Washoe Legal Services.
■ Southern Nevada Senior Law Project.
■ Volunteer Attorneys of Rural Nevada.
Building relationships
The .70 percent interest rate is a higher rate than most other states’ IOLTA program interest rates. The interest rate allows for the Nevada Bar Foundation and the organizations that provide legal services to ensure continuity of services and future program development. Further, while the higher-interest rates might seem like a deterrent, the banks that do participate in the IOLTA program develop relationships with lawyers and law firms. Akridge said many participating banks end up expanding their relationship with lawyers and law firms beyond an IOLTA account. Financial institutions can advertise to the legal community that IOLTAs are offered.
Meadows Bank is another local bank that participates in the program. Meadows Bank President Arvind Menon understands the importance of developing relationships with lawyers and law firms and said his bank is happy to provide banking services to local attorneys and work with IOLTA deposits. He plans on continuing to take part in IOLTA.
“We don’t normally hear that side of it all, but we realize that is what happens with the interest earned on those funds,” Menon said. “Who gets it and how much they get is something the bar foundation makes a decision on. I’m sure they are using it wisely to help people in the community who need help.”
Bank of Nevada also participates in the IOLTA program.
“Many years ago, our financial institution saw the opportunity to assist in raising more dollars through IOLTA, which would provide additional legal assistance to those residents who could not otherwise afford it,” said Chris Gaynor, vice president and relationship manager for Bank of Nevada.
Robert Horne is a Las Vegas freelance writer. He works full time as a publications specialist with the State Bar of Nevada.
