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Supreme Court of Alabama Approves Mandatory IOLTA Program

Indigent residents of Alabama will now have greater access to civil justice following a decision by the Supreme Court of Alabama to convert the state's IOLTA program from opt-out to mandatory status effective January 2008. The move affects all of the state's 15,400 lawyers licensed to practice.

On September 27, 2007, the Supreme Court amended Rule 1.15 of the Alabama Rules of Professional Conduct requiring lawyers to place all trust funds in an IOLTA account unless – in the lawyers' judgment - the funds can earn income for the client or third party in excess of the costs incurred to secure such income. As a result, lawyers' pooled non-interest bearing trust accounts must be converted to interest-bearing IOLTA accounts. The new IOLTA requirements are mandatory and are effective January 1, 2008.

State Bar President Samuel N. Crosby of Daphne (Stone, Granade & Crosby, P.C.) said, "The unanimous votes by the Supreme Court of Alabama and the Alabama State Bar Board of Bar Commissioners to amend Rule 1.15 are magnificent acts of leadership. Thanks to these leadership acts millions of dollars will be used to provide indigent Alabamians with justice in civil matters. This is a great day for our state."

Alabama becomes the 35th state to adopt a mandatory IOLTA program. Alabama's first IOLTA program was established in 1987 and awarded its first grants in 1989.

Funds are collected and disbursed by the Alabama Law Foundation, which was established by the Alabama State Bar, and the Alabama Civil Justice Foundation, which was established by the Alabama Association for Justice, through an annual grants process. As Alabama's major grant maker to programs that provide legal aid to the poor, the Alabama Law Foundation annually awards IOLTA grants for three purposes: to provide free legal services in civil cases to disadvantaged citizens, to improve the administration of justice, and to support law related education for the public. Since 1987 the Alabama Law Foundation has awarded $13.1 million in grants.

For more information on IOLTA and how to open an Alabama Law Foundation IOLTA account, please go to