From the Chair...
Commission on Interest on Lawyers' Trust Accounts
On January 24th, in accordance with the Federal Reserve’s new policy on greater transparency in interest rate forecasting, the Federal Open Market Committee (FOMC) announced that the current economic outlook warranted low levels for the federal funds rate through late 2014. Though we hoped for better news, the forecast was not surprising. Instead, it confirmed what many had suspected, that low interest rates were the new normal rather than an anomaly of the times.
This new normal came into sharp focus last fall. In October, the Commission held its meeting in Omaha, Nebraska. There we met with Doris Huffman, Executive Director, Nebraska Lawyers Trust Account Foundation, as well as, the Foundation’s Immediate Past President, Jerald Ostdiek, and its current President, Michael Brogan. The members of the Commission and I had the opportunity to learn about the good work and local challenges facing IOLTA in Nebraska. As the meeting progressed, reports from members of the Commission and staff showed the existence of national trends challenging many programs throughout the country. Banks were moving from safe harbor/benchmark to lower interest rates, reserves were being depleted, and fund raising was becoming a reality for many IOLTA programs. We realized these issues, brought on by a weakened economy and prolonged low interest rates, needed to be addressed.
In response, the Joint Meetings Committee developed a timely and thought provoking program for the winter IOLTA workshops. These workshops took place on February 2 – 3, 2012 in New Orleans, Louisiana and focused on navigating this new normal. Concurrent sessions addressed topics such as: policies every program should have, fundraising, disaster planning, and intelligent retrenchment. Other sessions focused on the delivery of legal services highlighting developments in pro bono and evaluation of Administration of Justice (AOJ) grantees. Banking breakouts allowed attendees an opportunity to discuss banking issues specific to their region, and speed dating returned to offer short discussions on relevant topics to the community. As always, the newer staff and trustees breakfasts provided these groups with an opportunity to discuss their unique challenges in this low interest rate environment. The workshops concluded with a plenary session on thriving in the new normal.
Following two full days of workshops, the Commission held its quarterly meeting. Mathile Abramson, Chair of the Louisiana Bar Foundation and Donna Cuneo, its executive director warmly welcomed us to New Orleans and reported on the state of IOLTA in Louisiana. Like so many others, Louisiana strives to meet the growing demand for legal services amidst near zero interest rates and necessary cuts in grants.
Our time in New Orleans reinforced the increasing importance of the IOLTA workshops. As programs face diminished revenue and the FOMC forecast offers no immediate relief, sessions addressing relevant topics, along with opportunities for discussion and collaboration, brought a fresh perspective and new strategies on ways to embrace the new normal. I thank the Joint Meetings Committee for providing a program that challenged the IOLTA community to thrive in this unfavorable environment. With no time to rest on its accolades, the Committee is already gearing up for the summer workshops to be held on August 2 -3 in Chicago. I am looking forward to this time of training and collaboration and hope to see you then.