Oral Testimony of Herbert S. Garten, Chair of the ABA Commission on IOLTA,
Before the American Bar Association
Commission on Multidisciplinary Practice
August 8, 1999
Herbert S. Garten, Chair of the ABA Commission on IOLTA, next presented remarks to the Commission. IOLTA, Interest on Lawyers' Trust Accounts programs, is the second most important source of funding for civil legal services, just under the Legal Services Corporation (LSC), which provides federal funding for the provision of civil legal services to the poor. In Mr. Garten's home state of Maryland, IOLTA surpasses the amount of money provided by LSC.
While he took no position on whether MDPs should be permitted to exist, Mr. Garten asked that if they are approved, the Commission make clear that the lawyer and the lawyer's rules of professional conduct control all client trust funds coming into the entity, whether the lawyer is a majority or minority owner. To safeguard client funds and IOLTA income, the Commission on IOLTA believes that more than segregation of only the MDP's legal fees, as detailed in the recommendation, is needed. Mr. Garten pointed out that a client who deposits trust funds with the MDP may seek both the services of a lawyer and a non-lawyer on a given matter or may first seek the services of a lawyer and later a non-lawyer on related matters. As a result, it is important to have one set of rules and the highest standards available governing the handling of client trust funds by the MDP. The Commission on IOLTA proposed specific language to amend the Report and Recommendation.