The New York Times reports that declining interest rates are devastating funding, though Interest on Lawyer Trust Accounts (IOLTA) programs, that help fund civil legal services for poor people. We’re wrestling with that in Georgia too.

While the Federal government providing some funding through the Legal Services Corporation, all states have adopted Interest on Lawyer Trust Accounts programs in which interest earned on funds that typically remain in our trust accounts for just a few days support legal aid for the poor.  In Georgia, IOLTA funds go to the Bar Foundation which in turn funds Georgia Legal Services.

Much of the money passing through lawyer trust accounts is related to real estate transactions. In this economy, the volume of those real estate transactions is way down. Combine that with the decline of interest rates to record lows, and you have a "perfect storm." 

I don’t yet have a handle on how much IOLTA funding will be down, but it is clear the impact on funding for Legal Services for the poor will fall dramatically, just as the need is increased just as dramatically.   Unless voluntary contributions multiply, the impact will be severe.

The Legal Services Program certainly has its detractors.  Perhaps in this financial crisis, alternative ways should be developed to supplement the Legal Services program and provide basic legal services for the poor.  


Ken Shigley is a trial attorney in Atlanta, Georgia who has been listed as a "Super Lawyer" (Atlanta Magazine), among the "Legal Elite" (Georgia Trend Magazine), and in the Bar Register of Preeminent Lawyers (Martindale), and is a Certified Civil Trial Advocate of the National Board of Trial Advocacy,. Mr. Shigley has extensive experience representing parties in trucking and bus accidents, products liability, catastrophic personal injury, wrongful death, brain injury, spinal cord injury and burn injury cases.  Currently he is Secretary of the 40,000 member State Bar of Georgia.