Article: Lack of IOLTA Funds Hurting Legal Aid Providers

Posted by OPI at 11:55 AM in Public Interest News

Interest on Lawyers Trust Accounts (IOLTA) programs were instituted by many states as a method of funding legal services providers.  During a strong economy, these funds generated millions of dollars for local legal aid offices, but over the past year the downturn in the economy has severely depleted these funds.  As a result, legal services providers have smaller budgets and fewer staff to meet the rising demand for legal assistance.  This Daily Times Reader article examines the impact of a 90% cut in IOLTA funding for a Mississippi legal aid.  (continued)

In 2007-08, North Mississippi Rural Legal Services (NMRLS)recieved $700,000 in IOLTA; for 2008-09, it received $80,000.  Mississippi's IOLTA fund only totaled $715,000 this year, down from $3 million a year ago.  NMRLS had no choice but to reduce its budget by reducing its staff.  The proposed changes to NMRLS personnel would get rid of all the paralegals working in each of the five district offices. Additionally, one of the two lawyers on staff at each office has been ordered to conduct legal advice over the phones, while the remaining lawyer is expected to handle the litigation cases and travel to the various courts in each of the counties that particular office represents.  NMRLS covers 39 counties in the northern part of the state.

Similar budget cuts have occurred throughout the country as IOLTA funding continues to diminish.