Facts about New Jersey's IOLTA Program

IOLTA as a Funding Source

The Interest on Lawyers' Trust Accounts (IOLTA) program is an innovative way to supply cost-free services to the public. Lawyers who place client funds in IOLTA accounts do so under the authority of the New Jersey Supreme Court. Client funds that are too small in amount or held for too short a period to earn interest net of bank charges or administrative fees are placed in a pooled, interest bearing trust account. Pursuant to Supreme Court rule, if a client's deposit is large enough or held for a long enough time to earn interest after fees and charges, then the funds must be placed in a non-IOLTA client trust account.

Promoting Equal Access to Justice

In New Jersey, IOLTA grants are used to fund the provision of civil legal services for the poor, improvements in the administration of justice and law-related education initiatives. IOLTA was first implemented in 1979 in Florida. Today, IOLTA programs operate in all 50 states and the District of Columbia and US Virgin Islands.

Administration

New Jersey's IOLTA program was initiated by the NJ State Bar Association and began operation in 1988. A board of nine trustees administers the IOLTA Fund of the Bar of New Jersey; at least four must be members of the bar of this state. The New Jersey Supreme Court appoints the trustees. Representatives from the NJ State Bar Association, the New Jersey State Bar Foundation and Legal Services of New Jersey, Inc. also serve as ex officio members of the board.

Disbursement of Funds

The IOLTA Fund Of the Bar of New Jersey disburses its funds according to guidelines established by the New Jersey Supreme Court under Court Rule 1:28-A.

• Legal Services of New Jersey Inc. receives not less than 75 percent of the funding to provide legal assistance to indigents in civil matters.

• The New Jersey State Bar Foundation receives not less than 12.5 percent of the funds to provide a variety of free law-related educational programs to students, senior citizens, and the public.

• The IOLTA Fund awards the remaining portion of its net revenue in annual discretionary grants not exceeding $150,000 each for legal aid to the poor, improvements in the administration of justice, and law-related public education programs.

In 2007, the IOLTA Fund disbursed $50.8 million in grants. Of that funding, Legal Services received about $40.2 million, the New Jersey State Bar Foundation received $6.7 million, and $4.1 million was disbursed in the 2007 Discretionary Grant cycle.

Since its inception in 1988, over $310 million has been collected by the IOLTA Fund for these grant programs.

How IOLTA Money is Used to Help New Jersey's Citizens

• Legal Services of New Jersey, Inc.

LSNJ coordinates the state's system of free legal representation and assistance for low-income people with civil legal problems. Legal assistance is available in a wide range of areas. Help is often provided to individuals facing eviction, victims of domestic violence, parents seeking custody or visitation rights, workers with employment problems, senior citizens and the disabled. LSNJ uses IOLTA funding for internal operations, as well as statewide functions including research, advocacy, and special projects. A portion of the LSNJ award was distributed to the six legal services programs throughout the state based upon the poverty-level population in each of the geographic areas. The network plus LSNJ provided direct representation and legal counseling to 63,000 low-income New Jerseyans in 2007. Legal information, materials, and counsel are provided to many others through telephone hotlines, publications, a website, and public education. 

• New Jersey State Bar Foundation

Through a free, comprehensive education program, the New Jersey State Bar Foundation reaches out to all segments of the population-from children to senior citizens-to promote awareness of the law. The Foundation's school-based learning initiatives help teachers familiarize students with the fundamentals of the justice system. Mock trials, conflict resolution training, workshops, publications, videos, and curriculum development projects are among the many services available to schools. The Legal Eagle newsletter reaches over 340,000 elementary, middle, and high school students. In addition, the Foundation offers a wide range of free seminars and publications designed to answer common questions about the law in such areas as bankruptcy, estate planning and consumer rights. The Foundation provides multiple grants for clinical fellowships at each of the state’s three law schools in special areas of the law including Special Education, Child and Youth Advocacy, Civil Practice, Children’s Justice, Urban Revitalization and Human Rights. Each of the three law schools received funding for Street Law Projects that bring law-related education to young people in Newark, Jersey City, East Orange and Camden high schools. Law students serve as instructors and mentors.

• Discretionary Grants