By Joseph R. Marconi[1]
Effective September 1, 2011, the Illinois Supreme Court has amended Rule 1.15 of the Illinois Rules of Professional Conduct respecting the safekeeping of client funds deposited in trust accounts. As professional fiduciaries, attorneys have long been required to keep their clients’ funds separate from their own. Now, the Supreme Court has limited the options for accounts to hold client funds, imposed new record keeping requirements on attorneys, and now requires banks to notify the ARDC when client accounts are overdrawn.
Specifically, Rule 1.15(a) limits the type of accounts in which client funds can be deposited to two kinds. The first is an Interest on Lawyers Trust Account (IOLTA). IOLTAs are pooled trust accounts that bear interest or dividends on nominal or short-term client funds—those funds advanced for costs or which belong in part to a client and “presently or potentially” to the lawyer. The interest or dividends is paid to the Lawyers Trust Fund of Illinois (LTF) which donates the funds to organizations providing legal services to the poor.[2] An attorney or law firm can establish an IOLTA account by: