Hi and welcome to Just Answer.I am Ray and will the expert assisting you tonight.
You are correct that Oregon Bar mandates that all lawyers hold client funds in an IOLTA account.This is a special trust account for the holding of retainers.The interest generated on such accounts goes to finance legal services for the poor.
Here is the law for reference.
(a) A lawyer trust account for client funds that cannot earn interest in excess of the costs of generating such interest (“net interest”) shall be referred to as an IOLTA (Interest on Lawyer Trust Accounts) account. IOLTA accounts shall be operated in accordance with this rule and with operating regulations and procedures as may be established by the Oregon State Bar with the approval of the Oregon Supreme Court. (b) All client funds shall be deposited in the lawyer’s or law firm’s IOLTA account unless a particular client’s funds can earn net interest. All interest earned by funds held in the IOLTA account shall be paid to the Oregon Law Foundation as provided in this rule. (c) Client funds that can earn net interest shall be deposited in an interest bearing trust account for the client’s benefit and the net interest earned by funds in such an account shall be held in trust as property of the client in the same manner as is provided in paragraphs (a) through (d) of Rule 1.15-1 for the principal funds of the client. The interest bearing account shall be either:
(d) In determining whether client funds can or cannot earn net interest, the lawyer or law firm shall consider the following factors:
(e) The lawyer or law firm shall review the IOLTA account at reasonable intervals to determine whether circumstances have changed that require further action with respect to the funds of a particular client. (f) If a lawyer or law firm determines that a particular client’s funds in an IOLTA account either did or can earn net interest, the lawyer shall transfer the funds into an account specified in paragraph (c) of this rule and request a refund for any interest earned by the client’s funds that may have been remitted to the Oregon Law Foundation.
(g) No earnings from a lawyer trust account shall be made available to a lawyer or the lawyer’s firm. (h) A lawyer or law firm may maintain a lawyer trust account only at a financial institution that: (1) is authorized by state or federal banking laws to transact banking business in the state where the account is maintained; (2) is insured by the Federal Deposit Insurance Corporation or an analogous federal government agency; (3) has entered into an agreement with the Oregon Law Foundation:
(4) has entered into an overdraft notification agreement with the Oregon State Bar requiring the financial institution to report to the Oregon State Bar Disciplinary Counsel when any properly payable instrument is presented against such account containing insufficient funds, whether or not the instrument is honored.
(j) Agreements between financial institutions and the Oregon State Bar or the Oregon Law Foundation shall apply to all branches of the financial institution. Such agreements shall not be canceled except upon a thirty-day notice in writing to OSB Disciplinary Counsel in the case of a trust account overdraft notification agreement or to the Oregon Law Foundation in the case of an IOLTA agreement. (k) Nothing in this rule shall preclude financial institutions which participate in any trust account overdraft notification program from charging lawyers or law firms for the reasonable costs incurred by the financial institutions in participating in such program. (l) Every lawyer who receives notification from a financial institution that any instrument presented against his or her lawyer trust account was presented against insufficient funds, whether or not the instrument was honored, shall promptly notify Disciplinary Counsel in writing of the same information required by paragraph (i). The lawyer shall include a full explanation of the cause of the overdraft. (m) Every lawyer shall certify annually on a form and by a due date prescribed by the Oregon State Bar that the lawyer is in compliance with Rule 1.15-1 and this rule. Between annual certifications, a lawyer establishing an IOLTA account shall so advise the Oregon Law Foundation in writing within 30 days of establishing the account, on a form approved by the Oregon Law Foundation. (n) For the purposes of paragraph (h)(3), “service charges” are limited to the institution’s following customary check and deposit processing charges: monthly maintenance fees, per item check charges, items deposited charges and per deposit charges. Any other fees or transactions costs are not “service charges” for purposes of paragraph (h)(3) and must be paid by the lawyer or law firm.
Here is good question and answer about IOLTA accounts here in Oregon.
More about the requirements her and law on such accounts.
Se page 14-15 of the Rules of Professional Conduct they go into retainers and IOLTA accounts.
The lawyer is required to bill against the retainer as work is performed.The balance of the retainer remains in the IOLTA account.Lawyers are subject to professional complaint if they co mingle funds or wrongfully spend such funds.They can be sanctioned for any violations.
I appreciate the chance to assist you tonight.Please let me know if you have more follow up.Thanks again.
You are correct that lawyers are required here to have IOLTA trust accounts and to keep client funds in such accounts until they are applied against the client's bill.Any surplus goes back to the client.
Jenson I appreciate the chance ot help you tonight.
It has been my pleasure let me know if you have more follow up.
Thank you Ray, that was both very quick and very professional.
certainly my pleasure, Ray.
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