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Boosting civil legal aid: How Florida’s IOTA program leads the way

Retired banker says controversial rule is good for citizens — and his longtime profession.

By Jody Hudgins
| 5:00 a.m. February 1, 2024
| 0 Free Articles Remaining!

Opinion

Since its inception in 1981, The Florida Supreme Court’s Interest on Trust Accounts (IOTA) program has pioneered a groundbreaking approach to funding civil legal aid for the underprivileged. By harnessing the previously dormant interest potential of short-term client funds held by lawyers, IOTA has become a national model, generating millions for those in need of civil legal representation.

Within the framework of the IOTA program, the Supreme Court, leveraging its exclusive jurisdiction to regulate the legal profession as stipulated in the Florida Constitution, mandates lawyers pool all nominal or short-term funds of clients or third persons into an interest-bearing checking account for the benefit of IOTA. Prior to the establishment of the Court’s IOTA program, these pooled funds, that couldn’t be invested in other ways, were relegated to non-interest-bearing accounts.

The financial crisis of 2008 and its aftermath underscored the need for a more secure funding source for legal aid, prompting The Florida Bar to propose a new Bar rule in October 2022. This rule requires lawyers to keep their trust accounts in institutions that tie interest rates for IOTA accounts to specific indexed rate points, offering a free-market approach to securing better funding for necessary legal services for low-income Floridians. The Supreme Court adopted this proposal and its amendments to Bar rules, which went into effect on May 15, 2023.