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Governor signs bills to help increase IOLTA,
legal services funds

By Diane Curtis
Staff Writer

Legal aid services in California got a boost last month as Governor Schwarzenegger signed a bill allowing for higher interest on lawyer trust accounts and final steps were taken to add a voluntary legal services donation to the State Bar’s 2008 fee statement.

Chief Justice Ronald George
Chief Justice Ronald George

“I’m very pleased that both of these measures were enacted into law,” said Chief Justice Ronald George. One measure, AB 2301, “permits lawyers to make a difference by something as easy as just writing a check or submitting a credit card and making a voluntary contribution to the State Bar for this purpose.” The other, AB 1723, “expands the different kinds of accounts attorneys can use so their IOLTA funds will generate a higher return.”

George praised the bills’ author, Assembly Judiciary Chairman Dave Jones, D-Sacramento, for showing “pre-eminent leadership in dealing with the problem of unrepresented individuals in our court system,” where 8,000 people are in need of legal services for every one legal aid lawyer and an estimated 80 percent of people in certain areas of the state have no professional legal representation.

Jones said the measures were part of a bigger plan to make sure that more low-income people get the legal representation to which they’re entitled. (See column) He cited a $400 million “justice gap” between the amount of money available for low-income people and their legal needs. “So we’re delighted to have the bar as a partner in reaching out to members and asking if they would make a voluntary contribution,” Jones said.

AB 1723 will allow attorneys to place Interest on Lawyer Trust Accounts (IOLTA) funds, which are statutorily designated for legal programs for the poor, into higher-interest, pre-approved investment and deposit accounts. State Bar officials estimate the change could possibly double — from $10 million to $20 million a year — IOLTA funds. Currently, the money is placed in accounts that earn only 1 percent interest. “Without costing Californians a dime, it’s going to allow thousands of poor Californians to get the legal services they need,” said State Bar President Jeff Bleich.

In a signing statement, Schwarzenegger said the higher earnings “will also benefit the courts by alleviating some of the burdens imposed by litigants who are currently forced to represent themselves.” The Legal Services Trust Fund Program will be working with banks to implement AB 1723, both to streamline the process and to avoid unnecessary paperwork by attorneys. Attorneys do not need to take any action at this time. They will be notified if, and when, any action is called for.

AB 2301, which was signed into law in 2006, authorized the State Bar to solicit contributions from its members to support legal services for low-income Californians. The result is the Justice Gap Fund. Line 10 of the annual fee statement to be mailed on Nov. 15 will allow attorneys to contribute $100 to the Justice Gap Fund. If attorneys wish to give a higher or lower amount, they may write that amount on Line 12 of their personal fee statement.

“The only way California can address the legal services gap is for every sector to do its part to help our poorest neighbors,” said Bleich. “The banks will be stepping up this year after AB 1723, and now it’s our turn. Simply by checking off the $100 voluntary fee on our dues invoices, each of us could help to raise millions of dollars that would allow every Californian a shot at justice.”

Attorneys, or even members of the public, may also contribute to the Justice Gap Fund online at Additional information on the new fund is available at

Justice Gap money will be used for a host of legal service needs, from providing legal assistance to such vulnerable clients as victims of domestic violence and elder abuse to ensuring that low-income children receive needed health care and special education services.

According to “Action Plan for Justice,” a report from the California Commission on Access to Justice, California by far has the largest low-income population of any state. Since 1980, the report states, population in the state has increased by 40 percent while the number of Californians living in poverty has increased 60 percent.

Legal aid officials say new funds will be welcome in every aspect of legal services: domestic violence cases, housing, health care, employee rights, foster care and guardianships, adoption, consumer fraud and discrimination.

“We have a number of significant unmet needs,” said Kenneth Bab-cock, executive director of the Public Law Center in Orange County. “They include providing services to clients who we typically turn away because we know we don’t have the staff to help them or staff to recruit and train the volunteers who could help them.”

Some clients who are turned away go the self-help route. Others, however, continue to live with whatever situation led them to seek help in the first place, or they may go to an organization that claims to be a legal aid office but isn’t. In those cases, Babcock said, clients often end up paying fees they cannot afford for ineffective representation.

Janis Spire, executive director of the Alliance for Children’s Rights in Los Angeles, said her organization, too, turns away “far too many clients,” especially at crisis points when young students are nearing expulsion or suspension. What she would like is to have the staff and time to tackle special education issues before they reach such extreme points. “With more funding, you could actually be more proactive,” she said.

“I think our system of justice works best when people have representation,” said Assembly Member Jones. “I don’t think anyone’s suggesting that these two bills alone solve the problem, but they help significantly, and they’re part of a broader effort to improve access to justice.”

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