Oregon State Bar Bulletin — OCTOBER 2006

Expanding Access
Lawyers and banks team up to boost
legal aid services through IOLTA

By Amelie Welden

After living in fear for more than 10 years, "Elena" decided it was time to seek legal help. She had long wanted to move her three young daughters out of her abusive husband’s home in Cornelius, but she had no idea how to go about it. Her husband’s constant threats against leaving were intimidating enough, but as an immigrant from Mexico, Elena faced even more challenges. Though she had lived in the U.S. since the early 1990s, she spoke Spanish almost exclusively. This language barrier made her feel isolated and powerless; she didn’t know her rights and had no understanding of how to navigate the legal system.

When Elena contacted the St. Andrew Legal Clinic (SALC) in Hillsboro, however, things began to look up. Not only was the clinic affordable on her very limited income, but it also employed three Spanish-speaking attorneys who could talk with her directly about her situation. Within weeks, the attorneys were able to help Elena and her daughters get out on their own. They helped her get a restraining order, file for divorce and win temporary financial support from her husband while the divorce is pending. They also helped ensure that her husband’s court-ordered weekly visits with his daughters are supervised.

"She’s starting a new life, and her daughters are starting a new life," says Susana Alba, branch manager of SALC’s office in Washington County and one of the lawyers working on Elena’s case. "For her to be able to have a lawyer who’s Latina who she can communicate with in her own language without an interpreter, it just makes all the difference. I really believe that if we hadn’t been there for her, she’d still be with her husband."

Alba notes that Elena’s story might have ended differently if it had taken place just over a year ago. At that time, the Washington County office of SALC had no Spanish-speaking attorneys on staff, and Elena would have run into the same language barrier there as everywhere else. But last August SALC hired Alba as the office’s first Spanish-speaking lawyer, and the organization has since added two more bilingual attorneys to help serve clients like Elena.

One of these new positions was created thanks largely to a one-time special grant from the Oregon Law Foundation. This grant has also enabled SALC’s Washington County office to plan on hiring yet another lawyer this fall and to expand its reach into underserved Columbia County.

"We were seeing more calls and more requests for services in our Hillsboro office," says Joel Overlund, executive director of SALC. "We also had gotten word from attorneys in Columbia County and from Columbia County Legal Aid that demand for services out there was growing. There was a need that we could help fill, and this seemed like a perfect opportunity to do it."

Record-setting grants awarded in 2006
SALC’s expansion is just one of several unexpected but welcome events made possible by special-projects grants from the Oregon Law Foundation this year. These OLF grants also provided funding to re-open a legal aid office in Klamath Falls, sustain a domestic violence clinic at the University of Oregon, develop a traveling immigration seminar and more. All this in addition to regular grants that were awarded to a dozen legal services organizations across the state. (See page 18 for a complete listing of grant recipients.)

In total, the law foundation awarded more than $1.8 million in regular and special grants for 2006, up 38 percent from the year before. And though financial need still exists for legal services programs, the extra money helped to begin repairing some of the damage caused by economic setbacks of recent years.

Tom Matsuda, executive director of Legal Aid Services of Oregon, says this year is a bright spot after years of struggle. "For the first time in quite a while, we’re thinking about re-opening an office after, basically, a 20-year history of having to downsize and close offices," Matsuda says of his organization’s plans to restore local legal aid services in Klamath Falls. "It’s a turning point."

Most of the foundation’s increased revenue came from escalating earnings on lawyers’ IOLTA accounts, which pool client funds in order to generate interest income that would otherwise be unattainable. Generally, lawyers who receive money that belongs to clients — such as settlement funds or unearned retainers — must deposit those funds into a trust account. When the amount of money is too small or held for too short a time to earn income for the client after administrative fees and banking charges, it is pooled with other clients’ money and placed in an IOLTA account. The interest income from IOLTA accounts is then channeled through the Oregon Law Foundation and distributed to state programs that improve access to justice. (For more information about IOLTA in Oregon and nationwide, see page 13.)

Mark Wada, president of the Oregon Law Foundation board, attributes much of the recent upsurge in IOLTA revenue to the generosity of banks. Many leadership banks have partnered with the foundation to provide high interest rates on and waive administrative fees for IOLTA accounts.

"The law foundation is so thankful to our leadership banks for maximizing the rate of return on IOLTA accounts," Wada emphasizes. "Their leadership and support have allowed us to give more money to organizations that provide critical legal services to those Oregonians who are most in need."

One of the most consistently generous banks has been U.S. Bank, which currently offers an industry-leading interest yield of 4.5 percent for IOLTA accounts. In February, U.S. Bank won the law foundation’s Partners in Justice award for its commitment to expanding access to legal services.

Tina Foster, senior vice president at U.S. Bank and regional manager for its Portland and Vancouver branches, explains that she and her colleagues made a blanket increase in IOLTA interest rates years ago after learning about the program from law foundation staff. She says the decision was based on the opportunity to efficiently help low-income Oregonians gain access to legal services.

"We’re always wanting to contribute to communities, and this is a great opportunity to do it in a way that isn’t complicated," Foster says. "We just give a higher interest rate for these accounts to give to this great cause. For us, it’s a relatively simple gesture."

Wada of the foundation board notes that there are significant differences between the IOLTA interest rates offered by different banks, so income earned on the same amount of deposited money varies widely. He encourages lawyers to consider banking where their IOLTA funds could make the most difference.

"If your bank is a leadership bank, thank them," Wada says. "If your bank is not a leadership bank, ask them what IOLTA rate they pay and use that information to make an informed decision regarding your IOLTA account. By simply asking that question, lawyers in Oregon can make a significant and long lasting impact on the law foundation and its grantees."

Judith Baker, executive director of the law foundation, adds that lawyers who choose to do business with IOLTA leadership banks can effect large changes to her organization’s bottom line. She offers Portland firm Garvey Schubert Barer as a recent example. Because Garvey Schubert Barer moved its business to The Commerce Bank of Oregon, annual revenue generated by its IOLTA account is expected to increase nearly fivefold.

Bob Weaver, one of the owners of Garvey Schubert, says IOLTA rates were a deciding factor in the firm’s decision about where to bank. "We moved our account to the Commerce Bank for a number of reasons, some business-related," Weaver explains. "The kicker was that they have a very attractive benefit for the IOLTA accounts.… This was another very impressive reason for us to move our account there."

According to Wada, these kinds of partnerships between Oregon lawyers and banks are essential to providing needed grant funds for legal services organizations across the state.

Legal aid restored in Klamath
Imagine it’s the middle of a snowy Lakeview winter, and you wake up to a house that’s almost as cold inside as the outdoor February air. When you call your landlord to ask about fixing the heat, he informs you that he has shut off your gas because you were late with your rent payment.

You dial the number for a legal aid hotline, hoping they can help explain and enforce your legal rights. When a staff member answers the phone, you express that you’re cold and worried and don’t know what to do, especially since you have only a small fixed income and limited access to transportation. You indicate that you’d like to meet with someone right away because you need heat restored to your home. Now imagine that the voice on the other end of the line says the nearest legal aid office is more than 170 miles away.

While LASO has worked hard to continue providing services to Klamath and Lake counties in recent years, there hasn’t been a legal aid branch physically located in the region since 1996, when a lack of funds forced the Klamath Falls office to close. The closure has meant that LASO lawyers who serve this area from adjacent offices – like those who serve many other rural parts of the state – must rely primarily on long-distance communications and only rarely can provide face-to-face assistance. Legal aid attorneys who are periodically able to meet clients in person must often drive up to three hours each way.

"The nearest adjacent legal aid offices are in Bend, Medford and Grants Pass," says Matsuda of LASO. "That’s far away, especially in the winter. So the need is primarily one of distance and access." Matsuda also notes that poverty rates in the Klamath-Lake region are higher than in many other parts of Oregon, making the need for legal aid services even greater.

With seed money from a special law foundation grant, however, the situation is set to improve. This fall, LASO plans to re-open the doors of its Klamath Falls office and restore local services to an estimated 15,000-plus area residents whose low incomes make them eligible for legal aid. Matsuda says this regional office will both open up access to local residents and allow attorneys to reallocate time to serving clients rather than traveling.

In addition to the special grant for re-opening a Klamath office, LASO and its partner organizations in the Association of Oregon Legal Services Programs received a sharply increased regular grant from the law foundation this year, up 38 percent from the year before. The money allowed several of the groups to boost staff sizes, thus increasing the number of clients they are able to serve.

"In our experience the most important factor in improving access is creating more lawyer positions in local offices, because they provide the direct legal services and legal representation that people need," Matsuda says.

David Thornburgh, executive director of the Oregon Law Center, agrees that staffing local offices is an important way to improve access to legal services. With grant money from the law foundation this year, his organization was able to add a much-needed third staff attorney at its Ontario office.

"We used to have two attorneys covering 27,770 square miles," Thornburgh says. "That’s larger than the states of Connecticut and Massachusetts together. Adding a third person is of great importance."

Thornburgh explains that much of the law center’s work is guided by community outreach, and the new lawyer will enhance outreach capacity and improve the organization’s regional visibility. A larger staff also means more in-person client contact.

"We have hotlines so that people can get advice by phone, but it’s always better — especially in emergency cases — to get a lawyer there really fast," Thornburgh says. "It’s critical to have face-to-face communication to establish trust."

Both Matsuda and Thornburgh note that some areas of Oregon continue to be underserved by legal services for low-income residents. They hope that future funding from the law foundation and other sources will continue to increase so that their organizations can expand into places like the Columbia River gorge and the north coast, which currently are served from off-site locations.

Matsuda and Thornburgh credit the law foundation for being a consistent supporter of their efforts to maintain and increase services. According to Thornburgh, "The Oregon Law Foundation has been a real leader in that time and again, they’ve taken a position that they want to fund the full range of services so that low-income clients get the same kind of service that other Oregonians get."

Serving domestic violence victims in Lane County
This year’s grants from the law foundation have done more than help organizations expand; in the case of a domestic violence clinic in Lane County, they saved an organization entirely.

"If we didn’t get this money, we wouldn’t have the clinic," says Laurence Hamblen, regional director of LASO in Lane County and former clinic manager. "The Oregon Law Foundation probably saved the day."

The domestic violence clinic — a joint project of the University of Oregon law school and the Lane County Law and Advocacy Center — provides free legal services to low-income victims of domestic violence, stalking and sexual assault. Each semester, third-year law students serve under the supervision of the clinic director to work on cases involving restraining orders, stalking orders and more complex family law issues. Since its inception in 1999, clinic law students and attorneys have provided direct legal services in more than 1,200 cases.

In fall 2005, the clinic learned that it had lost federal funding that was essential for its operation; the clinic was in immediate danger of closing. Luckily, the Oregon Law Foundation had recently invited applications for special grants due to unexpectedly high IOLTA revenues. The clinic was able to secure a special grant to provide "bridge funds" that will allow it to remain open through spring 2007. Clinic administrators are confident that federal funding will be restored after that point, and they also have embarked on an aggressive fundraising plan to provide more long-term financial stability.

This year is the first time that the clinic has received funding from the law foundation, and Hamblen says that the grant will enable low-income women in Lane County to continue receiving vital services, while also offering law students the opportunity to gain hands-on experience.

"Especially with the special grants, (the law foundation) took a look at anything that would be impactful," Hamblen says. "I think this is."

Immigration advice on wheels
The law foundation’s impact can also be felt at Portland-based Immigration Counseling Service (ICS). Recently, ICS staff members had begun to notice some growing trends in their client base. As always, many of the people at their twice-weekly legal clinics were seeking help with family unification, domestic violence issues, protection from persecution and other immigration matters. But at the same time, a large number of the attendees didn’t need specific legal advice as much as basic information about services that were available to them. Further, many did not know about their legal rights or their potential to qualify for citizenship or legal residency. People were driving from all over the state to attend the clinics, but the staff also knew that many more were unable to take time away from work or afford the cost of commuting to Portland.

With a special grant from the Oregon Law Foundation, the organization has launched an innovative way to address all these issues: a traveling clinic and education program.

"This has been a really interesting process, and we’re just a couple of months into it," says Barbara Babcock, executive director of ICS. "We feel now that we have a really good program that we’ve put together."

The basic agenda includes a presentation about legal rights and different paths to citizenship, as well as time for clients to meet one-on-one with counseling service attorneys. Babcock and her team are taking their program around the state to reach people who might not otherwise have the opportunity to benefit from the organization’s services. Fall trips are planned for Hood River, Hermiston and southern Oregon, with more locations to be scheduled soon.

At each site, staff members do outreach beforehand to determine easily accessible times and locations. They also talk with local organizations about what services they offer for immigrants so that this information can be distributed as part of the education segment of the program.

According to Babcock, one of the most integral parts of the new venture is a laptop computer that her organization was able to buy with a portion of the law foundation’s special grant.

"We put immigration forms on the laptop so that we can print them out for people while we’re there," Babcock says. "It also gives us access to legal information on-site. It’s like our walking encyclopedia."

Babcock notes that in addition to the special funds, ICS also received a regular grant from the law foundation to help pay for ongoing operations. She explains that the organization does not receive any federal or state funding and that most clients are able to pay only minimal fees. Thus, she says, funding from the law foundation is crucial.

"If we did not have them, we wouldn’t be in business," Babcock says of the foundation. "They are an absolute godsend."

The people who’ve been helped by Babcock’s organization or other IOLTA-funded groups almost surely don’t know about the law foundation. But if they did, it seems certain they would agree.

Interest on Lawyers’ Trust Accounts (IOLTA)

The basics:
IOLTA programs use the interest on lawyers’ pooled trust accounts to support legal aid for the poor and improvements to the justice system.

How IOLTA works
Lawyers who receive money that belongs to clients—such as settlement funds or unearned retainers—must deposit those funds in a trust account. When the amount of money is too small or held for too short a time to earn income for the client after administrative fees and banking charges, it is pooled with other clients’ money and placed in an IOLTA account. In Oregon, the interest from IOLTA accounts is given to the Oregon Law Foundation, which distributes it as grants to legal service organizations.

IOLTA nationally
Before the implementation of IOLTA programs in the United States, the system was already established in Australia and Canada. The first U.S. program, created by order of the Florida Supreme Court, began operations in 1981. Programs have since been established in all 50 states, Washington, D.C. and the U.S. Virgin Islands. Currently, 31 of these programs are mandatory (meaning that all lawyers with trust accounts are required to participate), 19 are opt-out (meaning that lawyers automatically participate unless they ask not to), and two are voluntary (meaning that lawyers must actively choose to participate). Most programs were established by court order, though a handful were created by state legislatures. According to the ABA IOLTA Clearinghouse, IOLTA programs nationwide generated over $186.8 million in 2005.

IOLTA in Oregon
In 1983, Oregon became the 6th state to institute an IOLTA program. Though it was originally established on a voluntary basis, bar members voted to make participation mandatory several years later. The Oregon Supreme Court approved the necessary rule changes, and Oregon’s current IOLTA program became effective on May 1, 1989.

In the 17 years since, Oregon’s program has produced almost $19 million in interest revenue. 2005 was a record-breaking year, with Oregon IOLTA accounts generating more than $2.2 million, up 82 percent from the year before. Through the Oregon Law Foundation, which administers the IOLTA program, over $1.8 million of this money will be distributed as grant awards in 2006 to such organizations as Legal Aid Services of Oregon, the Oregon Law Center, St. Andrew Legal Clinic and many more. (See a complete list of Oregon’s IOLTA grantees on page 18.) According to financial projections, the program is on pace to again shatter earnings records in 2006.

Where you bank matters
Lawyers can help raise more money to increase access to justice by establishing their IOLTA accounts at a bank that is committed to maximizing the rate of return. Many financial institutions have partnered with the IOLTA program by setting a generous interest rate and waiving service fees for IOLTA accounts. To find out which banks are at the forefront of this effort, see the list of Leadership Banks on page 28.

2006 Oregon Law Foundation Grant Recipients

Regular Grants
Association of Oregon Legal Services Programs (includes Legal Aid Services of Oregon, the Oregon Law Center, the Center for Non-profit Legal Aid Services and Lane County Law and Advocacy Center)
Classroom Law Project
Hood River Legalization Project
Immigration Counseling Service
Juvenile Rights Project
Legal Aid Service of Oregon summer clerkships for minorities
Multnomah Volunteer Lawyers Project
Northwest Workers’ Justice Project
Oregon Advocacy Center
Oregon State Bar Affirmative Action program
St. Andrew Legal Clinic

Special Grants
Association of Oregon Legal Services Programs
Domestic Violence Clinic (Lane County Law and Advocacy Center and the University of Oregon Law School)
Immigration Counseling Service
Juvenile Rights Project / Oregon Advocacy Center
Northwest Workers’ Justice Project
St. Andrew Legal Clinic

Amelie Welden is a marketing specialist in the OSB communications department and the author of "Girls Who Rocked the World : Heroines from Sacagawea to Sheryl Swoopes" (Beyond Words Publishing, 1998)

© 2006 Amelie Welden

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