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FCLAA worries about proposed IOTA rule amendments

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Rule booksAn organization representing most of Florida’s local legal aid programs is warning that a proposed amendment to The Florida Bar rule on IOTA trust accounts would severely hamper those legal aid offices.

The Task Force on the Distribution of IOTA Funds, set up by the Supreme Court in October 2019, has recommended amendments to Bar Rule 5-1.1(g), which governs how IOTA trust funds are collected and the proceeds distributed through The Florida Bar Foundation. (See https://www.floridabar.org/the-florida-bar-news/iota-task-force-sends-final-report-proposed-rule-to-supreme-court/.)

“To change a major funding structure for our legal aid agencies in the middle of a pandemic with a major economic crisis is a major concern,” said Monica Vigues-Pitan, president of the Florida Civil Legal Aid Association, which includes most of the state’s local legal aid programs, and also executive director of Legal Services of Greater Miami.

The FCLAA has been circulating a two-page review of the proposed rule amendments. Vigues-Pitan and Leslie Powell-Boudreaux, FCLAA vice president and executive director of Legal Services of North Florida, said the FCLAA will be filing its reservations with the Supreme Court, which is accepting comments on the rule amendments until January 4. (See the Official Notice at https://www.floridabar.org/the-florida-bar-news/proposed-amendments-to-bar-rule-5-1-1g-interest-on-trust-accounts-iota-program/). The task force has until January 25 to respond to those comments.

Currently, the Foundation distributes IOTA monies in accordance with its Supreme Court-approved charter and on court precedent, which requires the funds be used to provide legal help for low-income Floridians and to improve the administration of justice.

Under the task force’s proposed rule amendments, money would only be used to provide direct legal assistance to low-income Floridians, either by directly paying attorneys or arranging for pro bono representation. For the first time, there would be limits on how much overhead, including reserves, from IOTA funds could be used by legal aid agencies and the Foundation. And the Foundation would be required to distribute all IOTA proceeds within six months of receipt. The proposal also calls for a two-year review if the amendments are adopted.

Currently, the Foundation does not use the IOTA proceeds it collects in one fiscal year until the following fiscal year to avoid cuts to programs during a fiscal year if interest rates drop, as they did earlier this year. The Foundation also has adopted a policy of setting reserves based on a three-year average of IOTA receipts according to a formula that would prevent the Foundation from ever running out of money, and which would not conform with the proposed amendments.

The FCLAA concerns with the proposed rule amendments include:

• The 10% limit on overhead in IOTA grants to local programs for administration, rent, training, technology, reserves, and related expenses. Vigues-Pitan said legal aid offices across the state have collaborative training programs to stretch resources and use technology to support both legal staff and directly help clients. “Technology assets are really important to our clients,” Vigues-Pitan said. Added Powell-Boudreaux, “Technology for us is a way we deliver direct legal services and for that to be defined as administrative versus direct services is a real challenge. That’s how we do our intake, that’s how we get community education and materials out to people. That’s what I call preventative legal services, when we help people avoid getting into a legal issue and that’s part of what we do. It’s direct legal services, it’s just not direct representation.”

• The 15% limitation on Foundation overhead for collecting and distributing IOTA funds. Combined with the requirement to distribute IOTA funds within six months of receipt, this would effectively end the Foundation’s reserve policy. Vigues-Pitan said there could be instability on how and when the funds are distributed, and individual legal aid offices might not have enough reserves to keep programs functioning smoothly, especially since 90% of the money must go directly to pay attorneys who provide legal assistance.

• Loss of joint, cost-sharing efforts led by the Foundation, which helps individual organizations obtain group discounted purchases of case management software, legal research, health care, and other expenses.

• Loss of the Loan Repayment Assistance Program, or LRAP, where the Foundation helps legal aid attorneys repay their law school loans. The FCLAA summary noted minority law students are likely to have more student debt and the program helps provide diversity among legal aid staff. “We have attorneys on our staff who are able to continue to do the work because they have [LRAP] and I am concerned if LRAP is not here, they will not be able to afford to continue doing this work,” Powell-Boudreaux said. Although the task force proposal includes a two-year review if the amendments are adopted and which would look at their impact, the damage would be done with the loss of LRAP, she said. “We may be able to hire new lawyers, but we will also have to expend the time and energy in training them and that affects our ability to deliver those direct client services that are deemed critical under the rule,” Powell-Boudreaux said. Vigues-Pitan added that legal aid attorneys often work in specialized areas that few other attorneys do, such as Medicaid help for the poor, which means it will be hard to find experienced attorneys for those who leave. Around 200 attorneys per year typically have used the LRAP program, although this year that number is around 235 and around 220 are budgeted for next year. It provides $5,000 to repay student loans with a repayment requirement if the lawyer fails to remain working for legal aid that year.

The task force’s final report and other information can be found at: https://efactssc-public.flcourts.org/casedocuments/2020/1543/2020-1543_petition_76723_e39.pdf.

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