“Necessity is the mother of invention” goes the old saw, and
it was never truer than in Maryland in 1981. Congress was faced with a
proposal to eradicate civil legal services from the federal budget. Something
had to be done quickly in order to avert disaster in the legal services
A funding model was being used in only a few other states – Florida, for one – but was being used to great success in Canada and Australia. The model put forth was the Interest on Lawyers Trust Account (IOLTA) Program. In essence, the model requires banks to pay interest on short-term monies in escrow accounts that attorneys are holding for their clients. Maryland became the fourth state to adopt IOLTA, and now it exists in every state.
The idea behind the plan is that the funds generated by the interest on
these accounts are negligible when considered individually. However, when
considering all these accounts in the aggregate, it becomes an opportunity
to infuse civil legal services programs with a substantial amount of money.
The genesis of the IOLTA program also established the need for an agency to administer the process and the ensuing grants those monies would fund. Thus, in 1982 legislation was passed which established not only IOLTA but also the Maryland Legal Services Corporation (MLSC) and the Governor appointed its board of directors. The work was just beginning.
Since the IOLTA program was voluntary, it was necessary to get the attorneys and the banks on board. After a well-organized campaign by the bench and bar locally and across the state, the MLSC Board reported in its first year that over 1,000 attorneys had established IOLTA accounts, and 41 banks, representing over 66 percent of the commercial checking market in Maryland, were participating. In 1984, after establishing grant-making standards that concentrated on funding programs addressing the civil legal needs of the poor and disabled, MLSC awarded its first four grants, totaling $307,500. Another important milestone happened in 1985, when MLSC secured a steady revenue stream from the state’s unclaimed property fund appropriation.
Another major milestone came in 1989. Just eight short years after its inception, participation in IOLTA became mandatory, and the increase in accounts allowed MLSC to greatly expand the number of funded programs. The passage of filing fee surcharge legislation came about in 1998, just in time to help offset lost IOLTA revenue resulting from plummeting interest rates.
Over the past 25 years, tremendous advances in access to justice have been made possible for the citizens of Maryland by the programs MLSC has funded. Beginning with only a handful of programs , MLSC now supports 38 different agencies with a fund that has grown to $13 million annually ($6 million of which comes from IOLTA alone; the greatest amount since its inception). Visit their website at www.mlsc.org to see the programs and agencies currently being funded.
“Despite the great strides we have made, we know we still have a long way to go before all Marylanders have access to justice,” notes MLSC Executive Director Susan M. Erlichman. “With some of the excellent initiatives that we have under way, we don’t expect to take another 25 years to better meet these needs.”
Whether through orchestrating a statewide effort to bring about comparable interest rates, creative investment strategies in the programs and agencies they select for funding or finding the very best funding opportunities from the numerous applications that are submitted each year, Maryland Legal Services Corporation continually strives to find the very best combination of creativity and elbow grease that will move Maryland toward becoming a state where access to justice is a given, not a goal. (Thanks to Harriett Robinson, MLSC’s Deputy Director, for her generous support of time and information in the writing of this article. MLSC will be celebrating its 25th Anniversary along with its Annual Awards presentations from 5:30 p.m. to 8:30 p.m., December 10, 2007, at the Tremont Grand.)
Support the legal service agencies in your community. Add your resources to the fight. For more information on the legal service volunteer opportunities in Maryland, please contact Jon Moseley at the Pro Bono Resource Center office at (410) 837-9379 or (800) 396-1274.
Jon Moseley is Director of Volunteer Services & Community Outreach for the Pro Bono Resource Center of Maryland.