Supreme Court's IOLTA questioning leaves Illinois leaders optimistic
By Stephen Anderson

Two officials of the Lawyers Trust Fund of Illinois, who attended U.S. Supreme Court arguments last month, returned with optimism that the concept of funding legal aid with interest on lawyers' trust accounts (IOLTA) is not doomed.

LTF President R. Michael Henderson of Peoria and executive director Ruth Ann Schmitt of Chicago, both members of the ISBA Assembly, attended oral arguments on the appeal of a Texas ruling that interest belongs to clients unless they agree otherwise.

"I think we have a majority," Henderson said, noting that while a result can't be predicted, the questioning by individual justices "sounded more inclined toward the IOLTA position."

Calling it one of his more interesting experiences in a courtroom, Henderson said Chief Justice William Rehnquist jumped in almost before the Texas IOLTA lawyer finished his first sentence, "and it was all questions after that."

Schmitt also expressed enthusiasm with the type of questions posed Jan. 13 by the Supreme Court justices to counsel for both sides in Hon. Thomas Phillips, et al. v. Washington Legal Foundation, et al., No. 96-1578.

In Washington Legal Foundation v. Texas Equal Access to Justice Foundation, the originating 1994 case that went to the U.S. Court of Appeals for the 5th Circuit in 1996, the District Court in Austin dismissed a suit for injunctive relief.

The lower court held that the plaintiff foundation failed to allege a legally recognized claim or property interest in the state's IOLTA funds, and could not demonstrate that it was forced to support participating legal aid organizations.

The appeals court panel thought otherwise, finding that the traditional Texas rule, "interest follows principal," applies to client funds placed by attorneys in trust accounts (94 F.3rd 996, 1996).

That 5th Circuit opinion conflicts with rulings in the 1st and 11th Circuits that IOLTA funding of legal aid for the indigent is not an unconstitutional taking of property from clients of lawyers.

IOLTA funds in the District of Columbia and every state except Indiana reportedly generate about $110 million each year, helping somewhat to alleviate federal cutbacks in legal aid allocations.

The program is mandatory for all lawyers in 27 states, including Illinois; 20 other states permit lawyers to opt out, and three states have voluntary programs.

In Illinois, the Lawyers Trust Fund has been able to contribute a total of more than $16 million during the past six years to about 35 legal aid provider agencies throughout the state.

Grants for 1998 totalling $2,759,500 range from $470,000 to Prairie State Legal Services and $465,000 to the Land of Lincoln Legal Assistance Foundation, down to $3,000 for the Lake County Bar Volunteer Lawyers Project and $2,000 for the American Jewish Congress Legal Clinic.

To enhance its funding for Illinois provider agencies, the LTF has intensified its effort to convince participating banks to waive service fees and charges, so more of the IOLTA money can be used for legal assistance.

The LTF Honor Roll of Banks has increased from 176 to more than 400 in the past three years. Lawyers may call (312) 372-5906 to find out if banks in which their trust accounts are deposited are on the honor roll.

The Supreme Court opinion is expected before June, perhaps as early as April, LTF executive director Schmitt said last month.

Robert D. Evans of the American Bar Association told the ABA Journal in November that "a very large source of funding that goes toward providing civil legal services for the poor" would disappear if the court decides the IOLTA system is unconstitutional.

"Since all of the resources that are poured into legal services programs are currently able to meet only 20 percent of the legal needs of the poor, a cutback in any one of these resources is devastating," he said.

Ironically, the ABA Journal reported, the plaintiff Washington Legal Foundation would be among the casualties. Its advocacy in conservative causes is assisted by law students whose scholarships are provided by the Texas Equal Access to Justice Foundation.

Pro Bono Center honors state bar

The Illinois Pro Bono Center presented resolutions and certificates of appreciation in December to three Illinois State Bar Association staff members.

Executive director Robert E. Craghead, general counsel Dennis A. Rendleman and legal department assistant Jill VanGeison were honored for their respective roles in the establishment of the center and the contribution of services and materials.

Board chair Barbara O. Slanker of Champaign presented an award to Craghead at the close of the ISBA Midyear Meeting in Chicago for his leadership in providing significant staff resources for pro bono programs.

Rendleman was honored for his assistance in the incorporation of the Pro Bono Center in 1992, his innovation of the ISBA member expense reimbursement donation program, and his personal commitment in signing a pro bono service pledge.

VanGeison has facilitated production of Pro Bono Center handbooks, directories, training manuals and promotional materials.

Pro Bono Center board member Lawrence Johnson of Springfield made the presentations to Rendleman and VanGeison at the Illinois Bar Center in Springfield (see photo on page 3).

30 days hath august rejection as moratorium on mail solicitation
By Stephen Anderson

How soon is too soon for a lawyer to mail a solicitation letter for legal representation of someone who has been injured in an accident?

Is Florida's 30-day limit practical in Illinois? Probably not, according to a recent report to the Illinois State Bar Association Assembly by the Special Committee on Lawyer Advertising.

A mandatory 30-day moratorium on direct mail advertising to accident victims has been in effect for registered Florida attorneys since its constitutionality was upheld in 1995 by the U.S. Supreme Court (The Florida Bar v. Went for It Inc.).

That rule – in a state where lawyers mail some 700,000 solicitations annually – was based on a survey of accident victims or their survivors, a group that accounts for 40 percent of the mailings.

Respondents to the Florida survey generally reported feelings that the solicitations were unreasonable invasions of privacy, and that their respect for the legal profession and the justice system was diminished as a result.

A more recent 1996-97 consumer survey of 500 accident victims in Wisconsin, however, revealed little consensus of support for an arbitrary 30-day moratorium on mail solicitation by lawyers.

In fact, 70 percent of the Wisconsin respondents said they hired legal counsel within 30 days of the accident, and 11 percent hired lawyers who contacted them by mail.

Moreover, 42 percent were contacted by insurance carriers within 30 days of the accident, and 35 percent received settlement offers within the 30-day period.

Half of the Wisconsin respondents said no restriction should be placed on mail solicitations from lawyers, and only 18 percent said mailings should be prohibited for at least 30 days after an accident.

Answering a similar question that was phrased differently, 44 percent said a 30-day moratorium would have no effect, 28 percent thought it would be helpful, and 23 percent believed it would be harmful.

These findings, along with rules of other states that regulate lawyer advertising, were studied extensively for more than three years by the ISBA special committee.

The committee's conclusion, reported Dec. 13 to the ISBA Assembly, is that Supreme Court Rule 7.3 probably should not be amended to prohibit Illinois lawyers from soliciting legal business by mail within 30 days of an accident.

Although the ISBA had allocated $50,000 for an Illinois consumer survey, committee members felt that results would neither differ significantly from those in Wisconsin nor sufficiently support a rule change.

The committee, chaired by Rockford attorney Thomas S. Johnson, also expressed concern that a 30-day moratorium applied only to lawyers would not preclude contact of accident victims by insurance carriers.

In its report, the committee said it will continue to monitor lawyer advertising methods in Illinois, with emphasis on targeted direct mail solicitation.

The committee will review ways to improve compliance with Rule 7.3 and enforcement of its requirement that both the solicitation letter and its envelope be plainly labeled as advertising material.

The Attorney Registration and Disciplinary Commission had informed the committee that relatively few consumer complaints about lawyers involve solicitations by mail.

Among the committee's other objectives are to encourage lawyers to exercise restraint in advertising, and to be sensitive to the privacy of potential clients.

Rule 7.3 now prohibits an Illinois lawyer from resorting to duress or harassment, or from soliciting a client who might not be able to exercise reasonable judgment because of his or her physical or mental state.

Targeted direct mail by lawyers was prohibited until 1988, when the U.S. Supreme Court ruled in Shapero v. Kentucky Bar Association that solicitation of legal business from persons known to need legal services is protected by the First Amendment.

The court said state supreme courts may regulate targeted direct mail solicitation, but may not prohibit it. Rule 7.3 of the Illinois Rules of Professional Conduct is based on an American Bar Association model rule.