The rules establishing the Interest on Lawyers Trust Accounts (IOLTA) program and the Client Security Fund were approved by the Supreme Court of Alabama on the same day in 1987.  Since that time many bar members have gotten the two programs confused with each other, but they are completely different.  In fact, a number of people have recently contacted us asking why they have to complete a trust account certification when they have already paid their $25.

Through IOLTA lawyers’ client trust accounts are interest-bearing accounts with the interest being paid to one of two foundations that make grants of the funds received, the Alabama Law Foundation or the Alabama Civil Justice Foundation.  Lawyers may pay some bank fees on their IOLTA accounts, but do not pay any fees to the Alabama State Bar.  Only lawyers or law firms who hold client funds in the course of their practice are required to have IOLTA accounts.  All states have IOLTA programs, but Alabama is the only state with two.

The Client Security Fund is an annual $25 assessment paid by all members of the Alabama State Bar.  It is operated by the state bar, not the Alabama Law Foundation.  Below is the description of the Client Security Fund that can be found on the state bar’s website.

The Client Security Fund was established by the Alabama State Bar to provide a remedy for clients who have lost money or other property as a result of the dishonest conduct of practicing attorneys. The Alabama State Bar recognizes that the legal profession depends on the trust of clients and although very few attorneys breach that trust, it is important that the profession’s reputation for honesty and integrity be maintained and protected. The Client Security Fund serves this function by providing some reimbursement to clients whose money or property has been wrongfully taken by attorneys licensed to practice law in Alabama.



Alabama Law Foundation, Inc | Post Office Box 4129 | Montgomery, Alabama 36103 | tel 334 387 1600