Bar News - March 18, 2011
Bar Foundation News: Doing Business Out of State? How Does IOLTA Rule Apply?
NH Bar members licensed to practice in other jurisdictions may encounter conflicts between New Hampshire’s new mandatory IOLTA rule (Rule 50(i)) and IOLTA requirements in other states.
Under the new mandatory IOLTA rules, New Hampshire lawyers must maintain a trust account [Rule 50 (1)] in a banking institution authorized to do business within this state [Rule 50 (1)(A)] with the revenue remitted to the NH Bar Foundation.
This can be a conflict for attorneys practicing in more than one state. For example, Maine’s IOLTA requires that attorneys licensed there must maintain IOLTA accounts that remit interest and dividends for Maine clients’ accounts to the Maine Bar Foundation. If a New Hampshire lawyer is also licensed in Maine and has a Maine client for whom the attorney is holding funds, the lawyer may be subject to both state rules that are in conflict about where the interest is to be paid. This issue was brought to the Supreme Court’s attention. On behalf of the Court, Clerk Eileen Fox responded:
"The New Hampshire rules have made IOLTA mandatory but do not fully address the issue [of attorneys in multi-jurisdictional practice]. Thus, the gist of our rules requires firms to maintain an IOLTA account for eligible funds. As long as an IOLTA account exists that fulfills the purpose of IOLTA, compliance with the rules do not invariably require that the funds be in a New Hampshire bank. If a firm maintains an IOLTA account in an out-of-state bank, in compliance with the rules of that state, interest need not be remitted to the NH Bar Foundation. The rules thus allow for considerable flexibility."