Lawyers: High court ruling threatens pro bono project

The Clark County Pro Bono Project, which coordinates 15 cost-free legal services for indigent litigants, is at-risk because of a U.S. Supreme Court decision over interest collected on lawyers' trust accounts.

At issue is whether the accumulated interest on funds held for short periods was being illegally "taken ... without just compensation" from litigants and used by the governmental or quasi-governmental agencies that distribute it to help the poor.

In Nevada, the amount distributed by the Nevada Law Foundation is about $260,000, although nationally the figure jumps to about $100 million.

But lawyers say it is money that never would find its way to the clients because interest accrued generally only involves pennies per case. While individual cases gather little interest, all of the interest from lawyer trust accounts provides a sizeable fund for charitable ventures.

If forced by law to calculate and pay the interest, it actually could cost litigants money because of administrative fees that would have to be passed along, attorneys say.

"It would be a logistical nightmare," said attorney James Christensen, who specializes in personal injury cases.

Suzan Baucum, who heads the Nevada Law Foundation that collects and distributes funds, said it is unethical for lawyers to keep client money in interest-bearing trust accounts and pocket the money.

The choice becomes keeping the funds in non-interest-bearing accounts and letting the banks benefit from the availability of cash or collecting interest that goes to the IOLTA program -- an acronym for "interest on lawyers' trust accounts."

The case before the Supreme Court was filed by the conservative Washington Legal Foundation challenging the mandatory IOLTA program in Texas. Baucum said an identical case was filed by the foundation against the program in Washington.

While the 5-4 Supreme Court decision stated that the interest earned is the private property of the clients and leaned toward the ultimate demise of the IOLTA programs, it is not a ruling cast in stone. The high court sent the case back to a Texas judge in Austin to determine if the state had "taken" the litigants' property."

Baucum said that is a process that could take from a few months to several years before the case finally winds its way back to the Supreme Court.

"Until then it's business as usual," said Baucum, who has run the Nevada Law Foundation for the past seven years. "It's a long way from over and we'll continue distributing the funds for as long as we can."

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