Inside Western Alliance Bank’s Commitment to IOLTA and Justice

Too often, individuals struggle to afford necessary legal costs. Legal nonprofits are equipped to support these people and their search for justice. A critical funding source for legal aid nonprofits is the interest earned on Interest on Lawyers’ Trust Accounts (IOLTA), which attorneys use to hold certain client funds.

Though individual programs vary by state, all 50 states offer IOLTA programs and require attorneys to hold client funds that meet the state’s IOLTA criteria to be placed in an IOLTA account. These interest-bearing accounts are highly regulated and must be maintained at qualified financial institutions, but not all banks are equipped to serve that niche well.

For more than 15 years, Western Alliance Bank’s Juris Banking Group has provided IOLTA accounts in Nevada, and several other states, as part of its specialized banking services for the legal industry. The group provides full-service banking solutions for law firms, attorneys, legal technology companies and other legal industry businesses. Its services include IOLTA and other deposit accounts; Settlement Services for class action, mass tort and bankruptcy attorneys, claims administrators and related businesses; Bankruptcy solutions for court-appointed trustees, debtors in possession, receivers and fiduciaries; and Digital Disbursements that facilitate payments to claimants.

IOLTA accounts are an important part of that slate of products. In Nevada, interest from the accounts is directed to the Nevada Bar Foundation for community reinvestment, with funds going to support legal nonprofits that offer affordable legal aid to people struggling to pay for services.

“At Western Alliance, we have continued to invest in IOLTA accounts and support legal nonprofits because it’s about more than just us,” says Sarah Guindy, senior director of Juris Banking for Western Alliance Bank. “It’s all about our community and empowering people to get help fighting their legal battles.”

What an IOLTA Account Is and Why It Matters

An IOLTA account is an interest-bearing trust account for lawyers and law firms to deposit short-term client funds. The interest the accounts earn is funneled into a state fund and distributed to legal nonprofits.

The interest from IOLTA accounts is a critical funding source for legal nonprofits like Legal Aid Center of Southern Nevada. The nonprofit helps people whose income makes normal attorney fees and legal costs prohibitive. Around one-third of its annual operating budget comes from IOLTA interest from banks like Western Alliance.

“IOLTA funds are the glue that keeps Legal Aid Center’s programs running. This funding source ensures access to justice for the most vulnerable in our community,” says Barbara Buckley, Executive Director of Legal Aid Center of Southern Nevada. “We are deeply grateful to Western Alliance Bank and all the IOLTA participating institutions.”

Guindy says she has seen firsthand the real-world benefits of IOLTA funds in her role as a member of the State Bar of Nevada’s Access to Justice Commission. “Legal nonprofits come to that board and explain what they do for the community and how the IOLTA interest is funding their work,” she says. “It really opened my eyes.”

For that reason, she has continued to advocate for IOLTA accounts at Western Alliance. “We cannot discount how important IOLTA interest is,” she says. 

Western Alliance Bank Leads the Way with IOLTA

Several years ago, the Nevada Supreme Court asked banks like Western Alliance to step up and offer higher interest rates on their IOLTA accounts so more funds would be directed to legal nonprofits. Western Alliance was the first to commit to increasing its rates, leading the way for other financial institutions to follow. The bank is the inaugural platinum partner in the State Bar of Nevada’s Leadership Institution program, a group of financial institutions that offer premium rates on IOLTA.

“Sarah and her leadership team were instrumental in having Western Alliance Bank become an inaugural platinum partner in the IOLTA program, resulting in a landmark increase of funding for legal aid providers in our state at a time when the community needed them the most,” Buckley says.

“We are one of the highest paying banks in our community because we see the value of investing in legal nonprofits,” Guindy says. “We see what happens when that interest is passed on to them and how they’re able to help individuals who can’t hire their own attorneys.”

The Real-World Impact of IOLTA

Guindy and her team have been pioneers in the IOLTA space. Western Alliance Bank holds one of Nevada’s largest numbers of IOLTA accounts and offers one of the highest interest rates on IOLTA accounts. Western Alliance has consistently remitted more IOLTA interest to support Nevada legal nonprofits than any other participating bank, large or small. 
Firms and attorneys have taken notice: Legal clients often cite Western Alliance Bank’s positive IOLTA reputation as a reason for opening accounts.

The community is reaping the benefits in a big way. Legal Aid Center of Southern Nevada credits support and investment from IOLTA institutions, including Western Alliance Bank, as a key part of recent legal successes, such as a landmark $1.5 million settlement on behalf of 23 foster children with dyslexia who were overlooked in the school system and struggle with basic literacy as a result. These children will have financial and academic support to catch up with their peers and thrive.

Guindy says stories like that are why she and her team continue to advocate for IOLTA. “It’s about supporting our community and helping the people who don’t have the power to fight their legal battles on their own.”