Trust program generates money for Montana Justice Foundation

The combination of higher interest rates and perhaps some subtle peer pressure helped a Missoula foundation make a record donation this month to the Montana Legal Services Association, which provides civil legal help to Montanans unable to pay.

The Montana Justice Foundation annually grants money to the MLSA and several other organizations that provide legal help to low-income Montanans. This year's grant of $420,000 is nearly twice the $250,000 that was generated a year ago.

Alison Paul, deputy director of the MLSA, said the money will help the organization grow its staff and program offerings.

"This will allow us to add two (lawyers) and beef up other resources that are sorely needed," she said, along with avoiding potential layoffs next year.

Currently, MLSA employs 15 attorneys among its staff of 50 around the state. The group offers civil legal advice, the majority of which is in the area of family law -- divorces, parenting plans, child support and the like -- according to Paul.

It's annual budget is around $3.1 million, some $1.2 million of which comes from the federal government.

MLSA doesn't handle any criminal cases, car wrecks, personal injuries or business-related issues. Its attorneys around the state each have areas of expertise, from housing to domestic violence or Indian wills.

The grant money comes from the Interest on Lawyers' Trust Accounts program, a program instituted by the Montana Supreme Court in 1986 and made mandatory in 1995.

Through the program, lawyers across Montana deposit retainers or other client money that doesn't amount to enough to generate much interest on its own, or money that won't be held very long, into pooled trust bank accounts.

The interest on these accounts is passed along to the Montana Justice Foundation, which then distributes the funds to MLSA and other organizations around the state that provide legal assistance.

"In the last two years the amount we've been able to distribute in grants has more than doubled," Amy Sings In The Timber said. "It's only been very recently that the Montana Justice Foundation has been able to make an effort to go to the banking community and ask them to bring up their interest rates."

The grant was celebrated at a press conference this week at Mountain West Bank.

"One of the things that was brought to our attention was the importance of that money and what that money does in the community," said Mike Dalton, Mountain West's regional president. "We pay a little higher interest rate on those funds, and we're not the only bank. All the banks signed up."

While the interest rate paid on the accounts is driven by many factors, including in some cases the national prime lending rate and other interest rates, the banks ultimately decide what to pay on the IOLTA accounts.

Dalton said Mountain West stepped up with a rate higher than it pays on some savings accounts, which hasn't gone unnoticed among other banks. Four banks with a presence in Helena -- Mountain West, Valley Bank, Wells Fargo and Western Security -- are recognized by the foundation as "Gold Level Leadership Banks," meaning they pay interest of at least 2.75 percent on IOLTA accounts, and they peg those accounts to move in lockstep with a recognized market indicator.

Sings In The Timber, whose position was created just last winter, prints in the Justice Foundation newsletter the rates being paid for IOLTA accounts at banks across Montana -- a subtle but effective way of letting banks know what the competition is paying.

John Harrington can be reached at 447-4080 or john.harrington@helenair.com.