[2] The establishment of IOLTA in the United States followed changes to federal banking laws[3] passed by Congress in 1980 which allowed some checking accounts to bear interest.
In addition, the lawyer could not earn interest on the account[5] because it is unethical for attorneys to derive any financial benefit from funds that belong to their clients.
Proper management of a lawyer's IOLTA (also commonly referred to as a "trust account") is highly regulated by each respective state bar.
As a practical matter proper management of a lawyer's IOLTA or trust account is a key management skill in the operation of a law office which is based on principles of double-entry bookkeeping, with certain additional safeguards designed to enhance the audit trail in the event a lawyer becomes unable or otherwise unwilling to cooperate with bar auditors or an inventory attorney to account for handling of client property.
It is incumbent on the owner of a law firm to undertake adequate training for the responsibilities of managing an IOLTA client property trust account.
[6] Effective management of client property trust account is required for compliance with bar rules and the efficient and profitable operation of the law firm.