Opinion
J.L. Shaver, Jr., President of the Arkansas Bar Association, Wynne, Herman L. Hamilton, Jr., Chairman, Hamberg, Garvin Fitton, Harrison, Richard F. Hatfield, Searcy, Cyril Hollingsworth, Lonnie A. Powers and Gus Walton, Jr., Little Rock, for bar association.
PER CURIAM.
The Arkansas Bar Association, through its Interest on Lawyers' Trust Accounts Committee, has petitioned this court to permit the collection and disbursement of interest on lawyers' trust accounts and to provide for the procedures governing the same. This petition results from several years of study by this committee on this subject of utilizing lawyers' trust accounts (clients' funds) to produce interest income.
The committee points out that in compliance with the requirement that they separate client funds from lawyer funds, most Arkansas attorneys maintain accounts in conjunction with their practices, which accounts contain funds other than fees and which ordinarily consist of a combination of the funds of several clients, most of which are small amounts or are to be held for a short time, or both. The committee asks this court to adopt a program to permit the collection of interest on these accounts. The proposal provides that no attorney is required to participate in the program and, therefore, is on a voluntary basis. The funds derived from the collection of interest would be used as follows:
(a) To provide legal aid to the poor in civil matters;
(b) To provide funds for student loans and scholarships;
(c) To improve the administration of justice; and
(d) For such other programs as specifically approved from time to time by the Supreme Court of Arkansas for exclusively public purposes.
The committee submits that the proposed trust accounts program is consistent with the interests of clients and lawyers, will benefit the public good and will promote understanding and proper handling of trust funds by lawyers.
The proposal provides that the qualified recipient of the earnings on lawyers' trust accounts shall be a newly created Arkansas nonprofit organization, established pursuant to this court's authorization of the program, governed by a Board of Directors which is to be comprised of five attorneys appointed by the president of the Arkansas Bar Association, three members of the lay public appointed by the Governor of Arkansas, three judges appointed by the Judicial Council, and the president of the Arkansas Bar Association, for a total of twelve (12) members. It also provides that the qualified recipient of the interest funds obtain an IRS certificate of exemption from income taxes necessary to effect the following:
(a) To insure that income of the corporation be free from Federal and Arkansas income taxes; and
(b) To insure that no participating attorney or client be charged with or taxed upon any interest paid on the funds.
The committee further suggests that briefs and citations of authority be requested before acting on this petition. Accordingly, the court invites the members of the Bar, or any other individual or organization, to express their views on the suggested petition on or before March 1, 1983, by amicus curiae or other writing.