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Edward S. Cheng and Eyal Schwartz published in Massachusetts Lawyers Weekly for article on inactive IOLTA accounts

Edward S. Cheng and Eyal Schwartz, of the firm’s Litigation Department, were published in Massachusetts Lawyers Weekly on February 28th, 2025 for their article, “Beware of Rule 1.15: banks are dropping a dime on you.” This article explains the series of events that will occur for attorneys who currently have an inactive IOLTA account based on the Supreme Judicial Court’s ruling in Matter of Olchowski and the modifications to Rule 1.15.

From the article:

“If you have an inactive IOLTA account, you may soon be receiving unwelcome mail from your bank.

Following the Supreme Judicial Court’s ruling in Matter of Olchowski, the court modified Rule 1.15 to require financial institutions to first give notice to an attorney when an IOLTA account has been inactive for at least two and a half years and then notify the Board of Bar Overseers if nothing has been done within the following six months.

Rule 1.15(h)(5) provides that:

(5) The IOLTA account inactivity notification agreement shall provide that the financial institution shall give notice as follows:

(i) After two and one-half years of inactivity in an IOLTA account, the financial institution shall notify the lawyer and, if known, the law firm at which the lawyer last practiced while holding the account that the account has shown no activity for two and one-half years and that such inactivity shall be reported to the [BBO] if it continues for six more months.

(ii) After three years of inactivity in an IOLTA account, the financial institution shall notify the [BBO] that the account is inactive, with copies to the lawyer and, if known, the law firm at which the lawyer last practiced while holding the account.

Accordingly, banks have started issuing letters to attorneys that trigger the requirement that attorneys take follow-up steps.”

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