New Rule Change for Attorneys in Wisconsin
On July 1, 2016, the Supreme Court of Wisconsin granted additional options for accepting client payments via credit, debit, and electronic payments (ACH). Lawyers may, of course, continue to operate stand-alone, traditional IOLTA accounts under Wisconsin rules; however, credit, debit, and ACH transactions are prohibited in those accounts. Lawyers who desire greater flexibility to accept credit, debit, and other electronic deposits and make trust fund disbursements electronically must now maintain an E-Banking Trust Account (EBTA) or an “All-In-One” IOLTA.
You can read about the new options per SCR 20:1.15 here, but here are the basic explanations:
Meet the EBTA: Wisconsin lawyers can create a new E-Banking Trust Account (EBTA), which replaces the Credit Card Trust Account (CCTA) previously available. The new EBTA is more versatile than the CCTA, allowing both electronic deposits and electronic trust fund disbursements. Wisconsin’s Office of Lawyer Regulation provides specific instructions on changing the CCTA to the newer EBTA. (See, link above). And just like the CCTA, lawyers must still maintain a traditional “primary” IOLTA account. Lawyers may electronically transfer necessary funds between these accounts. However, funds deposited into an EBTA must generally be transferred within 3 business days of availability, either to the lawyer whose fees have been earned, or if the funds have not yet been earned, over to the traditional IOLTA account.
The All-In-One IOLTA: Wisconsin lawyers may also now create an “All-In-One IOLTA,” which allows the lawyer to open a single IOLTA account for checking and electronic transactions. The All-In-One can handle deposits from credit cards, debit cards, and ACH payments so long as the depositor is prohibited from withdrawing funds without the lawyer’s permission. Like deposits, distributions may also be by electronic transfer. The new rule does require a lawyer using the “All-In-One” to secure either a bond or a crime insurance policy to cover losses due to theft, including Cyber-scams. The insurance must be in an amount sufficient to cover the highest daily balance in the All-in-One during the prior year.
Under Wisconsin’s rule, fees and surcharges relating to the payment of legal fees and costs are the responsibility of the lawyer, but, upon proper disclosure and written authorization from the client, the client may be responsible for fees and surcharges relating to other electronic payments, such as the payment of a client’s settlement proceeds.
No matter which method a Wisconsin lawyer chooses, LawPay meets your needs. We guarantee complete separation of earned and unearned fees, giving you the confidence and peace of mind that your transactions are always handled the right way. Not only are your funds separated correctly, but we also legally protect the attorney trust account from all third-party access. No debits are allowed from your IOLTA at any time, for any reason. Processing fees are only debited from your operating account once a month.