ORLANDO – First GREEN Bank (FGB) recently announced it is now offering specialized banking services to the 90,000-plus licensed attorneys in the state of Florida through its Attorney Banking Department.
"First GREEN Bank is providing these products and services because we feel that a market as specialized as the legal profession requires a bank that understands the needs of a law firm - and a banker who understands the intricacies and regulations of legal practice in Florida," said Ken LaRoe, founder of First GREEN Bank, in a press release. "We recognize how important and vital Florida's attorneys are, and want to ensure they have the financial tools they need to best serve our community."
Lawyers are presented with several unique banking needs. One such need is the interest on trust account (IOTA). IOTAs are short-term checking accounts used by attorneys to hold their clients' funds for future use. Lawyers are commonly given funding for future use. If a large sum of money is trusted to the attorney, or if the money will be held for a long period of time, the attorney will invest this amount on behalf of the client.
IOTAs are used in cases in which the client’s funds are considered nominal or are being held for a short time. This creates a situation in which the expense in establishing an interest bearing account is greater than the possible return. Instead, the IOTA is used.
At the end of every month, the interest from these accounts is gathered by each participating bank and remitted to the Florida Bar Association. The money is then pooled from across the state and allotted to assist law students, provide legal assistance to low income individuals and to make improvements in the Administration of Justice.
In addition to being beneficial to attorneys and the community, LaRoe told The Florida Record that IOTAs are “beneficial to the bank as they are a checking-based account.”
Although the interest is passed on to the Florida Bar, the bank can loan the money out at a higher interest rate to other customers, just like any other checking based account, said LaRoe.
Lawyers in the state of Florida are required by law to use IOTAs in these short-term situations. The IOTA program was created by the Florida Supreme Court in 1981. It was the first of its kind in the country and has been replicated in several other states.
Attorneys may also face unique financing challenges through the litigation process. FGB offers an advanced cost line of credit to lawyers. FGB developed this product specifically for trial lawyers, said LaRoe.
The bank offers more traditional products to attorneys such as business loans, operating accounts, and commercial loans. Scott Leitner, director of Attorney Banking Services, told The Florida Record that “as a community bank, [FGB] can help an attorney get off the ground, which in turn helps to build the community.”
Having already offered these financial services to lawyers, FGB decided to package them together.
“As the legal market in Florida continues to grow, and the amount of attorneys continues to grow, we believe that we can continue to grow as a business,” said Leitner.
The Attorney Banking Department is the first of its kind in the Southeast. LaRoe said that other bankers often avoid working with trial lawyers as they are seen as “risky” or “gun-slinger types.” Esquire Bank in New York is the only other bank offering specialized, packaged services for attorneys.
“Other banks may have these services as well, but we are specializing in them. We believe this will change the way law is practiced in the future,” said Leitner.