Wisconsin IOLTA Compliance: Trust Account Rules & Requirements
Complete guide to Wisconsin's IOLTA compliance requirements. Covers reconciliation rules, record retention periods, overdraft notification requirements, and how Disbo automates compliance for Wisconsin law firms under SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2.
If you practice in Wisconsin, your IOLTA trust accounts are governed by SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2. You've got to run monthly three-way reconciliation on every trust account, keep an individual ledger for each client matter, retain records for 6 years, and bank with a financial institution that complies with Wisconsin's overdraft notification rule.
- Governing rule
- SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2
- Reconciliation frequency
- Monthly three-way reconciliation
- Record retention
- 6 years
- Overdraft notification
- Required — bank must notify Office of Lawyer Regulation
- Interest remittance
- To Wisconsin Trust Account Foundation (WisTAF)
- Client ledger
- Required — individual ledger per matter
Wisconsin IOLTA Requirements at a Glance
Key trust account rules under SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2
| Requirement | Wisconsin Rule |
|---|---|
| Reconciliation Frequency | Monthly three-way reconciliation |
| Record Retention Period | 6 years |
| Overdraft Notification | Required — bank must notify Office of Lawyer Regulation |
| Interest Remittance | To Wisconsin Trust Account Foundation (WisTAF) |
| Governing Rule | SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2 |
| Client Ledger | Required — individual ledger per matter |
Wisconsin IOLTA Key Requirements
- Monthly reconciliation required under SCR 20:1.15
- 6-year retention of all trust records
- Office of Lawyer Regulation overdraft notification required
- IOLTA accounts at WisTAF-approved financial institutions
- Electronic transaction rules under SCR 20:1.15-1 and SCR 20:1.15-2 apply (updated July 2023)
Wisconsin IOLTA Note
Wisconsin trust accounting is governed by SCR 20:1.15, with electronic transaction requirements detailed in SCR 20:1.15-1 and SCR 20:1.15-2, updated in July 2023. The mandatory record retention period is 6 years. WisTAF (the Wisconsin Trust Account Foundation) administers the IOLTA program and distributes interest to civil legal aid statewide.
Common IOLTA Violations in Wisconsin
These are the most frequently cited IOLTA violations for Wisconsin law firms. Each one can trigger bar discipline — and each is preventable with the right software.
- Failure to retain records for the mandatory 6-year period
- Non-compliance with electronic transaction rules updated July 2023
- Missing monthly reconciliation documentation
- Commingling client trust and firm operating funds
- Failure to notify Office of Lawyer Regulation of overdrafts
How Disbo Keeps Your Wisconsin Firm IOLTA Compliant
Disbo's rules engine applies Wisconsin's specific IOLTA requirements — including SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2 — automatically to every trust account transaction. Stop managing compliance manually. Let Disbo enforce the rules so your team can focus on clients.
Negative Balance Prevention
Disbo blocks any disbursement that would overdraw a client's trust balance — eliminating the #1 IOLTA violation in Wisconsin.
Automated Three-Way Reconciliation
Continuous reconciliation runs behind the scenes. Monthly reconciliation records are generated automatically and stored for 6 years.
One-Click Audit Package
If the Wisconsin Bar initiates an audit, generate a complete audit package — ledgers, reconciliation reports, disbursement records — in under 60 seconds.
6 years Immutable Audit Trail
Every trust account event is timestamped, logged, and retained for 6 years — meeting Wisconsin's retention requirement automatically.
Monthly Reconciliation Status
Bank Balance
$124,500
Trust Ledger
$124,500
Client Totals
$124,500
Recent Trust Activity
Smith v. Acme
Settlement Receipt
Smith v. Acme
Attorney Fees
Smith v. Acme
Medical Lien Payment
Jones Matter
Settlement Receipt
Wisconsin IOLTA Compliance FAQ
What rule governs IOLTA trust accounts in Wisconsin?
Wisconsin IOLTA trust accounts are governed by SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2. The rule sets the requirements for reconciliation frequency, record retention, client ledger maintenance, overdraft notification, and interest remittance to the Wisconsin IOLTA program.
How often must Wisconsin attorneys reconcile their IOLTA accounts?
Wisconsin attorneys have to complete a three-way reconciliation of their IOLTA trust accounts monthly. Three-way reconciliation lines up the bank statement balance, the trust account ledger balance, and the sum of every individual client ledger balance — and all three have to match.
How long must Wisconsin attorneys retain IOLTA records?
Wisconsin attorneys have to retain every IOLTA trust account record — bank statements, client ledgers, reconciliation reports, and disbursement documentation — for 6 years under SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2. Disbo keeps all of it automatically for the required period.
What happens if a Wisconsin IOLTA account is overdrawn?
Required — bank must notify Office of Lawyer Regulation. An overdraft notification can trigger a disciplinary review, and the only way to avoid that is to make sure cleared funds are actually in the trust account before any disbursement goes out. Disbo blocks transactions that would create a negative balance before they process.
Where does Wisconsin IOLTA interest go?
To Wisconsin Trust Account Foundation (WisTAF). The funds support civil legal aid programs for low-income residents throughout Wisconsin. Every IOLTA account has to be at an approved financial institution that forwards the interest to the Wisconsin IOLTA program.
Wisconsin IOLTA trust accounting is governed by Supreme Court Rule 20:1.15, a detailed rule that sets comprehensive obligations for every Wisconsin attorney who holds client or third-party funds. Attorneys must also comply with SCR 20:1.15-1 and SCR 20:1.15-2, companion rules that address electronic transactions and were updated in July 2023 to reflect modern banking practices. Every Wisconsin PI firm — managing settlement proceeds, medical lien payments, and attorney fee disbursements from offices in Milwaukee, Madison, Green Bay, and across the state — must maintain IOLTA accounts at Wisconsin Trust Account Foundation (WisTAF)-approved institutions, complete monthly three-way reconciliation, and retain all trust records for a minimum of six years. WisTAF administers the state's IOLTA program, collecting interest from participating banks and distributing the proceeds to civil legal aid organizations throughout Wisconsin. The July 2023 electronic transaction update makes Wisconsin's compliance framework one of the more detailed in the Midwest, and PI firms need to understand how the updated rules apply to the wire transfers, ACH payments, and EFT disbursements that are now standard in settlement practice.
Wisconsin Trust Account Foundation (WisTAF) IOLTA Program
The Wisconsin Trust Account Foundation (WisTAF) is the designated administrator of Wisconsin's IOLTA program. WisTAF's website at https://www.wisbar.org/trust provides attorneys with information on approved financial institutions, program requirements, and compliance resources. Under SCR 20:1.15, Wisconsin attorneys who hold client funds that are nominal in amount or will be held for a short period must deposit those funds into an IOLTA account at a WisTAF-approved institution. Participating banks remit the interest earned on pooled IOLTA accounts to WisTAF, which distributes the proceeds to civil legal aid programs across the state. WisTAF also coordinates the overdraft notification process with the Office of Lawyer Regulation, ensuring that banks report trust account overdrafts to the appropriate disciplinary body. Attorneys must confirm that their bank is on the current WisTAF approved list before opening a trust account, and again if the firm changes banking relationships.
Monthly Three-Way Reconciliation Under SCR 20:1.15
SCR 20:1.15 requires Wisconsin attorneys to complete a three-way reconciliation of their IOLTA trust accounts each month. Three-way reconciliation compares three independent figures: the ending balance on the bank statement, the balance in the trust account ledger maintained by the firm, and the sum of all individual client matter ledger balances. All three must agree. Any discrepancy must be investigated and corrected in the current period — it cannot be deferred. The reconciliation must be documented in writing and retained for the full six-year period required under SCR 20:1.15. Wisconsin auditors and the Office of Lawyer Regulation look for both the reconciliation documentation and evidence of how any discrepancies were identified and resolved. A pattern of unresolved discrepancies — even small ones — is treated as a systemic bookkeeping failure under the rule, regardless of whether a client has suffered any actual loss.
The July 2023 Electronic Transaction Rules Update
In July 2023, the Wisconsin Supreme Court updated SCR 20:1.15-1 and SCR 20:1.15-2 to address the growing use of electronic transactions in attorney trust accounts. The updated rules set specific requirements for how electronic deposits, wire transfers, ACH payments, and electronic funds transfers are recorded, verified, and reconciled. For PI firms, where large settlement payments are frequently received by wire and disbursed by ACH or electronic check, the July 2023 update has direct operational implications. The rules require that electronic transactions be recorded with sufficient detail to identify the source, amount, date, and client matter to which they apply. Electronic transaction records must be retained in the same manner as paper records and are subject to the six-year retention requirement. Firms that have historically tracked electronic transactions less rigorously than check-based transactions need to review their recordkeeping practices against the updated SCR 20:1.15-1 and SCR 20:1.15-2 requirements.
Overdraft Notification to the Office of Lawyer Regulation
When a Wisconsin IOLTA trust account is overdrawn, the bank is required by its WisTAF participation agreement to notify the Wisconsin Office of Lawyer Regulation (OLR). The OLR is the body that investigates attorney misconduct and initiates disciplinary proceedings in Wisconsin. An overdraft notification triggers an OLR inquiry, which can result in a formal disciplinary proceeding if the underlying trust account practices are found to be non-compliant. For Wisconsin PI firms, the practical implication is straightforward: cleared funds must be in the trust account before any disbursement is processed. A wire transfer received from an insurance carrier may appear immediately in the account balance, but it is not confirmed cleared until the bank has verified receipt from the sending institution. Disbursing before confirmation is a risk that can trigger an OLR notification if the wire is returned or delayed.
Six-Year Record Retention
SCR 20:1.15 requires Wisconsin attorneys to retain all trust account records for a minimum of six years from the date each record was created. This six-year retention period is longer than the five-year requirement in most other states, and it applies to every trust account record — bank statements, deposit slips, wire transfer confirmations, ACH and EFT records, individual client matter ledgers, three-way reconciliation worksheets, and disbursement documentation. For PI matters with long resolution timelines, records created in year one of a case must be retained through at least year seven from the date of creation. Electronic records are acceptable under SCR 20:1.15, but they must be stored in a retrievable format and backed up adequately. The July 2023 electronic transaction update clarifies that digital records of electronic transactions are subject to the same six-year retention requirement as paper records.
Approved Financial Institutions in Wisconsin
Wisconsin IOLTA accounts must be held at financial institutions that have entered into WisTAF's participation agreement and are on the current list of approved institutions. The participation agreement binds the bank to remit IOLTA interest to WisTAF and to notify the Office of Lawyer Regulation when a covered trust account is overdrawn. WisTAF maintains the current approved list on its website. Before opening a new trust account or transferring an existing account to a new bank, attorneys should confirm that the institution is on the current approved list. The July 2023 electronic transaction update also placed additional requirements on participating banks regarding how they report electronic transactions to account holders — attorneys should confirm that their bank provides the transaction-level detail required to support compliant recordkeeping under SCR 20:1.15-1 and SCR 20:1.15-2.
Common IOLTA Violations at Wisconsin Personal Injury Firms
Wisconsin PI firms encounter several recurring trust account compliance problems. Confusion about the six-year retention period — particularly at firms that migrated from older state guidance referencing a different retention period — remains a frequent issue; the current requirement is six years, and any firm retaining records for a shorter period is non-compliant. Non-compliance with the July 2023 electronic transaction rules under SCR 20:1.15-1 and SCR 20:1.15-2 is an emerging issue, particularly at firms that do not capture sufficient transaction-level detail for wire transfers and ACH payments. Disbursing before funds clear is the most common cause of OLR overdraft notifications. Missing or incomplete individual client matter ledgers — particularly in multi-matter trust accounts — are also frequently cited in OLR inquiries. Commingling occurs when earned attorney fees are left in the trust account after they have been earned rather than transferred promptly to the operating account.
Automating Wisconsin IOLTA Compliance with Disbo
Disbo is built to handle the requirements of SCR 20:1.15, SCR 20:1.15-1, and SCR 20:1.15-2, including the July 2023 electronic transaction update. The platform records each electronic transaction — wire transfers, ACH payments, and EFT disbursements — with the transaction-level detail required by the updated rules, and maintains individual client matter ledgers for every active case. Monthly three-way reconciliation is automated and stored as an immutable record for the six-year retention period required under SCR 20:1.15. Disbursements that would create a negative balance are blocked before they process, directly addressing the cleared-funds risk that triggers OLR notifications. Wisconsin PI firms using Disbo replace manual trust accounting workflows with a system that enforces the full scope of Wisconsin's trust accounting rules automatically.
Referral Fee Rules in Wisconsin — and How to Actually Pay Them
Trust account compliance and referral fee compliance go hand-in-hand for any Wisconsin firm that splits fees with co-counsel, accepts case referrals, or pays referring attorneys out of a settlement. The same SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2 that governs your IOLTA account also dictates how referral fees flow through it — and Wisconsin Supreme Court Rule SCR 20:1.5(e) adds a separate layer of disclosure, consent, and reasonableness rules on top.
Governing rule: Wisconsin Supreme Court Rule SCR 20:1.5(e)
The Wisconsin Referral Fee Standard, in Plain English
Wisconsin follows the ABA Model Rule 1.5(e) framework for fee divisions between lawyers who are not in the same firm. Referral fees and co-counsel splits are permitted only when the client gives informed written consent, the total fee is reasonable, and the division is either proportionate to services performed or each lawyer assumes joint responsibility for the matter.
- Client gives informed written consent to the fee division, including the share each lawyer will receive
- Division is in proportion to services performed by each lawyer, OR each lawyer assumes joint responsibility for the representation
- Total fee is reasonable
Once a Wisconsin matter resolves and the referral fee is owed, the trust accounting and the actual payment have to line up exactly. Disbo lets you pay attorney referral fees in Wisconsin directly from the settlement disbursement — with the client consent, fee split, and IOLTA ledger entries documented in one workflow.
The Referral Fee Workflow Most Wisconsin Firms Get Wrong
Almost every PI and employment firm in Wisconsin has the same broken referral fee workflow: the obligation lives in a spreadsheet, the disclosure lives in an email, the consent lives in a signed PDF in a shared drive, and the actual payment happens at the bank — completely outside the platform that holds the client funds. That gap is where bar discipline starts and where money gets lost. Here is what the end-to-end flow should look like under Wisconsin Supreme Court Rule SCR 20:1.5(e), and how Disbo executes it.
- 1
Intake — capture the referring attorney up front
When the matter is opened, the referring attorney's identity, firm, percentage share, and the basis for the division (proportionate services or joint responsibility, depending on what Wisconsin requires) are recorded as structured fields on the matter — not in a notes box.
- 2
Client disclosure and written consent
Disbo generates the Wisconsin-specific written disclosure and consent form pre-populated with the participating lawyers, the share each will receive, and the language Wisconsin Supreme Court Rule SCR 20:1.5(e) requires. The client signs it electronically and the executed form is bound to the matter file.
- 3
Settlement received into IOLTA
When settlement funds hit the IOLTA account, Disbo applies your three-way reconciliation rules under SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2 and posts the receipt to the client's individual ledger. Nothing is disbursed yet — including the referral fee.
- 4
Fee calculation and split preview
Disbo computes the attorney fee, the referring lawyer's share, the costs to be reimbursed, lien payoffs, and the client's net — all from the agreed percentages. The closing statement is generated automatically in the format your Wisconsin bar expects.
- 5
Compliance check before disbursement
Before any payment goes out, Disbo verifies the consent is on file, the client's trust balance is sufficient (no negative balance), the total fee is not unconscionable, and any state-specific caps or proportionality requirements are satisfied. If anything fails, the disbursement is blocked.
- 6
One-click payment to the referring attorney
Disbo pays the referring attorney directly out of the IOLTA disbursement by ACH, wire, or printed check — without leaving the platform, logging into your bank, or rekeying the amount. The payment is reconciled against the ledger in real time.
- 7
Audit-ready archive
The signed consent, the fee agreement, the closing statement, the ACH/wire receipt, and the ledger entry are stored together on the matter and retained for 6 years to satisfy Wisconsin's record retention rule.
Referral Fees by Practice Area in Wisconsin
Referral fees and co-counsel splits look different depending on the practice area. The underlying ethics rule under Wisconsin Supreme Court Rule SCR 20:1.5(e) is the same, but the money movement is not. Disbo handles all four of the patterns Wisconsin firms run into most.
Contingency referral fee from settlement
The classic PI flow. A referring attorney sends you a case, the matter settles, and a percentage of your contingency fee is owed to the referring lawyer. Disbo pays the referring attorney from the IOLTA disbursement, with the Wisconsin consent and closing statement already attached.
Hybrid contingency + invoiced business clients
Plaintiff-side employment cases are often contingency, but defense-side and advisory work for the same firm is hourly and billed to a business. Disbo lets you invoice businesses directly through the platform — generate the invoice, accept ACH or card payment, deposit operating funds (not IOLTA), and still record any referral or co-counsel split on the same matter.
Multi-firm fee splits with joint responsibility
When two or more {name} firms work a matter together — common in mass tort, complex litigation, and class actions — Disbo records each firm's percentage, the joint responsibility agreement required by Wisconsin Supreme Court Rule SCR 20:1.5(e), and disburses each firm's share separately at settlement.
Invoice a business for hourly fees
For defense work, in-house counsel arrangements, and business clients on retainer, Disbo lets you invoice the company directly, accept ACH/credit-card payment from the business, deposit it into the operating account (never IOLTA, per SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2), and route any agreed referral split to the referring attorney from operating — with the same documentation trail as a contingency split.
Invoice Business Clients Through the Same Platform — Even on Employment Disbursements
Most Wisconsin employment firms run a hybrid book of business: contingency wage-and-hour and discrimination cases on one side, and hourly defense, advisory, severance, and compliance work for businesses on the other. Disbo is built for both. You don't need a second tool to bill the corporate clients — and you don't need a third tool to pay a referring attorney when the case settles.
Issue invoices to businesses from the matter
Generate a branded invoice from any employment matter — defense work for an employer, advisory hours for HR counsel, severance negotiation, an ADA accommodation review. Line-item hourly entries, flat fees, or hybrid arrangements all flow into the same template.
Accept ACH and card payment directly
Businesses pay you online — ACH, credit card, or wire. Funds land in your operating account (not the IOLTA), the invoice is marked paid automatically, and the matter ledger shows the receipt next to the time entries it covered.
Recurring retainers and replenishment
Set up monthly retainers for business clients, automated replenishment when balances dip below a threshold, and credit-card-on-file for predictable corporate billing. The same platform that runs your IOLTA runs your A/R.
Pay the referring attorney from operating
When the business invoice is paid and a referral fee is owed, Disbo pays the referring attorney out of the operating account — not the IOLTA — and applies the same Wisconsin Supreme Court Rule SCR 20:1.5(e) consent and disclosure documentation you'd use on a contingency split.
One audit trail across IOLTA and operating
Whether the fee was contingent and disbursed from IOLTA, or hourly and invoiced to a business and paid from operating, the matter shows a unified audit trail: engagement letter, fee agreement, referral consent, time entries or settlement, invoice or closing statement, payment receipt, and the referral payment.
Invoice — Business Client
INV-2026-0418
Bill To
Northstar Logistics, Inc.
Employment Defense — Matter 2026-118
Linked Referral
Patel Employment Group
15% of fee — paid from operating
Consent on file · Wisconsin Supreme Court Rule SCR 20:1.5(e)
Common Wisconsin Referral Fee Mistakes
- Verbal-only fee splits with no signed client consent — unenforceable and a discipline risk under Wisconsin Supreme Court Rule SCR 20:1.5(e).
- Cutting the referring attorney's check from a personal account or operating account when the funds came from IOLTA, breaking the money trail.
- Disbursing the referral fee before the settlement check has actually cleared, creating a negative trust balance under SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2.
- Increasing the total fee charged to the client to absorb the referral split — a per se violation in most jurisdictions.
- Failing to document the basis for the division (proportionate services vs. joint responsibility) when the bar requires one.
- Mixing business-client invoices and IOLTA settlement receipts in the same account because the platform won't separate them.
What Disbo Enforces Automatically
- Blocks any referral fee disbursement when written client consent for that matter is not on file.
- Routes contingency-derived referral payments through IOLTA and business-invoice referral payments through operating — never the wrong direction.
- Refuses any disbursement that would create a negative client balance, no matter who the payee is.
- Locks the total client-charged fee so it can't be inflated to absorb a referral split.
- Prompts you to record proportionate-services or joint-responsibility basis when Wisconsin requires it.
- Generates the closing statement, payment receipt, and ledger entry as a single signed package retained for 6 years.
One platform, both sides of the ledger
Whether you're disbursing a contingent Wisconsin settlement out of IOLTA or invoicing a business client for hourly employment defense work, Disbo runs the trust accounting, the invoice, the payment rail, and the referral fee on a single matter — under the same Wisconsin Supreme Court Rule SCR 20:1.5(e) and SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2 rule set.
Explore the referral fee featureFirms in Wisconsin Using Disbo
See how Wisconsin law firms and medical providers use Disbo to stay IOLTA compliant and accelerate disbursements.
See How Disbo Keeps Your Wisconsin Firm Compliant
Stop managing Wisconsin IOLTA compliance with spreadsheets. Disbo enforces SCR 20:1.15; SCR 20:1.15-1, SCR 20:1.15-2 automatically — negative balance prevention, three-way reconciliation, and audit-ready records built in from day one.
No credit card required. Setup in minutes.