Note: The sources below are for client escrow/trust accounts rather than IOLA accounts per se, but IOLA appears to be substantially similar in the sense that they represent funds that the lawyer is not free to spend administratively. In other words, they are trust funds subject to fiduciary duty and not ordinary operating accounts.
The Staff of the Indiana Supreme Court Disciplinary Commission considered such a possibility in their opinion TRUST ACCOUNT MANAGEMENT: HANDLING CLIENT AND THIRD PARTY FUNDS. While not stating outright that such commingling is unethical if there is neither intent to defraud nor recklessness, it gives two reasons why it could cause serious trouble:
- Risks of Lawyer Commingling Client Funds in Lawyer's Personal or Business Account
(a) Client funds become available to the lawyer's personal creditors in the event of an attachment of those funds pursuant to proceedings supplementary to execution or otherwise under the Depository Financial Institutions Adverse Claims Act. IC 28-9-1-1, et seq. Even if the identity of the funds is later clarified, the client funds may be frozen for up to ninety (90) days by virtue of the automatic hold provision of IC 28-9-4-2.
(b) Upon bankruptcy, dissolution of marriage or death of the lawyer, client funds may become a part of the lawyer's bankruptcy, marital or probate estate. Once again, there may eventually be a separation of interests in the funds, but in the meantime, client funds will be unavailable to their true owners.
(c) ...[a scenario involving actual fraud and/or misappropriation]
What they are saying is that even if you 100%, really and truly intend to just use your operating account as an "in and out" tool with full intention to devote your entire attention to promptly disburse the funds to their proper destination, that five minutes of commingling could coincide with some sort of legal event that would greatly complicate the payment.
For example, you transfer the client's funds from the escrow account into your firm's operating account at Time=0, morally confident that the transfer will be complete at Time=5. Unbeknownst to you, an earthquake occurs at Time=3 in which you are knocked offline and you and your entire firm are killed by falling debris. The contents of your operating account are frozen by your bank and sent to probate. Your client and Walmart hire another attorney to spend the next few months arguing over what your intentions were and why all of that "operating" money needs to be paid over to Walmart.
Similar to the above, you are in the middle of the transfer when a court order is served on your bank to freeze your operating account as part of some investigation into something entirely unrelated to your representation of your current client. Now, you are making your case to the court to unfreeze certain funds while Walmart is still waiting and your client is upset that you messed up something that should have been "simple".
A potential solution:
The same opinion, in Attachment G, provides:
Lawyers are permitted to advance filing fees for their clients out of operating funds, see, Ind. Prof. Cond. R. 1.8(e). In that event, no trust account questions arise from the use of a debit card that draws funds from an operating account.
The opinion then seems to indicate that debit cards should not be used, but in this case they are talking about linking cards directly to the escrow account:
May lawyers use debit cards to pay client funds for filing fees directly out of trust? The answer has two parts. First, current rules appear to prohibit it. Second, even if the rules were not an impediment, many banks refuse to issue debit cards on trust accounts.
The professional rule cited above in the Indiana Rules of Professional Conduct provides that lawyers may "advance court costs and expenses of litigation". If the payment to Walmart can be considered a court cost or expense, it may be reasonable to pay the amount out of your operating fund and then immediately reimburse it with a client reimbursement from their escrow funds.
The pay-then-reimburse model also mitigates the issue mentioned above about intervening causes stopping the transfer. If you have a heart attack right after advancing the funds from your operating account but before filling out the paperwork to reimburse yourself, neither the client nor the other party (Walmart) has been adversely affected.