British Columbia led the way in 1969 when it established the first Law Foundation in North America. Since then, almost every other jurisdiction in North America has followed B.C.'s lead and established a Law Foundation.

The Law Foundation of B.C. is a non-profit foundation created by legislation to receive and distribute the interest on clients' funds held in lawyers' pooled trust accounts maintained in financial institutions. Pooled trust accounts are used to hold client funds for short periods of time, until it becomes feasible to distribute those monies to the client or others. Typically, funds held in this way are purchase monies in real estate transactions.

Because of the difficulty and cost of ascertaining how much interest in pooled trust accounts was attributable to each client's funds, and because the amount of interest related to each client was usually small, for many years financial institutions paid no interest on these accounts, although the total funds in the pooled account might be very substantial. As a result, the financial institutions profited from the use of the funds in the pooled trust accounts without charge.

British Columbia lawyers pioneered a change to this practice in 1969 when they persuaded the provincial government to enact legislation requiring financial institutions to pay interest on these pooled trust accounts to the Law Foundation which was, in turn, to use the interest to benefit the public of British Columbia.

The legislation directed the Law Foundation to distribute these funds in five areas:

• legal education;
• legal research;
• legal aid;
• law reform; and,
• law libraries.

The Foundation recognizes that while its objects are legal in nature, the income is to be allocated to programs which will benefit the general public of British Columbia.

From its inception through to 2009, the Law Foundation has approved grants totalling more than $421 million to support important law-related programs in British Columbia.