You can change the location of the log4j configuration file, log4j.conf, by modifying the iim.log4j.config parameter in iim.conf. If you do not specify a value for this parameter, the logger will look in im-cfg-base. If the logger does not find the log4j configuration file in that directory, it uses the logging parameters in iim.conf to generate non-log4j style logs.
See Instant Messaging Server Directory Structure for information on locating im-cfg-base.