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Bar News - December 19, 2008

Gaps Widen in Legal Safety Net


Crisis, defined: an unstable or crucial time or state of affairs in which a decisive change is impending; especially: one with the distinct possibility of a highly undesirable outcome.

The deepening economic downturn is diminishing the capacity of the legal services agencies in the state that assist underprivileged people at the same time as it is driving up demand for their services.

The Interest on Lawyers Trust Accounts (IOLTA) program, the innovative mechanism used to fund two of the state’s major civil legal services providers – chiefly, NH Legal Assistance and the NHBA Pro Bono Referral Program – is reporting plunging revenues due to lower interest rates and lower account balances. And the Legal Advice & Referral Center (LARC), which receives most of its funding from the federal Legal Services Corporation, is also tightening its belt in anticipation of difficult funding.

These impacts can also be felt by attorneys in private practice, who find themselves with no one to turn to when a low-income client asks for their help, or find their own resources stretched by a more difficult business environment.

The NH Pro Bono Referral Program finds it is increasingly straining to find attorneys to help with a burgeoning caseload. Ginny Martin, NHBA associate executive director for legal services, says she and her partners from the other legal services agencies are looking hard at new ways to communicate and share resources for handling and referring cases, and matching needy clients with the legal advice or representation that they need.

A Bittersweet Anniversary

It is an ironic circumstance, adds Martin, that the Pro Bono Program is marking the significant milestone of its 30th anniversary this year, at a time when the economy makes its services more important than ever. In a special anniversary section starting on page 16, Martin notes it was very similar conditions – where private sector attorneys realized that more needed to be done to meet the legal needs of poor people – that led to the founding of the Pro Bono Program in 1978.

This fall, both NHLA and LARC decided to lay off attorneys and staff due to the difficult economy. John Tobin, NHLA Executive Director, said that because of the decline in IOLTA revenues over the past several years and the end of other grants and sources of funding, it became clear this past summer that funding for NHLA was going to be especially difficult in the coming year. Over the past 10 years, NHLA has succeeded in receiving state appropriations that helped it open or reopen offices in Concord, Nashua and the North Country. The mounting state deficit, and the challenges faced by nonprofit funding sources such as the United Way and foundations, also are indicating that cutbacks were in the offing. To forestall even deeper cuts in fiscal year 2009, NHLA laid off three attorneys and two support staff members, and did not fill three vacant positions. "That’s a 15 percent reduction in our staff, and 20 percent of our lawyer staff," Tobin said.

Similarly, LARC laid off three attorneys this fall. Marilyn McNamara, LARC executive director, attributes the need to reduce overhead to the fact that years of level funding from the Legal Services Corporation had resulted in the organization losing ground financially over the past few years, with no hope for improvement in the near term.

NHLA, LARC and Pro Bono are all reporting increases in the number of potential clients seeking assistance with economy-related problems such as evictions, foreclosures, and bankruptcies, as well as family law cases where unemployment makes child support especially urgent.

Tobin says NHLA has not closed any offices yet or terminated any particular aspect of its work, but it is accepting fewer cases. "All the cases we do are pretty urgent," he said." It is very hard to say no, and we have to say no more often."

LARC’s hotline advocacy is increasingly important, providing information, referral and self-help to more clients as other resources grow scarce. "We’re hard at work answering calls and helping clients, but we’re stretched to the limit," McNamara says.

NHLA is sending more cases to the Pro Bono Program for possible placement with private attorneys. The Pro Bono Program, whose staff leverage the volunteer efforts of members of the Bar in providing pro bono legal services to eligible clients, are trying new ways to use those resources to serve as many clients as possible. Pro Bono Program director Martin said "clinic" models are being more frequently utilized for bankruptcy and some elder law matters where one or two attorneys come to the Bar Center to counsel a number of clients whose files and paperwork have been prepared in advance. Although each client is seen individually, this approach makes the most efficient use of the attorney’s time.

Also, Martin said the Pro Bono program is recruiting mentors from the private bar to assist the legal services staff lawyers who, due to the layoffs, may be working in unfamiliar areas of law. Martin says the Pro Bono Program, as it did in the early years of its founding, is helping to stretch resources to fill a widening gap between the civil legal needs of low-income people and the shrinking amount of resources to close that gap. Yet, the Pro Bono director noted that the program can only ask so much of staff and attorneys. Without other resources to fill in the looming IOLTA shortfall, Pro Bono cannot provide its current level of services. Martin commented that most other funding sources are dedicated to a subject area, unlike IOLTA which supports general operating expenses for Pro Bono.

Double-Whammy Drops IOLTA Revenues

IOLTA’s shrinking income is due to the drop in interest rates and smaller balances in lawyers’ accounts – both circumstances a result of the fall-off in business activity. NH Bar Foundation Executive Director David Snyder, at the NHBA Board of Governors’ meeting earlier this month, reported that even though the IOLTA program was budgeted for a downturn in revenues from last year, the fall-off has been ever greater than anticipated. Two years ago the IOLTA program took in an average of $160,000 to $170,000 in revenue each month. With declining revenue over the past two years the Bar Foundation budgeted only $140,000 in monthly income in the current fiscal year, started June 1, 2008. However, actual revenues. However, actual revenues have been averaging around $125,000 per month, and may even dip lower before the recession bottoms out. Last year, the Bar Foundation, using reserves to maintain stable funding, granted about $1.7 million to legal services providers. Snyder said that the grant funding to be made available this year will be much lower as a result of the revenue shortfalls.

Any Hope in Sight?

Tobin says one sign of hope he sees is that Congress may do something to provide relief for homeowners and slow the rate of foreclosures. There is also some talk from officials of the Obama transition team that relief may be provided for states with large deficits. That, in turn, might make it easier for NHLA to hold on to at least some of the appropriations it has gained from the legislature. Tobin says NHLA has been able to persuade legislators to provide the funding to NHLA by demonstrating that its lawyers, in representing clients in cases involving Social Security, Medicare and other benefits, bring federal dollars into the NH economy by getting clients the benefits they deserve.

What You Can Do

1. Opt-in for the IOLTA Program, if you haven’t already.

2. Check your bank statement to find out what interest rate your IOLTA account earns. Rates can vary from 0.0 percent to 3 percent. If your IOLTA account averages $100,000 or more a month and is earning less than 2 percent, call your bank today and ask it to raise the rate. Even a one-half percentage point raise can make a huge difference in revenues for the IOLTA Grants Program.

3. Volunteer for Pro Bono. Take a case. Take another case if you can. If you can’t take more cases or provide direct representation, offer to serve as a mentor. Perhaps you can make phone calls in a referral marathon to help find attorneys. Contact the Pro Bono Program if you don’t how to help. They are experts at finding ways to put lawyers’ talents, no matter what their level of experience or training, to use.

4. Contribute to the Campaign for Legal Services. Contributions are lagging for this joint fundraising campaign that provides supplemental funding for NHLA, Pro Bono and LARC.

5. Contact your lawmakers. Access to justice is not a discretionary expense. Make sure your legislators know that adequate funding for the courts and legal services for the poor are necessities.

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