Legal aid funding on the decline
A lawyer shows a woman a legal document
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Tess Vigeland: Lower interest rates can be a good thing for the economy. They boost lending and spending, or at least that's the idea. But rock-bottom rates can have just the opposite effect on at least one group -- those who provide free legal services to the poor. As interest rates drop so do their funds, so finding a free lawyer is getting harder by the day. As Marketplace's Jeff Tyler reports, the cutbacks couldn't come at a worse time.
Jeff Tyler: We all know our rights from watching TV.
Dragnet: You have the right to the presence of an attorney. If you can not afford one, one will be appointed before any questioning.
That's true if you're facing jail time. In civil cases --- like foreclosures, evictions, unemployment claims --- you have no right to a lawyer if you cannot afford one. This gap has been filled by legal aid groups, but the funding that pays for free legal help is fast disappearing. Don Saunders is with the National Legal Aid and Defender Association.
Don Saunders: We've seen, in some states, particularly, dramatic drops almost overnight.
Many states fund legal services, in part, by pooling tiny amounts of interest generated by escrow accounts. Those funds then collect interest themselves. In the past, they have been a stable source of income, but Steve Eppler-Epstein, with Connecticut Legal Services, says that's changed.
Steve Eppler-Epstein: In this peculiar economic downturn, business activity, particularly real estate transactions, have come to a halt at the same time that interest rates have plummeted.
That double whammy has eviscerated legal aid budgets across the country.
Eppler-Epstein: The revenues on this funding stream in Connecticut have dropped by 80 percent.
Massachusetts legal aid offices are turning away new clients. And in Texas, over the past couple years, funding has dropped from $28 million to $7 million. That means fewer lawyers to help people like the Bishops. Sixty-two-year-old Pat Bishop lives in Austin, Texas, with her husband, a Coast Guard veteran.
James Bishop: My name is James Bishop.
James is disabled -- he had a stroke and suffers from Alzheimer's. One day, out of the blue, the Bishops' landlord stopped accepting their rent and told them to get out.
Pat Bishop: We had always paid our bills on time and we had no problems. We didn't bother anybody.
Without free help from legal aid, Pat says --
Pat Bishop: I don't know what we would have done. I can't pay an attorney $300 an hour. We would have been out on the street.
As the recession deepens, fewer legal aid groups will be able to pay staff lawyers. Don Saunders says these cutbacks couldn't have come at a worse time. With workplace layoffs mounting, tensions tend to rise at home.
Saunders: When economic stresses are put upon families, it's always been the case that levels of domestic violence are increased. So there will be a huge need for legal assistance for low-income people.
That includes the formerly middle-class -- there's a growing number of folks seeking legal aid who used to be able to afford a lawyer.
Randall Chapman: They are the new poor.
That's Randall Chapman with Texas Legal Services Center.
Chapman: With predatory lending and the job layoffs that are now going on, we're seeing more and more demand. And frankly, those people are being denied legal help. There just are not adequate resources.
The legal services community hopes to get some financial assistance through state and federal stimulus packages and bar associations are calling on lawyers to do more pro bono work. But, with funding in a freefall and demand for legal aid climbing, fewer people will get their day in court.
I'm Jeff Tyler for Marketplace.