Minnesota’s resources for legal aid are drying up fast

LaVeda Pompey’s grandsons moved in with her a few years ago, along with a stack of papers with instructions on how to file for custody.

The boys were safe and there was no pressing need to rush for custody, so she waited.

In September things changed.

Her daughter tried to transfer one grandson out of his high school and return the children to an “unsafe, unhealthy environment.” That day, Pompey was paired with attorney Barbara Kueppers, who walked her through the complicated paperwork.

Kueppers works for the Volunteer Lawyers Network, where the court directed Pompey. It’s one of 32 organizations to receive a grant from the state’s Legal Services Advisory Committee this fiscal year.

The grants help cover low-income individuals who couldn’t otherwise afford legal services, like the homeless, the elderly and domestic violence victims.

Pompey, 52, has friends who took a second mortgage on their house to pay for a lawyer in a custody case. For her that wasn’t an option. She said the little money she has goes toward taking care of the kids.

‘Literally helped to save my family’
Without legal aid there’s “no telling what the outcome would have been,” Pompey said. “This program literally helped to save my family.”

As the demand for services keeps piling up, the cash Minnesota has to cover cases like Pompey’s is plummeting.

Of the state’s avenues for funding legal services, something called Interest on Lawyer Trust Accounts (IOLTA) is seeing the steepest loss. The program pools attorneys’ client funds, like a retainer for divorce or settlement check, in one account.

These individual accounts are usually only held a few days, and any interest accumulated would be a pittance. When the funds are combined, however, it adds up — in 2007 it hit almost $3.9 million.

But with interest rates at record lows, IOLTA revenue has dropped 85 percent from 2007 to 2010.

“It’s never been this bad before,” said Bridget Gernander, manager of the Legal Services Grant Program. “In the 27 years of IOLTA this is the first year that our revenue has been below $1 million.”

Worst will hit after July 1
The brunt of the economic downturn on the program will hit after July 1, when this year’s funding cycle ends.

In the past two years, IOLTA has leaned heavily on a reserve to keep funding levels consistent. Next year, what remains of the reserve will be depleted.

Jerry Lane, who retired this month as executive director of Mid-Minnesota Legal Assistance, which serves low-income, disabled and elderly people, said the loss of IOLTA funding goes beyond a drop-off.

“It’s more like a freefall,” Lane said.

Mid-Minnesota serves 20 counties and has 66 attorneys on staff. When the full IOLTA losses hit it could mean cutting four positions, he said, and people will go without critical legal services.

“The price that will be paid for this is not at Legal Aid,” Lane said. “It’s in the homes of the people that Legal Aid serves.”

A national problem
Minnesota isn’t alone. Nationally, the average IOLTA revenue dropped 57 percent from 2008 to 2009. Minnesota’s revenue dropped 60 percent, and Alaska was the hardest hit, diving 79 percent.

The reserve helped cushion Minnesota’s blow, and when the economy turns around program officials plan to rebuild it, along with grant levels. But no one is sure when that turnaround will be.

“If I knew that I would be working in Wall Street,” joked Judge Lora Livingston, chair of the American Bar Association’s commission on IOLTA, but added that she’s hopeful about signs of economic improvement.

At the bar association’s February meeting, IOLTA staff discussed alternative funding, like leftover money from class-action lawsuits that’s often given to charities.

While attempts to offset the blow abound, each seems to come with a caveat.

Some states have an “honor roll” of banks that provide high interest rates or waive IOLTA fees — but that’s just a patch on the issue. In Minnesota, where legal aid comes from the courts rather than a separate nonprofit, officials felt it was inappropriate to formally endorse certain banks.

Organizations like Mid-Minnesota have tried to get cities to pitch in — but possible legislative cuts to Local Government Aid could stem any local money. Foundations like United Way donate and are trying to hold their bottom line — but, Lane said, they’re not “well-situated to pick up where someone else is falling off, and I don’t know anyone else that is.”

Other support channels
IOLTA is not the sole funder of Minnesota legal aid and alternative dispute programs. It’s thrown in with a legislative appropriation, an attorneys’ registration fee and an endowment.

Minnesota’s Legal Services Advisory Committee doles out the money, which will be pooled together for the first time this year. IOLTA used to operate separately, but with its grantable cash falling from $2.25 million currently to $900,000 next year, combining with the other funds allows for more strategic distribution, Gernander said.

But before determining a strategy, granters need to know how much money they’re dealing with.

Two years ago, the federally required attorney registration fee increased from $50 to $75, helping offset IOLTA losses. The change sunsets June 30, and $600,000 hangs in the balance.

Gary Hird, chief operating officer at Southern Minnesota Regional Legal Services, said he’s “cautiously optimistic” the hike will be extended.  

Hird has lobbied at the state Capitol to keep legislative funding at its current level.

Down $1.29 million since 2008
Since 2008, state money to civil legal services has declined by $1.29 million to the current appropriation of $11.8 million. This year officials are requesting the same amount — no bump for inflation.

Gov. Mark Dayton’s proposed budget bill follows that request.

In preliminary meetings, legislators on both sides of the aisle called civil legal services a high priority and were concerned about prior budget cuts to the justice system, Hird said. But faced with a $6.2 billion state budget deficit, no one is getting specific about the appropriation.

Last Tuesday, he talked to the House Judiciary Policy and Finance Committee about legal service finances for the first time this session.

Committee Vice Chair Ron Shimanski, R-Silver Lake, said the IOLTA loss is unfortunate.

“I hope we can keep the funds solvent, but with the budget constraints we will only be able to go so far,” Shimanski said, adding that he’s not aware of any proposals to trim civil legal service funding further.

To help extend services, he emphasized that plaintiffs who are able to pay even part of their legal bills must do so.

Rippling across the courts
When programs apply in March for a piece of the shrinking funding, family law services — like those that helped Pompey — will be pitted against other types of aid, including aid to immigrants, homeless people and domestic violence victims.

There won’t be an even slice off the 32 organizations that got grants this biennium. The Legal Services Advisory Committee will evaluate organizations’ applications, prioritizing them by quality of service and trying to avoid funding similar programs serving the same community.

While the committee hopes to maintain rural services, Gernander said it’s “distinctly possible” small organizations will be trimmed, unless they fill an otherwise unmet need.

The Legal Rights Center, a nonprofit that does criminal defense, is applying this year. Unlike Mid-Minnesota, the center is a small operation, with 13 staff and the equivalent of 2.5 full-time legal advocates. Last year it received $10,000 from IOLTA.

While the center doesn’t depend on IOLTA to survive, Executive Director Michael Friedman said a dip would hurt.

“We’re all trying to avoid dying a death by a thousand cuts,” he said.

Value of frontline advice
Volunteers from the center spend hours in the community at places like the Brian Coyle Center and American Indian Center, where they help people with legal questions, both criminal and non-criminal. Frontline advice prevents unnecessary cases from entering court.

Legal aid services save courts about $5 million a year by screening cases and representing those that do have merit, said Steve Hirsh, the access to justice director at the Minnesota State Bar Association.

Aid cuts down on pro se cases — where individuals represent themselves. These cases can leave judges, who are supposed to be impartial, trapped between guiding a confused litigant and judging them.

Barbara Kueppers, who represented Pompey, said she’s seen the number of pro se cases in court rising. Many people in situations just as serious as Pompey’s are representing themselves, and are held to the same standard as lawyers.

“At the end of the day it can sink a case,” she said.

Often, organizations don’t have enough staff to cover individuals requesting representation and must turn them away. People bounce from one group to another seeking aid, only to become frustrated and give up, Friedman said.

That’s what happened to Pompey. After receiving the packet to file for custody of her grandchildren, she called a few legal aid organizations. Her calls were never returned, so she put the packet on the shelf.

But when she was thrown into a crisis, Pompey said she would have gone to great lengths for legal help. Dealing with the documents meant a feverish, sleepless night of preparation. If she hadn’t had Kueppers on the phone, explaining sections and showing her how to add an appendix of support, Pompey contends things would have been much worse.

“The people down at family court were so impressed with the presentation, they could not believe … that an attorney did not actually do the work themselves,” Pompey said.

On her first court date, Kueppers was there. Since then, she’s been with her at three hearings and a court services meeting. Although Pompey doesn’t have custody of the boys, she obtained a legal order to have them stay with her.

For families already in turmoil, Pompey said losing legal aid programs would be chaos.

“It would be so much trauma, so many traumatic stories, if programs like this weren’t in existence.”

Jessie Van Berkel, a student at the University of Minnesota, is a MinnPost intern.

Comments (4)

  1. Submitted by Randall Ryder on 02/28/2011 - 04:04 pm.

    These reductions in legal services will have a significant impact on the elderly who have limited incomes and often encounter legal issues that are new and unfamiliar to them. We should tax every class action suit and contribute the funds to legal assistance.

  2. Submitted by Jim Roth on 02/28/2011 - 07:18 pm.

    Don’t worry, it’s okay. It’s just part of the prevailing philosophy to just take it out on the poorest and weakest. IOLTA is a good idea and a good program. It just doesn’t deserve to be bailed out like the banks and businesses that are too big to fail.

  3. Submitted by Bernice Vetsch on 03/01/2011 - 03:26 pm.

    Shame on the Richest Country in the World and the State that Works (that used to work, anyhow).

    Shame on governors like Pawlenty and Walker and the legislators who support them in their war against ordinary people, especially the poor.

  4. Submitted by Connie Booth on 03/03/2011 - 11:44 am.

    Grandfamilies are families headed by grandparents and other relatives who share their homes with their grandchildren, nieces, nephews, and/or other related children. More than six and a half million children across the country live in households maintained by grandparents or other relatives. For more than 20 years Lutheran Social Service of Minnesota has offered services to these relatives and the children they are raising. Our Raising Relative’s Children program currently offers supportive education groups, individual counseling, caregiver respite, family retreats, and scholarships for children to attend summer camps and therapy groups for children who have witnessed family violence. A helpful resources for all Minnesota GrandFamilies is the an on-line resource guide which can be found at http://www.raisingrelativeschildren.com Families interested in the LSS Raising Relative’s Program can contact me by calling 612-879-5328.

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