As COVID-19 Layoffs Increase Demand for Legal Aid, Providers Expect Precipitous Funding Drop
Legal-aid groups are facing a triple whammy of being forced to work remotely from home like everyone else, expecting a major increase in demand for their civil legal-aid services, and having much less money to keep programs running.
March 25, 2020 at 04:15 PM
4 minute read
Before the world went into pandemic mode, most low-income Texans surfing the web for legal help landed on articles about divorce resources.
That changed quickly.
Coronavirus pages on Texas Law Help are getting traffic spikes and staff who man the chats are fielding tons of coronavirus questions, said Karen Miller, executive director of the Texas Legal Services Center in Austin.
When the dust settles, she and other legal-aid providers are bracing themselves for a massive spike in people seeking help with civil legal needs.
"We are going to have record numbers of people entering poverty for the first time," Miller said. "It will be challenging for us."
Civil legal-aid providers are expecting a flood of Americans to begin qualifying for legal aid because of mass layoffs arising from COVID-19 government shutdowns. Some will face serious legal issues, yet as the demand for legal aid increases, the bottom just dropped out of the legal-aid budget. When the federal government cut interest rates to spur the economy, that also zeroed out the interest rate for Interest on Lawyers' Trust Accounts, which is the traditional funding source for legal-aid providers.
"It's a really heavy weight. We bear the responsibly—I certainly do—for the clients that we serve, and for the staff who serve those clients. It's a big worry," Miller said.
Legal-aid providers receive 13.8% of their funding from IOLTA, and when that source dries up, it's a serious problem, said Ron Flagg, president of the Legal Services Corp. in Washington, D.C., which distributes legal-aid funding from Congress to providers across the nation.
Legal-aid groups are facing a "triple whammy" of being forced to work remotely from home like everyone else, expecting a major increase in demand for their services, and having much less money to keep programs running, he noted.
"Congress today is considering legislation that would appropriate to [Legal Services Corp.] an emergency sum of $50 million for us to grant out to our funding recipients," Flagg said. "The $50 million is intended to address the spike in demand for legal services caused by COVID-19. It's not to address the loss of the IOLTA funding."
He added that Legal Services Corp. will continue talking with legal-aid providers about their funding needs, and telling Congress about it.
Texans who've lost their livelihoods may need lawyers' help with unemployment claims, evictions or foreclosures, consumer credit matters, and more, said Betty Balli Torres, executive director of the Texas Access to Justice Foundation, which provides grants to the Lone Star State's 37 legal-aid providers. Torres is especially concerned with domestic violence victims who are forced to shelter-in-place with their abusers, she said.
"On March 2, our interest rates were 1.75%, and on March 15—two weeks later—we were at zero," Torres explained. "We project at least a 75% decrease in revenue."
The loss amounts to $1 million per month, she noted.
It's the middle of a grant cycle, and the foundation will honor its grant commitments, which means the legal-aid providers won't see an immediate impact. But in the future, they'll find themselves facing 75% shortfalls.
Texas Supreme Court Justice Eva Guzman, the court's access to justice liaison, said it's better to address a struggling Texan's legal needs at the outset instead of allowing a problem to snowball. For example, a family struggling with foreclosure might get through the crisis with legal help. But without assistance, the family would lose their home, become homeless, and need substantial public benefits to survive, she said.
"Access to justice is an essential service," she said. "We don't know how many Texans will move into poverty because of COVID-19, so legal aid becomes an emergency."
The Supreme Court will seeking funding from the Texas Legislature to address the shortage, she said, but there's also a role that lawyers and private law firms must play.
"Pro bono will be a huge part," Guzman said. "At perhaps no other time in our state's history is the need as great as it will be in the aftermath of the pandemic."
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