I was invited on January 7 to testify before a committee of the New York Senate which is looking at improving the delivery of legal services and is hunting for ways to fill the IOLTA shortfall. The following is my testimony from that day, which I delivered by videoconference. My comments highlight some of the advances that have taken place in Pennsylvania.

COMMENTS OF SAMUEL W. MILKES, ESQ.
EXECUTIVE DIRECTOR, PA. LEGAL AID NETWORK
BEFORE THE NEW YORK SENATE STANDING COMMITTEE ON
CRIME VICTIMS, CRIME AND CORRECTION
January 7, 2010

I am Sam Milkes, Executive Director of the Pennsylvania Legal Aid Network, the entity in Pennsylvania that is responsible for administering state funding and IOLTA funding, by contracting with the sources of these funds and subcontracting with legal aid programs that provide direct services to clients.

I want to thank Senators Hassell-Thompson and Sampson for their invitation to speak today and for the opportunity to appear before this Committee as it considers the important work of civil legal aid programs in New York.

The effects of IOLTA revenue declines in Pennsylvania have been dramatic and Pennsylvania has responded.

I am very much aware of and respectful of the fact that state government in each state has its own approach to the variety of challenges it faces. While my comments are about events that have occurred in Pennsylvania, please don’t interpret them to suggest we have the “only right path;” but hopefully this information will be of benefit to you.

Pennsylvania has a mandatory IOLTA program, meaning that every attorney must hold client escrow funds in an IOLTA account. The interest generated on these funds is pooled and used to help support access to legal services. IOLTA and filing fee funds are initially forwarded to the Supreme Court’s Pa. IOLTA Board, which in turn grants most of those funds to PLAN, for our administration and our subgranting to programs covering the state. The IOLTA Board also administers special direct grants to legal aid programs on a competitive basis.

While two years ago, annual IOLTA revenues were about $13.5 million, they dipped to about $3.5 million. I know this Committee is already well aware of the impacts of these cuts.
Pennsylvania has responded in several ways:

1. The Pennsylvania Supreme Court, through its Pa. IOLTA Board, has adopted a comparability standard, requiring that attorneys hold their client trust funds only in accounts that pay a rate that is comparable to other similar accounts. The effect of this “comparability” standard for now is to avoid even further cuts that would have occurred, were the rate of return at the prior level; so it is already helping. In the future, this standard will help to increase the IOLTA revenues above prior levels.
    
2. Last July, the state Supreme Court, which regulates the practice of law in Pennsylvania, increased attorney registration fees for Pennsylvania lawyers from $175 to $200, to raise more funds for civil legal services for those who have nowhere else to turn. The $25 increase, which is passed through to the IOLTA Board to fund civil legal assistance for the poor, generates about $1.5 million additional dollars annually.
    
3. In 2002, Pennsylvania’s General Assembly adopted the “Access to Justice Act,” implementing a $2 filing fee surcharge on a broad base of filings, including civil, criminal, mortgages and deed transfers, to help fund civil legal aid. This generates $9 to $10 million annually. This new source of revenue helped catch up on the stagnant funding from the Commonwealth, dating back many years.
    
4. For the current fiscal year, the Commonwealth adopted a supplemental filing fee to help fund legal services during this very difficult economic time. The supplemental fee for legal services is $1 and it applies to a slightly different set of filings. It is expected to generate about $3 million annually for two years, until it sunsets.
    
5. We continue to negotiate for some stimulus-funded support from the Commonwealth, which we expect will provide some further temporary financial support of legal services.

Even with this extra support, our legal aid system now has ten fewer lawyers than we had last year and the current 259 lawyers compare to 358 lawyers about 20 years ago.

I am sharing with the Committee a graph, which portrays our historic level of state funding and demonstrates the effect that IOLTA and filing fee revenues have had on this funding. The graph also displays the effect that the IOLTA cuts have had.
 

Client needs continue to increase.

We know from various studies that we are able to meet the legal needs of only about 20% of those needing civil legal aid. For each person we represent, we are turning away another person who was eligible for services and who actually made contact with a legal aid office. In these difficult financial times, we have seen a rise in requests for help in the areas of mortgage foreclosure, consumer concerns, and employment related representation. With regard to employment, we have created new projects that help clients not only with their claims for unemployment compensation, so they can maintain some basic level of income despite loss of their job, but we also help clients qualify for employment. Criminal records and mistaken credit and criminal records can have a devastating impact on the employability of some of our clients. We assist them with expungement of records, pardons, and in other ways to help clean up their records. Of course, the downturn of the economy has meant that more people are eligible for services, so we have seen a rise in requests for nearly every type of service we provide.

A committee of the PLAN, Inc. board continues to review emerging client needs, by taking testimony and looking at various studies. When funds permit, we expect to create additional special projects to target some of the most critical areas.

Pennsylvania has supported civil legal aid since 1973, with a well-designed delivery system.

Funding of civil legal aid began in 1973, which was also the year when my organization was created, albeit with a different name at the time. PLAN, Inc. contracts with the Department of Public Welfare for funds appropriated by the state and PLAN then subcontracts with individual legal aid programs for the delivery of legal services. We perform a similar role with the Pa. IOLTA Board, with regard to IOLTA and Filing Fee funding. PLAN is a funding conduit, an entity that monitors for contract compliance, and a supporter of legal aid programs. Since 1973, our state has annually appropriated direct state funding to legal services and it appropriates federal Social Services Block Grant funds. I believe we are the only state that appropriates these federal funds to legal services.

While we do not deliver any legal services directly from our offices, we support the legal aid programs in a variety of ways: a free annual statewide training, technology and fundraising help, administration of our Martin Luther King, Jr. Internship and Fellowship Programs (in which we recruit and pay all or a part of staff who are placed in our local programs, with the aim of improving the diversity of our statewide staffing), and through other means.

In turn, we fund 8 legal aid programs that provide on-the-ground services across the state and 6 specialized programs that provide targeted statewide services, such as in the areas of health, housing, and utility law or that meet the needs of special populations, such as farmworkers or the institutionalized. These 14 programs handle about 100,000 cases annually, through the funding we administer. To be sure, there are other legal aid programs that are not part of our network. They provide specialized services in specific areas of law or for specific populations and generally, they are concentrated in set geographic areas.

We feel that the legal aid structure in Pennsylvania has numerous advantages:

1. It maintains a level of local accountability and ownership of the programs that would not hold nearly as true were there a single statewide program.
    
2. At the same time, PLAN serves to coordinate services and approaches, so there is a degree of uniformity across the state.
    
3. By utilizing PLAN, Inc. as the intermediary funder, placed between State and Supreme Court funding sources and the programs providing services, we are able to help assure integrity of program oversight, without the risk of undue governmental influence over services. This can be particularly important since at times, client disputes can be with government itself.
    
4. As the umbrella organization, PLAN, Inc. is able to offer more than just a contract compliance role. We are able to help support the programs, as I mentioned earlier.

I encourage the adoption of a civil right to counsel.

The Pennsylvania Bar Association formally adopted a resolution supporting a civil right to counsel in matters where basic needs are at stake. I am a believer in this. I regularly appear before audiences of students and adults and ask them whether they believe there to be a right to counsel in matters such as a family facing loss of their home due to foreclosure or a victim of domestic violence needing a protection from abuse order. Universally, these audiences say to me that they believe a right to counsel exists in these kinds of fundamental areas. They are surprised to learn otherwise. I believe our society supports this right, in proper areas of law. Of course, we have to be careful that legal aid programs not be charged with an unrealistic service goal, when funding is inadequate to support the level of services requested.

Thank you for this opportunity.