With little fanfare, a newly created public entity, the Maryland Legal Services Corp., is formulating novel plans to give a financial transfusion to the state's legal assistance agencies for the poor, which have been hit by Reagan administration social welfare cuts.
The unusual concept -- utilized now only in Florida, California and a few foreign countries -- would transfer interest from millions of dollars held in escrow for clients by many of the state's 11,000 attorneys to a central interest-bearing "pool" account to be administered by the Legal Services Corp.
Interest from that account would pay lawyers to represent the growing ranks of the indigent in a variety of civil matters, ranging from evictions and divorces to insanity commitments and Social Security claims.
The lawyers would be hired and work through the existing legal assistance organizations in the state -- chiefly the Legal Aid Bureau, the Maryland Advocacy Unit for the Developmentally Disabled (MAUDD) and the Maryland Volunteer Lawyers Service.
"I see this as a response to a growing need for the disadvantaged . . . and hopefully we're going to be a national model," said Cheryl Lynch, a member of the Legal Services Corp.'s board of directors and a lobbyist for Catholic charities in Annapolis.
The Legal Services Corp. was created by the legislature last winter. Its nine-member board of directors, headed by former U.S. Attorney General Benjamin R. Civiletti, was appointed by Gov. Harry Hughes.
Though it has yet to hire a staff or open an office, the corporation has won the support of state bar association leaders, state Attorney General Stephen H. Sachs and others active in bar activities.
While existing agencies have suffered from Reaganomics -- the Legal Aid Bureau's 1982 federal grant was cut 25 percent to $2.4 million -- many poor and disadvantaged people have been denied assistance for years, according to Lynch. State law requires that abused or abandoned children be represented in court petitions for protection, for example, but according to a recent state survey, many of the 1,900 cases in juvenile courts each year are routinely processed without attorneys representing the children.
Under the Legal Services Corp. enabling legislation, legal assistance agencies such as the statewide Legal Aid Bureau would apply for grants from the corporation to pay attorneys to represent individuals or groups in low-income categories.
As a basic criterion, a client's income could be no greater than 50 percent of median family income in the state.
"For example," said corporation board member Michael A. Millemann, a University of Maryland law professor, "the Legal Aid Bureau could apply to us for a $50,000 grant for an attorney, a paralegal and a secretary to represent an additional 200 to 250 Social Security claimants in a year."
If the application is approved, Legal Aid would hire the attorney and staff, and the corporation would monitor their performance.
"Our purpose is to provide the money, not select the lawyers or run the operation," Millemann said.
Under the enabling law, the corporation's pool account would be supplied by interest volunteered from small-yield attorney escrow accounts that would be of no practical value to the client. That is, they would be too small or short-termed to generate more than $50 each -- about what an attorney would charge the client for establishing a conventional investment account.
Even so, with hundreds or even thousands of attorneys contributing interest from these accounts -- $50,000 or $100,000 held in escrow for three or four days in a real estate transaction, for example -- the corporation's pool account could be expected to grow rapidly, said Millemann. The pool account, in turn, would be invested to earn the highest interest available.
The Maryland Legal Services Corp. board is now embarked on a public relations campaign to inform the state's 11,000 resident attorneys of its existence and convince them to turn over interest voluntarily from their small escrow accounts.
"The whole thing depends on the lawyers' willingness to participate," said Lynch.
In the meantime, the corporation is looking for private contributions and foundation money to help it get off the ground. "We need $50,000," said Millemann. "We already have a $15,000 grant from the Maryland Bar Foundation, but it's contingent on getting the other $35,000. We're optimistic we'll get the rest. We're talking with other foundations."