Virginia's legal aid offices, hurt in recent years by cuts in federal funding, will soon be able to tap a new source of money, drawn from money earned on bank accounts held by the state's private law firms.
At the urging of the Virginia State Bar, the state's Supreme Court recently relaxed a rule banning the collection of interest on client trust accounts, provided that funds are directed toward nonprofit activities.
The court's order, to become effective July 1, will allow Virginia to join seven other states, including Maryland, in devising a new way of funding free legal services for the poor in civil cases.
The Legal Services Corporation of Virginia, which administers funds for 13 legal aid offices in the state, providing legal services to 25,000 clients, suffered a 25 percent cut in federal funds in 1981. The cuts, totaling $1.4 million, were partially offset by a $500,000 state contribution provided by the General Assembly last year and this year.
Poor people who qualify for free legal services in landlord-tenant disputes, domestic cases and other civil actions have already felt the effect of the federal cutbacks, said Jack Harris, director of the corporation. Five legal aid offices have been closed in Virginia and 35 attorneys have been laid off. "It's definitely had an impact," said Harris. "As a result, we are serving 7,000 fewer clients a year."
Tapping interest on money in law firms' bank accounts awaiting dispersal to clients is a funding technique first tested in Florida, where this year the program collected $1 million based on participation by about 15 percent of the state's attorneys.
The Virginia program, to be handled through the State Bar's nonprofit Law Foundation, will also be voluntary. Distribution of the funds will be made by the Foundation, although the expectation is that most of the money will go to legal services.
"We are very excited," said Harris. "This holds the potential of generating considerable funding for legal services, although there is no way of knowing how much that will be."
N. Samuel Clifton, director of the Virginia State Bar, said a committee has been named to coordinate implementation and to solicit participation by lawyers and firms. He noted that attorneys for several prominent firms, including two of Richmond's largest, have been active in establishing the program, suggesting that their firms will be among the first to volunteer.
"We've got a lot of names right off the crack of the bat," Clifton said. Still, he said he expects it will be several months before any significant amount of money is raised. "I doubt we'll see anything before the fall," he said.
The program puts no administrative or financial burden on the law firms. "It works very simply," said Harris. "The firm notifies its financial institution and fills out a form and from that point, the financial institution forwards the money earned to the Law Foundation."
"It's really a kind of a painless way to raise money," he said.