Underfunded for years, Texas legal aid organizations say they are struggling to provide civil legal services to the poor in the wake of revenue shortfalls and hurricanes that buffeted coastal regions in 2005 and again this year.

"What we have is a delivery system that the infrastructure has been starved to death," says Betty Balli Torres, executive director of the Texas Access to Justice Foundation (TAJF), which has awarded about $24 million in grants to approximately 40 legal aid groups this year. "When a hurricane hits, it's a huge challenge to an underfunded system," she says.

James B. Sales, chairman of the Texas Access to Justice Commission (TAJC) created by the state Supreme Court in 2001 to find ways to improve civil legal services for poor and low-income Texans, says only about 25 percent of the people who need those services are receiving assistance.

The Texas Supreme Court will hear testimony at a Dec. 10 hearing in Austin on the accomplishments of the state's legal services organizations and the problems they face. Torres says advocates also will discuss possible funding initiatives, including a proposal to allow judges to contribute revenue from the interest generated by campaign contributions to civil legal services to the poor.

There has been progress since the state Supreme Court's 2001 hearing on the status of legal services to low-income Texans. As a result of that hearing, the high court created the TAJC, which serves as an umbrella organization for efforts to expand access to the state's courts.

Torres says that in 2001, Texas ranked 48th in the nation for funding civil legal services to the poor. Texas today ranks 43rd for such funding.

But a combination of problems has created a new crisis for legal aid organizations.

Torres says the downturn in the economy has dropped interest rates from 5.25 percent in September 2007 to 1 percent today, resulting in substantially less revenue for the state's IOLTA program, which helps fund civil legal services for the poor. The acronym stands for interest on lawyers trust accounts.

At the beginning of 2007, TAJF projected the IOLTA program would bring in $28 million for that fiscal year, but the declining interest rates dropped that figure to $20 million, Torres says. She says the current IOLTA revenue projection for 2008 is $12.1 million and, for 2009, the projection is only $6 million.

"Our money -- we are seeing it disappear before our very eyes," Torres says.

In the past, the IOLTA revenue has made up a substantial portion of the funds that TAJF awards in the form of grants to legal aid groups. Figures provided by Torres show that TAJF also received about $12 million this year from other funding sources. The basic civil legal services fee, which ranges from $5 to $25 depending on the court in which a case is filed, generated the largest amount, about $5.4 million for the year. The second largest pot of money, about $2.5 million, came from the Crime Victims Compensation Fund administered by the Texas Office of the Attorney General.

Paul Furrh, executive director of Lone Star Legal Aid, says, "If we lose money from the foundation next year, it will be just disastrous." Other than the Legal Services Corp. (LSC), Furrh says TAJF is Lone Star's biggest source of funding.

Federal Question

But the state's three largest legal services providers -- Lone Star, Texas RioGrande Legal Aid (TRLA) and Legal Aid of NorthWest Texas (LANWT) -- also face uncertainty about the amount of federal funding they will receive from the LSC for the current fiscal year, which began Oct. 1.

Steve Barr, spokesman for the LSC, an independent nonprofit funded by the U.S. Congress, says the corporation awarded $332.1 million in grants in fiscal 2008, with more than $27.9 million of those awards made in Texas.

TRLA executive director David Hall says legal services groups had expected an 11 percent increase in LSC funding for fiscal 2009. In June, the House and Senate Appropriations Committees recommended a $40 million boost in funding for the LSC, according to a June 20 LSC press release. But President George W. Bush threatened to veto the federal budget, Hall says.

Barr says Congress passed a continuing resolution to keep funds flowing to the various areas of government until sometime in March. Congress is expected to have a budget in place for 2009 by mid-March, he says.

"In the interim, we're operating at our 2008 funding levels," Barr says.

If TRLA does not receive the up to $1.3 million in additional LSC funding it had been expecting, Hall says, the organization likely will have a limited reduction in force next year. TRLA, which serves 68 counties in the southwestern third of the state, has 128 attorneys on staff. If the organization is forced to reduce its staff, the cuts probably will not affect attorneys, Hall says.

LANWT director of administration Errol Summerlin says his group has laid off eight lawyers as well as support staff this year, because the anticipated increase in federal funding from the LSC has yet to materialize. To make ends meet in fiscal 2009, LANWT also has not replaced about 20 lawyers who left the organization this year, Summerlin says. Many of those attorneys left because of LANWT's low salaries, he says.

Summerlin says the starting salary for an attorney at LANWT is $39,000 a year, the lowest salary for the three largest legal services providers. Hall says TRLA raised its salary for first-year lawyers to $40,000 in November. Furrh says Lone Star's starting salary for attorneys has been $45,000 for the past year.

With LANWT's staff of lawyers now down to 82, Summerlin says, "during 2008 and 2009, there will be thousands of people who aren't going to get served in our service area."

For Lone Star, the drop in funding has been exacerbated by the devastation left by Hurricane Ike, which ravaged the Texas coast in mid-September, just three years after Hurricanes Katrina and Rita hit much of the same area. Furrh says Lone Star has opened more than 10,000 hurricane-related cases in the three years after Katrina and Rita and continues to open new cases stemming from the 2005 storms. Rita victims still are wrestling with land and housing problems and commuter scams stemming from that hurricane, he says.

Now, Lone Star also is assisting Ike's victims. Among other things, Lone Star attorneys are helping people who were left unemployed because of the storm's devastation apply for emergency assistance, such as food stamps and temporary housing, Furrh says. Many coastal residents are still living in tents, he says.

Furrh says Lone Star has been using staff attorneys who normally handle family law or other matters to assist the hurricane victims. "We can't devote 20 lawyers to that for two years," he says.

Lone Star wants to add eight lawyers and eight support staff to handle the hurricane-related cases, but Furrh says that will cost about $1 million a year for the next three years. So far, Lone Star has received about $400,000 in additional funding, with $300,000 of that coming from TAJF, he says.

Torres says the TAJF board voted Nov. 6 to award $500,000 to five legal services providers, including Lone Star, that are assisting Ike victims. TAJF is using its 2009 IOLTA revenue and about $18,000 in donations from the Asian American Bar Association of Houston and the Asian American Bar Foundation of Houston to fund those grants, she says.

More Money

Legal services advocates have come up with a number of ideas to increase revenue.

On Nov. 7, the Texas Judicial Council adopted a resolution supporting and recommending a judicial IOLTA program that would enable judges to give funds generated by interest on campaign contributions to legal services providers. Torres says advocates will seek the TAJC's support for the proposal at the commission's Dec. 11 meeting.

State Supreme Court Chief Justice Wallace Jefferson says it just makes sense to have indigent citizens benefit from those accounts, rather than the banks. It's a good idea, "if it can be done," Jefferson says.

Torres says the proposal would require approval from the Texas Legislature and the Internal Revenue Service. The Legislature would have to amend the state's Election Code to allow interest from judges' campaign accounts to be used for that purpose.

Tom Godbold, chairman of TAJF's and TAJC's joint Court Awards Strategy Committee, says another proposal is to get cy-pres funds -- typically money left over from a class action settlement -- dedicated to civil legal services for the poor. Godbold, a partner in Fulbright & Jaworski in Houston, says a number of states -- including Illinois, Massachusetts and Washington -- have enacted legislation or rules of procedure that allow a trial court to direct residual funds from a settlement to a legitimate legal services provider.

But Godbold says the committee believes trial courts have the discretion to direct residual funds after a settlement for such a purpose and wants to make lawyers and judges aware of that possibility.

"If ever there is a situation where people are looking for a place to direct funds, let's make sure legal services to the poor are considered," he says.

TAJC chairman Sales, of counsel at Fulbright in Houston, says the commission also is tackling the problems faced by legal services providers from another angle. Sales says the commission began this year urging Texas law schools to create fellowships for graduates willing to work for legal services organizations. The commission already is having some success with that initiative.

Eden Harrington, the University of Texas School of Law assistant dean for clinical education, says the school will launch its Justice Corps program during the spring 2009 semester. Harrington says the program initially will provide three two-year fellowships for graduates who will work full time for nonprofit organizations that provide legal services to underserved populations.

One of those fellowships, supported by the UT law school faculty, has been in existence for four years, Harrington says. Houston attorneys and UT law school alumni George M. Fleming, founder and managing partner of Fleming & Associates, and Julius Glickman, managing partner of Glickman, Carter & Bachynsky, are supporting the two new fellowships, she says.

Sales says his goal is to get more young lawyers interested in becoming legal aid attorneys. Notes Sales, "What I'm trying to get is more boots on the ground."