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The Legal Aid Society cleared a significant hurdle Tuesday in its effort to regain its financial footing when its 761 lawyers approved a package of cuts worth several million dollars over the next two years. Steven R. Banks, Legal Aid’s attorney-in-chief, said the vote “is an important action to help Legal Aid move forward by staff who are working hard to provide client services.” James Rogers, the head of the attorneys’ union, said the vote was “based upon the board of directors restructuring Legal Aid’s debt so Legal Aid can achieve financial stability.” Rogers, the president of the Association of Legal Aid Attorneys, declined to give a vote tally or describe the margin by which it passed. A staff lawyer who had seen the vote results by each office said the margin approving the cuts was “overwhelming.” Legal Aid, which has been struggling with a financial crisis for the past year, has said it would have to file for bankruptcy unless it could negotiate an adequate restructuring of present commitments to the union and other creditors. The union vote solved its first problem. The union leadership had approved the cuts by a 10-2 vote, and Rogers had toured Legal Aid’s offices urging that the mid-term reduction of the union’s three-year contract be adopted. The staff lawyer said Rogers “had done a good job of convincing the members that the cuts were really necessary to save the society.” The cuts are contingent on Legal Aid’s not filing for bankruptcy. The lawyers voted for a package that will reduce Legal Aid’s labor costs by $2.5 million in its 2006 fiscal year, which begins July 1, 2005. The biggest portion of those savings will come from reducing by more than half Legal Aid’s contribution to the union’s pension fund for fiscal 2006. Legal Aid will cut its contribution from 6.5 percent of the lawyers’ salaries to 3 percent, saving $2.1 million during the year. The lawyers also agreed to increase their contributions toward health care premiums starting Jan. 1, a step expected to save $350,000 a year. The lawyers’ health plan has two tiers. Lawyers receiving the higher level of benefits will see their contributions rise from 3.5 percent of the premium to 7 percent. Those on the more economical level will for the first time contribute to the cost of their premium, at 3 percent. The union also agreed to give up a 1.5 percent bonus contained in the existing contract. Earlier this summer the union had agreed to defer for two years the bonus, which was originally to be paid on July 1 of this year. The waiver of the bonus will result in a one-time savings of $825,000. Lastly, the union agreed not to pursue a $381,000 penalty that had been assessed against Legal Aid because of the way it handled payments to the pension fund.

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