A strike is looming at Legal Services NYC, a provider of civil legal services for the indigent, after union members reacted with anger to what management said was its final offer to attorneys and staff who have been working without a contract since July 2012.

"Our members are not monolithic on anything," said Gibb Surette, president of the Legal Services Staff Association, which is a unit of UAW Local 2320. "But the reaction I heard overwhelmingly is people are livid. People are really furious," Surette said in an interview.

The organization said that the two-year proposal was all that it could afford as it braced for multi-million dollar funding cuts from the federal government.

"Legal Services-NYC has put forward a proposal that responsibly deals with a 50 percent drop in Federal funding," said Raun Rasmussen, the executive director of Legal Services NYC in a statement. "We’ve already cut more than 20 percent of the managers in our organization. But our healthcare benefits are the most expensive in the industry and we need to save money there as well. By changing the benefit package a little, we can save jobs and services for thousands of New Yorkers."

The contract would increase worker healthcare contributions for about 200 union members and trim contributions to worker retirement accounts.

However, there is a "small increase" in salary, Rasmussen said.

In a May 3 interview he added that he was hopeful that when employees have had a chance to review the "extremely reasonable" offer, they will accept it.

But members of the union’s negotiating team refused to recommend the offer to its members and scheduled a May 15 strike vote.

Among their concerns was the method by which management seeks more employee healthcare contributions. For example, the organization has proposed increased out-of-network deductibles and out-of-pocket maximums. Surrette said the "sole effect" of such measures was "to shift cost to members" who needed medical services the most.

"It’s a great model for hyenas, not so wonderful for a legal services provider," he said.

Rasmussen countered on Friday that a pool of funds would be set aside for employees who hit the maximums.

Surette said it is "highly likely" they would vote to strike. The last strike at the agency occurred in 1993 and lasted about a month.

Rasmussen pledged that Legal Services NYC would maintain its quality services if there is a strike.

"We’re making plans now to make sure all our clients continue to receive excellent services," Rasmussen said. "Intake will slow down because our managers will have to manage cases, but we’re making sure that all clients get the service they deserve," he said.

According to Legal Services Corp. figures, Legal Services NYC closed 12,451 cases in 2012 and served 31,752 clients.

Surette said union members were concerned about the harm clients would experience if a strike occurred.

"We are at least as concerned about that as a strike causing hardships for ourselves," he said. "But we are absolutely convinced that preserving a program that people can make careers in and develop experience, in the long run, we benefit from that. But the clients are the ultimate beneficiaries. We don’t strike at the drop of a hat," said Surette.

The contract negotiations come as the national Legal Services Corporation, the organization’s largest funder, reduces its allocation to Legal Services NYC because of sequestration and funding adjustments that follow every census.

All told, Legal Services Corporation funding will drop to $8.8 million in 2015 from an all-time high of $17.6 million in 2010.

Moreover, it costs Legal Services NYC about $41,000 annually to provide health insurance to a worker and his or her family. According to management’s memo outlining its offer, that annual price tag is about $13,000 more per family than similar organizations, like the Legal Aid Society.

Though Legal Aid Society attorneys pay up to 7 percent of their healthcare premiums, Legal Services NYC employees now make no contributions, said the memo.

If the organization agreed to its current healthcare costs, by 2014 and 2015, it would spend between $6 million and $7 million more than it received in funding.

"This deficit is unsustainable, and if it continues unchecked will force us to cut services for low-income New Yorkers. By the end of 2014, unless we change this trajectory, we will need to lay off as many as 50 employees," said the management’s memo, which stressed "numerous" cost-cutting measures like changes in office space and consolidation of its legal services in Brooklyn (NYLJ, Aug. 20, 2012).

Surette said workers were willing to make healthcare contributions but they want elevated contributions to be uniform.

Furthermore, they want assurances that if any layoffs have to occur, in units where the manager-worker ratio is "out of whack"—more than one to five—managers be laid off first. Surrette said Legal Services has far too many managers and has "categorically refused" the idea.

Another worker concession was dropping a demand for a cost-of-living-adjustment, Surette noted.

Rasmussen said the union was seeking "a strict ratio" of workers to managers, but, he added, "that’s not a responsible way to lead an organization." Still, Rasmussen noted more than 20 management positions had been eliminated since he took over as executive director at the end of 2011. He added he "committed" to "streamlining" programs wherever possible.

Surrette said he and the labor negotiating team understood the organization was coping with funding cuts and had to made concessions.

"What we asked in return, if all their gloom and doom projections come true and they have to take all this from us and still lay off people, that they do it in a equitable fashion that doesn’t leave us having paid for saving their jobs before being shown the door. Their response to that has been a big middle finger," he said.

Andrew Keshner is a reporter for the New York Law Journal, a Legal affiliate.