Legal Aid Agencies Feeling Pressure to Merge

Across the state and nation, among many organizations that provide legal services to the poorest of the poor, merger mania is in the air.

Although there have been marriages between legal aid groups in the past, the current wave of consolidations and merger talks is occurring at a speed and scale unprecedented in legal services history.

The driving force is the Legal Services Corp., the quasi-government agency that allocates congressional funding for legal aid. Compelled to cut costs and improve services, the agency--the single largest source of legal aid funding in the country--has been pressuring some groups that receive its grants to consolidate or risk losing their grants.

That, in turn, has led to a concern that civil legal services will be less available to those in need.

“Basically, it’s our clients who are paying the costs of the mergers,” said Bill Kennedy, managing attorney of the Sacramento office of Legal Services of Northern California.

Some legal aid experts predict that the consolidations will lead to greater savings and improved client services, but others question the necessity of the mergers.

“What’s really bizarre about it is that it’s a solution in search of a problem,” said Gary Blasi, who worked in legal services for 20 years before becoming a law professor at UCLA. In some areas, he said, a forced merger “just doesn’t make any sense.”

In the San Francisco Bay area, five groups were told by the Legal Services Corp. in December that it would fund only one of them starting in 2000.

“We’re looking at a shotgun wedding,” said Bari Robinson, executive director of the Alameda County Bar Assn. “We’re being dragged into this. The whole thing is repugnant.”

Legal Services Corp. forced San Francisco Neighborhood Legal Assistance Foundation to take charge of the Alameda legal aid service area earlier last year, and the combined agency is now planning to merge with Contra Costa Legal Services Foundation and Community Legal Services of Santa Clara County. The two other groups, Legal Aid of the North Bay and the Legal Aid Society of San Mateo, have not yet agreed.

Even groups that have not been forced into mergers are feeling the heat. Like many others around the country, the five organizations in the Los Angeles-Orange County metropolitan area that receive Legal Services Corp. funding are voluntarily planning to consolidate into three, because of expectations that they may otherwise be forced to do so. They have already agreed that the two smallest--Legal Aid Foundation of Long Beach and Legal Services Program for Pasadena and San Gabriel-Pomona Valley--must go. Although the San Gabriel group has not yet decided on a merger partner, the Long Beach organization announced this week that it will consolidate with the Legal Aid Foundation of Los Angeles, effective in December 2000.

Legal aid groups in Arizona, Colorado, Ohio, Pennsylvania, Indiana, Nebraska, Mississippi and several other states are also either merging, or seriously considering it, said Kim Dixon, spokeswoman for Legal Services Corp.

“It’s not about saving money per se. It’s about efficiency in creating delivery systems that will provide better services,” Dixon said.

Only Recourse for the Needy

For the poor, who have the legal right to an attorney in criminal matters, legal aid organizations are often the only place they can turn if they have civil legal problems. Legal aid provides a range of free services such as aiding abused women in securing restraining orders, resolving landlord-tenant disputes, assisting with consumer fraud complaints and helping the needy obtain government benefits.

To qualify for aid funded by Legal Services Corp., a person cannot earn more than 125% of the federal poverty level. That equals an annual income of no more than $10,300 for an individual or $20,875 for a family of four.

Policy changes in Washington can have a profound impact on the level of services rendered. Studies in the 1980s and early 1990s showed that more than 80% of the legal needs of the nation’s poor were not being met, according to a 1996 report by the State Bar of California. In 1996, a year in which Congress slashed agency funding by 30%, numerous recipient groups had to lay off employees, which meant even more low-income people were not being served.

“Nobody’s getting hurt but the clients,” said Lucinda Horne, president of California Client Council, which represents legal aid client interests.

Although the ultimate effects of mergers are not yet known, the advantages and disadvantages were felt recently in Northern California, when tiny Redwood Legal Assistance, which served four Northern California counties, was forced to merge with Legal Services of Northern California, which handled an additional 19 counties.

The merger is expected to produce many long-term benefits, said Jake J. Smith, former director of Redwood and now managing attorney for the regional office. Through the Northern California group, Redwood received technology upgrades. The staff has received training for a better case management system, he said, and there is now a richer pool of co-workers for sharing expertise.

At the same time, the merger has been painful. Legal Services Corp. did not provide additional money to cover merger costs. Because the larger, Sacramento-based group was unionized, it had to lay off Redwood employees it could not bring in at its higher urban salary rates.

Redwood, which once had six attorneys, now has four. And only one of its two paralegals remains, Smith said. Outreach offices in Ft. Bragg and Lake County had to be closed. At least one of those offices might have been eliminated anyway because of Redwood’s dwindling resources, Smith said, but the merger directly caused the other’s demise.

Legal Services of Northern California spent money and a lot of staff time to bring Redwood into its fold, which meant that resources had to be shifted away from the other communities it served, said Roberta Ranstrom, the executive director of the Northern California agency at the time of the merger. Months after the merger, Redwood’s contributions to Northern California’s budget were still not covering the administrative overhead it required. “I wish [the costs] didn’t have to come out of our hide,” Ranstrom said.

The Legal Services Corp.’s approach should have been less “heavy-handed,” Smith said. “There could have and should have been more financial support.”

Ahn Tu, the agency’s program counsel for a number of western states including California, said, “In the short run there may be some costs, but maybe a year from now they can hire more staff.”

Legal Services Corp.’s urge to merge is motivated by good intentions, even many critics of the mergers say. Under siege by congressional conservatives who have cut, or threatened to slash, its funding for many years, the agency has been trying to stretch its dollars further.

For 1999, Congress increased the agency’s funding by 6%, to $300 million--the same amount it received in 1980. The agency’s budget is still 25% less than its 1995 funding of $400 million.

Critical Audit by Federal Agency

Recently, the agency and its budget came under more fire because of reports that legal aid groups had been over-reporting their caseload. A General Accounting Office audit of five large legal aid programs, including the Legal Aid Foundation of Los Angeles, revealed that they overstated their number of cases by about 33%. The agency reported serving close to 2 million clients in 1997.

The problems were due to an older, faulty reporting system, said Legal Services spokeswoman Dixon. “In no instance was there an intentional over-reporting of cases.”

The GAO audit, based on 1997 data, also did not capture results from a new case reporting system that the agency rolled out late last year, she added. “We’re confident that these fixes we put into the system are taking effect right now.”

Still, in such tenuous political times, legal aid providers are eager to use, or at least appear to use, their scarce resources wisely.

“We need to reach more people more effectively,” said Alan Houseman, director of the Center for Law and Social Policy, who works with the agency and advocates greater consolidation of services.

Reducing administrative overhead, for example, can lead to savings that could allow groups to expand their client services. Having an integrated intake system such as a single regional hotline number, for example, can reduce client confusion and allow them easier access to services.

“Efficiency is really the key word,” Dixon said. “We’re interested in creating comprehensive delivery programs.”