Maryland Bar Bulletin
Publications : Bar Bulletin : December 2007

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On December 10, the Maryland Legal Services Corporation (MLSC), the agency that oversees funding for the state’s network of non-profit legal services organizations that provide civil legal assistance to the poor, celebrated 25 years of serving Maryland’s needy population. What began as a legislative effort in 1982 to enhance funding for free legal services for the indigent has evolved into a comprehensive statewide network that has given legal assistance grants totaling $100+ million. In the last 25 years, MLSC has helped more than 1.4 million indigent Marylanders with civil legal services.

At the beginning, MLSC forged a partnership with Maryland’s Bar and Bench, legal community, legislators, government officials and state financial institutions, and this coalition has successfully increased funding for civil legal services for the needy. “MLSC and all of its partners should be proud of the tremendous strides we have made and the large number of people we have served,” declares Susan Erlichman, MLSC’s dedicated Executive Director. “We have targeted ways to serve the indigent and make civil legal services more available and more effective in all jurisdictions in the state.”

Across 25 years, MLSC has achieved many milestones. Perhaps its most significant may be found in the 1987 “Cardin Report”, which disclosed that more than one million of the state’s indigent did not have access to legal services. MLSC’s coalition immediately took action. Under its leadership, mandatory IOLTA, filing fee surcharge legislation and other measures were enacted to address this dire situation and increase access to justice for the poor in Maryland.

MSBA has been a “steadfast supporter of MLSC” since its inception in 1982, Erlichman exclaims. When the Legislature passed voluntary IOLTA, the Association launched a campaign to inform attorneys and encourage their participation. MSBA has backed IOLTA-friendly legislation and court rules to enhance revenue for IOLTA, partnered with MLSC to create an Honor Roll for financial institutions and generally supported MLSC’s ongoing quest to increase funding for civil legal services for the poor. Most recently, MSBA endorsed the IOLTA Comparability Rule which the Court of Appeals of Maryland passed on December 3 (see below). This Rule will elevate IOLTA rates in Maryland banks, and thus increase revenue for legal services in the state.

On December 10, MLSC celebrated this hallmark anniversary at its annual awards reception. MLSC Chairman F. Vernon Boozer and WYPR celebrity Marc Steiner were the hosts for the evening, welcoming more than 250 people to the Tremont Grand in Baltimore. In addition to its special legal services awards, MLSC paid tribute to 25 years of memories and milestones.

History

In 1981, federal funding cuts in civil legal services for the indigent inspired Maryland’s legal community to join forces and establish a statewide funding mechanism to financially support legal services for Maryland’s poor. The outcome was legislation before the 1982 Maryland General Assembly that created IOLTA (Interest on Lawyer Trust Accounts) and MLSC. IOLTA required state banks to pay interest on attorney escrow accounts for their clients. The legislation mandated that the interest compiled from these accounts be disbursed to fund legal services for the state’s indigent population.

To oversee the distribution of these funds, the Maryland General Assembly created MLSC and charged it with the responsibility of administering the funds and providing grants to civil legal services programs in the state. MLSC is statutorily directed to “receive and distribute funds to nonprofit grantees that provide legal assistance to eligible clients in non-criminal proceedings or matters.” Through its grants, this vital legal service organization “provides the most stable, economical and effective delivery of legal assistance and ensures that eligible clients in all areas of the state have access to such services.”

IOLTA is MLSC’s primary source to fund civil legal services for the poor. It was launched as a voluntary measure for Maryland lawyers and was supported by the state’s financial institutions. An extensive statewide Bar/Bench campaign complemented passage of this legislation and 1,000 lawyers opened IOLTA accounts in 41 participating Maryland banks. Initially, MLSC issued grants totaling $307,500 to four legal services providers through IOLTA revenue.

Funding sources expanded for MLSC in 1985, when the state’s unclaimed property fund appropriation furnished a steady flow of legal services income. To broaden its visibility and public recognition and enhance its support within Maryland’s legal community, MLSC also created an annual awards program, now in its 22nd year. In 1986, Robert J. Rhudy began his long, successful career as MLSC’s Executive Director, remaining in this position for 17 years.

One of the hallmarks of MLSC occurred in 1987, when Maryland U.S. Senator (then Speaker of the Maryland General Assembly House of Delegates) Benjamin L. Cardin conducted a comprehensive legal needs study disclosing that only 20 percent of the legal needs of Maryland’s poor were being met. This meant one million-plus low-income Marylanders did not have access to civil legal services. This MLSC study, dubbed the “Cardin Report”, changed the delivery of legal services to the poor in Maryland.

To address this dire situation, Cardin and his advisory group issued the Action Plan for Legal Services to Maryland’s Poor (Cardin Report), proposing 41 recommendations, including mandatory IOLTA and mandatory pro bono, as well as doubling the total resources for legal services to the poor. Mandatory IOLTA was supported by the Bar and was enacted by Legislature in 1989.

The Maryland State Bar Association (MSBA) did not support mandatory pro bono, so in 1989 MSBA President Herbert S. Garten launched an extensive state bar association volunteer pro bono attorney recruitment campaign in conjunction with Maryland’s Judiciary, and a large portion of the state’s lawyers volunteered. MSBA then created the People’s Pro Bono Action Center (now the Pro Bono Resource Center) to serve as the state’s pro bono clearinghouse, linking volunteer lawyers to pro bono providers with indigent clients in need of their services. MLSC continues to issue grants to the Pro Bono Resource Center today to help fund this legal service.

Despite these collective efforts, federal and state funding for legal services to the poor was tight and, when bank interest rates plummeted in 1998, IOLTA revenue followed suit. MLSC successfully sought legislative relief in the form of a filing fee surcharge, which boosted IOLTA income. Yet interest rates remained at rock bottom, so MSBA joined forces with MLSC to create the MSBA/MLSC IOLTA Honor Roll in 2002. The Honor Roll commended banks paying higher interest rates on attorney IOLTA accounts, prominently displaying their names to applaud their support of legal services.

Still, bank interest rates remained on a downward slide and additional revenue was needed. “Funding has been an ongoing crisis,” laments Erlichman. “Up until 2004, IOLTA was our primary funding source, but the nature of such a volatile revenue source is that it is contingent on the vagaries of the economy. So, we faced our most serious funding crisis that year.”

Once again, MLSC sought help from the Maryland General Assembly and attained a hike in filing fees to further enhance revenue. At the same time, it continued to recruit banks for the Honor Roll. By 2006, MLSC reported a 25 percent hike in IOLTA revenue. But, it is a constant battle to fund legal services in Maryland so its poor citizens have access to civil legal services.

MLSC Today

Today, MLSC’s budget totals $12.5 million, enabling its network of providers to serve more than 110,000 needy Marylanders every year. “That’s quite a milestone,” attests Erlichman. “We started as a relatively small, fledging organization with four grantees and $200,000 in funding and now fund 38 grantees with a total of $12.5 million budget.”

“I am proud of the way we have been able to find new resources and introduce new initiatives,” adds Erlichman. She attributes MLSC’s success to the “wonderful legal services community in Maryland. We have been so fortunate to have such a strong coalition of key supporters.’’

“MLSC’s job was to raise resources and develop a consensus-based plan of stakeholders to figure out how to most appropriately expand and improve civil legal aid in the state,” states Robert Rhudy, MLSC’s former Executive Director. “MLSC has done a good job of managing the development of a complex, diverse, high-quality legal aid system in this state. No other state has matched Maryland’s achievement in developing a civil legal aid system.”

MLSC’s successful journey across a quarter-century and the milestones it has achieved were applauded on December 10 at its annual awards reception. However, while MLSC has traveled far in 25 years, it still has further to go. “MSLC has the will, the working partnership and the experience,” asserts Rhudy, “and will continue to fulfill its important mission.” This is what MLSC celebrated on its 25th anniversary.

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Publications : Bar Bulletin: December  2007