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IOLA funds still impacted by slow economy

Low-interest rates and lingering effects of the economic downturn continue to impact the Interest on Lawyer Account funding for civil legal services programs in New York.

Awards for 2012 were fairly consistent with those of the previous year, according to the 2012 annual report released last week.

“We suspect that we’re still going to see the demand for legal services is going to stay very high,” said attorney Christopher B. O’Malley, executive director of the Interest on Lawyer Account Fund of the State of New York.

As an example, he said the need for housing services has increased significantly since 2007, particularly with foreclosures, which he said are up 600 percent.

Housing, at 32 percent, represents the largest category of direct assistance with 166,010 people receiving help with unlawful evictions, denials of access to public or government-subsidized housing and illegal foreclosure issues from April 1, 2001, to March 31, 2012.

Since the 1980s, when the fund was established, nonprofit organizations have been awarded more than $333 million from the fund, which draws off the interest of money pooled by attorneys statewide while being held on a short-term basis for clients.

The amount the fund has awarded each year, according to the report, has fluctuated, sometimes considerably, because its revenue is largely driven by prevailing bank interest rates. O’Malley said funds are distributed on a per-capita basis in terms of the overall poverty population with more funding going to the more impoverished areas.

O’Malley said the fund is “extremely grateful” for the “critical” support provided by the state Office of Court Administration, specifically Chief Judge Jonathan Lippman, in helping maintain IOLA support levels as interest rates remain low.

Judge Lippman has included $15 million in the judiciary budget for the IOLA fund in each of the last four years when O’Malley said the fund was only generating about $7 million or $8 million on its own.

Grantees last year provided direct legal assistance to more than 526,700 clients with statewide staff totaling 1,128 attorneys and 489 paralegals, compared to helping 507,000 clients during 2010-11 with 1,127 attorneys and 489 paralegals.

Working through grantees’ programs, pro bono attorneys from the private bar and corporate legal departments closed 20,650 cases in 2011-12, up 150 from the prior fiscal year. The attorneys volunteered 475,724 hours of time, valued at $118.9 million, based on a $250 billable hour.

Including back awards, the dollar benefits achieved for clients totaled more than $433.2 million in Social Security  and other public benefits, unemployment compensation, child support, spousal maintenance and affirmative judgments, according to the report.

IOLA grantees obtained more than $224 million in support in 2011-12, including $21.7 million from the IOLA fund. Their largest source of support — $41.7 million — came from the state while cities and counties contributed $40.7 million.

The remaining funds came from foundations that contributed $30.4 million; Legal Services Corp., $25.1 million; fundraising, $22.6 million; other federal funds, $14.7 million; the private bar, $12.9 million; and all other sources, $14.2 million.

Behind the figures are people, such as a 76-year-old Western New York woman whose rural home was falling apart because of shoddy work by an unsupervised contractor. Legal Services for the Elderly, Disabled or Disadvantaged of Western New York ultimately obtained a settlement for her to cover the costs of repairs by a new contractor, as well as the additional costs in coping with the inconvenience.

Legal Assistance of Western New York and Onondaga County Bar Association Volunteer Lawyers Project are sited for pro se service with the former having written materials to assist unrepresented low-income people manage legal problems in small claims court, at fair hearings on public benefits and with a broad variety of landlord-tenant matters.

Its website, (, which had more than 10 million hits from more than 300,000 unique visitors in 2011-12, boasts 89 self-help pages and community legal education articles and videos.

The Onondaga County Bar Association Volunteer Lawyers Project, collaborating with Legal Services of Central New York and Syracuse University, ran a pro se divorce clinic that served approximately 250 people last year.

O’Malley said this year will be very similar to what has been happening. He said the federal funds target rate has not moved so interest rates are expected to stay the same at least through 2014, maybe into 2015.

“Our income projections will remain essentially the same,” he said. “Until the interest rate changes, we’re not going to be generating nearly as much income as we were.”

The report is available on the IOLA fund website at