Fact Sheet | Why We Need to Fix the Legal Services Restrictions

Expand Legal Help for the Poor by Eliminating Draconian and Outdated Restrictions

In every appropriations cycle since 1996, the Commerce, Justice, and Science Subcommittee’s appropriations bill has included an outdated rider that restricts the activities of legal services organizations that receive funds from the Legal Services Corporation (“LSC”).  The rider restricts both the tools legal services providers can use when representing their clients and the groups of clients who can be helped.  Most egregiously, the rider extends the restrictions to all the activities of a recipient non-profit organization, even when those activities are funded by state, local, private or other non-LSC sources.

 The ill-conceived restrictions deny low-income families across the country equal access to the courts and much needed legal services:

• Mothers in prison who are trying to maintain visitation and custody of their children go without representation and efforts to help prisoners reenter society are needlessly postponed;
• Communities are hamstrung in their ability to combat predatory lending practices because legal aid clients cannot participate in class actions;
• Legislative and administrative reform efforts suffer without the input from those most knowledgeable about issues critical to low-income clients.

The Restriction on State, Local, Private and Other Non-LSC Funds Interferes With Efforts of Other Donors to Contribute to Legal Aid

Worst of all, the appropriations rider prevents LSC-recipient programs from using any non-LSC dollars, including individual donations, foundation grants, state and local government funds and other federal money, for any service or activity that the program is barred from doing with LSC dollars.  Under LSC’s “program integrity regulation,” 45 CFR § 1610, if a legal services program wishes to spend private funds on these restricted services or activities, it must set up a separate office with separate staff and thereby duplicate overhead, personnel and administrative costs. 

Nationally, the LSC restrictions tie up over $526 million in non-LSC funding annually, or 60% of LSC-funded organizations’ total funds, even as some affected programs receive only about a third of their funds from LSC.

The extension of the restrictions to non-LSC funds helps no one:

• The restriction on non-federal funds interferes with choices of state, local and private charitable donors about how to spend their money;
• When justice planners have to set up entirely separate organizations and law offices to do the work that LSC-funded programs cannot do, state, local, and private money is wasted in duplicated overhead, personnel and administrative costs; and
• Legal aid programs are unfairly burdened and are treated much more stringently than other government-funded entities, including faith-based organizations and TARP recipients.  

A No-Cost Fix to the Rider Would Expand Access to Justice at a Time of Growing Need and Declining State Funding 

The provision of legal services for the poor can be made more efficient and effective by removing the restrictions in a no-cost change in the language of the Commerce, Justice, and Science appropriations rider. Now more than ever — as legal needs are rising due to the economic crisis and as revenue sources are becoming more scarce — it is time to fix the federal legal services restrictions and remove a significant barrier to justice.

Specifically, the LSC rider should be amended to:

1.  Remove the application of the LSC restrictions to state, local, private and other non-LSC funds that legal aid organizations receive.    

2.  Remove the restriction on class actions, which interferes with the ability of legal services attorneys to protect their clients’ rights