Sept. 24, 2024 – Most lawyers would probably agree that adequately funding legal aid organizations to represent low-income individuals and families is positive for Wisconsinites and the court system. The real question is, who should pay for it?

Since 2005, when the Wisconsin Supreme Court established the public interest legal services fund (PILSF) under SCR Chapter 13, lawyers have paid $50 annually to help fund organizations such as Legal Action of Wisconsin, Judicare Legal Aid, the Legal Aid Society of Milwaukee, Disability Rights of Wisconsin, ABC for Health, and Centro Legal.

Funding sources, such as PILSF, allow these organizations to represent and serve low-income individuals and families pro bono or at nominal fees. The funds go to the Wisconsin Trust Account Foundation (WisTAF), which disburses the funds to providers.

Wisconsin-licensed lawyers annually pay the $50 PILSF (or WisTAF) fee along with other court assessments to help fund the BBE ($11), the Office of Lawyer Regulation ($155), and the Wisconsin Lawyers’ Fund for Client Protection ($25).

State Bar of Wisconsin members sometimes mistakenly believe these $241 in court assessments are imposed by the State Bar. They are not.

By Supreme Court rule, the court’s assessments appear on the annual dues statement from the State Bar, which collects the fees on behalf of the court.

But they are separate from State Bar membership dues, currently $296 for active members, and $148 for “senior active” and “inactive” members.

The court (5-2) created PILSF in 2005 “to aid the courts in carrying on and improving the administration of justice and to facilitate the improved delivery of legal services to persons of limited means in non-criminal matters,” under SCR 13.01.

The State Bar of Wisconsin opposed the $50 fee the court adopted in 2005, for various reasons. But the State Bar committed to a comprehensive report on the access to justice gap that could demonstrate the importance of state funding for civil legal aid.

Two decades later, six civil legal aid providers, as well as the Wisconsin Access to Justice Commission and the Wisconsin Equal Justice Fund, say the annual $50 fee is not nearly enough to cover the enormous need for civil legal aid in Wisconsin.

They say civil legal aid is one of the only safeguards for basic human needs, such as personal safety (domestic abuse), housing (evictions), food (government benefits), and child and health care (Medicaid) for Wisconsin’s poorest individuals and families.

Petition Pending

Their petition (24-05), filed in July, asks the Supreme Court to raise the annual fee that lawyers pay from $50 to $75, beginning July 1, 2025, and to $100 annually, beginning July 1, 2027. They note that the fee has not been increased in almost two decades.

Adjusted for inflation, they say, that same $50 paid in 2005 is now worth only $31 in 2024. At the same time, the petitioners cite numerous data points to show that the need for civil legal services among the state’s most vulnerable populations is only increasing.

Petitioners recently asked the State Bar of Wisconsin’s 53-member Board of Governors, the organization’s policy-making body, to support the petition, to put its weight behind it.

At its recent meeting, the board heard an initial presentation on this petition request and discussed the petition at length, but took no action.

The State Bar board is likely to vote at its December meeting, either opposing the petition, supporting it, or voting to take no position.

While many board members voiced ardent support for the petition, others asked whether lawyers should continue to bear the increased financial burden – akin to a tax on lawyers – while the state provides no general-purpose funding for civil legal aid.

The state currently provides a pass-through of federal Temporary Assistance to Needy Families (TANF) funding at $500,000 per year for domestic abuse victims, only about half the amount of funds currently generated through the PILSF assessment.

The Need

About 10.5% of Wisconsinites (619,000) live in poverty, according to census data from 2022. “[P]eople experiencing poverty have the greatest need for legal representation in family law, domestic violence, and elder abuse cases, evictions and foreclosure actions, and termination of government benefits,” the petitioners noted.

In Wisconsin, from 2022 to 2023, restraining order dispositions were up 14%, to 14,904, and eviction cases were up 10%, to 27,716, based on court system statistics.

Petitioners cited a report, concluding there is roughly one attorney for every 4,300 Wisconsinites with incomes below 125% of the federal poverty level ($18,825 for a single person, $39,000 for a family of four). Another report concluded that 75% of low-income households in the Midwest had one or more civil legal problems in 2021.

One petitioner, Legal Action of Wisconsin, which serves the state’s southern 39 counties, received more than 26,000 requests for legal help annually from 2015 to 2023, and requests for legal services reached a new high in 2023.

“Legal Action reports that it must decline service to eligible people seeking help about 75% of the time,” according to the petitioners’ supporting memo.

Judicare Legal Aid, which serves Wisconsin’s northern 33 counties, turned away 64% of the more than 5,000 applications it received in 2023.

Meanwhile, a recent study notes the wide-ranging beneficial effects of civil legal aid services, including an 8.4-to-1 return on money received by the programs. It concluded that 12 legal aid providers “generated a combined economic impact of $176 million.”

Funding Civil Legal Aid

The Legal Services Corporation (LSC), a federally funded nonprofit established in 1974, funds civil legal aid providers nationwide with a $560 million budget.

Legal Action of Wisconsin and Judicare Legal Aid, the only two Wisconsin providers that receive LSC funding, share $6.5 million per year in basic field grants from LSC.

The Wisconsin Supreme Court created the interest on lawyer trust accounts (IOLTA) program in 1986. Trust account interest goes to WisTAF for distribution to civil legal aid providers, but interest income fluctuates year to year, depending on the economy.

WisTAF provides about $4 million in annual funding from numerous sources to 26 organizations. About $900,000 comes directly from the PILSF fee, so doubling the per member fee to $100 in 2027 would raise, roughly, an additional $900,000 per year.

“With PILSF funding, 17 of WisTAF’s grantees were able to serve over 3,000 low-income clients in 2023,” petitioners noted.

The Well Is Drying Up

Federal LSC funding has remained flat, increasing from $300 million in 1980 to $489 million in 2022. “Adjusted for inflation, the 1980 appropriation of $300 million would be more than $900 million in 2022 dollars,” petitioners noted.

The Wisconsin Legislature provided $2.5 million for civil legal aid from 2008 to 2010, but the funding was eliminated in 2011 and has never been reinstated. Gov. Evers allocated federal pandemic relief of $8 million for civil legal aid, but that was a one-time grant.

“The other sources of funding that are available to legal aid providers in the state are mostly temporary, variable, or otherwise uncertain,” petitioners note.

Petitioners noted that several significant funding sources, accounting for nearly $1 million per year, have expired or will expire, such as pandemic relief streams and foreclosure prevention funding under a government settlement with Bank of America.

And civil legal aid funding under the federal Victims of Crime Act (VOCA) was reduced by 70% in the past year, reportedly from $44.5 million to $13 million. VOCA is funded by penalties from federal criminal prosecutions, but the funding is being diverted to other uses and new caps per grantee significantly reduce funding to legal aid providers.

The petitioners say “VOCA has long supported a variety of programs assisting victims of crime, including not only shelters and suppliers of food and other necessities, but also legal services to victims of domestic abuse violence, trafficking, and other crimes.”

“This funding loss has been devastating and has already led to staff layoffs at Legal Action of Wisconsin and curtailment of some programs for crime victims.”

Other funding, from pro hac vice admission fees, portions of unclaimed class action settlements and cy pres awards, “have accounted for only a small fraction of WisTAF revenues,” the petitioners’ supporting memo notes.

“[T]he combination of high need for civil legal aid and reduced funding for those services has created a crisis for low-income Wisconsinites facing life-altering legal problems,” the supporting memo notes.

The petitioners say increased funding “will not only help low-income litigants, but it will also improve the functioning and integrity of the legal system and enhance respect for the rule of law – a respect that depends on faith in the fairness of the courts.”

“Although lawyers cannot be expected to fund civil legal aid alone, their special role in the legal system – and the benefits they derive from investing in its healthy functioning – justify maintaining a steady level of their contribution towards helping to address the current crisis and enhancing one of the few stable sources of funding available to legal aid programs in the state,” the petitioners note in their supporting memo.

State Bar Board Discussion

At its first meeting of the fiscal year Sept. 20, more than 20 members of the State Bar’s 53-member Board of Governors voiced an opinion on the petitioners’ proposal. Some of them work for the petitioners and told real-life stories of their clients’ struggles.

Former Milwaukee County Circuit Court Judge Richard Sankovitz, who is on the board of the Wisconsin Access to Justice Commission, presented the proposed petition. He asked for the State Bar’s support before the board’s discussion.

“Consider the returns that we as lawyers receive, in our work as lawyers in our communities, if we help other lawyers who help people who can’t afford lawyers,” said Sankovitz, also noting the benefits of having represented litigants on both sides.

“Think of all the times you had to deal with somebody who doesn’t have the benefit of counsel. Think of how protracted your negotiations and litigation are, and how smoothly it works if they’ve got a lawyer. Maybe there’s not even a dispute in the first place.”

“If you think of it as, ‘here’s a tangible step we can take to demonstrate that civil legal aid deserves the support of the public,’ then you give us something to go to the people who can really make the difference: the public and the Legislature.”

Sankovitz said an increase in the assessment and all the pro bono hours that lawyers provide still won’t fix the justice gap, but it shows the legislature that lawyers believe strongly in funding civil legal aid and they “put their money where the mouths are.”

Dist. 16 Gov. William Harris, who works for Judicare Legal Aid in Wausau, told the gut-wrenching story of a client trying to escape an abusive husband who was physically abusing her and her three young children.

“She came to us seeking protection and a divorce,” said Harris, who explained that in the course of the representation, her house burned down and they lost everything. “It was my job to reassure her that I was going to be there for her.”

Judicare Legal Aid’s wraparound services helped her find shelter and emergency aid. Harris represented her through the divorce. Now her kids are thriving in school, and she has her own home. “She said it’s because of the services we provided,” Harris said.

“I want to make sure in this discussion that we don’t forget about the actual people, the human toll. We are talking about lives, people whose lives are threatened and who our services can save,” Harris said. “This funding can save lives.”

Harris noted that Minnesota lawyers pay $75 for legal aid, and Illinois lawyers pay $95. “We are asking to keep up. It’s a shame that we are so behind other states,” he said. “Victims suffer, and the people who want to help them can’t do their jobs.”

Other board members echoed Harris’s sentiments, calling on lawyers to be leaders on access to justice issues like this. Dist. 9 Gov. Sam Wayne suggested the PILSF fee should increase incrementally every year, in line with cost-of-living adjustments.

Dist. 2 Gov. Basil Buchko, chair of WisTAF’s Grants and Evaluations Committee, voiced support for the petition. He said the committee received $7 million in requests last year, but only had $1.9 million to disburse. “The need is an ocean, and we are scooping payments from a kiddie pool,” said Buchko. “The need is incredible.”

Questions and Concerns

While many voiced support for the petition, some had questions and concerns. One concern, first raised 20 years ago when the fee was adopted, was the fee’s legality.

Dist. 2 Gov. Lisa Lawless was a key voice in the 2004-05 discussions and reiterated her concerns again during the board’s Sept. 20 meeting.

“I don’t think there’s doubt in anyone’s mind that funding legal services for the indigent is vital, important for our state, the court system, lawyers and their clients,” said Lawless.

But she questioned the court’s authority to impose the PILSF fee to begin with. While the court has authority to impose fees that help regulate the legal profession, Lawless said the court’s authority does not extend to a fee designed to benefit the public.

“Is it a tax on lawyers for a public purpose?” she asked, concluding that the fee is a tax. “Under the Wisconsin Constitution, only the legislature can impose taxes. The Wisconsin Supreme Court doesn’t have the power to impose taxes.”

“The constitutionality of this assessment has never been challenged in court and has never been decided, in a court proceeding, whether it is constitutional or not.”

Lawless said she is a member of the Georgia and California bars, and they include a line item on dues statements that allows members to contribute to a legal aid fund, in whatever amount they choose. But it is not required. She also said that Illinois and Minnesota do impose fees for civil legal aid, but they are both voluntary bars.

Dist. 4 Gov. Julie Stodolka also raised concerns.

“What we haven’t discussed is why we should impose this increase on the people we represent,” said Stodolka, referring to State Bar members.

“We know a lot of them will support it.” Others, she said, will be aggravated by it, viewing it as a tax to practice law. “They are angry and they’ve been angry for a long time. We are also in an inflationary period. We ought to be careful not to overstep.”

Tiffany Woelfel, the board’s Young Lawyer Division (YLD) representative, said she’s heard from constituents on both sides. Some oppose and some support the proposal.

Woelfel said she wants to hear from more YLD members before taking a stance and encouraged others to get feedback from their constituents before a vote in December.

Do you have an opinion on this issue? Comment to the article or s​end your comments to govrelations@wisbar.org.