STATEMENT HIGHLIGHTED

Mr. EHRLICH. Mr. Chairman, until last fall, I was the dean at the Stanford Law School. In that role, one of my primary obligations was to try to look ahead over the next years to see what the major needs for legal services were and how to help train young men and women to meet those needs.

In that role, I became increasingly concerned about the reality that for most of the poor in this country there is no access to justice, there is no opportunity to utilize the legal system because there are no legal services programs available to them.

When I first graduated from law school, I was a law clerk for Judge Learned Hand. It was he who coined that commandment, "Thou shalt not ration justice."

I became increasingly concerned that we were doing just that in this country, that we were rationing justice. So when I had the good fortune to be asked by the Board to join the Corporation as its president, I saw an opportunity to help remedy that problem. I was particularly impressed by the potential of the Corporation because it is exclusively concerned with access to justice for the poor. It is not part of any other governmental program. It is not part of the executive branch. It is not part of the war against poverty. Its sole and exclusive focus is access to justice for the poor.

STANDARDS FOR PARTICIPATION IN LEGAL SERVICES PROGRAM

Senator PASTORE. What qualifies you for this kind of service?
Mr. EHRLICH. In my own background?

Senator PASTORE. No, no, not you. When I say that, I mean the poor.

Mr. EHRLICH. We do have standards we follow. A client's income must be below the poverty line. As a rough measure, that is about $2,500 for an individual, or $5,000 for a family of four. It doesn't sound like very much, and it isn't, of course.

Senator PASTORE. Does this work and operate only in cases of civil suits?

Mr. EHRLICH. Yes, sir, we are exclusively concerned with civil suits. Mr. CRAMTON. Civil suits that are not fee generating, because private attorneys can handle those.

Senator PASTORE. That are not what?

Mr. CRAMTON. That are not fee generating, like a personal injury contingent fee case, in which the private bar is available.

Senator PASTORE. I understand.

In other words, it applies only in the case of a civil case where the person really wants justice done.

Mr. CRAMTON. That is right.

Senator PASTORE. There is no remuneration or recovery of damages?
Mr. EHRLICH. Or the person cannot obtain a private lawyer.
Senator PASTORE. Oh, cannot obtain a private lawyer.

Mr. CRAMTON. Where the damage recovery is so small, $50 or $75, so that no private attorney would take the case.

Senator PASTORE. Where are you based?

Mr. EHRLICH. The headquarters of the Corporation is in Washington. Senator PASTORE. How much personnel do you have?

Mr. EHRLICH. We now have on the Corporation staff a total complement of 68 people. We have a total in Washington of 47, and in the field we have now 10 regional offices with an additional staff of 21.

Senator PASTORE. Why is it necessary to have so many concentrated in Washington? What do they do?

Mr. EHRLICH. The obligations of the Corporation under the act are carefully to review and evaluate and consider every single grant and contract we make, to audit them, and to audit them carefully.

Senator PASTORE. To whom do you make the contract or the grant-to the States?

Mr. EHRLICH. No; we make grants and contracts in almost all cases directly to the local programs. Some of those programs are on a statewide basis, such as in Rhode Island Legal Services, Inc. But in each case, the grants go directly to those who provide the services to the poor.

EFFECT OF A $110 MILLION PROGRAM LEVEL

Senator PASTORE. If the $110 million that the House gave you sticks, what happens to it?

Mr. EHRLICH. The reality, if the $110 million figure holds, is that we will not be able to do what the statute mandates us to doto help the poor in those parts of the country without any legal services programs. In the map directly behind me-which is also reproduced at the end of my prepared statement-you can see how much of the country is not served at all.

Senator PASTORE. Will this come out of the grants or will it come out of personnel, or both?

Mr. EHRLICH. It effectively would come out of both, but the people who would suffer would be those who are poor, who do not now have legal services and would not be able to obtain them, because we would not be able to establish new programs at the funding level the House provided.

We would be able to continue existing programs. Those are programs in the areas shaded on the map directly behind me. We would be able in some cases to strengthen those programs.

But for those 12 million in this country who are below subsistence level and who are totally without access to legal services because there is no program available to them, for those people there would continue to be no service.

EFFECT OF RESTORATION OF $20 MILLION

Senator PASTORE. With the restoration of the $20 million, where does that put you?

Mr. EHRLICH. If we receive an additional $20 million, which would bring the total to $130 million, we could bring legal services within the reach of an additional 2.3 million people.

We could add some 580 attorneys to serve those people. Each and every year our estimate is that they would handle more than a quarter of a million problems of poor people-real problems that they face and that today they know no answer to.

Mr. CRAMTON. Could I add to that a perspective of the Board of Directors, sir?

A very small portion of the total budget of the Legal Services Corporation is for the Corporation's personnel. Almost all of its funds are to these nonprofit corporations that deliver legal services to the poor throughout the country. But there is a very large part of the country that is totally unserved.

We want to extend service. We think the statute requires us to extend services to some of the millions of the poor that are now uncovered.

You know as well as I that we cannot start a grant program that holds out the potential of local nonprofit corporations and other groups getting money in communities throughout the country with a few million dollars.

That would just create expectations that then we would deny. We would get enormous reams of paper and applications and have to deny them all.

We think that we have to have $20 or $25 million to have a kind of minimum amount to work with in terms of a meaningful extension of the program to new parts of the country. The amount that the House would give us will allow us to expand a little bit around the periphery of existing programs, to improve their quality somewhat, but it wouldn't allow us to reach out to the unserved areas. Isn't that the gist of it?

Mr. EHRLICH. Yes.

Senator PASTORE. Thank you very much. Any other questions?

PREPARED STATEMENT

Senator HRUSKA. Mr. Chairman, I regret that because of an unavoidable conflict with my Judiciary Committee responsibilities I had to miss the earlier portion of this hearing. I request that remarks which I have prepared on the subject of the Legal Services Corporation be placed in the hearing record.

Seantor PASTORE. It is so ordered. [The statement follows:]

STATEMENT BY SENATOR ROMAN L. HRUSKA FOR THE SENATE, Justice, Commerce, THE JUDICIARY SUBCOMMITTtee Hearing oN THE LEGAL SERVICES CORPORATION APPROPRIATION FOR FISCAL YEAR 1977

I recall that last July, Dean Cramton, then the newly installed Chairman of the Corporation's Board of Directors, carried the full burden of representing the request for Fiscal 1976 and the transition quarter.

Today, I understand that President Thomas Ehrlich and other Corporation officers are accompanying Deam Cramton. Their presence signifies that an organization is in place and that this second full year appropriation request rests on a year of solid operating experience with careful Board oversight.

For many years I had expressed serious reservations about practices supported by the former Office of Economic Opportunity Legal Services program. The new Legal Services Corporation Act resolved some of my concerns, especially those dealing with class action suits. In other areas I will have to await Board and Corporation interpretations of the Act. So far, Mr. Chairman, I believe that both have proceeded carefully to balance the conflicting views which have surrounded this program since its inception in 1967 and have carried over to applying the new legislation.

The need to provide equal access to the system of justice has never been an issue. Indeed, it is an imperative. The serious issues have centered on the use of federal legal assistance funds-provided by the taxpayers-to support legal actions against other taxpayers or public officials who represent their interests. Sharp criticisms have been expressed about past practices, which in the judgment of many responsible persons exceeded reasonable constructions of the Code of Professional Responsibility and the Canon of Ethics in protecting the best interests of clients.

I do not question the legitimacy of strong advocacy of social causes, using all resources at the disposal of the legal profession. The issue has been, and remains, whether it is proper to use public funds to finance that advocacy.

The sensitivity displayed by the Board and Corporation officers to those sections of the Act intended to prevent or curtail objectionable practices has been reassuring to this Senator. Accordingly, I am prepared to consider carefully the appeal for additional funds above the Fiscal 1976 level and the House allowance. As I understand the situation, Mr. Chairman, we are being asked to decide whether the Corporation should receive more than token resources for expansion in Fiscal 1977.

As Mr. Ehrlich has stressed to me on other occasions, we must strive toward a time when we are not forced to ration justice. As Members of the Appropriations Committee, it is our burden not only to ration justice in terms of programs for legal assistance, but also, unfortunately, to ration access to health services, to educational opportunities, to employment and to many other services important to each citizen. The needs far outweigh our resources. As so often is the case, we must allocate carefully the small margin of new resources where they are likely to produce the best results in meeting the most pressing needs.

The performance of the Legal Services Corporation and its Board of Directors warrant careful consideration of this appeal.

Senator HRUSKA. The Corporation has submitted to the Congress a budget request for a substantial increase in funds, to begin a process which will get you to the point of providing minimum legal services to the poor in all areas of the country-at a level equivalent to two lawyers for every 10,000 Poor people. Can you explain to the subcommittee the role which the Board of Directors played in developing this budget request?

Mr. CRAMTON. The Board of Directors has taken a strong interest in all policy questions involving the Legal Services Corporation, and especially in the development of the budget requests submitted to Congress. There is no more vital decision for the Corporation than the formulation of its request for public funds. The Board's Committee on Appropriations-consisting of Glenn Stophel as Chairman, Senator Marlow Cook, and Melville Broughton-carefully reviewed with members of the staff the funding needs of the legal services programs. Public meetings were held at which interested persons presented information and views. The committee, with the assistance of its staff, formulated a budget proposal for review by the Board. The Board of Directors subsequently gave extensive consideration to the budget proposal and approved it unanimously. The Board enthusiastically supports the Corporation's budget request.

Senator HRUSKA. Is the Board persuaded of the Corporation's capacity to effectively utilize $140.3 million?

Mr. CRAMTON. There is no question of the capacity of the Corporation to expand the legal services program at the rate of the 1977 appropriation request. A substantial portion of the increased funds requested is for strengthening existing legal services programs. Those programs, which struggled through a 5-year period of inflation without any increased funding, urgently need and will quickly absorb the additional $13.4 million in our budget request. In addition, the Corporation must respond to the steadily growing requests for funds to provide legal services for the poor in areas that now have none at all. An amount is needed for this purpose that is sufficient to justify a nationwide grant application process. It would be unwise to raise expectations of funding and to invite thousands of applications, if the hopes were only to be dashed by insufficient funds. It would be equally unwise to create programs manned with so few lawyers and such

inadequate funds that they could not deliver quality legal services. The Corporation has already established procedures to give careful consideration to all applications and to insure that the funds Congress does make available will benefit as many citizens as effectively as possible.

QUALITY OF LEGAL SERVICES

Senator HRUSKA. Dean Cramton, when you appeared before this subcommittee last year, you had only just been appointed to the Board of Directors of the Corporation. I assume that since then you have had an opportunity to look much more closely at what local legal services programs are doing around the country. Would you share with us your impressions of their work and the quality of legal services they are providing?

Mr. CRAMTON. A year ago, when the Corporation was getting started, the local programs suffered from the malaise of a long period of indifference by many and hostility by some. They were doing the best they could to deliver quality legal services under adverse conditions. They viewed the Corporation with hope but with some suspicion. Today, with the Corporation providing firm leadership and with the hope of more adequate funding, the energies of the local legal services programs are being put to work even more effectively. There is a common striving toward the goal of high quality legal services for all of the poor. There is great effort to work with local communities and with the private bar to reach that objective. A promising era lies ahead in which the imagination and creativity of the legal services program can result in more efficient and better forms of service.

IMPACT OF PRESIDENT'S BUDGET

Senator HUDDleston. Would you give us some indication of the impact, in terms of numbers of programs and numbers of persons served, of (a) the administration's budget proposal of $80 million, (b) the House figure of $110 million and (c) your appeal figure of $130 million?

Mr. EHRLICH. First, regarding the administration proposal of $80 million, I emphasize at the outset the special status of the Legal Services Corporation as it relates to the Congress. The Legal Services Corporation Act established a private Corporation, not a part of the executive branch, but accountable directly to the Congress. The act limits the role of the administration-specifically the Office of Management and Budget-to "review and comment upon" the Corporation's budget proposals when they are transmitted to the Congress. Nevertheless, the President's 1977 budget did include a recommendation that the Corporation's appropriation be reduced from the fiscal year 1976 figure of $88 million, to $80 million. The administration offered no justification for this recommended decrease.

From the standpoint of the Nation's poor, any reduction in the present level of funding for the Corporation would be a disaster. Until the 1976 appropriation was approved by the Congress, legal services programs had labored since 1971 at a fixed annual appropriation of $71.5 million-this during a period of substantial inflation and rising unemployment that combined to produce sharply higher costs and increasing numbers of eligible clients.