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March 1, 2014
Foundation continues to struggle with the downturn in IOTA funds

By Megan E. Davis
Associate Editor

Among 23 of the world’s industrialized nations, the United States ranks 22nd in delivering civil justice, according to the World Justice Project’s Rule of Law Index 2012 report.

John Patterson “That’s shameful,” Florida Bar Foundation President John Patterson told the Bar’s Board of Governors at its January 31 meeting in Tallahassee. “We greatly lag behind our international peers in the dollars we use to fund programs for access to justice.”

Even in good financial times, Patterson said, it’s estimated that Florida and the nation serve only about 20 percent of the legal needs of the poor.

“If we all pause for a moment and just think about it, justice is accessible only for the wealthy who can afford it,” Patterson said. “What that does is leave most Americans’ needs in family law, housing, consumer affairs, and health care — things that profoundly affect their lives and can have a positive impact made by legal assistance — going unmet.”

Patterson juxtaposed that abysmal reality with another: The Foundation’s ability to fund legal aid programs to meet the needs of Florida’s poor is drying up.

He also expressed determination to weather the storm.

Since 1982, the Foundation has allocated $417.4 million to programs for legal assistance to the poor, $28 million for improvement in the administration of justice projects, and $12.2 million for law student assistance grants.

“The Foundation has been looked upon as a national leader and accomplished a lot, but we have some serious challenges,” he said.

Those funding challenges are tied directly to low bank interest rates on lawyers’ trust accounts, or IOTA, the Foundation’s largest funding source. Between 1989 and 2004, the Foundation’s annual revenues hovered around $10 to $13 million. After doubling to $22.7 million in 2005, IOTA funds ballooned to an all-time high of $72.6 million in 2007.

As the nation went into a recession and interest rates plummeted, so did IOTA revenues, tumbling down to between $5 and $6 million annually over the last four years.

Even while relying on reserves built up during the strong years, Patterson said the Foundation has been forced to cut staff and funding to its grantees, which in turn have reduced services. Those reserves are also rapidly diminishing, he said.

“Rates will not improve substantially in this fiscal year, and we don’t expect them to improve substantially next fiscal year,” Patterson said. “The legal needs of our most vulnerable citizens are going to go unmet, and funding for programs to improve the administration of justice are going to be cut.”

The Foundation already is no longer funding any law student assistance projects, he said.

“We say in our pledge, ‘one nation, under God, indivisible, with liberty and justice for all,’” Patterson said. “Right now, it’s liberty for all, but justice for some.”

After delivering that bleak picture, Patterson said the difficult times are only strengthening the Foundation’s resolve.

“Times are difficult and are not going to turn around any time soon, but we in the Foundation are really energized by the growing realization nationally, and in Florida, of how many opportunities we have to do better, and we know that we will,” he said.

After Patterson spoke, Bar President Eugene Pettis said the Executive Committee has spent time discussing the same issues, and while the Bar’s Vision 2016 commission is looking for long-term solutions to providing legal assistance for the poor, action in the interim is crucial.

“While no one has come to the table with the exact solution, I think it’s critical that we come together — this board and the Foundation — immediately,” Pettis said.

“We need to look at this intermediary period of time where the need is real and see if we can find some ways to work together.”

[Revised: 08-27-2014]