Supreme Court increases attorney registration fee to boost legal aid funding

Bethany Krajelis Jun. 6, 2012, 10:57am

Attorneys will now have to pay an additional $53 a year to practice law in Illinois.

The increase comes as a result of an amendment to Supreme Court Rule 756. The state high court this week announced the rule change, which also requires retired judges who want to remain active on the state's roll of attorneys to fork over the registration fee they previously were exempt from paying.

Under the amended rule that took effective Tuesday, the annual attorney registration fee jumped from $289 to $342. The court has earmarked the $53 hike for The Lawyers Trust Fund of Illinois (LTF), a nonprofit foundation that awards grants to some of the state's civil legal aid providers.

LTF, which administers the Interest on Lawyers Trust Account (IOLTA) program, uses the interest on funds that attorneys hold for clients while their cases are pending, and its cut of the annual attorney registration fee to give out these grants. The rule change will boost the amount it gets from the licensing fee from $42 to $95.

The Lawyers Trust Fund has been hit hard in recent years as the tough economy has forced banks to reduce the amount of interest they pay out on pooled trust funds. The court said in its press release that in 2008, LTF received about $17 million in interest from the trust accounts it administers, but expects to get only about $2.7 million this year.

"Since its inception, the Lawyers Trust Fund has been integral in providing access to our system of justice to those who can least afford it," Chief Justice Thomas L. Kilbride said in a statement. "It is a very important goal and even more so in these economic times. It demonstrates a clear commitment by the full Court to continue to encourage attorneys in Illinois to assume responsibility for those unable to afford legal services."

Ruth Ann Schmitt, executive director of LTF, said the court's decision to increase the registration fee will add about $3.5 million to the fund's annual revenues. She said that low interest rates, which are currently less than two-tenths of one percent, combined with state and federal cuts are threatening legal aid providers at a time when more people need services than ever.

"Before the Supreme Court's action, we were planning to reduce grants by 40 percent over the next three years beginning with a $1 million cut to grants in July," she said. "It's fortunate for all the citizens of Illinois that their Supreme Court recognizes the importance of access to the courts, especially for the growing numbers of those hardest hit in this difficult economy."

Lois J. Wood, executive director of the Land of Lincoln Legal Assistance Foundation, couldn't agree more. LTF grants, she said, make up about 23 percent of her group's annual budget. LTF is the foundation's second largest funder behind Legal Services Corp., a nonprofit corporation that awards grants to about 135 civil legal aid providers throughout the nation, including three in Illinois.

Although LTF has been able to keep its grants steady over the past few years thanks to having a strong reserve in place, Wood said she was preparing for a 15 percent cut in LTF's fiscal year 2013 budget, which begins July 1.

"Fifteen percent for us would have meant about $240,000," Wood said of her group, which provides legal services in 65 central and southern Illinois counties.

Wood said she was notified of the potential cut at about the same time Congress slashed funding for LSC, which resulted in a loss of about $400,000 for her group in the federal fiscal year 2012 that ends Sept. 30.

"We were looking at some serious staff cuts," she said, explaining that "$240,000 pays for several positions for us."

Some cuts still might be necessary, but Wood said that the increase in revenues that LTF will receive from the rule change will help the foundation's board craft its final budget this month.

"It was looking very bad for us, but the Supreme Court's decision to do this is just wonderful news," she said. "I am very grateful they did this."

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