Vol. 77, No. 11, November
Supreme Court Orders
The Wisconsin Supreme Court will hold a public hearing on Jan. 12,
the Wisconsin Trust Account Foundation petition to assess lawyers a
Wisconsin Trust Account Assessment
In the matter of the Petition of the Wisconsin Trust Account
Inc. for a Rule Assessing Members of the State Bar of Wisconsin for
Sum to Support Organizations that Provide Civil Legal Services to
of this State
On June 2, 2004, the Wisconsin Trust Account Foundation Inc. (WisTAF)
a petition proposing creation of a rule to establish an annual
each member of the State Bar of Wisconsin in the amount of fifty
to augment the insufficient funds received from Interest on Lawyers
(IOLTA) for the support of civil legal services for persons who cannot
IT IS ORDERED that a public hearing on the petition shall be held in
Supreme Court Room in the State Capitol, Madison, Wis., on Jan. 12,
IT IS FURTHER ORDERED that the court's conference in the matter
held promptly following the public hearing.
IT IS FURTHER ORDERED that notice of the hearing be given by a
of a copy of this order and of the petition in the official state
and in an official publication of the State Bar of Wisconsin not more
60 days nor less than 30 days before the date of the hearing.
Dated at Madison, Wis., this 5th day of October, 2004.
By the court:
Cornelia G. Clark, Clerk of Supreme Court
The Wisconsin Trust Account Foundation Inc. (WisTAF), by its attorney
S. Skilton of the firm of Heller, Ehrman, White & McAuliffe LLP,
M. Smith, its president, and Patrick F. Norris, its executive
this honorable court to adopt a rule establishing an annual assessment
member of the State Bar of Wisconsin in the amount of fifty dollars
or such other appropriate amount as the court may determine, to
insufficient funds received from Interest on Lawyers Trust Accounts
for the support of civil legal services for persons who cannot afford
(Proposed) Chapter SCR 14
Public Interest Legal Service
SCR 14.01 Public interest legal service fund: creation and
definitions. (1) A public interest legal service fund of
bar of Wisconsin is created to fund direct legal services to persons
means in non-criminal matters.
(2) In this chapter:
(a) "Attorney" means a person who is a member of the state
of Wisconsin, except a person who is an inactive member.
(b) "Wisconsin Trust Account Foundation" means the entity
pursuant to SCR 13.01.
(c) "Fund" means the public interest legal service fund of
state bar of Wisconsin.
(d) "Board" means the board specified in SCR 13.02(1).
SCR 14.02 Administration. (1) The fund shall be
and administered by the board of the Wisconsin Trust Account
(2) The board may make grants of available funds to
programs for the purpose specified in SCR 13.03(2)(a)1.
SCR 14.03 Assessment of attorneys; enforcement. (1)
assessments. Commencing with the state bar's July 1, 2005 fiscal year,
attorney shall pay to the fund an annual assessment, to be determined
court, to augment Interest on Lawyers Trust Account (IOLTA) revenues
and administered by the Wisconsin Trust Account Foundation Inc.
SCR Chapter 13. The initial assessment shall be $50.00. An attorney
state bar membership dues are waived for hardship shall be excused
payment of the annual assessment for that year. An attorney shall be
from the payment of the annual assessment for the fiscal year during
he or she is admitted to practice in Wisconsin.
(2) Collection: Failure to pay. The annual
be collected at the same time and in the same manner as the annual
dues for the state bar are collected. An attorney who fails to timely
annual assessment shall have his or her right to practice law
to SCR 10.03(6).
The Grounds for this Petition are as Follows:
WisTAF Has Limited Authority and Resources are
1. Except for IOLTA, the pro bono efforts
practitioners, bar associations and private donations to agencies
civil legal services there are no other funds raised in this state for
of the indigent in civil matters.
2. WisTAF has also served as a conduit for funds obtained by the
Foundation Inc. and for a $400,000 grant by the Wisconsin Legislature
Aid for Needy Families (TANF) that was administered over four years
in 1999. There are two agencies in the state that receive federal LSC
but they are also dependent on WisTAF grants of IOLTA funds as well as
3. WisTAF revenues are completely dependent upon the rise and fall
rates and the changing custom and practice of lawyers with respect to
accounts. Interest rates are at a 45-year low, and there are more and
private practitioners who, for competitive reasons, no longer can
up-front client retainer. Rather, lawyers favor billing clients
in a shrinking principal base for IOLTA funds.
4. WisTAF revenues have declined from more than $2.1 million in
2000-2001 to approximately $1.01 million for the fiscal year ended
a result, WisTAF has been forced to cut grant levels as revenues have
In 2000, WisTAF granted more than $1.98 million to 14 agencies. For
year 2004, WisTAF has promised grants of $1.11 million to 12 agencies.
decline of more than $875,000 is a 44 percent reduction from the year
to 2004 that translates directly to a material decline in the ability
to serve the needs of their clients in obtaining access to justice.
WisTAF projects only $850,000 of IOLTA revenue for fiscal year 2004.
erosion of revenue will mean that WisTAF will have to further cut its
expenses (staff) as well as its grants. There will be no one available
IOLTA grants other than at a very basic level. No resources would be
to seek alternative revenue sources other than IOLTA. The impact on
provision of civil legal services for low-income persons in Wisconsin
be disastrous. Access to justice will be put even further out of reach
A Quantitative Analysis of the Decline in 1986
5. The Wisconsin Supreme Court created the Wisconsin Trust Account
Inc. in 1986 to administer the IOLTA program in Wisconsin. The
WisTAF was a statement by the court of a social policy supporting
services to the poor by creating a mechanism to do so. Our existing
has been unable to maintain the level of support the court and
enjoyed in 1986.
6. In 1986 the Consumer Price Index (CPI), according to the Federal
Bank of Minneapolis, was 109.6. The CPI was created to quantify the
of inflation and interest rates in order to compare U.S. dollar values
time. At the time WisTAF was created by the court the Discount Rate
at which commercial banks can borrow reserves from the Federal
5.5 percent. The discount rate is important to this analysis because
the practical base of short-term rates in U.S. markets. It is an index
is used by the Federal Reserve to implement monetary policy and as the
rate moves so do other short-term rates like Treasuries and Federal
Most commercial banks will set the interest rates they pay on deposits
factor over the discount rate. Their decision of what to pay on
also a function of the bank's need for deposits or other competitive
8. In 1986 the discount rate was 5.5 percent. In 2002 it was down to
percent. In 2003 it reached a low of 0.75 percent (the lowest in 45
The average rate paid on IOLTA deposits at the present in Wisconsin is
9. The significant decline of WisTAF revenues in real dollars is
The 1986 CPI was 109.6. The CPI in 2003 was 183.8. At the end of
formal fiscal year revenues were approximately $888,000. Restatement
amount in terms of 2003 dollars is computed by multiplying the
(183.8/109.6 = 1.68) times the 1986 dollars. $888,000 (1.68) = $1.4
in 2003 dollars. The actual revenues for 2003 were $1.01 million. The
is a decline of $480,000 (or 32 percent). Using anticipated 2004
$850,000, the decline (with a 2004 est. CPI of 1.9) is $837,000 (or 56
in 2004 is less than half of the amount the court meant to provide for
legal services when WisTAF was created.
Other States Have Met the Scarcity of Funds in a Number
10. The funding or coordination of access to legal services for the
including the creation of a viable pro-bono program and fiscally sound
programs has not been an issue that has been addressed or resolved by
Legislature, the State Bar of Wisconsin1
Wisconsin Supreme Court.
11. Many of our sister states have developed alternative sources of
for providing access to justice for indigent citizens. The states of
Michigan, Illinois, Ohio, Pennsylvania, New York, Florida and
integrated into a single organization the management of IOLTA funds as
as private fund-raising and educational programs. Such organizations
to funds and grants that WisTAF, with its limited mandate, does not
12. Those states have generated from three to twelve times the
dollars that IOLTA has provided to Wisconsin residents for indigent
because those states have avoided the vulnerability of relying on one
of funds to support legal services for persons of limited needs.
13. The majority of money obtained by those organizations comes from
other than IOLTA, including assessments of licensed members of the
fees, escheats, private donations and gifts from private foundations.
14. Five states have adopted an assessment on lawyers to assist in
legal services for the poor. In three states (Minnesota, Ohio, and
the decision was made by the supreme courts. In one state (Missouri),
was made by its mandatory state bar association and in one state
assessment was imposed by the state legislature.
(a) In 1997, the Minnesota Supreme Court increased the registration
$50.00 for attorneys admitted more than three years and $25.00 for
admitted three years or less with a 50 percent discount for attorneys
adjusted gross income under $25,000. That came about as a result of a
by a blue ribbon committee charged by the Minnesota Supreme Court with
the long-term funding needs of civil legal services for the poor.
the General Assembly of the Minnesota State Bar Association (a
strongly endorsed the assessment.
In the year 2002, the Minnesota equivalent of WisTAF received more
million to fund civil legal service providers and provide legal
$1.6 million came from IOLTA; $1.03 million came from attorney
of $50.00 and the bulk of the remainder of $6.86 million came from
Minnesota general revenues.
(b) In 1998, the Ohio Supreme Court increased the attorney
by $50.00 generating an additional $1.75 million. The court has
allocated some - but not all - of those funds to the Ohio Legal
Foundation (OLAF): $375,000 in 1998 and 1999, $500,000 in 2000 and
$1 million in 2002. The 2002 increase was made because of the serious
in funding from the Legal Services Corporation and the reduction of
The court recently approved an additional $12.50 increase in the fee
will be allocated to help OLAF in its effort to stabilize the annual
at $1 million.
The Ohio Supreme Court made the decision to provide the funding over
opposition of the Ohio State Bar Association, a voluntary bar
(c) In the fall of 2002, the Board of Governors of the Missouri Bar
bar) increased bar dues by $20.00 for every member eligible to
in Missouri. The dues increase was precipitated by a reduction in
Corporation revenue due to the 2000 census redistribution, an over 50
decrease in IOLTA revenues and an anticipated elimination of
by the Missouri legislature.
(d) In late 2002, the Illinois Supreme Court, on its own motion,
an attorney registration fee increase of $42.00 for the purpose of
services providers. That fee produced $2.4 million in 2003.
(e) Michigan generated approximately $8 million for civil legal
in 2002. $1.5 million of that came from IOLTA but approximately $6
came from filing fees which are earmarked for legal services for the
Michigan does not assess members of the Bar, but it has a very active
among practitioners that has raised $4 million over two years for an
designed for civil legal services.
(f) In 2003, the Texas Legislature increased bar dues by $65.00. The
generated will be split evenly between civil legal assistance and
criminal indigent defense projects. The legislation is scheduled to
in four years.
Wisconsin Has Not Met the Legal Needs of the
15. In 1996, a Wisconsin State Bar Commission on Delivery of Legal
concluded that Wisconsin's civil legal service programs were so
that they served only a fraction of low income people needing legal
More important, the Commission concluded that Wisconsin lawyers had
far behind their colleagues in other states where the private bar was
implementing different strategies to raise funds for legal services.
Bar of Wisconsin allocated $75,000 to organize a private campaign
Equal Justice Coalition to raise funds. Fund-raising began in 1997
with a goal
of raising $5 million over three years: $2.5 million from lawyers and
and $2.5 million from foundations and corporations. At the end of the
campaign in June of 2000, the Equal Justice Coalition had raised about
million with $330,000 coming from law firms, $250,000 from
foundations and $620,000 from individual attorneys and other
gifts came from only 900 donors, mostly individual attorneys. Less
percent of Wisconsin licensed attorneys contributed. In short, the
raise a large sum of money as an endowment to support legal services
into the future was not successful. Instead the funds were slowly
as they were distributed to legal assistance organizations. Recently,
Justice Coalition closed its office and terminated all of its full
as its board of directors reassesses the strategic direction of the
16. A comment from the campaign literature put out by the Equal
in March of 2001 as it attempted to encourage lawyers to solicit
is as instructive today as it was then:
"[W]e learned some important general things about lawyers'
legal services. We learned that prospective lawyer and law firm donors
largely uninformed about Wisconsin's provision of civil legal services
poor and the need for the private bar's support... ." - EJC Memo
Campaign Committee Members, 3/5/01.
17. In July of 2002, the ABA Journal carried an article
the profession's lack of commitment to pro bono work. The article
R. Nichol, Dean of the University of North Carolina School of Law in
"Study after study shows about 80 percent of the legal needs of
poor are unmet."
"Less than one percent of our total expenditure for lawyers
services for the poor, but legal aid budgets are capped at levels
representation of the poor a statistical impossibility."
"We leave the poor unrepresented in the most crushing problems
divorce, child custody, domestic violence, housing and benefits
passes for civil justice among the have-nots is stunning."
"I can report from personal experience that bar associations
mandatory pro bono requirements with the zeal and passion unsurpassed.
we act exactly like a self-regulated monopoly would be expected
Margaret Graham Tebs, "Lag in Legal Services," ABA
July 2002, p. 67.
18. On March 21, 2003, the Board of Governors of the State Bar of
by a vote of 30 to 7 rejected a resolution to support mandatory pro
for a limited four-year period.
19. The 2000-2001 Annual Report for the Equal Justice Coalition Fund
that over 500,000 Wisconsin residents live in poverty.
"Because of their financial situation, they cannot afford a
faced with pressing legal problems, such as domestic violence,
of child support, discrimination, termination of government benefits,
of property or wages.
"Fortunately, Wisconsin's civil legal services programs are
provide 20,000 low-income people with legal assistance each year.
legal services programs often must turn away many more families
lack the resources to help all of those who need legal help."
20. A May 2001 article appearing in the Wisconsin Lawyer
case as follows:
"In Wisconsin, civil legal funding available for legal services
per low income citizen, placing Wisconsin as the 38th lowest of the 50
for such funding." - Hannah C. Dugan, "Who's Providing Legal
to Wisconsin's Poor?," Wisconsin Lawyer, May, 2001, pp.
21. In 1995, the Wisconsin Supreme Court denied a petition by the
Bar Pro Bono Trust Fund for a mandatory reporting of pro bono
Chief Justice Heffernan enclosed a letter in the 1995 dues statement
lawyers to voluntarily report their pro bono activities in order to
the Wisconsin Supreme Court's belief that a substantial amount of
pro bono work is being done in Wisconsin.
22. Only three percent of the Wisconsin lawyers responded to the
request making the verification of what is actually being provided
matter of mere conjecture.
23. For the profession as a whole, the following laudable statements
been largely ineffective:
(a) The attorney's oath:
I will never reject, from any consideration personal to myself, the
of the defenseless or oppressed, or delay any person's cause for lucre
(b) SCR 20:6.1 Pro Bono Publico Service:
A lawyer should render public interest legal service. A lawyer may
this responsibility by providing professional services at no fee or a
fee to persons of limited means or to public service or charitable
organizations, by service in activities or improving the law, the
or the legal profession, and by financial support for organizations
legal services to persons of limited means.
(c) April 15, 1989 State Bar of Wisconsin Board of Governors
1. The State Bar of Wisconsin is committed to expanding civil legal
for low-income residents of Wisconsin.
2. The State Bar of Wisconsin recommends that all attorneys in the
of Wisconsin voluntarily and resolutely agree to perform or contribute
services in one or both of the following ways:
A. Representation of low-income client(s) without a fee or at a
fee for at least 25 hours per year through:
1. Participation in an organized pro bono panel or project; or
2. Appointment by a state or federal court in civil cases; or
3. Serving of counsel or otherwise providing legal services directly
for an organization whose primary purpose is to serve the needs of
4. Accepting as clients low-income persons whose civil legal needs
otherwise be unmet.
B. Contribution of a dollar amount equivalent to 25 hours per year
organization or project for the providing of civil legal services for
for low-income persons.
24. With 17,500 members of the Wisconsin
full dues, an assessment of $50.00 would produce $850,000 a year in
income (beginning in July of 2005). This funding would allow WisTAF to
existing grant levels and give WisTAF time to expand its efforts to
sources of revenue. If the court would see fit to rule on the petition
spring of 2005 the assessment could go out with the Bar dues
May of 2005.
25. WisTAF's goal in seeking these funds is not to ensure WisTAF's
existence; the purpose is to further the goal for which WisTAF was
the continued funding of the provision of civil legal services for the
of Wisconsin who have a desperate need but cannot afford a lawyer.
counsel for the majority of the poor in this state is effectively
the lack of resources.
26. The problems surrounding the need for legal services to
are deep and complex, but they deserve attention now. The need is
and immediate. Funding the provision of civil legal services needs to
with a long-term strategy with input from the court, the bar, the
and those in need. The request of this petition does not even bring
back to 1986 funding levels.
27. The request for a $50.00 assessment is an amount less than
asking a Wisconsin
lawyer for the value of one billable hour per year.
28. WHEREFORE, the petitioners request the court to adopt proposed
14 and for such other and further relief as the court may deem
Dated at Madison, Wis., this 28th day of May, 2004.
Heller, Ehrman, White & McAuliffe LLP
By: Attorney John S. Skilton
Wisconsin Trust Account Foundation Inc.
By: Deborah M. Smith, President
Patrick F. Norris, Executive Director
1The State Bar of Wisconsin is mounting a
project to increase pro bono service by lawyers.