
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, February 5, 1995                   TAG: 9502060016
SECTION: VIRGINIA                    PAGE: B-7   EDITION: METRO 
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE:                                 LENGTH: Medium

SURPRISE PACT COULD MEAN DEATH OF LAW FOUNDATION

The Virginia Law Foundation would lose its sole source of revenue under a compromise reached by a House of Delegates committee last week.

Since 1983, the foundation has administered grants to the state's Legal Aid societies, as well as other law-related charitable and educational efforts.

Those grants were funded by the interest on pooled trust accounts set up by private lawyers for their clients. Lawyers' or law firms' participation was voluntary. But in 1993, the state Supreme Court ordered that participation be mandatory.

That ruling has since been challenged. Two legislative bills - one in the House and another in the Senate - proposed to throw out the Supreme Court's decision.

Last week, members of the House Committee on Corporations, Insurance and Banking unanimously entered a compromise that would end the program's mandatory nature and make it again voluntary. The compromise also would provide that all revenue under the voluntary program go to the Legal Services Corporation of Virginia, the administrative office for all state legal aid programs, instead of the Virginia Law Foundation.

The compromise surprised foundation administrators.

"Beginning July 1, we would effectively have no revenue" from the trust-account program, said Sharon Brooks, foundation director. "Our revenue would drop from the $5.2 million we anticipate this year to zero.

"We're still in the midst of sorting through this. It was a surprise. We were not aware that a compromise had been reached."

The foundation has no other resources, Brooks said.

The foundation administers the trust-account program, disbursing account earnings for four court-ordered purposes: legal services to the poor, including Legal Aid societies and pro bono activities; improvements in administration of justice; law-related education of the public; and summer internships, fellowships, loans and/or scholarships to law students.

Traditionally, the foundation has given a minimum of 70 percent of trust-account earnings to the Legal Services Corporation of Virginia. In July, after one year under the mandatory program, earnings increased substantially, Brooks said.

Consequently, the corporation's fund request for the 1994-95 fiscal year increased. And instead of receiving 70 percent of trust-account earnings, the corporation received 83 percent - or $2.68 million, Brooks said.

Keywords:
GENERAL ASSEMBLY 1995

by CNB