Legal aid societies are being forced to cut their staffs and services

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Interest Rate Drop Has Dire Results for Legal Aid

By ERIK ECKHOLM
Published: January 18, 2009

BOSTON — Scores of legal aid societies that help poor people with noncriminal cases — like disputes over foreclosures, evictions and eligibility for unemployment benefits — are being forced to cut their staffs and services, even as requests for help have soared.

In an odd twist, the societies have been hit hard by the Federal Reserve’s steep reduction of its benchmark interest rate, which finally plunged last month to near zero.

The rate decline, though generally welcomed as a blow against the recession, has had an unplanned and severe effect on legal aid societies, which depend heavily on revenues that are tied to the federal funds rate. As recently as 2007, the rate was more than 5 percent and legal aid agencies reaped more than $200 million for their operations.

Now, for many legal aid groups across the country, cutbacks in staffing are expected to reach 20 percent or more over the coming months, even as requests for their services have risen by 30 percent or more.

Read the entire article...
http://www.nytimes.com/2009/01/19/us/19legal.html?hp

That is a shame...