The story
Founded by United States Congress in 1974.1
Background
LSC is one of the organizational descendants of the former Office of Economic Opportunity (OEO). The Economic Opportunity Act of 1964, a key part of President Lyndon B. Johnson's Great Society vision, established the OEO. Building on the work of a 1964 essay, "The War on Poverty: A Civilian Perspective" by Edgar Cahn and Jean Camper Cahn, in 1965 OEO budgeted $1 million per year to create and fund 269 local legal services programs around the country, such as California Rural Legal Assistance, which made a name for themselves suing local officials and sometimes stirring up resentment against their federal funding. Jean Cahn was the first director of the National Legal Services Program in OEO.
By the early 1970s, the Nixon administration began dismantling the OEO; funding for legal services for the poor began to wither, and supporters looked for an alternative arrangement. In 1971 a bipartisan congressional group, including Senators Ted Kennedy, William A. Steiger, and Walter Mondale, proposed a national, independent Legal Services Corporation; at the same time, administration officials such as Attorney General John N. Mitchell and chief domestic advisor John Ehrlichman were proposing their own somewhat similar solution.
Creation and the Ford era
The idea behind the LSC was to create a new corporate entity that would be funded by Congress but run independently, with eleven board members to be appointed by the president, subject to Senate confirmation.
LSC was created by the Legal Services Corporation Act of 1974 (Pub. L. 93–355). The LSC Act contains certain rules and restrictions regarding what LSC grantees can do. The initial budget was set at $90 million.
Naming and confirmation of the first LSC board was delayed by inaction and opposition, but by July 1975, President Gerald R. Ford had named and the Senate had approved the first board, with Cornell University Law School Dean Roger Conant Cramton as its first chair. South Dakota legal services lawyer and prosecutor Bill Janklow was another member of the initial board. Thomas Ehrlich, at the time the dean of Stanford Law School, became the LSC's first president.
Carter era
In December 1977, President Jimmy Carter nominated Hillary Rodham to the board of directors of the LSC, for a term to expire in July 1980. Rodham, an attorney with Rose Law Firm in Little Rock, Arkansas and the wife of Arkansas Attorney General Bill Clinton, had a background in children's law and policy and had worked in providing legal services for the poor while at Yale Law School. She had also done 1976 campaign coordination work for Carter in Indiana. This was a recess appointment, so Rodham took her place on the board without immediate Senate confirmation. Rodham was nominated again in January 1978 as a regular appointment. In mid-1978, the Carter administration chose the thirty-year-old Rodham to become chair of the board, the first woman to become so. The position entailed her traveling monthly from Arkansas to Washington, D.C., for two-day meetings.
During Rodham's Senate confirmation hearings, she subscribed to the philosophy that LSC should seek to reform laws and regulations that it viewed as "unresponsive to the needs of the poor." Rodham was successful in getting increases in Congressional funding for LSC, stressing its usual role in providing low-income people with attorneys to assist them in commonplace legal issues and framed its funding as being neither a liberal nor a conservative cause. By her third year on the LSC board, Rodham had gotten the LSC budget tripled. Opposition to LSC during this time came from both Republican Congressman James Sensenbrenner, who favored a "judicare" approach of compensating private lawyers for work done for the poor, and Conservative Caucus head Howard Phillips, who objected to LSC representing gays.
LSC funding was at its highest-ever mark, in inflation adjusted dollars, in fiscal 1980, with a budget of $303 million. Some 6,200 poverty lawyers filed suits using its funds on behalf of 1.5 million eligible poor clients; the lawyers won almost 80 percent of their cases, which mostly involved divorces, evictions, repossessions, and interrupted payments from federal agencies. For fiscal 1981 it was budgeted at $321 million.
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In June 1980, Carter renominated Rodham for another term on the board, to expire in July 1983. Sometime between about April 1980 and September 1980, F. William McCalpin replaced her as chair of the board. He would remain chair through late 1981.
Reagan era
LSC was strongly opposed by some political groups. As Governor of California in the 1960s, Ronald Reagan had advocated elimination of all federal subsidies for free legal services to the poor in civil cases, and had tried to block a grant to California Rural Legal Assistance in 1970. Indeed, Time magazine would state, "Of all the social programs growing out of the Great Society, there is none that Ronald Reagan dislikes more than the Legal Services Corporation." The CRLA's executive director would characterize Reagan's attitude towards the organization as akin to that of Darth Vader.
When President Reagan took office in January 1981, he attempted to eliminate the LSC by zero funding it. Supporters of LSC rallied to defend it; American Bar Association president W. Reece Smith, Jr. led 200 lawyers to Washington to press its case. In response to Reagan's clear intentions against the LSC, the Coalition for Legal Services was formed to lobby outside, but on behalf of the LSC, which showed support via grant recipients.
The U.S. House Judiciary Committee blocked Reagan's zero-funding action in May 1981, but did cut financing to $260 million for both of the next two years as well as place additional restrictions on LSC lawyers. By the following month, the now Republican-controlled U.S. Senate Labor and Human Resources Committee had cut proposed financing to $100 million, as part of what The New York Times deemed an "increasingly bitter ideological struggle". Moreover, Reagan administration officials accused LSC of having "concealed and understated" its lobbying activity and support for politically motivated legislation.
In November 1981, the Reagan administration, although still hoping to eliminate LSC, decided to replace all eleven LSC board members with nominations of their own. In return the LSC began to set up "mirror corporations" to circumvent congressional restrictions and reuse funds for political advocacy. The proposed new chairman was Ronald Zumbrun, president of the ideologically opposite Pacific Legal Foundation, which had previously defended the state of California against several legal aid lawsuits. For fiscal 1982, LSC's budget was reduced by 25 percent to $241 million, with new rules prohibiting most class action suits and lobbying. Zumbrun's nomination was sufficiently controversial that in January 1982, the Reagan administration dropped it, and instead made a recess appointment of William J. Olson to be chair. Olson had headed the Reagan transition team dealing with LSC and had personally recommended its abolition, so LSC advocates were not mollified.
At the same time, the Reagan administration had named six other board members as recess appointments. In February 1982, the Carter-appointed members of the previously existing board filed suit to against the recess appointments, claiming they were unlawful and that they should be enjoined from holding meetings. Rodham hired fellow Rose Law Firm associate Vince Foster to represent her in the case and to seek a restraining order against Reagan. The Reagan nominees may have been prohibited from meeting with the Legal Service Corporation before confirmation.
Rodham also prodded Senate Democrats to vote against Reagan's nominees. The nominees did undergo heavy criticism in Congress, with one labeled a bigot and Olson lambasted for his transition position. In March 1982, yet another new chair was named, Indiana University law professor William F. Harvey, although Olson would remain on the board. Harvey and Rodham had a conference call in which Rodham reiterated her desire for the lawsuit. That action, McCalpin v. Dana, was decided in favor of the defendants by summary judgment in October 1982.
By December 1982, the Senate was willing to confirm six of Reagan's more moderate nominees, but not Harvey, Olson, and another; the Reagan administration instead pulled the names of all of them. This board then closed its last meeting in a public debacle, with Olson lambasting LSC as full of "abuses and rampant illegality" and a "waste of the taxpayers' money through the funding of the left," while being harangued by a hostile audience. And too, the Reagan appointees to the board were being criticized for collecting substantially higher fees than previous board members.
In September 1983 the General Accounting Office found that in early 1981, LSC officials and its local affiliates had used federal funds in assembling opposition to Reagan's efforts to eliminate LSC, and that this use had been in violation of the LSC Act's restrictions against such political activity. Such actions against the LSC Act were not crimes, and the GAO report did not claim any crimes had taken place. The investigation had been initiated by the LSC in 1983 ordering a series of "raids" on their own offices to attempt to discover evidence of questionable actions taken by the LSC in 1981, prompting Time magazine to declare LSC "an organization at war with itself."
More recess appointments were made by Reagan in late 1983, in 1984, and in early 1985, with again none of them being confirmed by the Senate. Indeed, LSC's board would go a total of three and a half years populated by recess appointments. Finally in June 1985 the Senate confirmed the latest batch of Reagan nominations. The Carter board lawsuit, since renamed and appealed as McCalpin v. Durant to the United States Court of Appeals, District of Columbia Circuit, was then decided later in June 1985 as moot.
George H. W. Bush era
Overt White House hostility towards LSC ended with the George H. W. Bush administration, with calls for level funding rather than decreases. Under board chair George Wittgraff, LSC began to ease relations with private lawyers and with state grantees. In fiscal 1992, LSC saw a funding increase back to $350 million.
Clinton era
Hillary Rodham's husband, the aforementioned Bill Clinton, took office as U.S. president in January 1993. The first two years of the Clinton administration saw more growth for LSC, as former chair McCalpin returned to the board and the former chair Hillary was now First Lady of the United States. Funding rose to a high mark in absolute terms of $400 million for fiscal years 1994 and 1995.
Things turned upon the advent of the Republican Revolution. In fiscal 1996, once the Republican party had taken over Congress the year prior, LSC had its funding cut again, from $400 million to $278 million. A new set of much more extensive restrictions were added to LSC grantees. The organization's supporters expressed disappointment that the Clinton administration did not make LSC a critical priority in its budget battles with the Republican Congress, especially given Hillary Clinton's former role in it.
As part of a comprehensive "welfare reform" of federal welfare laws beginning in 1996, most significantly the Personal Responsibility and Work Opportunity Act, Congress imposed restrictions on the types of work that LSC grantee legal services organizations could engage in. For example, LSC-funded organizations could no longer serve as counsel in class action lawsuits challenging the way public benefits are administered. Additionally, LSC grantees faced tightened restrictions on representing immigrants, specifically those illegally in the country. However, in 2001, the restriction on welfare advocacy was ruled unconstitutional in Legal Services Corp. v. Velazquez.
However, non-LSC funded organizations are not subject to these restrictions leading the legal services community to adopt a two-track approach: LSC restricted counsel taking on individual clients but not engaging in class actions, and non-restricted counsel (using private donor funding) both taking on individuals as well as engaging in otherwise restricted litigation. Poverty lawyers in both tracks still work together where they can, being careful not to run afoul of LSC restrictions.
George W. Bush era
In 2004, veteran Legal Aid Society attorney Helaine M. Barnett was named President of the LSC.
According to LSC's 2009 report "Documenting the Justice Gap in America: The Current Unmet Civil Legal Needs of Low-Income Americans," all legal aid offices nationwide, LSC-funded or not, were together able to meet only about 20 percent of the estimated legal needs of low-income people in the United States.
For 2007, LSC had a budget of some $350 million.
Obama era
In 2009 during the Obama administration, the LSC was on the path to getting a $50 million increase in its $390 million budget.
However, the LSC came under criticism from Senator Charles Grassley, who said, "There's just a lot of money being wasted," citing several General Accounting Office and Inspector General reports. At the same time, Congress rolled back the restriction that LSC-funded attorneys could not take attorneys' fees-generating cases; LSC finalized the regulation in 2010 after President Obama signed an appropriations bill into law.
By fiscal 2011, the annual budget amount for the LSC was $420 million. In early 2011, House now-majority Republican proposed a $75 million reduction in that current-year amount, while Obama's suggestion budget proposed a $30 million increase for the subsequent year.
On December 16, 2014, President Obama signed into law the Consolidated and Further Continuing Appropriations Act for FY 2015 that includes $375 million for LSC.
Trump era
From its inception in 2017, President Trump's administration repeatedly called for the elimination of funding for LSC. LSC has strong bipartisan support on behalf of robust funding for LSC. External stakeholders, including members of the legal and business communities, state attorneys general, and law school deans across the country sent letters to the House and Senate appropriations committees advocating for robust funding for LSC. They included:
252 General Counsels from some of the largest American businesses, including Apple, American Express, Google, Walmart, General Motors, and Walt Disney.
181 law firms from all 50 states and the District of Columbia.
The Conference of Chief Justices and the Conference of State Court Administrators.
41 bipartisan state Attorneys General.
167 Deans of law schools.
In addition, 209 members of the House of Representatives signed a bipartisan letter in support of funding for LSC, the largest number in history, and 46 bipartisan Senators signed a similar letter in support of funding for LSC. Ultimately, Trump signed into law increases in LSC funding during his tenure. Throughout Trump's presidency, Congress increased LSC's funding such that it eventually reached $490 million in Fiscal Year 2020, aided partly by a $50 million emergency supplement from the CARES Act. In the Consolidated Appropriations Act, 2021, Congress appropriated $465 million in Fiscal Year 2021 for LSC; this amount was an increase of $25 million over LSC's baseline appropriation (without the CARES Act supplement) of $440 million in the prior fiscal year.
Biden era
In 2021, President Joe Biden proposed a $600 million budget appropriation for LSC.
In March 2022, Congress passed an FY2022 appropriations bill in which they allocated $489 million to LSC.
Later in 2022, LSC asked for $1.26 billion for Fiscal Year 2023 and Biden proposed $700 million. Ultimately, for FY2023, Congress passed an FY2023 approprations bill in which they allocated $560 million to LSC, the highest ever real dollar amount appropriated to LSC.
Second Trump era
In Trump's second term, the administration's FY2026 proposed budget again proposed eliminating funding for LSC. In January of 2026, LSC's funding was renewed for FY2026 with a 3.6% cut from its 2025 funding level.
From Wikipedia’s article on Legal Services Corporation, shared under CC BY-SA 4.0.4