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Vol. 40, No. 2

You can take it to the bank: Bar association studies show economic impact

by Robert J. Derocher

Victoria Connor knew that public outreach was one of the ways to demonstrate to the community the economic impact generated by the York County (Pa.) Bar Association and York County Bar Foundation, the legal profession, and the civil and criminal justice system there.

And the CEO of the bar did it in a personal way.

“I grew up poor. We often went without food, heat, and hot water,” Connor wrote in a newspaper column earlier this year. “But for timely aid from publicly-funded programs, human services agencies, relatives and neighbors, we would have lost our home. Had my family also faced legal problems without the means to hire an attorney our lives would have been ruined.”

The column went on to discuss the growing problem of providing affordable civil legal services for the poor, and the bar’s efforts to combat the problem—as well as the financial impact of the situation on the community.

“Everyone wants to know where the attorneys are. What is their stake?” Connor says. “We needed to step up our communications efforts.”

Many bar associations and foundations are delivering similarly economics-focused and meaningful messages, as they seek to show the vital role their groups play in the community. Professionally designed and funded studies that demonstrate the financial impacts of the legal profession—from attorney spending to judicial operations—are becoming an important part of their promotional and informational arsenal.

The need to publicize those efforts is increasingly critical, many bar leaders say, as they seek to preserve and promote the profession and judiciary in the face of funding cuts, legislation, and ever-present jabs at the image of lawyers.

Filling the information gap

“There are a lot more studies out there right now. It’s helpful to put a spotlight on this,” says John Connaughton, an economics professor at the University of North Carolina at Charlotte, and co-author of an economic impact study of North Carolina’s court system, commissioned by the North Carolina Bar Association.

The NCBA study, released earlier this year, showed that the beleaguered North Carolina court system generated more than $460 million in direct economic impact in 2013-14 and another $430 million in indirect impact. The study, underwritten by the North Carolina Bar Association Foundation, was done, in part, to defend the court system from continued legislative budget cuts that were severely impacting court operations and the delivery of legal services statewide, says Catharine Arrowood, the bar’s immediate past president.

“The report filled a gap of information that our legislators needed to have filled,” she says. “One of the key messages we needed to get out is that while North Carolina is ninth in population, we were 48th in court funding. There are just huge costs to our economy if our courts don’t operate properly.”

The result? This year, for the first time in seven years, North Carolina legislators increased the court system’s annual budget.

In California, where $1.2 billion in state court funding was cut from 2007 to 2012, the San Diego County Bar Association has been active in publicizing the economic consequences of those cuts as part of an organized effort in the community to restore funding. The bar formed the Court Funding Action Committee, which issued a report in 2013—updated in 2015—detailing the problems caused by the cuts, says Karen Korr, the bar’s director of communications and outreach strategy. A website was also developed.

“Businesses in our community are also suffering,” the 2015 report stated. “Reduced court services means that cases are delayed, capital is tied up in lawsuits, and matters are not resolved in a timely manner, leaving San Diego businesses, particularly smaller ones, extremely vulnerable.”

For some in the business community, the report has been “a real eye-opener,” Korr says. It has also contributed to a closer working relationship with individual businesses and chambers of commerce in the community.

And while not part of the original plan in tackling the issue, the bar’s outspoken efforts have also positively raised its profile in San Diego County. “It’s nice to show the public that attorneys are out there working on their behalf,” Korr says.

York’s five-year plan yields results

Marshaling the forces of the business community and demonstrating the value of the courts and the legal profession was a challenge that Connor embraced in York County—a community of about 430,000 an hour north of Baltimore, where more than 50,000 people live below the poverty line and struggle to attain civil and criminal legal services, she says.

The bar, along with its charitable arm, the York County Bar Foundation, convened a Legal Service Task Force in 2012 that involved business and civic leaders and, a year later, commissioned an economic impact study that found that $1.1 million invested in York County-based civil legal services from all sources yielded $9.9 million in income and savings.

With that information in hand, Connor says, the foundation embarked on a five-year plan to raise $1 million to meet the community’s legal services needs. The effort has netted $700,000 in funding commitments—in just seven months. As part of that plan, the bar foundation hosted a first-of-its kind summit earlier this fall.

“We needed to make the case for our business funders and our public and private partners,” Connor says. “The average citizen does not understand that the law is the thread that binds the community together.”

Battling stereotypes

Misconceptions about the economic impact of the legal profession often go beyond the concept of legal services, extending to the stereotypes of lawyers themselves. That’s what past Cincinnati Bar Association and Ohio State Bar Association President Patrick Fischer had in mind when he promoted an OSBA initiative that detailed the profession’s economic importance in the state. The initiative grew out of a state legislative proposal to tax legal services.

“There’s a perception out there that lawyers just take,” says Fischer, an Ohio appellate court judge. “I always felt that lawyers had an economic impact—that they make businesses and the lives of every citizen work more easily.”

But Fischer says even he was surprised when the OSBA report released last year showed the profession’s total economic impact from earnings was $3.5 billion annually and that it created more than 80,000 jobs statewide.

The report not only identified the legal profession as a major employment source, but it also identified how the presence of attorneys in virtually all facets of business—along with extensive volunteer and pro bono service—contributed to the state economy, says OSBA Executive Director Mary Amos Augsburger. The report also established that the bar, and, by extension, the profession, deserved “a seat at the table” regarding legislation that involved the state economy.

“Oftentimes, the legal profession is overlooked. Yes, we’re big firms, but we’re small businesses in the community, as well,” she says. “It was wonderful to have the data to show it.”

While the report likely played a role in killing the legal services tax proposal, Augsburger believes it has also highlighted economic concerns about access to justice for poor Ohioans, and the role the profession can play in addressing those concerns.

In South Carolina, a professional economic impact study commissioned by the South Carolina Bar not only had the economic impact on communities in mind—it was commissioned, in part, to combat the negative public image of lawyers.

“Everybody always wants to hear the bad lawyer jokes,” says South Carolina Bar President Anne Ellefson. “We needed to show people that there a lot of us, and that we matter.”

And the economic impact report released in 2013 showed just that, she says. The report estimated a direct and indirect economic impact from the legal profession at $2.7 billion annually in the state. And as was Ohio’s experience, the South Carolina Bar found a receptive audience from legislators and the business community once the bar started talking about the report and its findings.

“It’s very effective in discussions to have those numbers,” Ellefson says. “It’s certainly one of the tools we use in our kit.”

Continual outreach needed

The South Carolina report has not only helped improve the view of the profession in the state, she adds, but it has also helped bolster the bar’s push to preserve funding for the state court system over the last two years. The bar has successfully worked in tandem with the state judiciary and the business community to illustrate the economic benefits from properly funded courts, she says.

Like other bar leaders who have supported economic impact studies, the York County bar’s Connor believes that the costs associated with paying for such studies are repaid in dividends from a better public view of the profession and improved positioning for issues important to lawyers, such as court funding and taxes and/or restrictions on the profession.

North Carolina’s Arrowood says those benefits made the study cost “an easy sell” to members of her bar association and to the North Carolina Bar Association Foundation Endowment, where access to justice and community benefits are paramount issues.

But perhaps one of the biggest challenges of talking economics for bar associations and foundations, she and others say, is one of communication—particularly in talking to the public, the business community, and the local and state legislators who often hold the purse strings and write the laws affecting the profession.

“We’re doing everything we can to be engaged in the community and to educate people,” Connor says. “More communication is needed with our members and with the public. It’s a challenge to continually reach people.”