We need a legal stimulus. Not just a stimulus that is legal, but one that provides legal aid. That is why any further congressional stimulus should allocate additional funds specifically for legal services to individuals who, as a result of COVID-19, face eviction, foreclosure, loan defaults, debt collection, bankruptcy, domestic violence, or denied insurance claims or coverage. The need is dire. These looming crises from the pandemic will hit, but mostly after the initial health scare has dampened, the executive orders are lifted, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act protections expire or are ignored.
We don’t have to wait to see what will happen—the fallout has already started. Some borrowers, for example, report that their loan servicers, in express violation of Section 4022 of the CARES Act, have informed them that forbearance is not an option; failure to pay will result in foreclosure. While some states and cities pass eviction moratoria, others fail to act. And tenants in locations without eviction protections remain vulnerable not just to eviction but also exploitation by landlords: some, sadly, are demanding tenants pay with their bodies instead of their bank accounts. If this is what’s happening now, just imagine what will happen when the full effects of the pandemic hit.
These crises are solvable, but not without legal aid. The problem is that those most likely to need these services—those evicted, foreclosed, bankrupted, abused, or denied claims—are the least likely to be able to afford it. And, like everyone else, most lawyers—the vast majority of whom work in small firms or solo practices—may be too worried about their own bills to provide counsel to clients who can’t pay. Even with practitioners, law firms, and the American Bar Association providing extra pro bono services, the demand for legal assistance from millions of Americans will far outstrip capacity. That’s precisely why any further stimulus should include funds allocated for COVID-19 related pro-bono legal services.
How do we ensure the legal services reach those who need them? One option is to provide a twelve-month grant, renewable for another twelve -month term, to legal aid organizations and law school clinics that offer free services to individuals. In doing so, we could replicate the method of the original CARES Act, which allocated funds to the Legal Services Corporation, a government-created non-profit corporation, that award grants to non-profit legal service providers. We could expand on this method to provide further funding to pro bono organizations and clinics that hire additional attorneys and staff to perform work related to COVID-19. This approach taps into existing networks of clients—and their contacts—who will likely need services as a result of COVID-19. It also leverages the knowledge and skills of attorneys already providing legal aid to these clients. Attorneys at these clinics and aid organizations can build out capacity by training additional attorneys to absorb excess caseload. Law school clinics also offer a built-in pipeline of new lawyers who have existing relationships with both clients and supervising attorneys. Clinics that hire former students—hopefully including new graduates who have been granted diploma privileges—will require less manpower to train and onboard new employees.
This is not the only option to deliver legal services. We could also scale up existing law firms to handle excess demand or build out new organizations by drawing on local communities of attorneys to address specific legal needs. Finally, we could use other innovative approaches developed by policy-makers.
Whatever its form, this legal stimulus makes sense not only as a proposition for everyday Americans but for the economy more generally. Our economy, in fact, may depend on it. Consider this: When the thousands of evictions and foreclosures do roll in—and they will—who will help renters and homeowners ward off homelessness? Without legal aid, how many families will be forced on the street? How much more difficult will it be for them to obtain employment, or even to eat, without the security of a bed to call their own? When patients crippled by COVID-19 return from the hospital they may be crippled yet again by enormous medical bills, denied claims, and lack of adequate care or medical coverage. How can we expect these people—many of whom will suffer extended recoveries and long absences from work—to contest any medical bills, or even to pay them? When countless patients, individuals, and small business owners go bankrupt, who will help them navigate the bankruptcy laws to allow them to restart their lives? When women who have been habitually abused during lockdowns attempt to separate from their abuser, how will they obtain a restraining order? Without the help of attorneys, many individuals will face daunting legal obstacles—some of which they might not be aware—without a real chance to overcome them.
That is why any further government stimulus should include funds allocated specifically for legal services to individuals who, as a result of COVID-19, face eviction, foreclosure, bankruptcy, domestic violence, or denied insurance claims or coverage. A legal stimulus to these patients, individuals, and families will have significant benefits—both to individuals and to the economy. Most importantly, it will protect the health and safety of millions of Americans by helping them to stay in their homes longer and, in many cases, permanently. Without a safe home, it becomes increasingly difficult to find work, food, or new housing. How can we expect social distancing to continue when people are forced into homeless shelters, or forced to choose between living with their abuser or on the streets? Not only that, but if the housing market collapses, it will wipe out many Americans’ most valuable asset. Millions will lose most of their net worth. The knock-on effects to the economy, as the collapse of 2008 demonstrated, will be devastating.
A legal stimulus also benefits the economy. Providing legal counsel to those in need creates incentives for landlords, creditors, and abusers to abandon or curtail their actions. The incentive to evict and foreclose—especially if those evictions will cost more time and money—will diminish. The same is true for individuals being hounded by debt collectors. Consumers with legal assistance can stave of debt collectors’ attempts to intimidate them into payment, repossess their car, or seize whatever money they have left. At the very least, legal aid may buy them much-needed time and money to get back on their feet. Legal representation may also induce parties to reach an agreement sooner, and at less cost, than would legal action against an unrepresented individual. All of that translates into a better economic outcome, both for the individuals and the economy at large.
A legal stimulus—any stimulus—will face challenges: implementation, waste, administration, delays. But that is a reason to push forward not to pull back. Once we’ve identified the risks and challenges facing any proposed solution, we are better equipped to ensure that the proposed solution is one that works—for everyday Americans and for the country.
Everyone loves to hate lawyers. Some say even Shakespeare liked to tease them in his plays. But lawyers are writing the stimulus, and they’ll be the ones arguing about it for years to come. Lawyers are our worst and best hope. They are what stand between us and the Law of the Streets. We need lawyers—we need a legal stimulus. In a very real way, our future depends on it.
David A. Simon is a Visiting Assistant Professor at the University of Kansas School of Law and a Fellow at the Hanken School of Economics in Helsinki, Finland. Beginning in the fall of 2020 he will be a Visiting Associate Professor and Frank H. Marks Fellow in Intellectual Property, George Washington University Law School. He thanks Brian Frye for helpful comments.