Opinion ID: 3065248
Heading Depth: 2
Heading Rank: 4

Heading: LASO and OLC

Text: LASO is a nonprofit legal aid organization and LSC grantee. It derives roughly 45 percent of its $6.5 million annual operating budget from LSC grants, and the remainder of its funding comes from other federal, state, and private sources. OLC is an independent legal aid organization that does not receive funding from LSC; thus, it is not subject to the Restrictions. The organizations share a common board of directors. Since 1995, when LASO spun-off OLC, the two organizations have coordinated their respective delivery of legal services, with OLC providing many of the services that LASO cannot offer pursuant to the Restrictions. In addition to their common board, the two organizations coordinate their efforts by: (1) maintaining separate but adjoining office space; (2) co-counseling certain cases; (3) holding regular joint planning meetings; (4) maintaining a single litigation support unit to aid both OLC and LASO attorneys; (5) dividing the use of physical resources like libraries, computer services, and phone systems; and (6) coordinating training, priority setting, and information sharing regarding administration, finance, personnel, and other policies. In May 2005, LASO submitted a new configuration proposal (the “Proposal”) to LSC. Under the Proposal, LASO and OLC would merge into a single, nonprofit corporation with two financially separate divisions. The new organization would operate under the leadership of a single executive director, and the two divisions would share personnel in a variety of job categories. LSC’s Office of Legal Affairs issued a written opinion rejecting the Proposal. The opinion explained that “[i]n order to maintain program integrity from OLC, LASO must be a legally separate entity and must have greater physical and financial separation than set forth in the proposal.” According 15502 LEGAL AID v. LEGAL SERVICES CORP. to the declaration of Mark Freedman, LSC’s Assistant General Counsel, LASO did not contact LSC to discuss the Proposal prior to submitting it, nor did it explore alternatives with LSC after receiving notice that the Proposal had been rejected. Freedman also stated that “the PIR would permit a limited number of individual LASO attorneys to work parttime for OLC, provided the organizations otherwise complied with the PIR in terms of legal, physical and financial separation overall.”