By: J.J. Prescott. Published by: Fordham Urban Law Journal. Published in February 2010.

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This essay explores how policymakers and other public-interested actors have empirically calculated the benefits of providing low-income access to legal services in the past, and how they might improve upon existing methods going forward. The author reviews, criticizes, and tries to build on two major civil justice needs studies, one published by the Legal Services Corporation in 2005 and the other by the American Bar Association in 1994. The author also briefly criticizes assertions that the public provision of services is necessarily counterproductive.

Summary

J.J. Prescott criticizes current economic approaches to assessing the value of public funded legal services. He claims that supporters and critics focus only on either benefits or costs and fail to provide policymakers with a valuation of legal services’ net benefit or cost to society that a policymaker might need when allocating limited government resources. Prescott suggests welfare economics as a more appropriate alternative to rights or values based rhetoric when persuading policymakers as it easily compares legal services’ value against alternative public or private destinations for government resources.

Prescott describes a welfare economist’s goal as calculating “an allocation that maximize[s] society’s net benefit by arranging funding so that the marginal net benefit for each exercise [is] the same.” Transfers between the public and private arenas could be effectuated through taxation if the transfer would increase the net benefit. Utility is measured through monetary wealth, so an economist’s goal becomes societal wealth maximization. Prescott concedes that a focus on wealth maximization could exacerbate distributional concerns (for example, cost-benefit analysis would support funding a program for the wealthy rather than the poor if it maximized overall wealth), but if the gain is enough to compensate any group that suffers from the decision, wealth could be redistributed. Under this model, legal services would be underfunded if they received less public resources than the model allocation dictated. Prescott rejects the current “any benefit” criterion used in many studies because it ‘almost always indicate[s] that more money is merited.” Rather he suggests that a better approach would assess legal services’ net benefit to society in comparison to benefits provided by private actors and other public programs.

Prescott claims that there are two important questions that must be answered: What are the costs and benefits of publicly funded legal services programs? How do we value these costs and benefits?

Recommendations

Prescott recommends that future surveys of public legal services use a contingent valuation (“CV”) method to value net benefits as the method is well oriented to needs-based survey approaches.

A CV method uses a willingness-to-pay metric (“WTP”) to assess what participants and non-participants would pay or trade for to have the legal services program. Prescott recognizes that market failures, such as the limited resources of low-income individuals and potentially limited knowledge about the value of legal services, might require researchers to adjust the metric. Prescott also recommends that studies reach out to non-low-income individuals who may value public legal services to reflect the wider benefit the programs offer society and that surveys ask participants how they would value specific legal services rather than legal services programming as a whole.

Prescott does not intend for a CV estimate “to drive our policy decisions” but rather should be “considered as a plausible method (among others) to answer one question that matters to policymakers…whether there are sufficient benefits produced to justify the expansion of legal services given their costs and the fact we live in a world of limited resources.”

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