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Legal Services offices continue to peel away from the mothership.

Last week, after months of negotiations with Legal Services of New York City, MFY Legal Services decided to break away from its parent organization. The Manhattan-based legal office is the second in the LSNY system, following the Bronx affiliate, to reject Legal Services’ plans to centralize its service network and instead move toward going off on its own.

“We asked ourselves, are we better off being part of a larger LSNY where we really don’t have that much of an identity, or are we better off having a smaller organization where we do have our own identity?” said MFY Chair David Keyko. “We chose the latter.”

Because federal law requires that Legal Services of New York City operate in every borough but Staten Island, LSNY will have to set up a new office in Manhattan, a move that could mean some layoffs and cuts in service. “When you have two operations where you had one, there will be some additional infrastructure costs,” said LSNY Executive Director Andrew Scherer. “It would have some short-term impact.”

For the last couple of years, LSNY, under a mandate from the federal Legal Services Corporation, has been drafting a plan to move its network of independent local offices to a system of central oversight. While each neighborhood office would maintain its own board of directors, the central LSNY board would gain the right to make final decisions on funding, staffing and programs for those local offices.

For MFY, the biggest sticking point on the plan, set to go into effect this winter, was whether LSNY would allow each local office to establish a separate operation to handle cases affected by a ban on the use of federal money to fund class action cases or to represent undocumented immigrants. Last December, MFY, along with LSNY and other legal service groups, filed a lawsuit against the federal Legal Services Corporation challenging those restrictions. MFY unsuccessfully urged its parent group to set up a separately funded entity or take other measures allowing their lawyers to take on the prohibited cases.

In LSNY’s defense, Scherer said his organization would like the local offices to be able to do restricted work, but with $12 million from the feds at stake, “We have to do that in a way that doesn’t jeopardize our funding.”

MFY is not the only local office to raise concerns. In August, Bronx Legal Services filed a lawsuit against LSNY claiming the restructuring plan violated antitrust laws. [“Rumble in the Bronx Over Free Legal Services,” August 12]. And Brooklyn Legal Services Corporation A has hired an attorney with the intention of limiting the LSNY central board’s powers and making it easier for local groups to pull out of the new entity. “We don’t anticipate litigation, but there can always be a breakdown,” said Brooklyn A executive director Marty Needelman, noting that he hopes the Bronx’s suit is successful.

MFY expects that it will have to scale back its operation, which last year provided legal help to 5,300 Manhattan residents through programs like the Disability Advocacy and Mental Health Law projects and tenant assistance in Chinatown. The office receives about 40 percent of its budget from the federal Legal Services Corporation and other sources funneled through LSNY. Depending on the deal that LSNY and MFY negotiate over the coming weeks, much of that funding may be gone.

“MFY will have more of a citywide focus than just a Manhattan focus,” said Keyko. He expects that many of MFY’s staff will go to work for the new LSNY office.

For more on how the restructuring of legal services is playing out at LSNY and nationally, check out the November issue of City Limits magazine, on newsstands next week.

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