Wisconsin’s low attorney compensation rates create conflicts for the indigent accused

Pleading the Sixth: Imagine holding the same job for 30 years without ever once receiving a raise. If that job required you to pay for many of the associated costs of doing business, inflation alone would have significantly decreased your take home pay. Regardless of the profession, the quality of the work being performed under such a financial arrangement will always be questioned. Now imagine that 20 years ago you were forced to take a 20% pay cut. This example is not a hypothetical. It describes the financial conflicts imposed on Wisconsin lawyers representing poor people charged with crime.

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Because the U.S. Constitution demands that a poor person facing a potential loss of liberty in a criminal or delinquency proceeding be given the services of a competent lawyer, the Wisconsin Supreme Court must ban all attorney compensation arrangements that “interfere with a lawyer’s professional independent judgment through economic incentives or disincentives.” Thus concludes Justice Shortchanged, a new Sixth Amendment Center report that highlights how Wisconsin’s lowest in the nation assigned counsel compensation rates place the indigent accused’s constitutional right to competent counsel in direct conflict with an attorney’s financial health.

The American Bar Association, Ten Principles of a Public Defense Delivery System are a set of standards that former Attorney General Eric Holder called the “basic building blocks of a well-functioning public defense system.” The Ten Principles requires two things of the indigent defense system when it comes to assigned counsel compensation: Principle 8 states that “[a]ssigned counsel should be paid a reasonable fee in addition to actual overhead expenses,” while specifically banning contract systems that are let “primarily on the basis of costs” without regard for “performance requirements,” “anticipated workloads,” and additional expenses – referred to nationally as “flat fee” contracting.

The state of Wisconsin currently pays private lawyers handling public defense assignments in one of two ways: a) at a rate of $40 per hour (a rate that has not changed since 1995, when the Wisconsin legislature actually reduced the rate from $50 per hour); or b) a flat per-case amount – for example, a flat $248 per misdemeanor case. (For a full description of how Wisconsin provides indigent defense services, click here.) And so, our report makes the following findings:

Finding #1: Wisconsin violates the ABA Ten Principles’ demand that appointed counsel be paid both a “reasonable fee” and “actual overhead expenses”

cover_6ACjusticeshortchangedAlthough $40 per hour may sound like a lot of money to the average person trying to make ends meet in tough economic times, it is not given the requirements of representing accused persons. The up-front costs required to maintain and operate a law practice in Wisconsin – commonly referred to as “overhead expenses” – are many, including, but not limited to: office rent, telecommunications, utilities, support staff, accounting, bar dues, legal research services, business travel, and professional liability insurance. A 2013 Wisconsin State Bar Association survey determined that the average overhead rate in Wisconsin is $41.79, or slightly more than the total $40-per-hour state compensation rate.

As a means of comparison, the Mississippi Supreme Court determined, in a case challenging the state’s assigned counsel compensation rate, that private attorneys representing indigent criminal defendants are entitled to a reasonable hourly fee in addition to overhead expenses. During hearings on the matter, the Mississippi Court took testimony from the Mississippi Sate Bar Association that set the average overhead rate at $34.86 per hour (or 87% of the total hourly rate paid in Wisconsin). Consider the cost of living difference between, for example, Madison and the Mississippi Delta, and then consider that the Mississippi case challenging public defense compensation is now nearly 25 years old. In other words, the assigned counsel rate today for Wisconsin lawyers today barely would have covered the basic costs of keeping a law practice open in Mississippi in 1990.

Finding #2: Wisconsin violates the ABA Ten Principles’ prohibition on contracts let primarily on cost

Using the state bar’s $41.79 per hour overhead rate, an attorney paid the state’s $248-per-misdemeanor-case flat fee would begin to lose money within the first six hours worth of work performed on the case (and would not have any net income from the fee). So, what if the attorney wants to earn some money and, on average, disposes of the cases within five hours time? Under that scenario, the attorney’s overhead costs would be $208.95.This leaves a “reasonable” fee of just $39.05. Spread over the five hours worth of work, the attorney is working at a rate of $7.81 (or slightly more than minimum wage).

Working to complete the average job in three hours means that an attorney expends $122.63 in overhead costs, netting $125.37 for him or herself. This equates to working at a rate of approximately $42 per hour – approaching a “reasonable fee” based on the rates of other states. There is a clear financial incentive to the attorney to limit what is done on a case in order to make it profitable, all to the detriment of the defendant. For example, in 2014 the ABA published a report on public defense workload that determined that to provide reasonable effective assistance of counsel, a Missouri lawyer must spend on average 11.7 hours to dispose of the average misdemeanor case through a plea deal. Applying this analysis to Wisconsin, the state of Wisconsin would have to pay attorneys nearly $490 per misdemeanor case just to cover overhead.

To prevent these financial conflicts, several states have recently prohibited fixed fee contracting altogether because of the financial conflicts of interest they generate. For example, Idaho requires that representation shall be provided through a public defender office or by contracting with a private defense attorney “provided that the terms of the contract shall not include any pricing structure that charges or pays a single fixed fee for the services and expenses of the attorney.” Similarly, the Michigan Legislature created a statewide public defender commission in the 2013 legislative session, called the Michigan Indigent Defense Commission (MIDC). In establishing minimum standards, rules, and procedures, the MIDC is statutorily barred from approving indigent defense plans that provide “economic disincentives” and statute further states that “incentives that impair defense counsel’s ability to provide effective representation shall be avoided.”

Finding #3: Unreasonably low attorney compensation rates interfere with a lawyers’ ethical obligation to give undivided loyalty to each and every defendant

It is not simply because the ABA has determined that such compensation arrangements create conflicts between attorney and defendant that the Wisconsin Supreme Court is urged to ban these arrangements. There is a constitutional imperative for defender representation to be independent and free from undue interference on a lawyer’s professional judgment. In the 1979 case, Ferri v. Ackerman, the United States Supreme Court determined that “independence” of appointed counsel to act as an adversary is an “indispensible element” of “effective representation.” Two years later, the Court determined in Polk County v. Dodson that states have a “constitutional obligation to respect the professional independence of the public defenders whom it engages.” Observing that “a defense lawyer best serves the public not by acting on the State’s behalf or in concert with it, but rather by advancing the undivided interests of the client,” the Court concluded in Polk County that a “public defender is not amenable to administrative direction in the same sense as other state employees.”

Despite these constitutional imperatives, a survey of Wisconsin private attorneys conducted as part of our research determined that less attorneys are willing to take cases at said rates, and that those that do accept indigent defense appointments spend less time on their public cases, file less pre-trial motions, and they are more likely to resolve cases by pleading to the offense charged. This suggests that attorneys with many SPD cases are prioritizing speed in order to make representation more profitable. Even if that is not the conscious intent, the pressure of having to make a living can have that effect.

Conclusion

In urging the Wisconsin Supreme Court to ban flat fee contracting and to raise the compensation rate to $85 per hour with an annual trigger (e.g., cost of living) to keep fees reasonable over time, Justice Shortchanged makes the case that there is no separation of powers issues to consider – an important lesson for other states that have imposed similar financial conflicts.

A state supreme court has inherent power to ensure the effective administration of justice. Although the legislature holds the power to pass budgets, an expenditure policy that creates a financial conflict of interest in which the constitutional right to counsel is compromised cannot be allowed to stand. State courts should not fear that passing a court rule increasing pay would necessarily result in forcing the legislature to expend more money. The Wisconsin legislature can, for instance, work together to increase the reliance on diversion that could move juvenile and adult defendants out of the formal criminal justice system and provide help with potential drug or other dependencies. Similarly, lawmakers can change low-level, non-serious crimes to “citations” – in which the offender is given a ticket to pay a fine rather than being threatened with jail time thus triggering the constitutional right to counsel. By shrinking the size of the criminal justice system, a state’s funding requirements under the right to counsel could be mitigated, even with increased rates of pay for attorneys.

The 6AC worked in conjunction with the Defender Initiative of the Fred T. Korematsu Center for Law and Equality at Seattle University School of Law (SUSL Defender Initiative) to research this project. The SUSL Defender Initiative is a law school-based project aimed at providing better representation for people accused of crimes through a unified vision that combines research, advocacy, and education. The 6AC/SUSL partnership is generously supported by the U.S. Department of Justice, Bureau of Justice Assistance.

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