Govt bailout saves 120 law centre jobs

The Government has rescued about 120 jobs in community law centres that were threatened by a collapse in revenue from lawyers' trust funds.

Justice Minister Simon Power received an emotional standing ovation from staff of the 27 law centres when he told their annual meeting that he would maintain their funding in the year starting in July at the same level as in the current year, around $11 million.

Law centres spokesman Kevin Campbell said the centres had faced a $7 million cut because of recent falls in house sales and interest rates, which have cut the centres' funding from the interest earned on house settlement money in lawyers' trust accounts.

Centres had said they would be forced to lay off staff, reduce hours or start charging people for legal advice if the cut went through.

Mr Campbell said the centres employed an average of six to eight people each, so a 60 per cent cut would have cost about 120 jobs.

Mr Power said the Government would make up the funding shortfall for 2009-10 and would work to find "a more enduring funding framework" after that.

"The arrangement with the solicitors' trust accounts is proving to be unsatisfactory due to the volatile nature of both the housing market and interest rates," he said.

Mr Campbell said it was "an emotional moment" for staff. "We are very relieved."