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The demand for free legal help is up, too, especially with evictions and foreclosures on the rise. In some states, budgets for legal aid are taking a massive hit. Anna Sale from WNPR in Hartford, Connecticut, reports.

ANNA SALE: Last Spring, Alice Banks got an eviction notice. Her landlord said she was six months behind on rent, and she and her three-year-old daughter had to get out.

Ms. ALICE BANKS (Resident, Hartford, Connecticut): I wanted to cry...

(Soundbite of laughter)

Ms. BANKS: Because I didn't know what was going on, why I had received, what to do.

SALE: She called the city hotline for help. They referred her to Greater Hartford Legal Aid; that's where she met Nancy Boone.

Ms. NANCY BOONE (Attorney, Greater Hartford Legal Aid): All right, any other new information for me?

Ms. BANKS: No.

SALE: Boone is Bank's legal-aid attorney. The two are huddled around a stack of papers at Hartford's housing court. They dispute the timing of an increase in Bank's subsidized rent. They end up settling with the landlord: Banks and her daughter get to stay put, and she doesn't think that would have happened without her free lawyer.

Ms. BANKS: I don't think just me standing alone would have been able to go forth with them.

SALE: Nancy Boone spends almost all of her time on housing issues, mostly helping clients navigate through the rules and policies of HUD, the Federal Department of Housing and Urban Development.

Ms. BOONE: I was wondering if they were hiring now. I was thinking maybe I could (unintelligible)...

(Soundbite of laughter)

Ms. BOONE: I was going to work for HUD.

SALE: She's joking about working for HUD because she's getting laid off at March along with five other lawyers; that's a fifth of Hartford's legal-aid attorneys. It's part of an effort to shrink the office's budget by 30 percent. And it's not something Boone saw coming.

Ms. BOONE: Not at all. I figured that my job was safe because there would be more people who needed our services.

SALE: Legal-aid lawyers represent low-income people for free. They handle eviction and unemployment hearings, food stamps and disability benefits, domestic violence and divorce cases. Their budgets woes have roots in the same economic downturn that's making things tougher for their clients.

Ms. SANDY KLEBANOFF (Executive Director, Connecticut Bar Foundation): IOLTA is an acronym for Interest on Lawyers Trust Accounts.

SALE: Sandy Klebanoff is the director of the Connecticut Bar Foundation, which manages Connecticut's IOLTA Program. It's a private funding stream that gained popularity after major cuts to federal legal aid in the '80s and '90s. Every state has one. Here's how it works: lawyers deposit clients' money in IOLTA accounts, like from a real-estate deal or legal settlement. It's usually only there until checks clear, but while it is, it collects interest.

Ms. KLEBANOFF: That interest, believe it or not, in Connecticut in 2007 amounted to $20 million.

SALE: That was good news for legal aid because that money funds public-interest legal programs. Then housing sales slowed and prices fell, which meant less money going through lawyers' accounts. Interest-rate cuts compounded the program. The decline was gradual at first.

Ms. KLEBANOFF: But it just - I mean, it just bottomed so quickly. It's a crisis.

SALE: Next year, Klebanoff is expecting the interest to be down 80 percent from its high. The National Legal Aid & Defenders Association says the budget shocks have been the most severe in Northeastern states and in Texas. But the organization's Don Saunders says low-interest rates are hurting programs nationwide.

Mr. DON SAUNDERS (Director, Civil Legal Services, National Legal Aid & Defenders Association): I think it is the responsibility of government. Equal justice under the law is a guarantee of our Constitution.

SALE: And his group is already reaching out to Barack Obama about shoring up legal-aid budgets long term with more federal support. For NPR News, I'm Anna Sale in Hartford, Connecticut.

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