Legal Services Reform Act of 1990

Legal Services Reform Act of 1990 - Imposes requirements with respect to funds provided by the Legal Services Corporation. Sets forth prohibitions, with exceptions, on redistricting activities, the solicitation of employment, participation in precomplaint settlement negotiations or litigation involving agricultural entities, lobbying, or the provision of defense assistance in drug-related matters by fund recipients.

Directs the Corporation to require each recipient to maintain records of time spent on the cases of matters with respect to which that recipient is engaged in activities.

Grants the Board of Directors of nonprofit State legal services organizations which are funded by the Corporation authority over the selection of those matters and cases to which their staffs shall devote their time and resources.

Allows fund recipients to use non-Corporation funds to match Federal or State funds provided under the Older Americans Act of 1965 and other government funds. Specifies that funds derived from Interest on Lawyers Trust Accounts (IOLTA) and other non-Corporation funds shall not be expended for any purposes prohibited under this Act or the Legal Services Corporation Act.

Requires all grants and contracts awarded by the Corporation to be awarded under a competitive bidding system.

Outlines provisions regarding: (1) termination or denial of funding under such a system; (2) distribution of funds; and (3) approval of attorney members of local boards.

Enables the Corporation to sanction individual employees of fund recipients who violate this Act, the Legal Services Corporation Act or its regulations, or State codes of professional responsibility.

Prohibits fund recipients from claiming or collecting attorneys' fees from nongovernmental parties to litigation initiated by such recipients. Provides that if the defendant prevails in such a lawsuit, the Corporation is required to pay 90 percent and the fund recipient ten percent of the defendant's attorney fees, except where the court finds that an action was commenced to retaliate or harass the defendant in which case all fees must be paid by the fund recipient. Provides that if the amount recovered is less than ten percent of the amount of damages sought, the court may award attorney's fees to the defendant.

Prohibits any attempt, such as the creation or use of "alternative corporations," to evade the provisions of this Act or the Legal Services Corporation Act.