The words ‘target’ and ‘budget’ are often used interchangeably and/or in different ways by different firms in relation to setting objectives for their pro bono programs.
For the purpose of this chapter, target refers to a firm’s goal in relation to pro bono performance or output: for example, the Centre’s National Pro Bono Aspirational Target of 35 hours of pro bono legal work per lawyer per year.1 The term budget is used to refer to the operational costs or expenses that are incurred by a firm in relation to its pro bono program: for example, $150,000 in operational costs.
This chapter outlines why firms that wish to establish a robust and sustainable pro bono program should have clear targets and budgets.
1.8.1 TARGETS FOR PRO BONO LEGAL WORK
FIRM WIDE TARGETS FOR PRO BONO LEGAL WORK
WHY SET A TARGET?
A key indicator of a firm’s commitment to pro bono legal work is whether capacity for this work is planned. At a fundamental level, this can be demonstrated by whether a firm sets a target for the amount of pro bono legal work that will be undertaken, and how pro bono legal work is measured against this target.
Firms may choose to set targets for pro bono legal work for the whole firm and/or for groups or individuals within it. The advantages of setting a target, where the target is sufficiently ambitious and communicated to all in the firm, include:
- sending a message to all in the firm about the firm’s commitment to, and expectations and objectives in relation to pro bono legal work; and
- setting benchmarks against which the firm’s pro bono program can be evaluated.
One advantage of setting an annual firm-wide target, at least while developing a program, is that the partnership may be more willing to commit to an active pro bono program if the extent of the program is clearly delineated.
Setting an annual target is also consistent with the way that other aspects of the firm’s business are managed. It may also allow or encourage the firm to think strategically about planning its pro bono legal work, especially initiatives that may have significant resource implications, for example, an ongoing commitment to a particular not-for-profit organisation or public interest litigation.
In order to encourage pro bono legal work, and a pro bono culture, it is important that the annual pro bono target adopted is not too conservative or subject to a strict maximum. If the annual target is not met by a significant margin, the firm’s pro bono committee can inquire into the reasons for this and make improvements to the pro bono program in doing so. A firm that regularly fails to meet its target by a significant margin may need to:
- reconsider the kinds of work it is agreeing to take on;
- contact their referral sources to find out why more matters are not being referred; and/or
- develop new sources of work or new areas of expertise.
THE FORM OF TARGET
A firm’s target represents the extent of its commitment to pro bono legal work. Most mid and large sized law firms set an annual pro bono target as a means of managing and focusing their pro bono programs.2
Sixty-five percent of the respondents to the Centre’s 2014 National Law Firm Pro Bono Survey set the target for their firm’s pro bono legal work based on hours. The remaining respondents had a financial or funds based target. For example, the delivery of $1 million of pro bono legal services per year or pro bono legal work equivalent to 5 percent of the firm’s annual billable fees.
An annual target for a pro bono program that is based on hours3 is best practice for a number of reasons:
- the ‘hours per lawyer’ target is recognised as a standardised benchmark both within Australia, as part of the National Pro Bono Aspirational Target, and internationally;
- it allows for clear, simple and standardised reporting within the firm. Although lawyers in different groups within a firm may have different charge out rates all groups generally record the time they spend on matters in time based units;
- it allows for clear, simple and standardised reporting to external parties, such as the Commonwealth Office of Legal Services Coordination and the Centre; and
- it supports the idea that undertaking pro bono legal work is a professional obligation for all lawyers by making the overall target referable to the individual.
Measuring pro bono contributions on a financial basis is problematic because it:
- does not take into account differences in:
- firm size, both as between firms and for each firm over time; or
- the hourly rates of individual lawyers and different fee arrangements; and
- sends a message that pro bono legal work primarily represents a financial cost rather than:
- a professional obligation for its lawyers; and
- an important contribution by the firm to the community.
Regardless of the form that a target takes it should be periodically reviewed, particularly in the early stages of the development of a firm’s pro bono program. A target should also be capable of upwards adjustment as the firm’s pro bono culture develops and capacity increases.
OTHER TARGETS FOR PRO BONO LEGAL WORK
Firms might wish to set targets in addition to an annual firm wide ‘pro bono hours’ target in order to promote and manage their pro bono practices. Like firm-wide targets any other form of budget or target needs to be incorporated into the firm’s pro bono policy and appropriately communicated, so the firm’s objectives and expectations are well known.
Other targets used by firms include the following:
- A target for each group or office within the firm. One advantage of this is that each group or office is then clear about its pro bono expectations and monitoring can occur at the group level. If a group based target is set in addition to an annual firm-wide target both should use the same metric for consistency: for example, hours per lawyer per year.
- A target for each lawyer within the firm. Where firms set targets for individual lawyers, these are often linked to the firm’s method of crediting and recognising those hours in terms of lawyers’ individual budgets, salary, advancement and/or performance appraisal.
- A target percentage of the firm’s lawyers, including partners, participating in pro bono.4 Firm and incorporated legal practice signatories to the National Pro Bono Aspirational Target agree, amongst other things, to:
Encourage and support the provision of pro bono legal services by all its lawyers.5 (emphasis added)
- A target number of matters for the firm per year, particularly having regard to previous performance, or for each group per year.
- A target for matters for certain client groups or areas of law. For example, 50 percent of the pro bono program to be dedicated to assisting individuals or a growing and significant proportion of the program dedicated to the firm’s key focus areas.
1.8.2 BUDGETS FOR PRO BONO PROGRAMS
A firm should also have a separate operational or expenses budget for the management of the pro bono program itself, similar to commercial teams within the firm.
If a pro bono program is in its early stages and still taking shape, one challenge of working within a fixed operational budget is that it may restrict the ability to adapt the budget as the firm’s understanding of the best program for the firm develops. However, an operational budget is important because it helps ensure the pro bono program is treated in the same way as any other practice in the firm. One way to address this challenge is to incorporate an annual budget review in the pro bono program.
The first step is to consider what items should be included in the budget, taking into account the costs associated with running the pro bono program. For example:
- the salaries of the dedicated pro bono lawyers;
- overhead costs;
- business development and marketing, including tickets for dinners and sponsorships;
- training and attending conferences;
- hosting community legal organisations and other pro bono clients within the firm’s offices;
- pro bono referral organisation membership fees; and
- other disbursements.
In this regard, consider what type of legal work will be done and what expenses are likely to arise in the course of that practice.
The firm’s general accounting procedures will also be relevant — for example, which costs are borne by practice groups rather than by the firm as a whole. If expenses are allocated to the pro bono budget then there will be no ‘cost’ to a practice group if one of its lawyers is undertaking pro bono legal work. If expenses are allocated to the practice group budget there will be a cost to the group which may impact on the amount of pro bono legal work that a group is willing to support or undertake. Particular arrangements may also need to be made in the case of secondments, where a lawyer spends a dedicated and regular period of time on pro bono legal work.
When considering how much to allow for in budgets, again consider the type of work likely to be done, and if possible, be guided by expenditures incurred in similar commercial practices in the firm. For example, although litigation matters can be long-running and expensive, discrete advices are less so. It may also be useful to consult pro bono coordinators in other, similar firms.
1 For more information on the National Pro Bono Aspirational Target see the Centre’s website at http://probonocentre.org.au/provide-pro-bono/aspirational-target/.
2 Seventy-six percent of respondents to the Centre’s 2014 National Law Firm Pro Bono Survey indicated that their firm set some sort of overall target or budget for its pro bono program in the 2014 financial year. See National Pro Bono Resource Centre, Fourth National Law Firm Pro Bono Survey (Australian firms with fifty or more lawyers) – Final Report, December 2014, p 55, http://probonocentre.org.au/information-on-pro-bono/our-publications/survey/.
3 Pro bono hours should be recorded in a manner that is consistent with the firm’s time recording policy for commercial legal work.
4 The respondents to the Centre’s 2014 National Law Firm Pro Bono Survey reported an average participation rate of 50 percent overall and 40 percent for partners. See National Pro Bono Resource Centre, above n 2, pp 28-30. http://probonocentre.org.au/information-on-pro-bono/our-publications/survey/
5 Australian Pro Bono Centre, Statement of Principles, http://probonocentre.org.au/provide-pro-bono/aspirational-target/statement-of-principles/.