In the process of setting up or maintaining a pro bono practice, firms should take steps to identify, analyse and manage any issues that may impede effective pro bono service delivery. This serves to minimise exposure to liability and to maximise opportunities for undertaking pro bono legal work. In the context of addressing unmet legal needs and access to justice with pro bono legal work, an innovative response to requests for assistance might involve looking at risk management through a different lens.
This chapter examines some of the issues that may arise in pro bono practice such as lawyers’ duties, supervision, and conflicts of interest, as well as tips to navigate and remove common hurdles. It also looks briefly at issues relating to practising certificates and professional indemnity insurance to the extent that these issues may affect pro bono service delivery. The chapter concludes with a discussion about disclosure to the court when acting pro bono and discrete task or limited pro bono assistance.
This chapter deals with the risk management issues of specific relevance to pro bono. It does not deal with other risk management issues that arise in legal practice generally (for example, legal practitioner liability issues arising under the Civil Liability Act 2002 (NSW)) which also need to be considered.
- 2.2.1 Pro bono matters falling outside a firm’s areas of expertise
- 2.2.2 Conflicts of interest
- 2.2.3 Practising certificates & professional indemnity insurance
- 2.2.4 Disclosure to a court
2.2.1 PRO BONO MATTERS FALLING OUTSIDE A FIRM’S AREAS OF EXPERTISE
Some firms explicitly state in their pro bono policies that they will only provide pro bono legal assistance where they can do so with competence. Some firms specify particular areas in which they will not provide pro bono legal services (most commonly for large firms, these are family and criminal law). Pro bono legal work should be undertaken with the same degree of competence, expertise, and to the same high standard as any other legal work.
Firms can, however, consider acquiring expertise in new areas. A key component of many successful pro bono partnerships is the expert training provided to pro bono lawyers by their partner organisations in areas in which they have not previously practised. See further Chapter 1.14 Training and skills. For examples of these kinds of initiatives, see Chapter 1.7 Current models of pro bono legal work and What Works, Part 4 Models of pro bono legal assistance.
2.2.2 CONFLICTS OF INTEREST
When deciding whether it can provide pro bono assistance, a firm should refer to its intake criteria which are generally formalised in the firm’s pro bono policy. These criteria usually include consideration of conflicts of interest. Conflicts of interest may be:
- legal conflicts — also known as direct conflicts; or
- commercial conflicts — also known as indirect conflicts.
Firms generally have systems in place to identify and respond to legal conflicts of interest.
Commercial conflicts, which however, are the more contentious area in pro bono legal work, are discussed further below.
A commercial conflict is the firm’s understanding that taking on a particular pro bono matter may deter a current or potential commercial client, because the matter is seen as damaging to the firm’s allegiances or relationships, or prohibitively controversial. Situations that can give rise to commercial conflicts in pro bono legal work include:
- doing pro bono legal work that raises concerns for a commercial client, or advocating a point of view that is antagonistic to them or their interests, or acting in proceedings against their interests. This may include acting in a matter that directly impinges on the known and explicit legal or business interests of a client: for example, hosting a workshop for a CLC that is considering a class action against an industry where the firm has a significant practice in that industry;1
- appearing in matters against a particular class of clients (for example, doctors) from whom a firm regularly receives instructions;
- acting in a matter perceived as contrary to the firm’s general vision or strategic plan;
- acting for plaintiffs in a class action against a corporation, institution or government agency to whom unrelated legal advice was previously given;
- acting for ‘the other side’: for example, acting for a patient or aggrieved customer, when the firm normally acts for doctors or banks, even though the defendant in question is not a client;
- acting in politically sensitive or ethically controversial matters or matters seen as ideologically charged; or
- acting against an organisation that the client is trying to attract as a client.
OVERCOMING AND MANAGING COMMERCIAL CONFLICTS OR CONCERNS
While commercial conflicts can arise from time to time when pro bono requests are made, there are various ways to mitigate or eliminate them.
Because commercial conflicts are about perceptions, it is ultimately a matter for each firm to decide whether a conflict exists and how best to respond. It is worth noting that an overly cautious approach to commercial conflicts can inhibit a firm from taking on pro bono legal work, and consequently, limit the firm’s ability to help address unmet legal need. A commercial conflict may, on occasion, be erroneously interpreted as a legal conflict, due to anxiety about alienating a long-standing or desirable client. This may in part stem from confusion about terms and definitional issues.2 Without prejudicing business interests, adopting a common-sense approach to commercial conflicts will ensure that clients are not denied pro bono assistance unnecessarily.
The following strategies are options for addressing commercial conflicts:
- Contact the client to discuss the perceived conflict and obtain the client’s consent to the firm’s acting. Both the Commonwealth and the Victorian governments have made clear in their documentation concerning pro bono legal work and service providers that government agencies, departments and statutory authorities should not adversely discriminate against legal service providers that have acted, or may act, pro bono for clients in legal proceedings against government.3 In Victoria, any potential conflict can be raised with the contract manager within the Department of Justice and Regulation. In the Commonwealth, the Office of Legal Services Coordination in the Attorney-General’s Department administers the purchase of legal services under the Legal Services Directions 2005 (Cth) and enquiries should be directed to the office’s principal solicitor.
- Clarify with the commercial client that the firm’s commitment to pro bono is an integral part of its corporate image and public relations strategy. Pro bono legal work is proudly promoted by many mid-sized and large firms as a cornerstone of their corporate culture. The client may in fact prefer to partner with businesses that demonstrate similar values and a similar corporate culture to their own.
- It may be possible to accommodate a firm’s involvement in a particular matter by having its staff act as volunteers at a CLC, non-government organisation or charity that is supervising the matter. The firm’s lawyers would still do the work and the principal lawyer of the organisation would act as the supervising lawyer. In this way the client is the organisation’s client and any risk rests with it.
- Where a matter referred from a community legal organisation raises a commercial conflict, give general advice about the issues to the community legal organisation and/or undertake research into areas relevant to the issues, or offer alternative assistance such as administrative support or secondments.
- Undertake to place the refused referral elsewhere — this will require developing ties with other firms with pro bono practices that can accept referrals on this basis.4
- Develop and publish policies and procedures to identify and resolve potential commercial conflicts. A policy could require staff training and education on appropriate interpretation of commercial concerns.
- Form a commercial conflicts committee that identifies in advance areas that they suspect may cause problems with particular commercial clients, and consults and liaise with those clients to determine whether the client will support the firm’s pro bono commitment to a particular matter or cause. This approach can help prevent ad hoc decision-making in relation to pro bono.
- In relation to secondments, equip the firm’s secondees with a list of the firm’s top 50 clients to facilitate quick conflict checking, and potentially preclude the secondee from working on particular matters.
Firms may be especially cautious about taking on matters of a controversial or sensitive nature. In these rare cases, a firm can adopt similar procedures to those that apply to commercial conflicts, for example, additional scrutiny of the matter at a senior or committee level. This approach has the advantage of putting the firm’s management on notice, enabling the firm to develop in advance an appropriate strategy to deal with any media attention, and therefore shield the pro bono legal work from undue criticism.5
As a matter of procedure, if the firm’s policy is not to take on matters against a particular client, or class of clients, this information should ideally be made available to the referring organisations to avoid inappropriate referrals. See Chapter 2.1 Casework procedures.
2.2.3 PRACTISING CERTIFICATES AND PROFESSIONAL INDEMNITY INSURANCE
Each jurisdiction has its own rules concerning practising certificates and professional indemnity insurance requirements, and lawyers undertaking pro bono legal work should contact their relevant professional association and professional indemnity insurer in relation to any specific requirements or exemptions. Employed lawyers undertaking pro bono legal work within their firm will have their practising certificates and insurance needs met by the firm. Professional indemnity insurance generally extends to pro bono legal work so long as it is undertaken in connection with the practice of the firm. Pro bono legal work done in this context should be undertaken with the knowledge and approval of the firm, and subject to the same supervisory arrangements as commercial work.
Pro bono legal work undertaken by a lawyer on secondment to a community legal organisation is generally covered by the community legal organisation’s professional indemnity insurance policy. The obligation for the organisation to maintain adequate professional indemnity insurance for a secondee is sometimes reflected in the formal agreement between the organisation and the firm providing the secondee. For secondment agreement precedents see Appendix 1 Precedents.
There are also various clinic and partnership arrangements that either carry their own professional indemnity insurance or rely on the professional indemnity insurance provided to all community legal centres nationally.
Lawyers employed as in-house lawyers by corporations and government should check whether their practising certificates permit them to undertake pro bono legal work. In-house lawyers will require professional indemnity insurance for any pro bono legal work they undertake. The cost of this insurance may represent a barrier to in-house and volunteer lawyers undertaking pro bono legal work. To address this barrier, in 2009, the Centre established the National Pro Bono Professional Indemnity Insurance Scheme which provides free professional indemnity insurance for approved pro bono projects (see below).
NATIONAL PRO BONO PROFESSSIONAL INDEMNITY INSURANCE SCHEME
The National Pro Bono Professional Indemnity Insurance Scheme,6 together with the first edition of the Australian In-House Legal Counsel Pro Bono Guide, was prepared by DLA Phillips Fox (now DLA Piper) and launched by the then Attorney-General of NSW, The Hon John Hatzistergos on 3 June 2009. The latest edition of the Australian In-House Legal Counsel Pro Bono Guide was published in August 2013. The Scheme removes one of the key barriers to pro bono legal work for in-house and volunteer lawyers: the need for professional indemnity insurance cover for any civil claims arising from their pro bono legal work. The Scheme’s Policy is underwritten by Lawcover and is held and administered by the Centre. The Policy insures lawyers and paralegals who undertake pro bono legal work on pro bono projects approved by the Centre.
A project is defined broadly, for example, it can be:
- legal work for a charity or community organisation;
- work being referred through a PBRO;
- work as part of a multi-partner project involving a law firm pro bono program; or
- a single legal case.
However, any work conducted as part of a project must conform with the definition of ‘pro bono legal work’ in the Policy.7
Lawyers may seek cover under the Policy by completing an application form and submitting it to the Centre for approval. Once approved, the Policy will provide free professional indemnity insurance, subject to terms and conditions, for all lawyers and paralegals who work on that project.
The Policy is a ‘safety net’ policy, so cover will only extend to circumstances where no other professional indemnity insurance policy provides cover. The Centre has paid the premium and will cover the excess payable on any claim.
2.2.4 DISCLOSURE TO A COURT
The question has arisen as to whether a lawyer who has filed a notice of appearance for a client and is acting pro bono should notify the court of that fact. There is no statutory obligation, nor principle of general law, requiring lawyers to inform the court that they act pro bono. However, in certain circumstances, disclosure may be advisable.
The first issue concerns costs orders. A court has a general discretion regarding costs orders without needing to know whether a liability exists for a client to pay costs to the lawyer. Once a costs order is made by the court, the question of what costs can be recovered is one for parties to agree on or the relevant costs assessment process to determine. It is only at this stage that a lawyer may be obliged to disclose to the costs assessor that he or she is acting on a pro bono basis (but it will be important to note on what basis the firm acts, for example, conditional costs basis). See Chapters 1.12 Costs and disbursements and 2.2 Letters of engagement.
There may be other practical reasons why disclosure may be, at least strategically, advisable in particular circumstances. For examples of cases where courts have taken account of pro bono representation see the Centre’s ‘Case Law’ page on its website. 8
1 In some cases there can be a number of ‘layers’ in a situation which presents a perceived commercial conflict. That is, a reluctance to act not simply because of a perceived conflict in relation to a client but also a client’s client. For example, where a firm acts for a number of banks and a proposed pro bono matter will impact on one of the banks’ major clients.
2 Removing the word ‘conflict’ from what is known as a commercial conflict may clarify the confusion between professional conflicts as stated in professional rules of conduct and what are really commercial concerns. See E Wentworth, ‘Barriers to pro bono: commercial conflicts of interest reconsidered’, in C Arup and K Laster (eds), For the public good: pro bono and the legal profession in Australia, The Federation Press, Sydney, 2001, p 169.
3 Legal Services Directions 2005 (Cth) cl 11.3-11.5; Deed of Standing Offer for the Provision of Legal Services (Vic) Pt C cl 22.
4 The National Law Firm Directory allows, amongst other things, firms to log in to see the focus areas of other firms. This may be helpful in placing a refused referral. See the Centre’s website at http://probonocentre.org.au/national-law-firm-directory/.
5 E F Lardent, ‘Trends in law firm pro bono: taking on politically or ideologically charged matters’, What’s New in Law Firm Pro Bono, Sept/Oct 2002, Issue 44, Law Firm Pro Bono Project at Georgetown University Law Center, p 7.
6 For more information about the National Pro Bono Professional Indemnity Insurance Scheme see the Centre’s website at probonocentre.org.au/provide-pro-bono/pi-insurance-scheme/.
7 The definition of ‘pro bono legal work’ contained in the policy is based on the Law Council of Australia’s definition of pro bono legal work. Projects are also assessed against the National Pro Bono Aspirational Target definition of ‘pro bono legal work’. See Chapter 1.2 Defining pro bono legal work.