Guidance Notes on Reporting
‘Pro Bono Legal Services’

4. All signatories that signed up to the Target during the reporting period must report their hours, regardless of how recently they became a signatory. If a signatory is a new Target signatory (i.e. signed up to the Target on or after 1 July, but on or before 30 June of the reporting period), they should only report on the pro bono hours undertaken since they became a Target signatory – not the whole financial year.

5. “Firm’s lawyers”² or “in-house legal team’s lawyers”,³ as applicable, includes law graduates not yet admitted to legal practice and thus their pro bono hours should be reported. It does not include paralegals, and their hours should not be reported as pro bono hours.

6. Signatories have the option of separately reporting paralegal hours where the work performed is of a legal nature and would otherwise be charged to the client if it were a commercial matter.

7. Time recorded for the purpose of delivering pro bono legal services should be treated in the same way that work performed for commercial clients is treated. In this respect, each signatory firm’s or in-house legal team’s policies for the treatment of travel time should apply to their pro bono legal work.

8. Each signatory should have systems in place to ensure that accurate records are kept of the pro bono legal work performed.

9. Pro bono legal services may include international pro bono legal services,⁴ that is, pro bono legal work undertaken:
   • outside Australia, by lawyers who are supervised by, or provided from, an office based in Australia
   • for clients based outside Australia, by lawyers based in Australia; or
   • for organisations based in Australia where the work concerns an initiative outside Australia.

10. When reporting on the percentage of the firm’s/in-house team’s lawyers that did at least one hour of pro bono legal work in the reporting period, the response should capture the staff’s overall engagement in pro bono. Please therefore report on the percentage of the total number of lawyers in the firm/team throughout the year that participated in at least one hour of pro bono work, including those who commenced work for or left the firm throughout the year (and not the percentage of FTE lawyers).

11. In relation to pro bono legal services provided for a “substantially reduced fee”:
    • Signatories will be asked to report separately on pro bono legal services provided for a “substantially reduced fee” compared to pro bono legal services provided for no fee.
    • “Substantially reduced fee” pro bono hours reported to the Centre should only count on a pro rata basis based on the proportion that the reduced fee bears to the fee that would otherwise be charged. For example, if the fee charged is reduced by 75% of what would otherwise be charged for the matter, then 75% of the hours worked on the matter can be counted towards the Target.
    • The Centre will only count “substantially reduced fee” hours reported against the Target if those fees have been reduced by at least 50% of what would otherwise be charged for the matter.
    • The term “otherwise be charged for the matter” as used in this Note 11 refers to what the fee would be if the matter were not considered a pro bono matter.

PART 2 – PRO BONO WORK FOR CHARITIES, OTHER NOT-FOR-PROFIT ORGANISATIONS AND SOCIAL ENTERPRISES

The following Guidance Notes relate specifically to clause 1(c) of the definition of “pro bono legal services”:

Mission

In assessing whether legal work for a charity, other not-for-profit organisation or social enterprise should be undertaken on a pro bono basis, the key factor is whether the mission and impact of the organisation is likely to benefit low income or disadvantaged members of the community, or be for the public good.

To be for the public good the mission of the organisation must be to advance a broad public interest, namely that it is likely to affect a significant number of people and/or that it raises a matter of broad public concern.

Mission alone may be a sufficient determinant subject to the unique criteria to be considered for social enterprises (see below).

Matter

If the mission that would justify the matter being a pro bono one is partial, or not sufficiently compelling, the nature of the proposed legal matter should be considered. If the matter is one that aims to benefit a low income, socially disadvantaged or a marginalised individual or group, or is clearly in the broader public interest, the matter may be considered a pro bono legal matter.

Means

Where neither the mission nor matter is itself conclusive, a matter may still be considered a pro bono legal matter if the organisation cannot afford to pay for legal services. However, a lack of means alone is not sufficient to meet the criteria for pro bono legal work. Other factors for consideration may include all or any of:

• the constituency ordinarily served by the organisation and their disadvantage (if any);
• the nature and extent of the legal services requested and the possible outcome if legal services are not obtained;
• whether the organisation has been referred by a pro bono legal referral agency;
• the overall financial position of the organisation; and
• the stage of development of the organisation.

Social Enterprises

Social enterprises are not defined in Australian law but for the purposes of this Guidance Note their key characteristics are that they operate as a business seeking to generate revenue and have a primary social, humanitarian, cultural or environmental mission. Social enterprises aim to benefit the public and the community rather than shareholders and owners.

Since the circumstances of each social enterprise will be different, professional judgment should be applied in each case.
Work for social enterprises will be considered pro bono legal work if:

(a) Profit Allocation: At least 50 percent of the social enterprise’s profit is used or to be used to support its mission, whether as a continual re-investment into the enterprise itself or donation to a third-party charity or other not-for-profit organisation.

To demonstrate that a social enterprise reinvests at least 50 percent of its profits to support its mission, the pro bono legal service provider could seek documented evidence, which may include:

• the social enterprise’s governing documents;
• evidence of commercial joint ventures with charitable or not-for-profit organisations;
• evidence of the social enterprise’s historic payout to investors or owners, if relevant; and/or
• other publicly available information; and

(b) Phase and Duration of Engagement:

The pro bono relationship is viewed, from its inception, as lasting only until the social enterprise becomes profitable from a market perspective and can pay for reasonably-priced legal services.

The size and phase of development of the social enterprise should therefore be considered. Early-stage start-up ventures will often have less capacity to pay for legal services than more established enterprises.

The duration of the pro bono legal representation should be determined on a case-by-case basis with reference to, for example, when:

• the social enterprise closes its first round of funding;
• the social enterprise begins to generate revenue or profit; or
• the annual profits of the social enterprise exceed a pre-determined amount.

Additional Criteria

Additional criteria to be considered in determining whether a social enterprise is eligible for pro bono legal assistance may include:

• Cost ratio: the ratio of expenditure on administrative costs (including remuneration of owners, directors and employees of the social enterprise) compared to expenditure on programs or services of the social enterprise in pursuit of its social, humanitarian, cultural or environmental mission;
• Funding sources and expected investor rates of return: the funding sources of the social enterprise and the rate of return expected by investors. Whether the social enterprise is funded through debt or equity or a hybrid of both, the social return expected by investors should be weighed against the expected financial return.

Social enterprises that are funded by low (below market) interest loans or other debt instruments and/or through share purchase where equity investors expect a below market rate of return are more likely to qualify for pro bono legal assistance by prioritising their Social Mission above financial return;

• Suppliers: whether any other service providers or suppliers to the social enterprise are providing services on a commercial basis;
• State of market: the state of development of the market(s) in which the social enterprise operates; and
• Joint venture arrangements: any joint venture arrangements with other organisations.

N.B. In July each year the Centre will send to each signatory an email attaching a standard form which is to be completed and returned to the Centre.

The Centre aims to publish, within 3 months of the end of each year, under the categories of law firm, solicitor, barrister, in-house legal team and individual in-house lawyers, the number of signatories and the percentage that have met the Target in the previous year within each category. The Centre does NOT publish the names of those signatories that have met or not met the Target.

Signatories which have not achieved the Target during the year will be invited to discuss confidentially with the Centre their plans for how they will work to meet the Target in future.

¹ Where a new Target firm or in-house legal team is reporting for a period less than a full financial year, the number of FTE lawyers should be calculated by using the average number of FTE lawyers at the first day and the last day of the reporting period.

² For the purposes of these Guidance Notes, “firm’s lawyers” refers to lawyers and law graduates at a law firm or at an incorporated legal practice, as appropriate.

³ References to “in-house legal teams” and “in-house lawyers” in these Guidance Notes refer to in-house corporate and government legal teams and lawyers.

⁴ In this context references to “community” in the definition of “pro bono legal services” include communities outside of Australia.