This chapter outlines a number of different methods adopted for crediting and recognising pro bono legal work.
A best practice pro bono program credits and recognises pro bono legal work in the same manner that commercial legal work is credited and recognised within the firm. Crediting specifically refers to the way in which an individual lawyers hours of pro bono legal work are treated in terms of billable hour and financial targets. Recognition is a broader concept and refers to other ways in which lawyers are rewarded or ‘recognised’ by the firm for their pro bono contributions.
Crediting and recognising pro bono legal work in the same way as commercial legal work is best practice because it:
- clearly signals that pro bono legal work must be performed to the same standard as commercial legal work;
- demonstrates that the firm is committed to pro bono legal work and it is expected to be a part of each lawyer’s practice;
- encourages broad participation, and may overcome the perception that pro bono legal work will not be viewed as work which must be done in addition to a lawyer’s daily commercial legal work; and
- allows for the establishment and maintenance of a sustainable pro bono practice that can draw from a large pool of experts.
See Chapter 1.4 Promoting a pro bono culture, Chapter 1.8 Setting targets and budgets for pro bono legal work and programs and What Works, Chapter 4 Importance of developing a strong pro bono culture.
The following methods are those most commonly used for crediting or recording pro bono legal work in mid-sized and large law firms.
The method adopted should be compatible with the firm’s time-recording and accounting systems. Recording elements of the method adopted should be developed in close consultation with the finance team. Maintaining a good relationship with the finance team can also help ensure that the pro bono team is treated as a key stakeholder in relation to any proposed system changes.
In developing the method adopted the following elements should be considered.
In addition to being aware of how pro bono hours are treated from a crediting perspective, pro bono coordinators should be aware of how pro bono hours are presented in reports generated by the firm’s accounting system. Even in firms where pro bono hours receive full billable hour credit, pro bono matters may be allocated a ‘non-billable’ matter number as part of the accounting system to allow the finance team to distinguish matters that generate revenue from those that don’t (for example, pro bono matters).
Where a firm’s accounting system generates reports that categorise pro bono matters as
‘non-billable’ this has the potential to undermine the value of pro bono legal work. One way of addressing this issue is to arrange for the finance team to generate bespoke reports that identify matters as ‘pro bono’ rather than ‘non-billable’.
Work in progress
It is important for pro bono coordinators to be aware of how work in progress (WIP) is recorded in the firm’s accounting system. Ideally the firm’s accounting system should also be structured so that commercial work in progress (WIP) and pro bono WIP can be distinguished at a firm level, but not at an individual lawyer level. This is important because it reinforces that pro bono legal work is treated and valued in the same way as commercial legal work.
Matter activity statement or bills
Pro bono coordinators should work with the finance team to develop a tool to monitor pro bono time and disbursements. As part of their accounting system, some firms may choose to generate bills or some form of a statement of activity for each pro bono matter in order to monitor time and disbursements. This ensures that lawyers remain accountable efficiently using their time and provides oversight in relation to disbursements. In many cases these statements or bills will be signed off by the supervising partner.
Write-offs and accounting adjustments
It is also important for the pro bono coordinator to be aware of the impact of write-offs and accounting adjustments made in relation to pro bono time. This should be discussed with the finance team at an early stage given the potential impact that these actions may have on remuneration and key performance indicators for the associated lawyers and partners.
METHOD 1 — BEST PRACTICE — PRO BONO HOURS ARE TREATED AS BILLABLE HOURS FOR BILLABLE HOUR AND FINANCIAL TARGETS
Under Method 1, lawyers receive full billable hour credit for their pro bono legal work. That is, pro bono legal work is taken into account in meeting both billable hour and financial targets (if applicable) in the same way as commercial legal work. The hour-for-hour and dollar-for-dollar credit model is used by leading pro bono practices and represents best practice.1
In a variation on Method 1, a lawyer receives full billable hour credit in relation to their individual billable hour targets but the lawyer’s billable pro bono hours do not count for the purpose of their team’s billable hour or financial targets (if applicable). Depending on the strength of the pro bono culture within a particular team this may act as a disincentive for lawyers to become involved in pro bono legal work and may signal that it’s not valued by the firm. This variation may also be applied to Method 2.
METHOD 2 — PRO BONO HOURS ARE TREATED AS BILLABLE HOURS BUT are given a lower or negligible VALUE FOR THE PURPOSE OF FINANCIAL TARGETS (IF APPLICABLE)
Under Method 2 lawyers receive billable hour credit for their pro bono legal work; that is, pro bono legal work is counted towards billable hour targets in the same way as commercial legal work. However, in contrast to Method 1, lawyers receive no, or only negligible, financial credit towards their financial targets.2 As a result, in order to meet any financial target a lawyer will have to work extra ‘non-pro bono’ hours. This undermines the credit that a lawyer receives towards their billable hour target.
If Method 2 is used, the firm will need to make its commitment to pro bono very clear. This could be done by:
- specifically advising lawyers that pro bono legal work is expected of all staff and is encouraged as part of the firm’s values;
- by providing other forms of recognition for pro bono legal work as outlined below; and
- including pro bono legal work in lawyers’ and partners’ key performance indicators.
METHOD 3 — A LIMITED NUMBER OF PRO BONO HOURS ARE TREATED AS BILLABLE HOURS
Under Method 3 lawyers receive billable hour credit for the time they spend on pro bono legal work but only up to a specified per lawyer hour limit per lawyer. Once the limit is reached lawyers will not receive billable hour credit in relation to billable hour or financial target for any work undertaken on the pro bono matter, unless an increase is approved.
As with Method 2, if Method 3 is adopted it will be important for a firm to make its commitment to pro bono very clear. Where firms allocate the individual annual pro bono limit across weekly or monthly budgets, ideally the system should be structured so that lawyers are not penalised for doing more than the budgeted amount of pro bono legal work in any period.
In general terms, while this method has the potential to encourage broader participation in pro bono legal work throughout a firm it also has the negative effect of placing clear limitations on a firm’s pro bono contribution.
METHOD 4 — PRO BONO HOURS ARE TREATED AS NON-BILLABLE HOURS
Under Method 4, lawyers do not receive any billable hour credit for their pro bono legal work. Instead pro bono legal work is treated as non-billable from a crediting perspective. It may be difficult for a firm to grow a robust pro bono practice if lawyers are not given billable hour credit for undertaking pro bono legal work.3 The impact of this approach is that pro bono legal work would have to be undertaken in addition to the legal work required to meet any billable hour or financial targets.
As with Method 2, if Method 4 is adopted, it will be important for a firm to make its commitment to pro bono very clear. In addition to the suggestions outlined in relation to Method 2, to counteract the negative impact that Method 4 may have, some firms set and formally assess group budgets for non-billable pro bono time. Failing to put measures in place to appropriately recognise pro bono legal work, especially when it is not credited on an hour or financial basis, is likely to result in lawyers being less inclined to participate in the firm’s pro bono program.
A firm will maximise participation in its pro bono program by ensuring that there is effective communication and leadership from firm management and partners that an individual’s pro bono legal work will be recognised with respect to remuneration, evaluation and advancement.4 It is especially important for firms to focus on pro bono in performance appraisals when they do not provide billable hour credit for pro bono legal work.
Some ways in which pro bono legal work can be specifically recognised by a firm are:
- in lawyers’ performance appraisals;
- when considering promotion or advancement;
- in salary reviews; and
- internal awards, events and communication.5
Pro bono legal work should be considered in all performance appraisals. Performance appraisals provide a practical way of recognising the pro bono contributions of lawyers within the firm.6 It is important that when considered as part of the performance appraisal process pro bono is given appropriate weight: for example, by making pro bono a separate category in the appraisal form rather than it simply being a consideration with respect to another category, such as firm culture.
Other issues to consider in relation to the inclusion of pro bono legal work in the performance appraisal process include:
- who should be involved in providing information regarding a lawyer’s pro bono contribution (for example, the lawyer, the pro bono coordinator, the pro bono committee, supervising partners); and
- how should pro bono legal work be addressed (for example, number of hours, number of matters, skills obtained, assistance provided).
Promotion or advancement
In terms of promotion or advancement a number of firms require their lawyers to outline their pro bono contribution in their application for promotion to senior associate, special counsel or partner. In this way pro bono legal work is also taken into account in salary reviews. At one firm lawyers cannot access their bonuses unless they have met the pro bono target set by the firm.
Internal awards, events and communications
A number of firms specifically recognise lawyers who have met or exceeded the firm’s annual target for pro bono legal work. One firm uses its yearly honour roll to individually name and congratulate lawyers who have performed 35 hours or more of pro bono legal work in a year. This method of recognition has the added benefit of promoting the pro bono program throughout the firm which is important for the establishment and maintenance of a strong pro bono culture.
Another firm writes a thank you letter to each lawyer who has undertaken more than 100 hours of pro bono legal work in a year and also gives them a small gift in order to acknowledge their contribution. Lawyers who have undertaken more than 50 hours of pro bono legal work in a year go into the draw for a cultural tour.
1 Forty percent of respondents to the Centre’s 2014 National Law Firm Pro Bono Survey treated pro bono hours as billable hours for billable hour and financial targets (if applicable). See National Pro Bono Resource Centre, Fourth National Law Firm Pro Bono Survey (Australian law firms with fifty or more lawyers) – Final Report, December 2014, p 59, http://probonocentre.org.au/information-on-pro-bono/our-publications/survey/.
2 Only one respondent to the Fourth National Law Firm Pro Bono Survey indicated that their firm treated pro bono hours as billable hours and provided negligible or no credit in relation to financial targets. See National Pro Bono Resource Centre, above n 1, p 59. http://probonocentre.org.au/information-on-pro-bono/our-publications/survey/.
3 The number of firms who record hours of pro bono legal work as non-billable has recently grown. In the 2011-2012 financial year only 20 percent of respondents to the Centre’s National Law Firm Pro Bono Survey recorded hours of pro bono legal work as non-billable. In the 2013-2014 financial year this number had grown to 47.5 percent. See National Pro Bono Resource Centre, National Law Firm Pro Bono Survey (Australian firms with fifty or more lawyers) – Final Report, January 2013, p 40, http://probonocentre.org.au/wp-content/uploads/2015/09/National-Law-Firm-Pro-Bono-Survey-2012-Final-Report.pdf; and National Pro Bono Resource Centre, above n 1, p 59. http://probonocentre.org.au/wp-content/uploads/2015/09/4th_National_Law_Firm_Pro_Bono_Survey_2014_Final_Report.pdf.
4 The highest number of respondents to the Centre’s 2014 National Law Firm Pro Bono Survey named management and partner support as a crucial factor in the success of their firm’s pro bono program. See National Pro Bono Resource Centre, above n 1, p 64. http://probonocentre.org.au/information-on-pro-bono/our-publications/survey/.
5 For information on how respondents to the Centre’s 2014 National Law Firm Pro Bono Survey recognise pro bono legal work see National Pro Bono Resource Centre, above n 1, p 60. http://probonocentre.org.au/information-on-pro-bono/our-publications/survey/.
6 Eighty-five percent of respondents to the Centre’s 2014 National Law Firm Pro Bono Survey indicated that pro bono legal work was recognised in performance appraisals. See National Pro Bono Resource Centre, above n 1, p 60. http://probonocentre.org.au/information-on-pro-bono/our-publications/survey/.