Hard times for law firms spell pro bono cutsNovember 28, 2011: 12:25 PM ET
While a still uncertain economy pushes more people into poverty, some law firms are decreasing the amount of hours they are devoting to pro bono work.
FORTUNE – The promise of pro bono work with a corporate law salary is alluring, especially for budding lawyers who head to law school in the hope of righting wrongs but soon confront the reality of massive student loans. But the industry's changing economics are making it tougher to give away lawyers' hours as freely as in previous years.
Last year, the percentage of free legal hours slid noticeably compared to 2009. The decline comes as the perilous economy pushes a greater number of people into poverty, which drives up bankruptcy, child custody, foreclosure and domestic violence cases, among others. At the same time, budget deficits are leading to cutbacks in government funding of no or low-cost legal services for those with limited means.
As free legal hours fall, the American Bar Association and other groups are trying to come up with new ways to enlist lawyers to assist in navigating the court system. Those involved in civil cases do not have a right to a lawyer becuase the Constitution guarantees legal representation only to those who are accused criminally.
In civil cases, which are far more numerous than criminal proceedings, the federal government funds some legal aid for the needy, and lawyers traditionally donate millions of unpaid hours every year to help. The ABA estimates that 63 million low-income people (of which 22 million are children) are qualified for civil representation.
The increase in the American poverty rate has exacerbated a crisis that's already being felt in the courts due to funding cutbacks and diminishing pro bono legal aid. In response, the ABA held its first National Pro Bono Summit last month to explore new ways to ramp up lawyer participation.
U.S. Attorney General Eric Holder, speaking at the summit, urged those in the legal profession to come up with novel ways -- including enlisting retired lawyers and law students, among others -- to plug what some are calling a chasm in basic legal services and access to the justice system.
Donated legal hours take a hit at Big Law
Lawyers typically pledge to devote between 20 and 50 hours of free work annually as part of state bar licensing. They can sign up with a number of different local or state groups or bar associations to offer their services, but only seven states track participation, and lawyers who opt out are not penalized.
No one tracks the overall volunteer attorney hours nationwide, but a recent study by the Pro Bono Institute, a Washington, D.C.-based nonprofit, found that the average number of pro bono hours per attorney at big firms, each of which has at least 50 lawyers, sank by 8.6% last year compared to 2009. To be sure, 2009 was the most active year recorded in the program's nearly two-decade history.
The findings mirror a study released last summer by The American Lawyer, which reported an 8% decline in the average pro bono hours for attorneys at the top 200 U.S. law firms.
Law firms are lagging in donating legal help because "they are anxious, and they don't staff up quickly to meet the increase in client demand when the economy begins to improve," says Esther Lardent, chief executive of the Pro Bono Institute. "Much of the pro bono work is done by younger lawyers, but when they are in short supply, paid work is the priority."
Currently, law firms are racing to retain, or win, paying clients, and the largest firms especially are scrambling to adjust to a new world where restive corporate clients are no longer as willing to automatically pay the sky-high hourly rates that are the bedrock of most law firms' finances.
Still, pro bono work gives staff attorneys a chance to handle challenging cases, gain trial experience, and pat themselves on the back for doing good while still earning handsome wages.
The large firms -- which self-report -- surveyed by the Pro Bono Institute pledged to contribute between 3% and 5% of their billable hours annually to pro bono work. That amounts to between 60 hours and 100 hours per staff attorney.
But The American Lawyer survey found that some major law firms like Latham & Watkins registered notable declines in donated hours. The Los Angeles-based firm reported 47,000 fewer hours, a 30% drop in donated hours -- even as the overall number of firm lawyers increased by 10%.
Other legal powerhouses like Cravath, Swaine & Moore in New York added substantially to their pro bono annual totals, while other firms stayed steady. But as fewer donated hours stack up against an overloaded court system, at least half of those in legal need will not receive services, says Jim Sandman, head of the non-profit Legal Services Corp., whose hundreds of offices across the country are assisted by volunteer or discounted services provided by private lawyers.
At Akin Gump, a prominent law firm in Washington, D.C., Steve Schulman, head of the pro bono practice, notes, "as a firm, we are a bit leaner, so, of course, pro bono hours are down." A firm restructuring trimmed nearly 200 attorneys from its roster since 2007, which has resulted in a reduced pro bono case load, Schulman says.
Akin Gump lawyers have racked up 48,000 free hours so far this year, and the firm expects to be close to last year's 57,000 total hours. Such work, he says, "is still a draw to recruit top law students."
Larger firms also have deeper pockets to cover expenses, such as travel, to pursue a pro bono case. But, Schulman maintains, that while "our attorneys are on salary, which is a fixed cost, and it doesn't cost that much to generate an extra free hour, the cost to the firm of these hours is not zero."
Pro bono cases as apprentice work?
One potential solution is to create a model where pro bono work is formally used as "the way lawyers gain skills and experience," says the Pro Bono Institute's Lardent. Since fewer corporate clients are willing to pick up the tab for novice lawyers to learn on the job, she says, pro bono work can provide those opportunities.
If not enough hours are being devoted to pro bono work, why not just come up with a mandatory minimum for big firms or all practicing lawyers?
"A mandate would not be enforceable in any way that is meaningful," maintains Schulman. "Law schools need to follow the medical school model and devote significant time to clinical practice so it's not just one credit a semester.
"Law students could apprentice to a legal services office, for example," he says, "and could spend two years learning and two years in law school."
Like aspiring lawyers in colonial days who learned the legal ropes under the tutelage of a practicing attorney, law students today could apprentice themselves at public interest or legal aid offices to "read the law," a practice that largely did not change (although a few states still allow it) until the 1890s, when the ABA began urging formal post-college instruction -- what is now called law school.