R. Bruce McLean still shakes his head when he thinks about how his firm, Akin Gump Strauss Hauer & Feld, derailed its pro bono program in 2000. Firms across the country had increased associate salaries to $125,000. Akin Gump had generally allowed associates to mix pro bono with the minimum 2,000 billable hours needed to be eligible for a bonus. But after the raises, it stopped counting pro bono work -- all 2,000 hours would have to be billable.
In 2001 Akin Gump recorded a nearly 40 percent drop in pro bono hours per lawyer. But by year's end, the firm reversed its position, again allowing pro bono work to be counted toward the minimum. "We made a very serious error," McLean says.
Eight years later, things seem eerily similar. Last year associate salaries jumped, at the peak of another bubble, and the economy is again slowing down. But this time, Akin Gump is leaving its billables requirement alone. It is allocating more resources to its pro bono coordinator, and even hinting to associates that their jobs are safer if they perform pro bono work. Following a revamp to its program, average pro bono hours per lawyer rose to 69 last year, almost double its 2006 figure of 35.4.
Still, pro bono partner Steven Schulman can't help but wonder whether hours will drop as the economy slows. "You sometimes see that, that firms hunker down and don't do pro bono," he says. "And I'm very attuned to that, that our hours could be down."
Many firm leaders and heads of legal aid groups wonder the same thing. "Everybody's a trifle uncertain about what the next year will bring," says Esther Lardent, the director for the Washington, D.C.-based Pro Bono Institute. Yet she's quick to note that so far no one seems to be scaling back their pro bono work. Indeed, of the top 50 firms in our 2007 A-List rankings, 33 say that pro bono hours for the first quarter of 2008 either matched or exceeded the year-previous quarter. Only one, Bingham McCutchen, reported a drop, due to what it calls an "influx of billable matters." (Eight firms said they didn't track hours on a quarterly basis. The rest didn't respond to queries.)
Is it possible that for once, pro bono will be safe from a recession? Nationally, 2007 was a banner year for pro bono work. The average Am Law 100 firm logged 25,893 hours, up 13.2 percent from 2006. Total hours grew to 4.8 million -- a record -- and the number of lawyers doing more than 20 hours of pro bono work climbed 12 percent, to 38,196. On average, pro bono hours per lawyer climbed 7.7 percent to 53.6. While subprime mortgages and the credit collapse can claim many victims, pro bono hasn't been one of the them, at least so far.
In part, this may be because of the sorts of firms that were hit hardest by the current slowdown -- firms with disproportionately large capital markets and structured finance practices and comparatively small litigation departments. Even before they started laying off lawyers, McKee Nelson, Thacher Proffitt & Wood, and Cadwalader, Wickersham & Taft were not major players in pro bono. In 2006 their pro bono hours per lawyer ranged from a low of 7.3 at Thacher Proffitt to a high of 26 at Cadwalader.
Yet in 2007, all three increased their pro bono commitment, despite or maybe because of the downturn. In a year when revenue per lawyer at the three firms dropped 9 percent to 13 percent, pro bono hours per lawyer climbed 35 percent to 48 percent. Together, they had 93 more attorneys performing more than 20 hours of pro bono than they did in 2006. Such totals are still shoddy compared to the Covingtons and Debevoises of the world, but they do reflect an uptick at firms where pro bono hasn't been a priority.
A variety of reasons help explain why those three firms saw their pro bono numbers grow. But many lawyers say the slowdown helped. A drop in transactional work freed up time for lawyers to pursue pro bono projects. "When you're working around the clock on billable work, no matter how good [your] intentions are, you've got to sleep sometime," says Thacher Proffitt pro bono chairman Walter Van Dorn, Jr. He says the slowdown may have contributed to a 48 percent gain in pro bono hours per lawyer at his firm, to 10.8 hours.
It's not just the laggards who say the downturn may increase pro bono at their firms. Many firms say that pro bono in the first part of the year is up, in some cases significantly. At Skadden, Arps, Slate, Meagher & Flom, which ranked 30th on our survey, pro bono in the first quarter of 2008 rose more than 50 percent, compared to the same period a year ago, says executive partner Robert Sheehan. Profits per partner rose 9.1 percent in 2007, but the firm acknowledges that since the fourth quarter, some practices have slowed. "When people aren't busy, it's easy to take on a [pro bono] project that's interesting," Sheehan says. For 2007, the average U.S. attorney at Skadden completed 87.4 hours of pro bono work, up 28 percent from a year earlier.
Firms seeing those types of increases say they aren't explicitly telling their less productive lawyers to turn to pro bono work. "When you have a culture in a firm that's always encouraging people to take pro bono, that will happen on its own without being explicit," says DLA Piper pro bono coordinator Lisa Dewey. Average pro bono hours by her firm's U.S. lawyers slipped by 11 percent last year, to 79.4, and overall U.S. pro bono hours dropped 3 percent, to 106,057. But the firm says that hours for the first quarter of 2008 are up about 19 percent over a year ago.
Also contributing to these increases is a trend toward further coordination and institutionalization of pro bono work that firm leaders say could help keep hours up even during rough times. O'Melveny & Myers, for instance, last year increased counsel David Lash's pro bono management duties from a fifth of his workload to full-time. It also began tracking pro bono hours on a monthly basis and requiring new lawyers to take on a pro bono project in their first year. In addition, O'Melveny adopted a policy of finding a pro bono project within 48 hours for any of its lawyers who ask for one. "We make it so easy for people to get involved in a significant way," Lash says. "That's part of the magic behind the dramatic increase in hours." In 2007 O'Melveny's pro bono per hours per lawyer increased by 23 percent, to 89.7.
Indeed, among the top 50 firms in the 2007 A-List rankings, none reported scaling back pro bono policies after the credit crunch. Instead, since July, several firms bolstered their policies. In July, Kirkland & Ellis (No. 39 in the 2007 A-List rankings) formed a firmwide pro bono committee, led by of counsel Thomas Gottschalk, which focuses on increasing pro bono and soliciting projects. That firm's average hours per lawyer climbed 7 percent, to 67.5. Also in July, Morrison & Foerster (No. 16 in the 2007 A-List rankings) revised its policies to say that it "strongly urges" every attorney to take on at least one pro bono matter. Average hours per lawyer there jumped 23 percent, to 93.8.
Other firms are toughening up their policies. At Dechert, Chairman Barton Winokur says the firm has long encouraged its lawyers to perform at least 25 hours of pro bono work per year. But many ignored the rule, he says. In August 2006 the firm made the 25-hour standard a requirement. In an internal e-mail announcing the new policy, Winokur wrote: "Our hope is that this new policy will ensure universal participation in our pro bono program, which is fundamental to the success of our program."
Not mentioned in the e-mail, but made clear three months later, was that noncompliance would be factored into compensation reviews. "To the extent people did not do it, they would have failed to meet expectations," Winokur says. Several underperforming attorneys were warned in their reviews that they would be penalized the next year if their numbers didn't improve. The move paid off: In 2007 the number of lawyers handling more than 20 hours of pro bono jumped 144 percent, from 303 to 739, about 80 percent of total head count. The firm's projects included representations of Guantanamo detainees, low-income tenants in disputes with their landlords and small businesses.
Partners at Weil, Gotshal & Manges may have a similar experience this year. The firm expects all of its U.S. lawyers to perform at least 50 hours of pro bono work. Although Weil's U.S. lawyers averaged 87.2 pro bono hours last year, one-third of them didn't even do 20 hours, a decline of almost 5 percent from 2006. Average pro bono hours per lawyer slipped as well, by 7.4 percent from 91.0.
"In our view it should be a relatively rare occurrence for lawyers to do less than 20 hours," says Weil partner Steven Reiss, who chairs the firm's pro bono committee. In an effort to boost pro bono work by partners, the firm instituted a policy in January requiring partners to identify their pro bono projects as part of their annual reviews -- and, if their numbers are low, to explain why.
Naturally, such policies only affect lawyers who have jobs, and pro bono coordinators say that layoffs have traditionally been the biggest challenge to keeping hours up during down times. The recession of the late '80s and early '90s saw several firms reduce head count, to the point that when the economy picked up, they were short-staffed, even for paying matters. Pro bono took a back seat.
"What we tend to see is [that] the hardest times to garner significant pro bono resources is when [the] economy is very hot or when it has cooled down for a while," says Jonathan Smith, executive director of the Legal Aid Society of the District of Columbia. Since The American Lawyer began tracking pro bono hours under its current definition in 1995, the only drop in average pro bono hours per firm occurred in 1998. In that year, the Internet boom was well under way, and need for associates was outstripping supply.
After the turn of the century, the dot-com bust cut into pro bono numbers at California firms. Several, such as Cooley Godward (now Cooley Godward Kronish), laid off associates. In August 2001 Cooley dismissed 85 lawyers; the next year, pro bono hours fell 15 percent. Even so, the firm kept pro bono hours from slipping on a per-capita basis: Average hours per attorney were steady at 42 hours. Several firms wanted to keep people but didn't have enough work. "They would actually tell them to do pro bono for a certain amount of time," says Tiela Chalmers, director of the San Francisco Bar Volunteer Attorney Program. That's exactly what Cooley did, by -- among other things -- sending a newly hired associate to work at Chalmers' group on Cooley's dime.
Firms outside Silicon Valley also felt the pinch. Nearly all big firms had increased associate salaries just prior to the slump, and some, like Akin Gump, cut back on pro bono. Yet during the three years that followed, average pro bono hours per firm nationally continued their ascent each year. Timing was a factor: The recession roughly coincided with the terrorist attacks of Sept. 11, 2001, which created a wave of projects. "That kind of event fuels pro bono work at our firm and firms like ours more significantly than temporary slows in the economy," says Christopher Tahbaz, a litigation partner at Debevoise & Plimpton, which has been among our top 10 pro bono firms every year since 1996. After 9/11, Debevoise lawyers worked with The Association of the Bar of the City of New York to provide legal services for families and small businesses affected by the attacks, and worked with several firms and New York Lawyers for the Public Interest to represent building and restaurant workers who had been employed at the World Trade Center.
While about a dozen large firms have announced layoffs, and more have almost certainly quietly reduced payrolls through performance reviews, the casualties still pale in comparison to what occurred in the early '90s. Still, some pro bono advocates are concerned that the mere worry among associates about getting fired might cause some to emphasize billable work and skip pro bono matters. "As places are more concerned about the bottom line, that may make associates more nervous either in the short term or long term," says Heller Ehrman pro bono partner Kit Pierson. (At Heller, where revenue per lawyer dropped 4.7 percent, to $805,000, pro bono hours per attorney rose 5 percent, to 107.5.)
After encountering several midlevels worried about how pro bono work would affect their partnership chances, Pierson checked firm data. He found that associates who made partner at Heller during the last six to seven years were "significantly above the median, typically, in the pro bono work they do."
Similar questions at Akin Gump prompted pro bono partner Steven Schulman to conduct his own study. Schulman found that attorneys who worked on pro bono matters in 2007 billed 42 hours more on average than lawyers who didn't. "Someone who doesn't like being a lawyer and doing legal work won't want another pro bono matter," he says.
So will pro bono survive the recession? We'll know by this time next year. With any luck, even if firms lose some business, they won't lose their way.
Related chart: (Free registration)
Ranking the Firms: 2007 Pro Bono