Amid Heavy Profits, Big Law’s Pro Bono Time Saw ‘Significant’ Drop in 2021

As big law firms were widening their profit margins last year amid dizzying demand, the number of pro bono hours across the industry fell.

Large law firms, in a survey, tallied more than 4.6 million hours of pro bono service last year, according to the latest report from a nonprofit focused on charitable legal services. That amount represents a “significant” decrease from 2020, the Pro Bono Institute wrote this week, especially as the need has only increased since the onset of the COVID-19 pandemic.

Specifically, attorneys performed a total of 4,614,182 hours of pro bono service last year among the 126 firms with 50 or more lawyers that committed to the Institute’s Law Firm Pro Bono Challenge Initiative, a group that agreed to donate 3% or 5% of their annual total client billable hours to pro bono activities during the calendar year. In contrast, 123 firms gave about 5.4 million hours in 2020—a high-water mark, according to the Institute.

Soon-to-be released ALM data also shows a decline in pro bono hours.

The lower pro bono hours came in the same year that Am Law 100 firms’ revenues rose on average by 14.8% and profits per equity partner shot up 19.4%, partly driven by a glut of M&A and corporate work.

Eve Runyon, Pro Bono Institute president and CEO, said that it’s not yet clear what caused the drop. In an email, she acknowledged that paid client demand increased last year, and she suggested that 2020 resulted in an unusually high level of pro bono work. Events in 2020 such as the murder of George Floyd “definitely” corresponded to an increased commitment to racial justice and pro bono work by firms in that area, Runyon said.

“In addition, many firms engaged in pro bono work directly related to the pandemic,” Runyon said about 2020. “This included assisting small businesses and nonprofits, working on compassionate release or prison’s rights cases, addressing housing security, and providing support to front-line health workers.”

Pro bono service as a percentage of all client billable hours also dropped in 2021, from about 4.2% to about 3.32%, the report stated. Runyon added that while firms pledge a certain amount of time to commit to pro bono up front, that number is aspirational.

About 58% of firms with a 3% goal did not reach it, she said. “On the other hand, many firms that met their goals greatly exceeded them,” Runyon added.

She said in a broader statement that 2021 showed that growth in law firm pro bono work “is not something we can take for granted,” that the need for pro bono work has only grown over the last couple of years and that firms should consider if they are providing support and space for lawyers to engage in service.

There was some good news, however. In terms of money given to legal services organizations, the report found the average firm donation increased by more than 25% last year relative to the previous year. The mean reported firm donation in 2021 was $576,090; in 2020, the mean firm donation was $459,845.

The total given by all firms counted by the Institute was $23,043,603 in 2021, surpassing the total of $18,853,661 in 2020.

Almost all firms indicated they had either increased or maintained their pro bono efforts on behalf of racial justice. According to the report, 55.8% of responding firms said they devoted more hours to racial justice in 2021 than 2020; 43% said they maintained the same level. Only one firm said it put less time into such issues.

“Currently, there is not a universal definition of racial justice pro bono work,” the report acknowledged, adding that the five most commonly addressed areas that firms identified as racial justice-related work included criminal justice (including court, policing and prison reform), economic empowerment, housing, education and health care.

Runyon added on Thursday that the group remains “encouraged” by law firms’ commitment to pro bono this year.

“While there is no reason to conclude that 2021 started a downward trend in pro bono hours, we will monitor the situation closely,” she said.

https://www.law.com/americanlawyer/2022/06/17/amid-heavy-profits-big-laws-pro-bono-time-saw-significant-drop-in-2021/