Will any firms lose their QLD government contracts for not meeting pro bono targets?

By Jerome Doraisamy|17 November 2019

The Queensland Government has mandated that any firms it outsources work to must meet their pro bono commitments, or risk suspension or termination from government work. As such, we took a look at whether firms will be able to adhere to this requirement.

What is the QLD legal services panel?

The whole-of-government legal services panel, according to the state government’s website, is a standing offer arrangement between the Sunshine State and solicitor firms who are selected to provide legal services to various governmental departments. Firms chosen are appointed to the panel as suppliers of services in one or more of 18 overall categories.

By organising the provision of legal services to the government in a “centrally managed arrangement”, QLD is able to achieve “better value for money by simplifying procurement and tendering” and “better management of activity and expenditure through informed purchasing, consistent contracts better performance management and reporting”, it says.

By its own figures, the QLD state government spends over $60 million every year on such external legal services.

The current panel appointed by the QLD government was recently extended beyond its initial three-year term and two options for extension and will run until 31 March 2020.

Requirement to meet or exceed pro bono commitments

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In its Standing Offer Arrangement (SOA) for the new whole-of-government legal services tender, invitations to offer for which closed at the beginning of November, the QLD government has mandated that suppliers of legal services to the state must confirm it has met its yearly National Pro Bono Aspirational Target, as committed to with the Australian Pro Bono Centre.

That commitment, of course, is that signatories to the Target must provide at least 35 hours of pro bono legal services per lawyer, per year. Signatories have to report annually to the Centre on their performance against the Target.

Moving forward, QLD has decided that firms who are successful in the tender and join the panel will be suspended or terminated from that panel if they do not meet or exceed the Target.

In a statement provided to Lawyers Weekly, a spokesperson for the QLD Department of Justice and Attorney-General said: "During the panel term, the panel manager will work with suppliers who do not meet any of the panel KPIs in accordance with the processes outlined in the SOA, including their compliance obligations in relation to pro bono targets."

"The State has the discretion to suspend or terminate the SOA with panel members where SOA conditions are not met," it confirmed.

"As the procurement for the legal services panel is currently in the evaluation phase the Queensland Government is not in a position to discuss publicly specific potential arrangements for management of the panel."

The potential consequence of being suspended or terminated from the panel, Market Expertise chief marketing officer Jaci Burns said, is “groundbreaking”.

Australian Pro Bono Centre CEO Gabriela Christian-Hare said this is something the Centre has been pushing for across the board.

“The Target has had very good take-up [172 firms are signatories as of the time of speaking with Lawyers Weekly]. But, to help cement its place as a key lever in the legal services market, we have been encouraging major purchasers of legal services, including governments and corporations, to insist that panel firms sign up to the Target and use their best efforts to achieve it.”

“Major corporations want to see their suppliers aligned with their values, including environmental social governance,” she submitted.

When asked if the outlined consequence of suspension or termination will serve as a wake-up call to certain firms to take their pro bono commitments more seriously, Ms Christian-Hare said “it will no doubt” send a message to firms that they must use their best efforts to meet and exceed the Target.

“Firms shouldn’t underestimate the benefits that come from pro bono. Pro bono support provides the only route to justice for some of the most vulnerable members of our community and vital assistance to a wide range of not-for-profits and charities,” she explained.

“But there are considerable benefits to the individual lawyers who participate. Law firms with strong pro bono practices report resultant benefits in the form of staff retention and recruitment, satisfaction and loyalty, and training and development.”

The impact of mandating pro bono hours to get government contracts

In a recent opinion piece published by Lawyers Weekly, Ms Burns said that law firms that have “to date been making just a token effort to perform pro bono work are now in strife”.

“Having examined the current Queensland government panel and analysed each firm’s pro bono performance over the past several years, it’s apparent that some of the country’s largest government practices are seriously exposed. One national firm, which is currently appointed to 11 of Queensland’s 18 categories of law, would need to quadruple its pro bono hours if reappointed,” she wrote.

“The incumbent law firms could reasonably be defending millions of dollars in revenue.”

Without naming any particular firms that might be in danger of having their government contracts suspended or terminated, Ms Christian-Hare noted that less than half of the signatories to the Target had adhered to their commitments.

“In the last financial year, approximately 45 per cent of National Pro Bono Target signatories met or exceeded the Target, she outlined.

“While the number of pro bono hours continues to grow overall, there is a marked discrepancy of effort among Target signatories and reports against the Target therefore vary widely between firms.”

“Depending on the final selection of panel firms, it may be that some firms will need to work harder to meet the Target.”

Is pro bono the cost of doing business with the government?

According to Ms Christian-Hare, engaging in pro bono legal work is “an ethical professional responsibility” for all lawyers.

“Having a strong pro bono program is a good way of demonstrating ‘social value’. We are therefore pleased that the Queensland government is integrating the National Pro Bono Target into its legal purchasing arrangements,” she said.

Ms Burns went further, positing that the completion of pro bono hours should be inextricably linked to the securing of paid governmental work.

“Pro bono is a central pillar of a law firm’s corporate social responsibility efforts. I applaud what Queensland is doing. It’s time for law firms to stop making excuses for not achieving the target,” she said.

“For a law firm, the cost of doing business includes the cost of doing pro bono work. If a firm cannot accommodate the cost, it should re-examine its business model.”

An examination of 14 firms currently on Qld’s legal services panel

The idea that law firms working with and for the government could lose that work if they do not complete enough pro bono hours is a fascinating precedent, and one that was worth exploring as to whether it could, or will, happen.

Categories:

Lawyers Weekly selected 14 firms that not only form part of the 31-strong Queensland whole-of-government legal services panel supplier list but are available to be called on in multiple categories, including “major projects”, “general property” and “compulsory acquisitions”.

The firms we chose to look at were: Allens (appointed to 15 categories), Ashurst (13), Clayton Utz (18), Corrs Chambers Westgarth (15), DLA Piper (nine), Gadens (eight), Herbert Smith Freehills (13), HWL Ebsworth (11), King & Wood Mallesons (nine), Lander & Rogers (five), MinterEllison (12), Norton Rose Fulbright (18), Piper Alderman (six) and Sparke Helmore (three).

2017-18 reported hours:

In its Legal Services Expenditure Report 2017-18, produced by the Office of Legal Services Coordination, the Attorney-General’s Department provided data on government legal service providers with regard to the National Pro Bono Aspirational Target.

The department outlined the legal service providers who – based on data provided by the Australian Pro Bono Centre – had met or exceeded the target in that financial year, as part of their duties as signatories.

Looking specifically at the 14 firms listed above, Lawyers Weekly lumped those firms into three groups: those who comfortably exceeded the target, those who just met or exceeded the target, and those who were not listed as having met the target.

Firms whom we deemed to have comfortably met the target in 2017-18 were: DLA (54 hours per lawyer), CU (50), Allens (45), HSF (43), Ashurst and Landers (both 41).

We deemed the following firms to have just exceed or met the target: Minters (37 hours per lawyer), Sparkes, Corrs and KWM (all 35).

Finally, the following firms were not listed by the A-G’s Department in its report as having met the target: NRF, Gadens, HWL Ebsworth and Piper Alderman.
(NB: Our reporting here is predicated on available data from AGD, as the Pro Bono Centre does not reveal the reported hours of each of its signatories.)

2018-19 reported hours:

As aforementioned, approximately 45 per cent of all signatories to the target met or exceeded the requirement of 35 hours of pro bono work per lawyer for the previous financial year, and the centre was not able to provide us with data on specific signatories.

Ms Christian-Hare did add, however, that in 2018-19, “signatories reported 473,379 hours of pro bono work in aggregate, a 14 per cent rise in hours from the year before.

The average number of pro bono hours per lawyer in the last year was 35.83, she said, up from 34.97 in the previous year.

For the financial year just gone, we were advised by AGD that it did not have data on providers meeting or exceeding their pro bono targets for 2018-19. This is because, it said, “during the 2018-19 period, in light of the Legal Services Multi Use List having expired, Commonwealth agencies obtained legal services directly from legal services providers.”

“In the absence of an overarching procurement framework, providers were not under an obligation to report their pro bono hours to the Attorney-General’s Department for that period,” it said.

In light of this, we approached each of the 14 firms in question and asked them about their reported hours, and specifically, if they had met the committed the target of 35 hours per lawyer for the year gone by. We received the following responses:

CU: “Clayton Utz has exceeded the target every year since its inception”.
Corrs: “Corrs exceeded the aspirational target with our lawyers working 39.9 hours (on average) on pro bono matters in the last financial year.”
Gadens: “We can confirm Gadens meets all the requirements of the state government’s invitation to offer.”
KWM: “In 2018-2019, KWM recorded a total of 32,573 pro bono hours which translate to 39 hours per lawyer for the financial year, well above the target. Achieving more than 32,500 hours represented a 19.4 per cent increase on the previous financial year and KWM’s highest pro bono output to date.
Landers: “Yes — in 2018-19 we achieved approx. 39 hours. We think as a law firm contributing to impactful pro bono work is the right thing to do. We hold a genuine commitment to supporting our community through pro bono legal work and engagement of our people.”
Minters: “Yes, we did achieve this commitment.”
NRF: “Yes. We met the target in 2018-19 and we have every reason to believe we will meet the target in the current financial year.”
Sparkes: “Yes – we in fact exceeded the target.”

Allens, Ashurst, HSF and Pipers declined to comment for this story. DLA Piper noted it was unable to meet our prescribed deadline, and HWL had not responded by the timing of filing.

How can law firms ensure they meet their pro bono targets?

Given that the new panel is scheduled to take effect in early 2020, there will be a number of firms, Ms Burns noted, that – based on the 2017-18 figures – will be coming towards the tail end of an 18-month period in which they will have had to “triple or even quadruple their recorded pro bono hours”.

“The incumbent law firms will be investing heavily in business development expertise to help them win the Queensland tender. Exposed firms would be foolish not to be simultaneously seeking assistance with their pro bono program,” she mused.

“Pro bono opportunities aren’t necessarily easy to identify, and they take time to negotiate.”

Luckily for those firms who might be worried about their capacity to meet the target, the Pro Bono Centre “would stand ready” to help those firms, Ms Christian-Hare proclaimed.

“If a firm is not meeting the target, the question should be asked, why not? If a firm does not meet the target, there should be an onus on them to explain what those efforts were and why they have failed, and to develop (with the centre’s help if they wish) a comprehensive plan to show how the target will be achieved in the future,” she said.

“Some firms are newer target signatories than others, and a number of firms are still developing their pro bono practices. We would like to encourage that development rather than cut them out, provided they have a genuine commitment, and a solid plan, to achieve the target.”

Specifically, Ms Christian-Hare continued, there are a “wide range of pro bono opportunities” available for firms to get stuck into.

“For example, accepting case referrals from a referral organisation, helping community legal centres through participation in clinics (such as for the homeless, asylum seekers and refugees) and sending lawyers on longer term secondments, undertaking law reform and policy work, and assisting not-for-profits and charities. Forming strong relationships with community partners leads a good flow of pro bono work in the longer term,” she outlined.

“We also encourage firms to set clear and greater expectations around participation by lawyers at their firm. Firms should develop strategies for broad engagement of staff to support lawyers of all seniority levels to participate in the firm’s pro bono program and instil a ‘pro bono culture’. Critically, pro bono work should have the same prestige and priority as commercial work. It is not meant to be a spare time activity.”

Moreover, those firms must ensure there exists a “robust management” of their pro bono efforts, she added.

“Firms should devise a pro bono policy and plan which [encourage] involvement and [are] expressly supported by senior management,” she advised.

“Firms with strong pro bono practices have a dedicated pro bono leader or leaders to coordinate pro bono involvement, ensure there is adequate crediting and recognition of pro bono within the firm, and set a firm-wide pro bono target and budget.”

Is it fair for governments to expect its service providers to meet pro bono targets?

With regard to the reasonableness or otherwise of the new mandate to reach the committed pro bono target, King & Wood Mallesons said: “While the potential to be struck from the provider list is a new approach, it is not dissimilar to KWM’s approach to other government panels, for example the Commonwealth Panel Head Agreement, which requires all legal services providers use their best endeavours to meet or exceed the target.”

“Being a founding signatory to the target, the 35-hour requirement is not one we take lightly and continue to do our best to ensure our people always meet or exceed it. We strongly support the government’s approach and its efforts to boost the delivery of pro bono legal services across all legal service providers.”

Other firms provided shorter responses on this matter, such as Corrs, which noted that it “supports the expectation that any firm on a government panel makes a significant pro bono contribution to the community”.

“It is important to give back to the community and support everyone having access to justice. It’s also good for our people, who get great personal satisfaction from contributing and sharing their skills for the benefit of others,” Sparkes offered.

Minters said: “We think it is important to carry out pro bono work and give back to the community”.

NRF submitted: ““We value the opportunity to contribute as a firm to pro bono legal work. We also take seriously the requirements that any of our clients set in their arrangements with us.”

Gadens, on the other hand, said it “does not think it is appropriate to comment on matters relating to a government tender during the currency of the tender process”.

CU and Landers chose not to respond to this question.

The other six firms, as aforementioned, either declined to comment or did not respond to any questions by the time of filing this story.

Conclusion

The eight firms who responded to us all said they met or exceeded the Pro Bono Aspirational Target for 2018-19, which would allow them to retain their positions on the legal services panel in Queensland. Elsewhere, it was clear from the firms that elected to engage on the question, that pro bono is and must remain a key pillar of a firm’s overall strategy and is, in this sense, part of the cost of doing business.

Whether the state government actually does suspend or terminate any firm that does not meet its committed target is yet to be seen. But, looking ahead, it is at least promising to see a major purchaser of legal services enforce what is, as Ms Christian-Hare put it, “an ethical professional responsibility” for all lawyers.

The prescription of such a standard highlights that the law, and the professionals who uphold it, serve the community around it. Failing in this duty (at least to the level a firm has pledged to uphold) will in all likelihood result in lost work with the Sunshine State, which could not only set a precedent for the securing of government contracts across the country but also ensure that the undertaking of pro bono work is perceived as more than just a box to be ticked by an employer – rather, it will be perceived as a fundamental and inextricable part of a lawyer’s professional arsenal.

Will any firms lose their QLD government contracts for not meeting pro bono targets?
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