Law firms can keep lawyers busy during a slowdown by assisting the increasing number of people unable to afford legal advice as a result of the financial crisis, writes Mat Tinkler
In a recent online poll, Lawyers Weekly asked readers if their job security might "be threatened by the impending economic downturn". The question reflects a sense of anxiety emerging in some quarters of the profession, particularly among junior lawyers and graduates whose tenure may be less certain than their more experienced counterparts.
In such a climate, few line items in the budget will escape scrutiny as law firms seek to trim excesses while retaining their most important resource: their people. Some firms may view pro bono budgets as one of those "nice to have" line items. But, in reality, firms that pursue innovative pro bono opportunities during a slowing economy can prevent retrenchments and enhance the profitability, sustainability and morale of the firm in the long term.
Most firms are geared to withstand changing market conditions - a new business cycle will often mean that work dries up in one practice group to the benefit of another. While this is bound to inflict short-term pain in some areas, it also presents an opportunity to up-skill and occupy staff with work that is not only professionally challenging and rewarding, but also ensures that the public interest is best served when demand for pro bono is at its peak.
In the community legal sector - the "Main Street" of Australia's legal economy - the economic downturn is a double-edged sword, with demand on services increasing as funding opportunities contract.
The Public Interest Law Clearing House (PILCH) has already observed a spike in demand on its services as a direct result of market conditions. Whether via redundancies, relationship breakdowns, spiraling debt, or mortgage foreclosures, in one way or another many people who are unable to afford legal advice will encounter the justice system for the first time as the economy slows. For those at the coalface of social service delivery, such as the PILCH Homeless Persons' Legal Clinic (HPLC), this means more work.
Meanwhile, consolidated revenue will take a significant hit from reduced corporate tax receipts and return on Government investment, meaning the clamour for community sector funding will become all the more competitive. As philanthropic and other corporate benefactors grapple with their own reduced returns and decreasing profit margins, the funding outlook could become dire.
Firms invest huge resources in attracting and retaining quality staff and the business case for pro bono is well established. Pro bono opportunities provide lawyers with experience, responsibility and client interaction that they might never encounter through commercial practice, and firms are increasingly sought out by graduates on the strength of their pro bono programs.
There is also a clear commercial imperative for firms to establish co-ordinated and targeted pro bono programs as governments in many jurisdictions trend towards pro bono requirements in their legal services contracts.
While retrenchments may be an attractive short-term option for some firms, staff turnover is expensive. In the US, law firms learnt from the last downturn in the legal economy following the burst of the tech-bubble in 2001 and are maintaining or increasing their pro bono outputs in response to the credit crunch.
Australian firms should follow this lead.
Firms could keep good layers busy by incorporating a community legal centre rotation in the graduate program, seconding a senior associate in-house to a community organisation, accepting a piece of strategic litigation pro bono, or becoming involved in projects such as the HPLC.
Such initiatives could avoid the inevitable cost of hiring and training during the upturn, and firms would send a clear message to their staff and the broader community about the firm's values and commitment to social policy, notwithstanding the economic turmoil. The in-kind support would significantly enhance the ability of the community sector to deliver services to those most in need.
In a recent swansong speech at Griffith University, the retiring Justice Michael Kirby urged young lawyers to "be a voice for the voiceless" and "protectors of the weak and the vulnerable". His Honour noted that, for lawyers: "With our privileges and gifts, go great duties and obligations".
Law firms would do well to have His Honour's words in mind when considering the bottom line.
Mat Tinkler is the Acting Executive Director of the Public Interest Law Clearing House (Vic)
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