The "Good" Pivot: From Pro Bono to Social Impact Law

^That's the original title of the piece I wrote for The American Lawyer Magazine's July 2017 issue.  Their team changed the title to "Must Law Firms' Good Deeds Be Done for Free?" Insofar as that question invites curiosity, I am cool with it.

The article is what matters most. And I wrote it following a friendly and constructive Twitter exchange about AmLaw rankings of law firms which a super nice person named Gina joined. In the midst of the exchange, I clicked Gina's profile to discover she is the CEO of The American Lawyer Magazine (which oversees the AmLaw rankings).  For someone who doesn't spend a ton of time on Twitter, it was a solid stroke of luck.

Gina and I had a call. She was completely open to a new perspective and invited me to write an article.  You can read that article by clicking this link. Alternatively, I'm including the full text below for anyone who gets bounced to a sign-in screen they aren't motivated to conquer. 

Must Law Firms' Good Deeds Be Done for Free?

Scott Curran, The American Lawyer

A new model of how law firms do good is emerging, one that delights clients and talent, is profitable, and captures the work that many firms are already doing. This new model—serving social impact clients and achieving social impact through direct firm undertakings—embraces the role of lawyers as the architects of social innovation. At scale, it creates new practices within firms and throughout the profession to serve a growing market of social impact clients and expands the model of how firms "do good."

Pro Bono Important but Limiting

When describing how firms do good, most attorneys understandably cite pro bono practices. Pro bono (providing legal services without charge) has always been the primary way law firms and attorneys serve those with the most urgent unmet legal needs.

But pro bono alone is no longer a sufficient framework, nor metric, to capture the increasingly diverse ways in which firms are evolving to achieve greater social impact. The rest of the private sector has grown beyond traditional corporate social responsibility (using profits to do good) into more integrated social impact approaches that merge the business model with social purpose.

Similarly, law firms are evolving beyond pro bono alone in how they serve social impact clients. The new social impact model for law firms has two primary components: 1) social impact client services; and 2) direct firm undertakings for social good.

Social Impact Client Services

A large market of social impact clients has emerged and, with it, an increasing demand for sophisticated legal support. While inclusive of nonprofits and other traditional pro bono clients, the social impact market consists of increasingly larger, more diverse and better-funded paying clients.

Sophisticated global nonprofits, family offices, social financiers, impact investors, social enterprises and entrepreneurs all comprise the emerging social impact client portfolio. And they are all using lawyers.

Toms Shoes, Warby Parker and Thrive Market are just a few of the growing number of high-profile businesses with an integrated social purpose.

The Chan Zuckerberg Initiative, an LLC and not a charity, works to solve social problems through a combination of approaches including making investments in profit-seeking endeavors.

Impact investors and social financiers deploy capital that seeks market rate returns in socially responsible investments.

The world's largest foundations and operating charities with large budgets that fund programs increasingly require sophisticated professional support.

Behind all their work are lawyers. Law firms are happy and excited to have these clients in their book of business. And lawyers throughout their firms' practice groups who service the diverse needs of these clients are excited to do the work. Serving these paying clients grows opportunities for law firms to achieve the double bottom line of doing good while doing well. But law firm social impact doesn't stop at client services alone.

Law Firms as Social Actors

Beyond the growing market of social impact clients, firms are evolving in how they use their own time, talent and treasure to achieve social impact.

Some firms have large foundations that make grants. Other firms have operating charities that deploy lawyers to support programs working on rule of law and access to justice in developing countries. Some firms undertake community service initiatives involving all firm staff (not just attorneys). The list goes on.

This all makes sense. Doing good is inherent in the profession and motivates many of us personally. And, as our increasingly interdependent and connected world exposes us to global challenges, as growing ranks of millennials seek meaning in their work, and as lawyers discover new ways to deploy their talents to solve challenges, lawyer-led social impact efforts will increase.

New Framework, Measuring What Matters

While this exciting work grows within firms, no universal framework yet exists to meaningfully recognize, organize, market and measure it. Pro bono rankings only capture free attorney time. They don't account for paying social impact clients or for the direct social impact undertakings of firms. This will change with a new social impact metric currently in development by my consulting practice, Beyond Advisers.

Leading firms should be recognized for the work they are already doing. Other firms will welcome the road map that a social impact metric provides to track and measure their existing work. Most importantly, by using a more inclusive social impact metric, we will foster an atmosphere more conducive to greater innovation, collaboration, and even competition in serving social impact clients.

New Markets, Approaches and Opportunities

As social impact work increasingly blurs lines between sectors and blends profits and purpose, new legal entities, financing tools and uniquely sophisticated deal work are emerging. The challenges of this pioneering work require creativity, innovation and extra time from the lawyers who support these endeavors. But the generally high hourly rates of the most in-demand attorneys become a unique challenge. Premium rates assume efficiency and expertise. However, the innovative landscape does not yet know the same efficiencies, and existing expertise must be reconfigured for this new market. And pro bono requests become harder to make or approve for seemingly well-resourced and/or profit-generating endeavors.

There is a fertile middle ground between pro bono and premium rates. Current examples include discounted rates, flat fee pricing, capped fees, alternative billing arrangements, payment tied to success metrics, fixed cost retainers, and per-deal pricing. Firms of all sizes have an opportunity to develop new models to serve social impact clients.

Big clients with big budgets will continue to look to Big Law, which has tremendous ability to innovatively meet social impact demand. But premium rates (even at a discount) and industry rankings prioritizing revenue and profits (and tracking only pro bono efforts) remain a challenge.

Startup clients with smaller budgets can find boutique firms catering to the social impact market. While fast, nimble and affordable, these firms are challenged to scale with their most successful clients whose eventual full-service needs require a hand off to other firms that can pick up where they max out.

Middle market firms have a "Goldilocks" opportunity. Not too big or expensive, not too small or unscalable, but just right with reasonable rates, sophisticated full-service practices, and the ability to speak and practice social impact.

There are clients and opportunities for every sized firm. And the clients and talent of these firms will increasingly prioritize firms that speak and practice social impact. With a framework and metric that more inclusively recognizes and measures social impact, attorneys and their firms will have a greater opportunity to scale their social impact work.

The Bright Future of Social Impact Law

During my 10 years as counsel to a global operating charity with thousands of staff working in more than 30 countries on more than a dozen initiatives, and in my experience advising dozens of organizations doing similar work globally, I have seen firsthand the enthusiasm of outside attorneys to engage in new, dynamic, cross-sector social impact work. Just a few examples of the services that lawyers and law firms that speak and practice social impact provide include:

  • Knowing when, where,and how to register and build and manage teams in countries where "on the ground" work occurs.
     
  • Engaging smart business lawyers to structure multiparty, cross-sector partnerships supporting dynamic global programs.
     
  • Working with corporate, finance and tax counsel to properly structure program- and mission-related investments.
     
  • Creating innovative new financing structures and mechanisms to develop social investment policies and streamline deal work for impact investors.
     
  • Using real estate lawyers to develop land leases in developing nations where commercial farming and supply chain operations help smallholder farmers increase their productivity and access to global markets.

As an adjunct professor teaching social impact law, and as founder of a social impact consulting practice, I have developed an even fuller view of the opportunity ahead for the law to achieve greater social impact at scale.

I see a bright future where:

  • Law schools teach social impact in classrooms and practice it in clinics for the benefit of community social impact organizations and practice-ready graduates alike;
     
  • Law firms recruit eager and motivated talent with a zeal for serving the double bottom line of doing good while doing well; and
     
  • Industry rankings measure social impact inclusive of, but not limited to, pro bono alone to capture how the profession comprehensively achieves its highest and best purpose.

Lawyers are the architects of social innovation. We are already behind so much social impact work. Imagine how the future looks when we put lawyers in front of it!


Scott Curran is the founder of Beyond Advisers, a social impact consulting practice that simplifies professional services for the social sector (www.beyondadvisers.com). He previously served as General Counsel of the Clinton Foundation. He teaches, lectures and speaks with considerable enthusiasm on the topic of lawyers as social innovators. Twitter: @scottmcurran