Editor: Tell us about Pro Bono Partnership (PBP) and any significant developments since we last spoke.
Hobish: The great majority of the Pro Bono Partnership’s clients are nonprofit organizations serving the poor and disadvantaged. Although, in 2007, as a result of a deliberate strategic planning process, we expanded our mission to include arts, civic and environmental organizations, as well.
As you may recall, the Partnership was created in 1997 by in-house counsel for in-house counsel, and while our program focuses on the in-house bar, we also welcome and receive substantial volunteer participation from law firms. These volunteers represent our clients on about 80 percent of matters, all involving non-litigation, business legal issues. Our nine-person legal staff provides direct representation on the other 20 percent. In any given year, 150 corporations and law firms, and as many as 900 attorneys, provide pro bono legal assistance to PBP clients.
Most of our matters are discrete and require volunteers to utilize their existing legal skills, so no training is required. For example, a real estate attorney reviews leases, an employment attorney deals with personnel issues, a corporate attorney may deal with governance issues and so on. And, for those volunteers who value the opportunity to learn something new, we provide support all along the way either by enlisting the help of other volunteers with the required expertise, or by involving our legal staff, experts in the laws of nonprofits and tax exempts, one of whom is assigned as co-counsel on every matter undertaken by a volunteer. The process works. Surveys we conduct each year reflect the highest levels of client and volunteer satisfaction.
A significant recent development is that we have proudly reached our 15th anniversary. We are hosting a celebration on October 17 at Cipriani in New York City, and honorees will include Brackett Denniston, senior vice president and general counsel of GE, and Brad Karp, chairman of Paul, Weiss, Rifkind, Wharton & Garrison LLP. The dinner chairs are Jeff Immelt, chairman and CEO of GE, and Stephen Cutler, executive vice president and general counsel of JPMorgan Chase.
We have also experienced incredible growth in our program since 2007 – more than a 100 percent increase in the number of matters we undertake annually. Needless to say, our resources have not grown commensurately. While we have been fortunate to be able to add to our staff in recent years and have increased our bench strength through the efforts of a number of retired in-house lawyers who volunteer part-time in our offices, we must regularly take stock of our priorities to ensure the best use of our resources.
Editor: Is the number of nonprofits increasing, and what resources does PBP offer to start-up nonprofits?
Hobish: Definitely. Since 2007, the number of registered nonprofits filing Form 990 has increased by 62 percent across our service area. This growth is partially attributable to expansion of IRS annual reporting requirements to include small nonprofits that formerly did not have to file. In addition, the severe economic downturn and the sharp increase in community needs have inspired more people to create new nonprofits.
We cannot help every organization wishing to incorporate, however, nor should we. While many start-ups do provide vital services needed by specific communities, many simply are duplicative, structurally weak or unready to move forward. It’s our job to determine which ones have the potential for success and encourage the others to pursue other options.
In our effort to maximize the number of successful nonprofits, PBP presents a monthly teleconference called “Starting a Nonprofit: Upsides, Downsides and Alternatives.” This teleconference addresses the legal and administrative responsibilities of forming a nonprofit, including the challenging task of building a board of directors and complying with all state and federal regulatory requirements. It also highlights certain factors of which founders of nonprofits may be unaware. For instance, once a project is incorporated as a nonprofit, it will be governed by a board of directors with the power to fire the executive director (often the founder) at will. The volume of compliance work involved in running a nonprofit is often an eye opener as well.
As part of our intake process, we require founders to submit a detailed business plan to ensure that they have thought through in detail the requirements of starting a new business. A common misperception, for instance, is that fundraising revenue will flow in effortlessly after tax-exempt status is achieved. Thus, we also want to ensure that a start-up has concrete funding sources and a well-formulated program for future revenue generation.
Some projects focus on a real need, but the organization isn’t yet mature enough to undertake all responsibilities of a full-fledged nonprofit. For these projects, we might suggest fiscal sponsorship by an existing 501(c)(3). Under this arrangement, donations on behalf of the new entity are made to an existing tax-exempt organization, which makes an independent decision in accordance with its own mission to allocate funds to the new program. While there may be some control issues when the time comes to separate – perhaps the sponsor is reluctant to give up a successful program – risks can be mitigated with a well-drafted agreement.
Editor: What are the challenges you face in recruiting, and how does PBP recognize volunteer excellence?
Hobish: Recruiting volunteers is a very time-consuming process for our staff lawyers, in part because many corporate legal departments and law firms have had to decrease staff in this economy. Nevertheless, the in-house bar and law firms remain very committed to pro bono service.
To help recruit and retain volunteers, we place a high priority on recognizing their good works. Each year we select three individuals, a corporation and a law firm as our Volunteers of the Year. In making these selections, we consider a number of factors, including the complexity or transformative nature of projects, the responsiveness of volunteers and the volume of matters on which they worked. Using these criteria, it was obvious last year that we should recognize Merck’s legal department as one of our Volunteers of the Year and a shining example of a highly effective pro bono program.
PBP is among a few organizations with which Merck’s legal department collaborates, and we are proud to have Merck as a partner. We are also fortunate that its general counsel, Bruce Kuhlik, sits on our board. His commitment and dedication to providing pro bono legal services has played a huge role in producing a high level of meaningful participation among his legal staff.
Editor: How does PBP match clients with legal counsel?
Hobish: First, you should know that we hold the interests and satisfaction of volunteers and clients in equally high regard. The process of working with a new corporation or firm begins by exploring its strategic objectives and operational needs for pro bono and community service programs. From there, we craft a program based on corporate goals. I invite your readers to visit our website for a more comprehensive listing of PBP’s Programs and Services for Corporations.
In practical terms, the matching process involves a lot of staff work, screening clients and maintaining an extensive database of volunteer profiles that include substantive expertise and personal interests. We post new volunteer opportunities on our website regularly and email them directly to our volunteer corps monthly. Staff lawyers also pick up the phone to ensure that urgent matters are placed in good time.
Once a matter is placed, the staff attorney assigned to the matter convenes an initial meeting with the volunteer and the client to review the issues, identify timelines, and otherwise manage everyone’s expectations. This process contributes to our reputation for quality and our excellent track record for responsiveness.
Editor: We understand that many clients’ matters are straightforward, fairly discrete and suitable for a single volunteer, but how do you go about staffing a more complex matter?
Hobish: The more complex the matter, the more likely it is to require a team of volunteers and possibly provide an opportunity for corporate volunteers to partner with law firm attorneys. Such matters may also require more hands-on legal advice by our staff attorneys, experts in the law of nonprofit tax-exempt organizations, who spend time on all matters helping volunteers to translate their substantive expertise into the nonprofit context.
Editor: Tell us about PBP’s innovative clinics.
Hobish: Our clinics represent excellent team-building opportunities. For example, a team of volunteers from a single corporation may participate in a one-day intellectual property or governance clinic where they use their legal skills to identify the needs of participating nonprofits and recommend solutions. Or a number of lawyers may provide a workshop on employment law and then, that same day, perform customized employment audits, working individually with a number of our clients. Our staff is always in attendance to provide guidance on nonprofit issues that may arise.
Corporations appreciate the opportunity to get many lawyers involved without requiring an extensive time commitment, and clients gain valuable perspective on what their legal needs might be. Issues identified in the clinics are subsequently addressed by a volunteer or one of our staff lawyers.
Editor: In February, New York State Attorney General Eric T. Schneiderman released the report of his Leadership Committee for Nonprofit Revitalization. What are the salient points made in the report?
Hobish: The attorney general selected 32 New York nonprofit leaders for the committee, and I’m proud to have been included. The committee was charged with taking a hard look at legal, regulatory and financial burdens on nonprofits; governance and accountability practices; and with developing a strategic vision for New York's nonprofit sector. This process resulted in 38 recommendations detailed in the AG’s subsequent report, including a number of important measures to eliminate costly red tape and undue regulatory burdens impacting New York nonprofits, while also bolstering accountability and strengthening oversight to prevent fraud. Many of these recommendations were included in a bill now before the New York Legislature, for example, measures to fix state contracting problems, modernize a number of out-of-date laws, mandate independent oversight of executive compensation, and new initiatives creating “New York on BOARD” to help recruit and strengthen nonprofit boards and, also, “Directors U” to strengthen director education and board oversight. Similar initiatives are underway in Connecticut and New Jersey.
Editor: Do you have any final thoughts for our readers?
Hobish: I applaud the commitment to pro bono from both the in-house and law firm bars, and I encourage ongoing participation with the promise that volunteering is doable and rewarding with the support that we offer at Pro Bono Partnership.