The hidden costs of pro bono work

In this increasingly divided world, it is good to take some time and help those who are less fortunate than ourselves.

Offering pro bono services can be a way to offset some of the negativity of the world and do some good for someone.

The positive PR that tends to come from this kind of work is also something that will benefit you going forward.

However, there are a number of financial considerations that are worth keeping in mind when you are engaging in pro bono work.

You provide a vital service to many clients, and effective financial management can allow you to continue performing this role and open the doors to new ventures.

Time and resource management

It might seem obvious that the biggest consideration regarding pro bono work is that you do not get paid to do it.

You will likely have accounted for the fact that the pro bono work will not yield any direct financial gain, but it is worth considering the work in the context of your overall workload.

Solicitors who effectively engage in pro bono work do so in tandem with the regular paid work.

Ensuring that your pro bono work does not consume valuable time and resources more befitting of your paid work will allow you to handle both types of work without slowing down.

Remember, you will still incur expenses, such as employee costs, for engaging in pro bono work, so it is important to make sure those bills can be paid.

Tax implications

If you reclaim VAT expenses on some of your work, then it may be necessary to consider how pro bono work will impact this.

As pro bono work does not generate income, it is not possible to recuperate VAT expenses even if they were paid in order to conduct the work.

This may be most prevalent in cases where traveling is an essential part of conducting the work, and you typically reclaim the VAT on travel expenses.

It is important to consider the nature of the pro bono work before taking it on and determine whether it will be ultimately cost-effective to engage in the work.

Insurance considerations

Although you do not charge for the pro bono work, you are still engaging in legal work.

As such, the legal risk that is associated with your other work persists.

Due to the financial instability of engaging with pro bono work, some insurance companies may have specific restrictions on how much, or the type of, pro bono work you perform and may charge higher premiums based on pro bono work.

To ensure your insurance remains valid, it is worth checking the details thoroughly and making any necessary changes to either the policy or your work approach.

Factoring in these increased insurance costs can make pro bono work off-putting, but it may still be a valuable avenue for your firm to approach.

Seeking professional financial advice is always a good thing to do, and we can help you effectively budget and plan for any financial risks incurred while doing pro bono work.

In some cases, it may be more appropriate to refer a client to a Legal Aid solicitor and leave yourself space to work with only those who have no other option.

If you want to enhance your approach to pro bono work, speak to our team today.