Summary: Although many of the country’s biggest law firms make billions in revenue, most only contribute a tiny fraction of their earnings to legal aid causes.
According to a recent analysis by the American Lawyer, though major law firms pulled in over $100 billion in revenue last year, most only donate one-tenth of one percent of these proceeds to legal aid services that help low-income individuals.
Institutional giving for legal aid programs accounts for about 7 percent of total funding. The remaining funds are provided by federal, state, and private sources. Most law firms give to clients’ charities and their law school alma maters.
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Five firms stated that they gave over $1 million to organizations that provide legal aid services last year. According to the American Lawyer, the average donation was $356,503. However, most firms in the analysis refused to disclose the exact amounts they gave.
Four firms did reveal their legal aid donations. Kirkland & Ellis gave $2.6 million; Sidley Austin gave $2.1 million; Paul, Weiss, Rifkind, Wharton & Garrison gave $1.5 million; and Reed Smith gave $300,000. Paul Weiss gave the largest percentage of its revenue. Paul Weiss, which is headquartered in New York, employs around 850 attorneys, according to Wikipedia.
Most top-grossing firms, including Latham & Watkins, which raked in $2.5 billion in revenue last year, declined to state their donations. Latham & Watkins was one of 12 firms that had $3 million in profits per partner last year.
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The analysis noted that there was no system to track donations by individual attorneys. Although personal giving is important, “institutional giving by law firms is crucial” to the legal aid funding structure.
The American Bar Association reported in 2013 that law firms provided $95.8 million out of close to $1.39 billion in legal aid funding. Funding has suffered as a result of cutbacks for the Legal Services Corporation, which provides most legal aid funding.
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However, most law firms prefer to provide funding to measures that will either maintain or attract clients. A client’s causes may be doing “good and valuable work,” but these gifts are “more in the nature of marketing or client relationships,” according to James J. Sandman, the president of the Legal Services Corporation.
For example, Kirkland & Ellis’ third largest gift of $298,200 was to Bain Capital Children’s Charity. Bain Capital is a major client of the firm.
Summary: New York Times
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