April 3, 2009 8:30 AM

Non-Profits: Who Pays the Costs of Hiring Deferred Associates?

Posted by Rachel Breitman

Public interest and nonprofit legal organizations might soon find hundreds of deferred law firm associates knocking on their doors. While these organizations are grateful for firms' commitment to subsidize their deferred associates' volunteer work, the reality of the scenario is daunting.

"It's fabulous that law firms in a time of economic crisis want to figure out how to get more hands working in nonprofits," says Michael Rothenberg, the executive director of New York Lawyers for the Public Interest. "But it's going to be a challenge to receive all these brand new attorneys, and we will need to have new infrastructure in place to support their training and supervision." Rothenberg says NYLPI will likely take three deferred associates this year. 

The biggest question facing nonprofits and public interest organizations is how to cover the hidden costs of bringing more lawyers on board. While many firms are paying $60,000 to $75,000 stipends to their associates, the organizations taking on these volunteers will have to stretch already thin budgets to accommodate them.

"There are out-of-pocket expenses for any person who comes into our organization, from furniture to technology," says Mitchell Kamin, president and chief executive of Bet Tzedek Legal Services, whice provides legal advice to Los Angeles's poor and minority populations. Kamen estimates the added cost of taking on an intern for one year at his organization will come to roughly $10,500 to cover office supplies, parking, and postage (an additional $3500 will be necessary for the added training and supervision costs for these newbie lawyers). Kamin hopes to accommodate seven to ten deferred associates. 

Bet Tzedek will cover malpractice insurance for its interns, but not health insurance. Kamin says he hopes the law firms or the volunteers will pay these costs. If those lawyers are coming from Ropes & Gray and Sidley Austin, there won't be a problem--both firms have agreed to cover health insurance for their deferred associates who choose nonprofit work. Some other firms have offered instead to give the stipends directly to the nonprofits, who can add the associates to their payrolls and offer benefits. But this scenario presents additional complications, says Kamen, requiring organizations to cover Social Security and Medicare payments.

Responding to the lingering questions and challenges, the National Association for Law Placement added a session to its annual education conference held this week in Washington, D.C. Reena Glazer, assistant director of the law firm pro bono project at the Pro Bono Institute, Paul Igasaki, deputy chief executive director of Equal Justice Works, Karen Sarjeant, vice president at Legal Services Corporation, and Don Saunders, director of civil legal services at the National Legal Aid & Defender Association addressed a standing-room-only crowd of pro bono coordinators, law school administrators, and public interest staff.

"Some law firms acted quickly, but hadn't anticipated issues implicated in their choices," says Igasaki. "In some cases, the new associates will arrive at their placements without health insurance, malpractice insurance, a computer, or even a desk." The panel recommended law firms make in-kind donations of office furniture and technology to ease some of these burdens. 

Some nonprofits are also asking law firms to pay training fees, and others are hoping additional fund-raising will cover the balance.

"We're trying to convince some of our funders that this is worth their investment long range," says Barbara Arnwine, executive director of the Washington, D.C.-based Lawyer's Committee for Civil Rights Under Law, a group that handles matters involving racial discrimination. In an already tough fund-raising climate, she is asking existing donors to cough up more cash for the additional volunteers. 

Her organization expects to take on 12 new associates in its Washington, D.C., headquarters, and three others for field placements in New Orleans, filling half of the spots now, and half by the fall. The group also is considering taking on deferred associates who will work from home. "Everybody from the law firms keeps telling us that they would like to have their plans completed by May 15, before the incoming class is out of school and has to make decisions about where they are going to live," says Arnwine. 

With just six or so weeks before many deferred associates will graduate law school, few are sure what the fall will bring. 

Orrick, Herrington & Sutcliffe pro bono coordinator Rene Kathawala has been working around the clock to complete a 100-page guide for new associates about work opportunities, while simultaneously playing matchmaker for the firm's new hires. So far, 36 of 43 deferred associates have expressed an interest in taking on an internship, which the firm will subsidize with a $75,000 stipend. Of the 36, only four have actually secured a placement.

"The nonprofit organizations are doing the law firms an enormous favor," says Kathawala. "Some are unhappy that we aren't paying overhead or benefits, and they need to decide whether the amount we are paying is enough to support a fellow."

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