Charities often stuck in ‘bad contracts’

Pro bono work gives a voice to the “most marginalised, underrepresented” in society and has benefits for both client and lawyer, a recent panel on transactional pro bono has heard.

Of approximately 300,000 companies in Ireland, some 30,000 are community and voluntary sector organisations.

Grassroots

The sector includes 12,000 registered charities and ranges from grassroots organisations to large service providers acting on behalf of Government.

It accounts for 10% of the workforce, generates about €18 billion in revenue and has an estimated economic impact of €32 billion.

Jon McBride, governance and compliance manager at The Wheel, added that the sector also had 650,000 volunteers, 75,000 charity trustees and that 50% of charities had no paid staff.

Former practising barrister Marcus Keane, head of compliance and legal affairs in the Irish Red Cross, spoke of the importance of legal input from the outset of an organisation but identified an “information gap” whereby charities did not always recognise when such input was required.

Panel chair Tony O’Sullivan, senior partner at Beauchamps Solicitors and lead of its pro bono team, noted that “social-impact organisations are operating in an environment of growing demand, increased regulation, and constrained resources.” 

The lawyer added that only 30% of pro bono work involved litigation, “for charities, social enterprises and voluntary organisations, the most pressing needs are frequently transactional governance frameworks, commercial contracts, employment matters and regulatory compliance.” 

Jon McBride identified governance reform, particularly in light of the Charities Amendment Act, as a current area of demand.

Organisations are reviewing constitutions and aligning activities with stated objects to avoid “mission drift”.  

He also noted increased requests relating to conflict management at board and executive level and spoke of the value of training by legal experts on topics such as data protection, compliance, and accessibility.

Chris Gordon, chief executive of the Irish Social Enterprise Network, outlined structural challenges at start-up stage.

There is no register of social enterprises. Legal forms are not ‘one size fits all’.

Founders must consider whether to establish a company limited by guarantee, a private company limited by shares, or a charitable entity, the teaching fellow at TCD went on.  

He said founders were often ‘vulnerable’ and required early guidance.

Gemma McLoughlin-Burke, coordinator of the Voluntary Assistance Scheme (VAS) at the Bar of Ireland, said charities frequently entered “bad contracts” or faced situations such as illegal eviction that could have been avoided with early advice.

She reported an increase in organisations seeking assistance at an earlier stage. VAS assigns cases by reference to a panel of volunteers, matching expertise and seniority to the query.

Transactional pro bono is “preventative, practical and often transformative,” according to Elini Stavrou of Arthur Cox, who said that it strengthened organisational infrastructure and allowed organisations to focus on their mission.

“Pro bono can integrate naturally into your legal practice, and it doesn’t displace client work,” she said, adding that access to justice “is not a privilege. It is a foundation to the rule of law.”

On the relationship dynamic in pro bono engagements, Marcus Keane said that beneficiaries might feel reluctant to “hold somebody’s feet to the fire” where advice was provided free of charge. 

Within Arthur Cox, pro bono clients are treated “as if they are any other client,” Elini Stavrou said, with pro bono hours recorded and treated just as billable hours. 

Less quality

Jon McBride stated that there was sometimes a belief that unpaid advice was of lesser quality, which he said “is simply not true”.

Tony O’Sullivan noted that professional obligations applied regardless of payment.

“I think there's actually a huge appetite and willingness to do it,” Gemma McLoughlin-Burke said, adding that not only did VAS volunteers treat cases with the same urgency as fee-paying work, “I find the turnaround and response time of some of them to be far quicker than ordinarily.”

Encouraging lawyers to be “fearless”, the barrister told the audience of mostly lawyers: “Your skills are so transferable. You’re way more capable than you realise." 

Operational advice

As well as operational advice, Jon McBride spoke of the “huge emotional relief” clients felt from legal support.

“These are volunteers,” he added, “so minding their mental health is also a real priority for the safeguarding of the charity.”

Gemma McLoughlin-Burke agreed.

“People love working with charities and NGOs; you're working with really passionate people who often are very impactful in their communities, and it's such a pleasure to represent them,” she said.