Editorial Time-Out: A Word In Favor of Legal Aid Donations

Pro bono work, services or cash donated to legal aid, and charitable contributions by law firms in general have received scant attention at "Adam Smith, Esq.", a shortcoming I hereby resolve to remedy, if for no other reason than that the actual Adam Smith was found only upon his death to have donated a substantial proportion of his income to charity.  (And you thought capitalism has no place for eleemosynary activities—think again.  Capitalism is about how one generates wealth, not so much about how one spends it.  But that is a topic for another day.)

Comes word that Allen & Overy will now be donating the "excess" interest it earns on client's escrowed funds to legal aid centers in the UK that offer counseling on issues such as housing, family law, and employment, and further that it has written a letter to Tony Blair encouraging the government to increase legal aid funding.  Needless to add, A&O is encouraging other Magic Circle firms to do the same, and even going so far as to say that "any firm with more than 20 partners" should do the same.

Back up for a second:  What is this "excess" interest, again?  We all know law firms hold clients' funds for different periods of time and for a variety of purposes;  A&O, like any firm that has graduated beyond doing its accounts at the kitchen table, aggregates all those funds and holds them in a single bank account,  on which it has negotiated a higher interest rate than any one of the clients alone could obtain by virtue of the size of the account.  The "excess" interest, then, is the margin A&O earns over what each client alone could earn; the client's share is obviously returned to the client, but in the past A&O (and everyone else) had simply pocketed the excess—estimated to total around £200,000 over three years.   Now that amount will be going to legal aid.

So what?  Editorial time, people:  It is occasionally a proper role for MSM and bloggers alike to champion good citizenship among their readers, and this is such an occasion.  (Don't worry; they will remain few and far between on "Adam Smith, Esq."!)  Just as The American Lawyer tries to do with its "A-List" giving ranked firms credit for their commitment to pro bono work, I want to urge AmLaw 100 firms to take a page from A&O's book and contribute comparable funds to legal aid on this side of the Atlantic.  £200,000 is estimated to be about four months' profits for a single A&O partner.  Is that honestly too much to ask, from those to whom so munificently much has been given?