Is Pro Bono also Pro Lucrum? Doing Well by Letting your Human Capital Do Good

Many professionals derive value from engaging in pro bono work, which is also supported by a large and increasing number of employers. Ongoing shifts in the work values held by young professionals and an increasing emphasis on social responsibility within professional fields has reinforced this trend. In this paper, we investigate the potential value of pro bono programs for firms, in particular through their impacts on the firms’ ability to compete for and motivate their human capital. We posit that pro bono programs may provide talented employees with highly valued non-pecuniary benefits, and can therefore be a significant source of superior firm performance and competitive advantage in businesses that rely on highly skilled professionals. Using a panel data set from the legal industry, which has been a pioneer in pro bono work programs, we find that law firms’ sustained commitment to pro bono is associated with increasing employee satisfaction, and in turn with superior firm performance. Additionally, we find that the performance benefits derived from employees’ satisfaction with pro bono increases with the degree of human capital leverage that firms employ, and the extent to which their human capital is highly inexperienced.