Pro Bono as a Human Capital Learning and Screening Mechanism: Evidence from Law Firms

Abstract

Inquiry into CSR as a human capital management tool has suggested that firms benefit from such activities because employees value the meaningfulness of these activities, which influences motivation and retention. We propose an alternate avenue through which firms can benefit from an important type of socially responsible activity – pro bono services – that does not require that employees derive utility from the meaningfulness of the activity. We propose that pro bono activities can benefit firms through human capital learning and screening mechanisms, given the stretch roles that pro bono engagements allow. We formalize this argument in the legal services industry, where we provide primary evidence, a formal model, and empirical results using a panel dataset of the top 200 law firms to support this argument.

Keywords: Corporate Social Responsibility, Human Capital Strategy, Promotions, Organizations, Legal Services