Diversions: Pro bono appointments - risks and considerations

In our recent Podcast, The Turnaround Podcast: Sophie Ulhorn & Andrew Vincent - Putting on someone else's brand with Hamilton Locke we discussed the rewards from Pro Bono Work:

"The work I've done in the pro bono space...a lot of that work is some of the hardest work I've ever done. But it's also the incredible learning curve incredible, incredible difficulties, incredible trauma and incredible challenges, even in just being able to see an advocate to help them overcome their situation, whether that's, gaining asylum in a third country, or, maintaining one's right to liberty, whatever the situation might be. It really helps you, with objectivity. It helps you with empathy, helps you with judgment, it helps you with communication, and it helps you manage stress. Frankly, at the end of the day, because it helps you identify at what point you need to start stressing and at what point you can sort of be a little bit more relaxed about it."
(Sophie Uhlhorn – Hamilton Locke, on Pro Bono Work)

UNDERSTAND THE LANDSCAPE

Accepting pro bono appointments (whether as a lawyer, director, accountant, consultant, or professional) can bring meaningful benefits, but there are also many risk issues to consider:

Risks	Detail
Legal	Liability Exposure: Even for unpaid services, you still owe duties of care, diligence, and skill, so are exposed to negligence or breach of duty claims Conflicts of Interest: Pro bono work may inadvertently conflict with your professional or business obligations, particularly if clients or stakeholders overlap Insurance Coverage: Not all professional indemnity insurance automatically covers pro bono work—especially if it’s outside your usual scope of practice
Governance	Regulatory Breaches: Directors taking pro bono board appointments still carry statutory duties (under the Corporations Act in Australia or the ACNC Regulations) Personal liability can arise if the organisation breaches WHS, tax, financial reporting of rother requirements Policy and Protocol Gaps: Small or under-resourced organisations often lack strong compliance systems
Professional	Scope Creep: Unpaid roles often expand beyond what was agreed, increasing workload and risk Standards of Practice: Courts and regulators do not apply a lower standard because you acted pro bono—the professional duty remains the same Skill Mismatch: Sometimes people accept pro bono roles outside their expertise, which increases risk of error
Financial & Resource	Out-of-Pocket Costs: Travel, materials, or other expenses may not be reimbursed Time Commitment: The unpaid time may detract from your paid work or personal commitments, creating financial strain
Reputational	Association with Organisation: If the organisation behaves unethically, mismanages funds, or collapses, your reputation may suffer by association Quality of Service: If capacity constraints lead to lower quality outcomes, this could affect your professional standing

PRACTITIONERS ENGAGING PRO-BONO LAWYERS

We are not lawyers (obviously) so do not want to opine on too many of the issues associated with Legal Pro Bono work. However, where we engage lawyers in that capacity (as opposed to retaining lawyers “On Spec”, where there is an expectation of some financial reward), we are mindful of expectations:

Expect the same duty of care and competence, but anticipate some timing slippage
Ensure relevant engagement letters confirm insurance policies cover pro bono work automatically
Request a conflict check and clearance
Manage your own scope expectations: don’t expect extensive representation, anticipate limits and try to avoid asking for scope creep

We found the Australian Pro Bono Centre | Australian Pro Bono Manual – Contents a good source of information.

PRO BONO WORK IN ACCOUNTING AND RESTRUCTURING

We are not aware of any guidance provided by ARITA. Accountants doing pro-bono charity work can have regard to the CA-ANZ article on Why it’s important to get pro-bono work right | CA ANZ which includes a few “myths” to watch out for:

PRO BONO MYTHS

Myth 1: “It’s only a not-for-profit organisation so the work should be pretty straight forward.”

APES 110 Code of Ethics for Professional Accountants Code of Ethics – Home is still relevant and binding – whether or not you’re getting paid. Watch out for personal use of Charity Assets, and Related Party Transactions at inflated prices. The ACNC require NFP’s to submit financial documents each year.

Myth 2: “I’m not charging for my services, so I won’t need Professional Indemnity (PI) Insurance.”

If you’re not charging for your services, CA ANZ’s Regulation CR 2 doesn’t require you to hold a Certificate of Public Practice (CPP) and in turn, you’re not required to hold professional indemnity (PI) insurance. However, it is critical to take out insurance cover against any potential claim.

Myth 3: “There’s no way friends and family will sue me if I’m doing free work for them.”

Sadly, some of the most bitter disputes arise within families or between friends. Before you take on pro bono work, ask yourself: Do I possess the qualifications and experience needed to work at the level required? Do I have a conflict of interest? Am I independent? What about insurance?

Tips for Restructuring Professionals

Here are some key tips to help guide advisors through a pro bono process:

Tip	Detail
Ethical / professional obligations	pro bono work must meet the same ethical standards (integrity, objectivity, professional competence & due care, confidentiality, etc.) as paid work.
Engagement Letter	It should set out the scope of work, responsibilities, timeframes, what the accountant is expected to do, what the client needs to provide APES 305 Terms of Engagement
Insurance and liability	Assess personal liability even though there may be less formal requirement for public practice certificate or professional indemnity insurance
Risk assessment	Expect a higher risk of poor records, internal fraud, related party transactions, old or weak accounting systems, volunteers with limited technical knowledge, etc.

DIRECTORS IN PRO-BONO/ CHARITY GOVERNANCE ROLES

Of real relevance is the role that Directors play, in charities and NFP’s in particular, or where individuals are asked to provide support services that are essentially in that capacity. Many of the issues are similar to those described above.

Closing Tips For Non-Executive Directors

Due Diligence: Have I reviewed the organisation’s finances, compliance record, and reputation?
Insurance: Does the organisation have adequate Directors & Officers (D&O) liability insurance? Have I seen the policy? Statutory duties Am I clear on my statutory duties (care, diligence, good faith, no insolvent trading)?
Statutory duties: Am I clear on my statutory duties (care, diligence, good faith, no insolvent trading)?
Conflicts of Interest: Have I disclosed any actual or potential conflicts?
Workload & Expectations: Do I understand the expected time commitment and responsibilities?
Board Processes: Are minutes, reporting, and governance systems in place?
Reputation Check: Am I comfortable being publicly associated with this organisation?

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