PLI Annual Report 2024

2024 ANNUAL REPORT

BOARD OFFICERS

Adrian E. Dollard Chair of the Board

Lynn K. Neuner Vice Chair of the Board

BOARD OF TRUSTEES

Jai Massari Co-Founder & Chief Legal Officer Lightspark

*Robert P. Bartlett, III W.A. Franke Professor of Law and Business Stanford Law School

CHAIRS EMERITI William P. Frank Hon. Angela M. Mazzarelli Werner L. Polak

*Troy A. McKenzie Dean New York University School of Law

Philip R. Bryce Global Chief Knowledge Officer Mayer Brown LLP

TRUSTEES EMERITI David M. Balabanian Charles E. Barnett Stephen J. Friedman Edward F. Greene William F. Kennedy Hon. William F. Kuntz Lance Liebman John J. Roche Frederick P. Schaffer

Tiffany Moller Co-Founder & Partner Jonas & Moller LLP

*Devereux Chatillon Partner & Co-Founder Chatillon Weiss PLLC

*Lynn K. Neuner Partner Simpson Thacher & Bartlett LLP

*Ellen M. Cosgrove Independent Law School Consultant

*Hon. Dianne T. Renwick Presiding Justice New York State Supreme Court, Appellate Division First Department

*Adrian E. Dollard Founder, Katerincon; Co-Founder, Qatalyst (Ret.)

John S. Siffert John W. White

Jonathan I. Forrest Principal Deloitte Tax LLP

Noga Rosenthal Chief Privacy Officer & General Counsel Ampersand

Hon. Diane Gujarati U.S. District Judge Eastern District of New York

Tammy Roy Partner Cahill Gordon & Reindell LLP

Dawson Horn, III Associate General Counsel, Vice President (Ret.) AIG

*Samuel W. Seymour Of Counsel Sullivan & Cromwell LLP

Larry H. Krantz Founding Member & Partner Krantz & Berman LLP

Katherine J. Stoller Partner A&O Shearman

*Mei Lin Kwan-Gett Deputy General Counsel & Global Head of Litigation Citigroup

Hon. Elizabeth S. Stong U.S. Bankruptcy Judge Eastern District of New York

Carmen J. Lawrence Partner King & Spalding LLP

*Members of the Executive Committee

2024 Annual Report

OF THE CHAIR AND VICE CHAIR OF THE BOARD REPORT

Ever Current , Into the Future

Delivering Cutting-Edge Learning Content: PLI continues to anticipate and meet the needs of the market with offerings such as the two-day Artificial Intelligence Law program (with over 9,000 unique registrants to date) as well as over 100 new AI-related pieces of content, a 56% increase over the previous year. This is in addition to cutting-edge programming offered on cybersecurity, fintech, data law, and other topical subjects. From in-person Institutes to engaging and interactive on- demand programs, to podcasts, to new career-focused video series and more, the organization is continually expanding its unparalleled collection of content types and topics. Attracting and Supporting World- Class Faculty: PLI’s cutting-edge content would not be possible without the contributions of volunteer faculty, comprising more than 4,000 leaders from across the legal, corporate, academic, and nonprofit sectors. In 2024, PLI hosted its first Contributor Appreciation Dinner, honoring retiring Program Chairs and Authors; several of us on the Board were pleased to join in celebrating them. Amplifying PLI’s Pro Bono Mission: Reflecting PLI’s ongoing commitment to equipping practitioners with the appropriate training to take on pro bono matters, more than 3,000 scholarships were granted to qualified individuals (nearly 300 more than the previous year). With 57 new Pro Bono Memberships added in 2024, the organization offers full access to PLI’s programs for free to over 850 legal services organizations providing direct pro bono support to clients. Among PLI’s 54 pro bono programs and 15 pro bono-focused One-Hour Briefings last year were programs on disaster response, offered at no cost to the legal community in the wake of Hurricane Helene and the Los Angeles wildfires.

On behalf of PLI’s Board of Trustees, we are pleased to report that 2024 was an exceptionally strong year for the organization. In addition to increasing revenue by 5%, PLI continued to build its roster of world-class content, leading the way in developing programs, publications, podcasts, and video series that meet the current professional development and credit needs of its more than 450,000 Members. With a consistent upward trend in engagement and usage, PLI remains a trusted and reliable source for CLE and other credit types. In 2024, the organization issued more than 1.1 million certificates and 2.3 million credits, representing an increase of 2.8% and 5%, respectively, over the previous year. Program growth also remained steady in 2024, with in-person, webcast, and on-demand offerings covering 33 practice areas along with professional skills and more. Throughout the year, leadership and staff maintained the organization’s steady momentum on key goals outlined in PLI’s five-year Strategic Plan. Examples include: Advancing Learner-Centricity: PLI’s Media Player, which enables the streaming of hundreds of programs on- demand, was thoughtfully redesigned and relaunched to allow for greater customization. Drawing on PLI’s expertise in instructional design, the player has earned acclaim from users, who appreciate the many interactive options that enable them to control how they learn. The Media Player relaunch was part of PLI’s broader reworking of its entire digital ecosystem to provide customers with a streamlined, consistent, and enjoyable experience that revolves around their learning preferences. Along with the award- winning Mobile App, which surpassed 100,000 downloads in 2024, the updated player represents a sound investment towards the strategic goal.

ADRIAN E. DOLLARD CHAIR OF THE BOARD

LYNN K. NEUNER VICE CHAIR OF THE BOARD

As we recognize these achievements, we also honor the memory of longtime PLI Trustee and Chair Emerita, Hon. Roberta Karmel, who passed away in 2024. A highly respected securities authority and educator, she blazed a trail as the first woman commissioner of the U.S. Securities and Exchange Commission and as the first woman to serve as PLI’s Board Chair. In addition to contributing to programs and publications, she served on PLI’s Board for more than three decades, leaving a legacy of leadership and friendship for which we are thankful. Keeping learners ever current remains central to PLI’s mission — and to its success. We are confident that PLI’s focus on strategic goals will continue to drive even greater achievement, benefiting the legal community and beyond.

2024 Annual Report

OF THE PRESIDENT REPORT

Professional Development Beyond CLE We also continue to produce timely and thoughtful short-form non-credit- bearing content, including new video series such as PLI Testimonials , featuring first-person accounts and advice from lawyers at key stages of their careers; and The Well-Rounded Lawyer , a series of bite-sized videos offering expert insights on positive psychology, mindfulness, and more. Early in the year, we also launched the popular podcast Fast-Tracked: Emergent Issues in the Legal Profession, where thought leaders cover trends shaping the practice of law. On Top of Trends Not surprisingly, artificial intelligence led our trending topics in 2024 with nearly 120,000 registrations for our AI programming. In addition to our most popular program of the year, Artificial Intelligence Law, we produced programs on data law and AI, AI and cybersecurity, generative AI and eDiscovery, among others; and addressed AI topics in broader programs such as FinTech and Intellectual Property Law. None of these achievements would be possible without PLI’s smart, hardworking, and innovative employees. They are not only inspired to improve the learning experience for our customers, they also enjoy giving back to our communities — and spending time together — as you will read about on pages 5-6. I am thankful to work alongside them, and for all that they contribute to PLI. As always, I am also grateful to our volunteer faculty and other contributors, with special thanks to our retiring Program Chairs (see pages 65-66) and Authors (page 67), many of whom have worked with us for decades.

Built for Learners For nearly 100 years, PLI has remained consistent in its dedication to putting learners first, recognizing that the ever- evolving legal landscape requires us to create and deliver content that is both practical and engaging for our Members. In 2024, we successfully carried on this commitment, as we continued to transform and enhance what we offer to the legal community and allied professionals. Meeting You Where You Learn After the well-received rollout of our Media Player early in the year, which gives learners control over how they view and interact with our programs online, we immediately turned to modernizing PLI.edu. As part of this project, our teams reorganized thousands of pieces of content, from programs to podcasts and publications to videos, for faster and more effective search functionality. With our award- winning Mobile App and the new Media Player, the new site is built for a user-friendly, personalized learning experience across our platforms. Reaching New Audiences In recent years, we have focused on expanding and tailoring our content for various types of professionals, and 2024 was no exception. We introduced our Corporate Counsel Corner, including a new Business and Leadership Academy curriculum tailored for in-house legal practitioners at all stages of their careers. We also launched a Law School Hub, with tracks for content relevant to law school faculty, students, and career services professionals. And we continue to develop resources for those who must meet compliance requirements for accounting, human resources, and other credit types.

SHARON L. CRANE PRESIDENT

I would also like to acknowledge our Board of Trustees for their support during another incredibly productive year. Finally, none of this would be possible without the active participation of our community of Privileged and Pro Bono Members. All of us at PLI are thankful for the opportunity to learn from you and to contribute to your learning — and we look forward to many more years of growing together.

2024 Annual Report

OUR PLI COMMUNITY 2024

PLI GIVES BACK Across departments and offices, PLI employees enjoy spending time together and getting involved in their communities. That’s why the PLI Gives Back initiative has been such a success. Launched in 2022 under the leadership of President Sharon L. Crane, PLI Gives Back has hosted 16 group volunteer events in and around New York and San Francisco. More than a third of PLI’s staff has taken part in projects with colleagues, donating over 500 hours to assist local food banks, parks, arts groups, and other causes. All staff receive a day of paid time off per year to use as they wish for group or individual volunteering.

Some of the organizations we’ve helped

Broadway Community Community Food Bank of NJ FABSCRAP God’s Love We Deliver Holy Apostles Soup Kitchen

Materials for the Arts NYC Parks Project Open Hand – San Francisco Queens Botanical Garden Tenafly Nature Center

OUR PLI COMMUNITY 2024

LEAD in the Legal Community Designed to provide selected staff with enhanced professional development opportunities, targeted training, and mentorship, the LEAD (Lead, Engage, Accelerate Development) program marked its second year in 2024, with 23 employees participating in the first two classes. Participants in PLI’s LEAD program attended a private tour of the historic courthouse of the Appellate Division of the Supreme Court, First Judicial Department, led by Hon. Dianne T. Renwick, Presiding Justice and a member of PLI’s Board of Trustees.

An Engaging Place to Work PLI staff bring their whole selves to work. Whether they practice meditation or creative writing; draw, read, or do arts and crafts; or tee up at golf or run bases with our champion PLI Defenders softball team, there’s a group for every interest meeting regularly. And during our popular Fall Wellness challenge, now in its fourth year, staff from across our offices engage in friendly competition to encourage and track healthy habits including mindfulness, sleep, hydration, and steps — collectively logging more than 16,000 miles during the 2024 competition!

2024 Annual Report

We offer condolences on the passing of these dear colleagues and friends in 2024. PLI REMEMBERS

David Cruickshank, a partner with Edge International in San Diego, where he advised law and other professional services firms on partner compensation, strategy, governance, leadership development, and talent retention strategies. Formerly the Director of Professional Development at Paul, Weiss, Rifkind, Wharton & Garrison, he served as Chair of PLI’s Interactive Learning Center program, Time Management for Lawyers, and was a regular speaker on time management and related topics, including project management, delegation, and PLI’s Train the Trainer Workshop.

Barry R. Goldsmith, a partner in the New York and Washington, D.C. offices of Gibson, Dunn & Crutcher. A leading securities regulatory and enforcement attorney, he chaired the Hedge Fund and Private Equity Enforcement & Regulatory Developments program for many years and spoke on several other programs, and he co-authored the treatise SEC Investigations and Enforcement Actions from PLI Press.

Joseph D. Harbaugh, Dean Emeritus and Emeritus Professor of Law of the Shepard Broad College of Law at Nova Southeastern University in Fort Lauderdale. Formerly Dean at the University of Richmond School of Law and a faculty member at a half dozen law schools, his subjects of expertise included negotiation, criminal procedure, evidence, trial advocacy, professional responsibility, and constitutional litigation. A frequent speaker and writer on negotiation, he presented PLI’s Negotiation Workshop for Lawyers for 40 years. He collaborated with PLI’s R&D team to author and develop the award-winning interactive simulation, Mastering Negotiations: The Significance of Planning and Preparation, as well as the follow-up Mastering Negotiations: Conducting a Two- Party Negotiation.

Hon. Jonathan Hudis, an Administrative Trademark Judge with the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (USPTO) and a recognized leader in intellectual property law. A speaker on several trademark law programs for nearly 20 years, including most recently, Advanced Trademark Law 2024: Current Issues, he formerly was a partner with the firms Quarles & Brady LLP and Oblon, McClelland, Maier & Neustadt LLP.

Bruce E. H. Johnson, a veteran litigator who represented information industry clients on issues involving media and communications law as well as technology and intellectual property matters at Davis Wright Tremaine LLP in Seattle. He authored the PLI treatise Advertising and Commercial Speech: A First Amendment Guide and served as a speaker at PLI’s Communications Law in the Digital Age program for over 25 years.

Marcia G. Madsen, Chair of the Government Contracts practice and Co-Chair of the National Security practice at Mayer Brown LLP in Washington, D.C., representing contractors in regulatory, policy, transactional, litigation, and investigative matters involving virtually every federal department and agency. She contributed her expertise as a Chair, Co-Chair, and speaker on PLI’s Government Contracts program for more than a decade.

C. Ellen MacNeil, Managing Director of US National Tax for Andersen and a member of the Board of Directors of Andersen Global. Prior to joining Andersen, she was a Partner with Deloitte and with Arthur Andersen in their national tax practices. A frequent speaker at PLI’s annual Tax Strategies program, she also contributed to the treatise, Tax Accounting Issues in Mergers and Acquisitions.

James T. O’Reilly , professor at the University of Cincinnati College of Medicine and College of Law and former Associate General Counsel of The Procter & Gamble Company. He was the author of PLI’s Legal Guide to the Business of Marijuana, Healthcare Employment Practice , and COVID-19 and Other Pandemics , along with more than 50 other texts and more than 200 articles.

FINANCIAL STATEMENTS

STATEMENTS OF FINANCIAL POSITION As of December 31,

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Board of Trustees of Practising Law Institute Opinion We have audited the financial statements of the Practising Law Institute (the “Institute”), which comprise the statements of financial position as of December 31, 2024 and 2023, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Institute as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Basis for opinion We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Institute and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of management for the financial statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Institute’s ability to continue as a going concern for one year after the date the financial statements are available to be issued. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with US GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Institute’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Institute’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

2024

2023

Assets Cash and cash equivalents............................................ $

19,464,875 $ 20,904,245

Accrued interest and dividends receivable ...................................... 4,213 Accounts receivable for programs, publications and memberships, net of allowance for credit losses of approximately $540,000 in 2024 and $446,000 in 2023.......... 2,190,439

67,597

2,375,857 Investments, at fair value...................................................... 127,074,771 119,038,752 Inventories.................................................................................... 279,750 265,420 Fixed assets, net..................................................................... 30,542,077 27,627,978 Goodwill. ...................................................................................... 381,200 476,500 Other intangible assets, net.......................................................... 140,000 140,000 Prepaid expenses and other assets.......................................... 6,616,416 5,779,283 Operating lease - right of use assets........................................ 21,290,403 25,626,756 Total assets.................................................................... $ 207,984,144 $ 202,302,388 Liabilities and Net Assets Liabilities Accounts payable and accrued expenses................. $ 10,164,930 $ 10,153,901 Deferred revenues................................................................ 38,734,202 37,769,934 Operating lease liability......................................................... 27,509,492 32,911,413 Term bank loan..................................................................... 7,500,000 8,500,000 Accrued postretirement benefits.......................................... 13,294,000 13,597,000 Total liabilities..................................................................... 97,202,624 102,932,248

Net Assets - without donor restrictions ............................. 110,781,520 99,370,140 Total liabilities and members equity......................... $ 207,984,144 $ 202,302,388

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF ACTIVITIES For the years ended December 31,

2024

2023

Operating activities Revenues Programs, publications and memberships............. $ 87,179,542 $ 82,841,579 Expenses Programs, publications and memberships..................... 80,420,527 75,834,854 General and administrative............................................... 8,496,869 7,471,348 Total expenses......................................................... 88,917,396 83,306,202 Decrease in net assets from operating activities................................................. (1,737,854) (464,623) Non-operating activities Interests and dividends.................................................... 2,577,597 2,493,402 Realized and unrealized gains on investments, net.................. 9,729,010 18,010,517 Increase in net assets from non-operating activities................................................ 12,306,607 20,503,919

Increase in net assets before pension related adjustment other than service cost................................. 10,568,753

20,039,296

Pension related adjustment other than service cost............ 842,627

(979,829)

CHANGE IN NET ASSETS .................................... 11,411,380

19,059,467

Net assets, beginning of year.......................................... 99,370,140 80,310,673 Net assets, end of year................................................ $110,781,520 $ 99,370,140

The accompanying notes are an integral part of these financial statements.

New York, New York April 24, 2025

2024 Annual Report

FINANCIAL STATEMENTS

STATEMENT OF FUNCTIONAL EXPENSES For the year ended December 31, 2024

STATEMENTS OF CASH FLOWS For the years ended December 31,

2024

2023

Programs Publications and Memberships

Cash flows from operating activities Change in net assets.............................................................. $ 11,411,380 $ 19,059,467 Adjustments to reconcile change in net assets to net cash provided by operating activities: Pension related adjustment other than service cost.............................................................................. (842,627) 979,829 Depreciation and amortization................................................... 5,764,604 4,867,994 Amortization of right of use assets............................................ 4,336,353 4,259,180 Bad debts.................................................................................... 112,500 130,000 Realized and unrealized gains on investments, net.................. (10,281,789) (18,538,884) Changes in operating assets and liabilities: Interest and dividends receivable ............................................... 63,384 (33,753) Accounts receivable.................................................................... 72,918 23,903 Inventories................................................................................. (14,330) 92,518 Prepaid expenses and other assets........................................ (837,134) (122,380) Accounts payable and accrued expenses.............................. (487,607) (406,504) Deferred revenues..................................................................... 964,268 3,338,903 Decrease in deferred rent payable........................................................- - Lease liability........................................................................ (5,401,921) (5,052,803) Accrued postretirement benefits............................................... 539,627 409,171 Net cash provided by operating activities...................... 5,399,626 9,006,641 Cash flows from investing activities Capital expenditures .................................................................. (8,084,766) (8,328,542) Purchases of investments......................................................... (15,386,177) (15,778,491) Proceeds from sales of investments........................................... 17,631,947 18,289,578 Net cash used in investing activities.............................. (5,838,996) (5,817,455) Cash flows from financing activities Repayments of borrowings........................................................ (1,000,000) (1,000,000) Net cash used in financing activities............................. (1,000,000) (1,000,000) (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,439,370) 2,189,186

General and Administrative

Total

Compensation

$ 49,489,755 $ 6,483,587 $ 55,973,342

Professional fees

1,202,973

615,603

1,818,576

Advertising and promotion

1,662,570

Office expenses

835,078

118,668

953,746

Technology maintenance

6,727,556

443,056

7,170,612

Royalties

743,887

Occupancy

5,656,569

337,015

5,993,584

Travel

1,187,620

64,263

1,251,883

Training

271,042

37,710

308,752

Program expenses

4,933,084

1,159

4,934,243

Depreciation and amortization

5,527,081

237,523

5,764,604

Insurance

476,878

40,090

516,968

Other post retirement employee benefit

834,859

78,141

913,000

Interest

229,340

Office equipment

88,553

6,894

95,447

Telecommunication

314,061

23,057

337,118

Other expenses

601,787

Total expenses

$ 75,834,854 $ 7,471,348 $ 83,306,202

The accompanying notes are an integral part of this financial statement.

2024 Annual Report

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION Practising Law Institute (the “Institute”) is a not-for-profit organization founded in 1933 and chartered by the Regents of the University of the State of New York. The Institute provides lawyers and other professionals with continuing professional education through programs, publications and educational software. The Internal Revenue Service has ruled that the Institute is a Section 501(c)(3) organization exempt from federal income taxes under Section 501(a) of the Internal Revenue Code (the “IRC”). The Institute has been classified as a publicly supported charitable organization under Section 509(a)(2) of the IRC. The Institute is also exempt from state and local income taxes. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the significant accounting policies followed by the Institute in the preparation of the accompanying financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied in the presentation of the accompanying financial statements. Basis of Presentation The classification of the Institute’s net assets, revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, all of the Institute’s net assets are classified as without donor restrictions as they are available for general use and operating activities without any donor- imposed restrictions. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include financial instruments with original maturities at the date of purchase of three months or less and exclude cash and cash equivalents held in the Institute’s investment management account, which are considered to be held for long-term purposes. Investments Investments in publicly traded securities are recorded at fair market value generally determined on the basis of quoted market prices. Investments in certain mutual funds are carried at fair value as determined by quoted market prices. The Institute’s alternative investments in certain not-readily-marketable securities consist of certain mutual funds, hedge funds and private equity, for which market values are not readily obtainable. These alternative investments are carried at fair value based upon their stated net asset value (“NAV”). The estimated value provided by these managers may differ from actual values had a ready market for these investments existed. Purchases and sales of securities are reflected on a trade-date basis. Gains and losses on sales of securities are based on average costs and are recorded in the statements of activities in the period in which the securities are sold. Interest is recognized as earned. Dividends are recognized as of the ex-dividend date. Accounts Receivable and Allowance for Credit Losses Accounts receivable relate primarily to program, publication and membership revenue. Management provides an allowance for credit losses for estimated losses that may result from the inability of its customer to make required payments based on the consideration of the type of receivable, responsible party, the known financial condition of the customer, historical collection patterns and comparative aging. These allowances are maintained at a level management considers adequate to provide for subsequent adjustments and potential uncollectible accounts. These estimates are reviewed periodically and if the financial condition of a party changes significantly, the Institute will evaluate the recoverability of any accounts receivable from that customer and write off any amounts that are no longer considered to be recoverable. Any payments subsequently received on such receivables are recorded as income in the period received. Inventories Inventories consist of books in process of approximately $49,000 and $46,000 and completed books of approximately $230,000 and $219,000 at December 31, 2024 and 2023, respectively. The Institute utilizes the weighted average method of capturing inventory costs. Costs include paper, printing, binding, taping and outside editorial costs, and are valued at the lower of average cost or market. Fixed Assets The Institute capitalizes all expenditures for fixed assets in excess of $1,000. Furniture, equipment and computer hardware are stated at cost and are depreciated over periods ranging from five to six years using the straight-line basis. Computer software and website costs are being amortized over a three- to 10-year period from the time the asset is placed into service. Leasehold improvements are amortized over the shorter of their estimated useful lives or terms of the leases. Goodwill Goodwill represents the excess of the consideration paid over the fair value of identifiable assets acquired. The Institute follows guidance allowing not-for-profit entities the option to amortize goodwill on a straight-line basis over 10 years or less, and to test for impairment at the entity or reporting unit level when a triggering event occurs that indicates the fair value of the entity or a reporting unit may be below its carrying amount. The Institute is amortizing the goodwill prospectively over 10 years and will test for impairment at the reporting unit level when a triggering event occurs.

Intangible Assets Intangible assets are recorded at their fair value at the date of acquisition. The Institute accounts for intangible assets, other than goodwill, subsequent to acquisition based on the asset’s useful life. The useful life of the intangible asset is the period over which the asset is expected to contribute directly or indirectly to the Institute’s future cash flows. An asset for which no legal, regulatory, contractual, competitive, economic, or other factors that limit its useful life is considered to have an indefinite useful life. The Institute evaluates the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. The evaluation of asset impairment requires the Institute to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require judgment and actual results may differ from assumed and estimated amounts. If the carrying amount of the long-lived asset (or asset group) exceeds its fair value and the carrying amount is not recoverable, an impairment charge is recognized. An impairment loss is measured as the amount by which the long-lived asset (or asset group) exceeds its fair value. Revenue Recognition The Institute follows guidance whereby revenue is recognized when control of the promised goods or services are transferred to the customers in an amount that reflects the consideration the Institute expects to be entitled to in exchange for those goods or services. The applicable standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. Donated Services Volunteer instructional services provided by attorneys and others in the legal profession have not been reflected in the accompanying financial statements as the nature of these services does not meet the criteria for recognition of contributed services under U.S. GAAP. Scholarships Scholarships given to program participants principally for financial need totaled approximately $23,816,000 and $21,623,000 in 2024 and 2023, respectively. Program, publication and membership revenues on the statements of activities are shown net of these scholarships. There are three ways to apply for a PLI Scholarship: (1) Fill out an on-line application for any program and submit to PLI’s Pro Bono Department for review and approval; (2) Become a Pro Bono Privileged Member; and (3) Register for programs that PLI offers at no cost. For items (1) and (2), PLI assigns a dollar value to its scholarships offered throughout the year. Since approximately 92% of program registrations are at “member rate” vs. approximately 8% of program registrations at “retail rate,” PLI values its Scholarship Program at “member rate” rather than “retail rate.” The member rate is expressed as a percentage of the retail rate calculated based on actual privileged membership revenue as a percentage of retail value. For item (3), PLI values the scholarship at the rate established by the outside pricing consultants. Expense Allocations Direct expenses are assigned to the various programs and supporting services based upon actual costs incurred. Indirect expenses are principally allocated based on headcount. Fair Value Measurements The Institute follows guidance which establishes a framework for measuring fair value, expands disclosures about fair value measurements and provides a consistent definition of fair value, which focuses on an exit price between market participants in an orderly transaction. The guidance also prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information and establishes a three-level hierarchy for fair value measurements based on the transparency of information used in the valuation of an asset or liability as of the measurement date. Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The type of investments in Level 1 include listed equities held in the name of the Institute, and exclude listed equities and other securities held indirectly through commingled funds. Level 2 - Pricing inputs, including broker quotes, are generally those other than exchange quoted prices in active markets, which are either directly or indirectly observable as of the measurement date, and fair value is determined through the use of models or other valuation methodologies. Level 3 - Pricing inputs are unobservable for the assets or liability and include situations where there is little, if any, market activity for the assets or liability. The inputs into the determination of fair value require significant management judgment or estimation. Investments that are included in this category include hedge funds, privately held investments and partnership interests. The Institute follows guidance on measuring the fair value of alternative investments, which offers investors a practical expedient for measuring the fair value of investments in certain entities that calculate NAV. Under this practical expedient, entities are permitted to use NAV without adjustment for certain investments which: (a) do not have a readily determinable fair value; and (b) prepare their financial statements consistent with the measurement principles of an investment company or have the attributes of an investment company. Additionally, investments measured using the NAV practical expedient are exempt from categorization within the fair value hierarchy and related disclosures. Instead, entities are required to separately disclose the required information for assets measured using the NAV practical expedient. Entities are also required to show the carrying amount of investments measured using the NAV practical expedient as a reconciling item between the total

2024 Annual Report

NOTES TO FINANCIAL STATEMENTS

NOTE 3 - INVESTMENTS At December 31, 2024 and 2023, investments consisted of the following: 2024 Level 1 Money market funds............................................................... $ 766,262 $

amount of investments categorized within the fair value hierarchy and total investments measured at fair value on the face of the financial statements. Advertising The Institute expenses the costs of advertising as incurred, except for direct-response advertising. Direct-response advertising consists primarily of the costs to produce promotional mailings that contain coded order forms and coupons for specific seminars and publications. These costs are capitalized and expensed during the period in which the seminars are held or upon the sale of the specific publications. Advertising costs totaling approximately $17,000 and $30,000 are included in prepaid expenses at December 31, 2024 and 2023, respectively. Advertising expense for the years ended December 31, 2024 and 2023 totaled approximately $1,663,000 and $2,031,000, respectively. Concentration of Market and Credit Risk Cash, cash equivalents and investments are exposed to interest rate, market, and credit risks. The Institute maintains its cash and cash equivalents in various bank deposit accounts that may exceed federally insured limits at times, however, the Institute has not experienced, nor does it anticipate any losses with respect to these bank accounts. To minimize risk, the Institute’s cash accounts are placed with high- credit quality financial institutions, and the Institute’s investment portfolio is diversified with several investment managers in a variety of asset classes. The Institute regularly evaluates its depository arrangements and investments, including performance thereof. Measure of Operations Operations include all revenues and expenses other than investment income, related investment advisory fees, pension related adjustments other than service cost, and other items considered to be unusual or of a non-recurring nature. Income Taxes The Institute follows guidance that clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a tax return, including issues relating to financial statement recognition and measurement. This guidance provides that the tax effects from an uncertain tax position can only be recognized in the financial statements if the position is “more-likely-than-not” to be sustained if the position were to be challenged by a taxing authority. The assessment of the tax position is based solely on the technical merits of the position, without regard to the likelihood that the tax position may be challenged. The Institute is exempt from federal income tax under IRC section 501(c)(3), though it is subject to tax on income unrelated to its exempt status, unless that income is otherwise excluded by the IRC. PLI has processes presently in place to ensure the maintenance of its tax-exempt status; to identify and report unrelated income; to determine its filing and tax obligations in jurisdictions for which it has nexus; and to identify and evaluate other matters that may be considered tax positions. The Institute has determined that there are no material uncertain tax positions that require recognition or disclosure in the financial statements. Leases The Institute recognizes the assets and related liabilities for the rights and obligations created by the leases (lessees) on the statement of financial position for leases with terms exceeding 12 months. A lease is defined as a contract or part of a contract that conveys the right to control the use of identified assets for a period of time in exchange for consideration. The lessee in a lease will be required to initially measure the right- of-use (“ROU”) asset and the lease liability at the present value of the remaining lease payments, as well as capitalize initial direct costs as part of the ROU asset. The Institute accounts for non-lease components and the lease components to which they relate as a single lease component for all leases. The Institute determines if an arrangement is a lease or contains a lease at inception of a contract. A contract is determined to be or contain a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) in exchange for consideration. The Institute determines these assets are leased because the Institute has the right to obtain substantially all of the economic benefit from and the right to direct the use of the identified asset. Assets in which the supplier or lessor has the practical ability and right to substitute alternative assets for the identified asset and would benefit economically from the exercise of its right to substitute the asset are not considered to be or contain a lease because the Institute does not have the right to control and direct the use of the identified asset. The Institute’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases result in the recognition of ROU assets and lease liabilities on the statement of financial position. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease, measured on a discounted basis. The Institute determines lease classification as operating or finance at the lease commencement date. ROU assets and lease liabilities for operating leases are included in the statement of financial position and presented separately based on the classification of the underlying lease arrangement. ROU assets and lease liabilities for financing leases would be included within property, plant and equipment, and lease liabilities, respectively, in the statement of financial position. Currently, the Institute does not have any finance leases. At lease inception, the lease liability is measured at the present value of the lease payments over the lease term. The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid or deferred rent, and lease incentives. For the initial and subsequent measurement of all lease liabilities, the discount rate used is the Risk-Free Treasury Par Yield Curve Rate. The portion of payments on operating lease liabilities related to interest, along with the amortization of the related ROU, is recognized as rent expense. This rent expense is recognized on a straight-line basis over the term of the lease. The portion of payments on finance lease liabilities related to interest is recognized as interest expense. The amortization of the ROU assets under finance leases is recognized as part of depreciation expense.

Total

766,262

12,039,453 57,594,384 70,400,099

Fixed income mutual funds........................................................ 12,039,453 Common stocks and commodity mutual funds......................... 57,594,384

$ 70,400,099

56,439,799

Alternative investments at NAV...................................................................... Redemption Receivable*............................................................................... Investments, at fair value...........................................................................

234,873

$127,074,771

2023

Level 1

Total

Money market funds. ............................................................. $ 738,932 $ Fixed income mutual funds....................................................... 12,098,233 Common stocks and commodity mutual funds........................ 52,270,947

738,932

12,098,233 52,270,947 65,108,112 53,930,640

$ 65,108,112

Alternative investments at NAV...................................................................... Investments, at fair value...........................................................................

$119,038,752

* Redemption receivable pertains to a transfer of funds from an investment fund agreed to prior to December 31, 2024 for which the funds will be received subsequent to year end. Investments valued at NAV or its equivalent as of December 31, 2024 consisted of the following:

Frequency of Redemptions (If Currently

Number

Redemption Notice Period

Fair Value of Funds

Commitments Eligible)

Alternative mutual funds Hedge funds

$47,093,341 $ 8,065,742

6 4

$ $

- Monthly and quarterly 5 to 90 days

- Monthly/semi-

65 to 95 days

annually/annually.

Private equity

$ 1,280,716

$ 3,670,806 N/A

N/A

Investments valued at NAV or its equivalent as of December 31, 2023 consisted of the following:

Frequency of Redemptions (If Currently

Number

Redemption Notice Period

Fair Value of Funds

Commitments Eligible)

Alternative mutual funds Hedge funds

$44,738,769 $ 8,801,372

6 4

$ $

- Monthly and quarterly 5 to 90 days

- Monthly/semi-

65 to 95 days

annually/annually. Two hedge fund investments are subject to a lockup

period that has not yet expired.

Private equity

$ 390,499

$ 2,089,462 N/A

N/A

The net realized and unrealized gains for the years ended December 31, 2024 and 2023 totaled approximately $10,282,000 and $18,539,000, respectively. Investment expenses incurred for the years ended December 31, 2024 and 2023 totaled approximately $553,000 and $528,000, respectively. Included within the investment balance at December 31, 2024 and 2023 are certain shares of stock which have been pledged as collateral in conjunction with the term bank loan, line of credit and letter of credit (Note 7). The value of those shares at December 31, 2024 and 2023 totaled approximately $53,988,000 and $46,966,000, respectively, and are considered to be Level 1 within the fair value hierarchy. NOTE 4 - LIQUIDITY The Institute regularly monitors liquidity required to meet its operating needs and other contractual agreements, while also striving to maximize the investment of its portfolio. The Institute has various sources of liquidity at its disposal, including cash and cash equivalents, short-term marketable equity securities and a revolving line of credit. In addition to financial assets available to meet general expenditure over the next 12 months, the Institute operates with a balanced budget and anticipates collecting sufficient operating revenue and investment portfolio returns to cover all of its operating needs.

2024 Annual Report

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72

www.pli.edu

Made with FlippingBook. PDF to flipbook with ease