Ultimately, it comes down to operating with some common sense by bolstering the practice areas poised for growth, and developing the legal foresight to navigate complex client demands and expectations.
Nearly 10 months after its emergence, the COVID-19 pandemic continues to incite fear and trepidation in communities and markets. Back in April, the IMF cautioned global markets to brace for the deepest global recession since the 1930’s, a caution of equal practical importance today. And, with a second wave now in full swing, countries will be contending with greater financial instability through renewed societal disruptions and financial crunches. Concurrently, legal systems and practices have had to adjust to a new ecosystem consisting of virtual court proceedings, fluctuating client demand based on practice area and sector, and corporate clients in financial distress.
As such, it is incumbent on attorneys and law firms to keep abreast of all COVID-19 related developments, and to carefully track pending and approved state and federal emergency legislation. Insightful and diligent counsel offered to clients in times of national crisis, and application of altruistic policies at the expense of short-term self-interests, will foster greater client loyalty and pave the way for post-pandemic survival.
Disparate Demand by Legal Practice Area
With reports from S&P Global that U.S. corporate bankruptcies hit a 10-year record high in October, bankruptcy and restructuring attorneys have been experiencing a meteoric rise in demand. Stalled investments have kept a firm lid on resources, leaving beleaguered start-ups, retailers, and other public companies to default on loan obligations, and require representation in bankruptcy courts. Therefore, it comes to reason that as law firms look to bolster their distressed practice areas, bankruptcy and restructuring specialists are roundly expected to close the year as the most coveted lateral law firm hires.
In parallel, soaring job losses over the summer with over 40 million layoffs, signaled the worst jobs market since the Great Depression. Owing much to the increase in jobless Americans, employment and labor attorneys have continued to experience an upswing in demand for counsel on a variety of employment law issues. These encompass age and disability discrimination, health and safety whistleblower protections, data privacy concerns in contact tracing apps, and layoffs that are non-compliant with the newly enacted Families First Coronavirus Response Act. However, demand may soon dwindle following a recent announcement by the U.S. Bureau of Labor Statistics of a strong resurgence in the jobs market and a 50% plunge in unemployment since last April.
Further, another practice area expected to hit full stride is constitutional law. State authorities are granted inordinate powers to restrict the movement of people and property in times of national emergencies. The conditions upon which these limitations may be applied have fueled debates on the constitutionality of curtailing certain personal property rights and personal liberties. Thus, as new protests against social distancing measures sweep through areas in the U.S. and Europe, constitutional law attorneys have been gaining more visibility by actively filing suits against state governments and agencies for constitutional violations.
Conversely, demand for non-restructuring, non-distressed transactional practices have stalled for the time being. Financial data recently provided by Refinitiv has indicated M&A activity dropping to its lowest point in 10 years, and thinning revenue in many firm’s corporate transactional departments. Also, closures and operational restrictions to physical retail shops, restaurants, and B2B service companies, coupled with the uncertainty of a timeline for reopening, has rendered many pre-pandemic business agreements obsolete.
Finally, the landscape for medical malpractice attorneys has rapidly evolved over the last few months. As many as 34 states have recently enacted immunity provisions to protect healthcare professionals from mounting medical liability claims. With more robust liability protections now in place, demand for malpractice defense attorneys has naturally declined. At present, it will be more difficult for a claimant to succeed in a lawsuit on a simple negligence claim, including claims of insufficient hospital resources or inadequate crisis management procedures.
With a second COVID-19 wave upon us, general practice law firms should make adjustments for an upswing in demand in bankruptcy and restructuring law, employment and labor law, constitutional law, and business litigation. A re-allocation of resources away from non-distressed practice areas, and a pivot to a dedicated client services approach, will be necessary to cultivate trust and drive growth.
Further, the importance of building enduring client trust and loyalty is all the more important during a pandemic. But first, law firms and practices must be willing to shift away from deep-rooted myopic client practices and a reliance on transient client relationships. Deeper investments should instead be made in altruistic and strategic initiatives that bolster long-term client relationships. Such initiatives could include services that offer discounted consultations on business recovery programs, flexible fee payment terms, accounts-receivable write-offs where feasible, and expansions to new COVID-19 related pro bono programs.
Ultimately, it comes down to operating with some common sense by bolstering the practice areas poised for growth, and developing the legal foresight to navigate complex client demands and expectations. An industry vision that promotes long-term altruistic practices will facilitate a more seamless transition into a post-pandemic era.