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How is Coronavirus Affecting the Legal Industry?
Coronavirus has created an impact on businesses and individuals like never before. Today, almost every industry is struggling with the COVID-19, and the legal sector is no different. Regardless of your operating country, Coronavirus has literally changed the way law businesses operate.
Know the Impact of COVID-19 on the Legal Industry from Experts:
1. Social Distancing is Delaying Legal Procedures
The biggest impact of Coronavirus on the legal industry is social distancing. Legal practitioners cannot meet face-to-face with clients and other parties.
This means that legal procedures that require a meeting in person, such as a contract signing, have to be postponed. Such delays can end certain procedures in their entirety.
Legal firms that have embraced technology may benefit, as they can take the business away from firms that have no such technology.
Furthermore, certain sectors in personal law, particularly employment law and personal injuries are seeing more business than usual due to the heightened number of illnesses and work, and redundancies that have come as a result of Coronavirus.
2. People are Looking Forward to Taking Online Help More
Even here in the *Midwest* – frequently teased as ‘fly-over country’ – COVID 19 is impacting my law firm. With offices in Minneapolis and Des Moines, Iowa, although both in the Midwest, I do have a unique perspective on the timing of the impact the virus is having on law firms with significantly different populations.
As of this writing, the increased use of technology for client meetings is up significantly at both offices. However, my Minneapolis staff started seeing an increase in requests for online help about one week before my Des Moines staff got their first request like this. Since Des Moines took its first call, the two metros are now in lockstep as far as the percentage of current and potential clients who are requesting online help (nearly all of them).
In order to cut down on the number of callers who are calling to see if we are open, as well as to assure any potential callers, we put a large dialog box on our homepages explaining the steps we have taken as a result of COVID-19 and some of the ways we are still able to service our clients.
Marketing around a pandemic has proven to be tricky. There is a fine line between sincerely offering services and benefits not otherwise offered and being perceived as attempting to capitalize on a tragedy so proper marketing is more important now than ever. Running a law firm during a pandemic is hard enough – the last thing we’d want is to emerge from the pandemic with a hit to their reputation!
One of our practice areas that are particularly hard hit is Elder Law. Granted, this is a time when many people need varying degrees of estate planning, and, via tech; we are still able to serve our clients. However, with many of our clients confined to nursing homes and members of an extremely high-risk group, we, as a business, are currently not directly looking for new Elder Law clients as their health, and that of others around them takes priority.
3. General Court Discussions have been Postponed
Covid-19 has, and will continue to have, a tremendous impact on the legal industry. Courts have closed their doors to the general public with the exception of emergency and constitutionally-required hearings.
Employment lawyers are being bombarded with questions from employees and employers about their respective rights and responsibilities during a crippling economic crisis.
Transactional attorneys will continue to provide legal guidance to their corporate clients but will find that invoices may not be paid promptly due to capital restrictions.
Most, if not all, law firms require a continuous influx of new clients to survive as a business. The Covid-19 crisis has significantly decreased new client inquiries at law firms throughout the country.
The legal industry is certainly not immune from the short-term financial difficulties posed by the current pandemic but the lack of prospective new clients as the public shelter in their homes and focus on social distancing may prove to be an even more worrisome issue for long-term business survival.
4. Adapting to a New Working Environment is Challenging
The impact of coronavirus has been immense for all business, including the legal industry. I am a partner at a boutique personal injury law firm based in Montgomery County, Pennsylvania – we have been working hard to adapt to this market shift. Courts have been closed, deadlines are up in the air, and we cannot meet with clients in person.
Before coronavirus, we prided our law firm on being at the cutting edge of tech, which we used in concurrence with good old fashioned face-to-face interactions. Now we must use tech to be able to communicate effectively with our team, our clients and move cases along to the best of our abilities in this trying time.
Our team has worked tirelessly to adapt to the uncertain climate and assuring our clients that we are here for them whether via phone, text, email, and/or video chat.
Necessity is truly the mother of invention; while this is a difficult time, we are confident that our personal injury law firm will come out of the coronavirus quarantine better, stronger, and more efficient.
5. COVID-19 has Impacted Several Areas
I have been a Business, Labor, and Employment and Real Estate lawyer for 30 years. I categorize the legal issues associated with the swift evolution of the coronavirus outbreak into several categories.
Risk Assessment– Approximately, four weeks ago, my law firm and some others counseled clients to have health risk assessment and management protocols in place. These protocols were necessary in order to take preventative measures to protect their workplace, employees, and patrons while navigating the intricacies of various privacy, discrimination, and employment laws.
This included formulating plans for off-site workplaces and working remotely. The value of a good lawyer is the ability to foresee problems and issues in order to prevent future consequences and liabilities.
Triage– Suddenly the outbreak was upon us and there were a multitude of issues to address. While health and safety issues obviously took the forefront, many businesses and employers found themselves flatfooted, not knowing what they could and should do with their business, employees, ongoing contracts, business travel, and trade just to name a few.
Even for those who took preventative measures, there were significant legal issues now confronting all of us and our livelihood. Most of this centered on the unfortunate reductions in the workforce with complicated state and federal labor laws to navigate through.
With state and federal government orders of shutdowns and quarantines, businesses and employers had to immediately turn to business and labor attorneys for guidance. For those that practice in these areas, it was and remains a busy time.
Even for lawyers who do not practice in these areas, it has been an all hands on deck collaborative effort to help maintain civility and equality for all.
Unknown Benefits- With most state and federal courthouses closed, the usual adversity associated with litigation has taken a different path. Attorneys, judges, arbitrators, and mediators are now finding other and far more efficient and less expensive ways to resolve legal disputes. Litigants do not want to have their cases disputes placed in an uncertain hold, especially in court systems that are already overburdened and congested. This has led to unprecedented early negotiations, resolutions, and settlements.
6. Remote Notarization is on the Rise
The legal industry will likely be affected by COVID- 19 in several ways. Notary, trust, estate planning, and industries will likely see growth, due to the fact that many individuals are considering life planning as a result of the pandemic.
Individuals who are at high-risk for contracting the virus will need to consider what to do with their property and possessions in the event that they fall ill. The potential for so much of the population to contract the virus will make life planning a top priority for most. Many individuals may now have more time to consider setting up trusts or wills for asset management and allocation to meet future needs.
While social isolation has caused detriment to many industries, recent legislation has shifted the laws surrounding notaries. New legislation around remote notarization will allow these industries to continue conducting business. With people all around the world sheltering-in-place, remote notarization will allow business-critical activities to continue despite the worldwide pandemic. This remote notarization will also allow individuals to conduct life planning business, such as creating a trust or will.
7. Margin-Dependant Businesses are Being Affected
The legal profession is similar to many service industries. That is, lawyers are selling a service consisting of their advice, their skill in the courtroom, their skill in drafting documents and their time. Lawyers, unlike most other service professionals, are not selling any product.
Lawyers are also like many businesses in that they either operate on what I call “the margin” or they may operate at a higher end of the business scale. By operating on the margin, I mean that they are essentially operating on their cash flow. It is that regular influx of cash that keeps them going.
Some lawyers, in particular larger law firms, have large cash reserves. In the alternative, they may have large credit lines. Lawyers that operate on the margin typically don’t have either of those.
The businesses, whether they be service businesses or otherwise, that are most dramatically affected by the Coronavirus are those businesses that operate on the margin. They don’t have a large cash reserve or credit lines to draw on.
During this time of crisis, the cash flow has ended for many small businesses. That is devastating. That lack of cash flow means they can’t pay staff. They can’t pay for services that they need consisting of perhaps other professionals, books, or other such things that are the staple of the legal industry. In not being able to pay for those things, they fail.
Most creditors have little mercy. If you don’t pay your Westlaw bill for 2 months, your account will probably be canceled. Your landlord likewise may not be terribly flexible. The landlord wants the rent. If the rent is not forthcoming, you may have to vacate.
As such to answer the question above, you would need to know how long the current health crisis is going to last. If it lasts more than 8 weeks then I would say that the effect on the legal industry is going to be devastating. Devastating in particular to those operators that live on “the margin”, as defined above. Those that operate with large cash reserves or large credit lines probably are not going to be permanently affected. Once the crisis passes, those latter firms can simply infuse cash into the business and ramp up to full speed.
A large part of American business is small business. A large part of those small businesses operate on the margin. Those businesses that operate on the margin include many single practitioners in the legal field and many small practitioners. The effect on them I believe is going to be devastating.
Most lawyers are fighters. They are scrappers. They know how to come back when the odds are against them. As such many of these lawyers that are adversely affected will come back but many of them may simply move on to other professions or to other work situations where they no longer operate their own business but rather work for someone else.
8. Difficulty Finding the Notary Replacement
The COVID-19 pandemic has been trying for all sectors of the economy – including law firms of all sizes. However, in some respects, our firm has seen a shift in the type of services we are being asked for.
Small business owners are asking for advice about how to handle existing contracts, and individuals are frequently asking to update the will and estate documents.
Our firm has taken great lengths to continue operating while distancing, including offering free virtual consultations, utilizing digital signatures where possible, and working remotely.
One issue that has been a bit difficult to navigate is the frequent necessity for notarization or witnessing of legal documents. Historically, this solemn event requires in-person interfacing. However, Ohio has recently enacted rules permitting online notarization – which has added some flexibility to our tool kit.
9. Insurance Claims and Disputes are on the Rise
We have 13 attorneys plus staff. Our main practice areas of Family Law and Criminal Defense are down almost exactly 50% comparing the first two weeks of March with the second two weeks of March.
We have closed our offices to walk-in traffic and are handling almost all client interactions over the phone, through email, or via Skype. A good percentage of our staff is working remotely but some of us are continuing to work at the main office, to be available for emergency proceedings (custody, protective orders, bond hearing), for which the courts remain open.
We are pivoting toward our practice areas more in need currently. This includes Unemployment, Business Insurance Claims, and Construction disputes related to Coronavirus shutdowns. We are gearing up to be prepared for an increase in bankruptcy clients.
We have staff focusing on getting caught up on existing tasks, updating and streamlining processes (forms & templates), and will have marketing-related tasks ready for staff to complete should other work run out during this dry period, in order to maintain our full staff.
10. Courts’ Shut-Down is Creating the Greatest Impact
The coronavirus is going to affect law firms very differently depending on the type of law. Our law firm is a litigation and trial law firm. Our area of practice will be one of the most affected due to the fact that courts are closed or very limited in what they will do or hear. Trials are on hold and hearings are limited to only certain types of hearings.
When courts create the timeline and deadlines in a case, their closures have a very significant slowing down of our cases. On top of that, deposition and some discovery are limited to video. All of these things taken together mean that everything is on pause or significantly slowed.
Our clients cases will progress slower and resolutions will take longer. We are making an effort to relay this information to our clients to set their expectations and let them know we are in this together and their cases are still our priority.
11. Major Decline in New Legal Cases
Our small law firm saw a massive decline in new business in individual practice areas like family law and criminal law over the past few weeks. Additionally, we have seen a decline in personal injury practice.
Bright spots have included the continuation of work for corporate clients in written discovery, but we have been unable to conduct a single in-person deposition over the past 3 weeks with over a dozen cancellations. We are already seeing cancellations through late April.
In terms of positives, we are accelerating our longer-term plan to implement a bankruptcy practice and have begun interviews of attorneys to head this practice area. We hope to see revenue from this area in the mid to late 2nd quarter.
12. Convincing Clients of the Reality is Difficult
We have gone remote. We had an event in the past that induced us to become largely cloud-based a few years ago. This enabled us with a couple of tweaks to work completely remotely. We prefer the office as the equipment is better, but we are still taking care of people as per their availability, except for face to face in-person meetings.
So far, the business has been fine, so we have not had to cut back on anyone or on hours. The biggest struggle has been getting clients to accept the reality that we are not in the office. We miss that in-person interaction. We are encouraging our clients to schedule remote consultations.
It has really impacted the flow of things in the courts. Most hearings have been put off until, at least, June. We are making a more significant effort to reach out to opposing counsel to try and work things out. This has been a struggle as some attorneys are so used to grandstanding and just fighting for their clients that they cannot step back and find solutions, even if temporary.
13. Remote Working & Technology Came to Our Rescue
Luckily, our firm has been in the cloud since its inception. We use a case management system called Clio, which allows us to manage our firm from anywhere. We can communicate with clients via secure messaging and share documents. It will ultimately helps us to track and bill our time.
Additionally, we are using Zoom to do video conferencing every day with our staff and attorneys. For phone calls, we are using an answering service to forward calls.
We are working remotely from home and using the court system’s website to monitor court dates. We are also documenting our time in our case management system. All of these efforts help to maintain social distancing and employees’ and clients’ safety.
14. Clients are Taking Things Even More Seriously
We have been working remotely for two weeks now as of March 30, 2020, to protect our employees and clients. We have found that the transition has been easier because our firm is 99% paperless and has a remote server. This has given employees the ability to work virtually through a secure system.
We also have phones that work via the internet through our phone system online. So, our staff members can answer their desk phones via their computer or cell phone. All of our staff members have multiple monitors to attach to their laptops to keep productivity up.
As far as personal injury matters are finding that people need help more than ever because they want their cases resolved or moved forward while living in this uncertainty. There’s also a large majority of people who feel the need to hire an attorney to take over their case to get the ball moving quickly. We are that law firm for individuals since we are a functioning law firm working remotely.
15. Old Cases on Hold & Few New Cases
Our law firm went 100% remote two weeks ago. A week before, Ohio Governor Mike DeWine issued a “stay at home” order, which closed all non-essential businesses. The most significant change for our law firm is the fact that all civil litigation is on hold. Courts in Ohio are only handling cases deemed essential – basically, criminal cases. All other cases are in continuation and will resume after the courts re-open for normal business.
We’ve seen a dramatic decrease in the number of new client calls as well. It is difficult to determine exactly why, but people stay home out of safety. It is difficult to be injured due to someone else’s negligence from the comfort of your own home.
16. COVID-19 has Slowed Down my Some Business Operations
The Virus has impacted the legal business tremendously. I am in litigation, and I am always in the court for hearings. This new virus has virtually stopped almost all court proceedings. It has also made us bar advocates focus on novel ways to get clients out of jail with bail. It is usually what would hold them inside due to not being able to come up with the funds.
As a small business owner, even I have had to find novel ways to save money and to work a lean business. This has allowed me to find ways, mostly using technology, to keep overhead low and ways to serve the clients far and wide. I believe it is here where most larger firms are in state of shock by the way this virus is changing the way business operates, both in the short term and going forward.
It is one thing to have a technology department or have attorneys know how to use technology. It is another way to know how to implement it properly and make it unnoticeable to the client.
This brings us to the conclusion that almost every professional in legal has witnessed COVID-19 impacts. Lawyers are trying to find new ways to keep their business operations running smoothly. They are also incorporating the use of technology for remote working and taking outside help.
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