From Dusk to Dawn
The Spanish flu pandemic of 1918, the deadliest in history, infected an estimated 500 million people worldwide—about one-third of the planet’s population—and killed an estimated 20 million to 50 million people. It struck as World War 1 had just come to an end and it was followed by the post WW1 Recession (Aug 1918 –March 1919) and the Depression of 1920-21 (Jan 1920 –July 1921). This dark era was immediately followed by the ‘Roaring Twenties’, a period of great economic, technical and cultural prosperity.
As the Corona virus rages through the world, we are forced to drastically change our lifestyle and the way we work. Social distancing is the new norm. No more handshakes and maintaining an interpersonal distance of 2 meters. Bars, restaurants, cinemas, museums and more have been closed. Airlines are grounded, borders are closed, and tourism is forbidden. Supply chains are disrupted, forcing factories to close. Financial markets are in turmoil as share prices continue to drop at unprecedented rates. On top of that we have Saudi Arabia and Russia engaged in a price war making oil drop below $30 a barrel. In an attempt to mitigate the devastating effects of the pandemic and the financial crisis, governments announce new measures, legislation and rescue packages on a daily and sometimes hourly basis.
What should law firms do?
The first thing to do is not to panic! Historic data shows that the impact of a recession on the business of law has always been very limited. After the 2008 financial crisis, revenue showed a little dip, but has steadily been growing ever since. There is a 99% certainty that all business law firms will survive. This cannot be said of any other industry. Even if the partners have to take a 10% pay cut, we will still be able to pay the mortgage for the second home. So, don’t panic over the business, focus on your health and the health of your associates and staff instead. In response, many law firms have turned to partial measures, including voluntary and rotating remote policies, to stem transmission and protect their talent. But simply reducing the number of attorneys and staff in an office isn’t enough according to infectious disease experts. So, work from home!
Working from home.
Most law firms already had an existing possibility for their lawyers to work remote. However occasional working from home or from a hotel room is very different from structurally working from home over a prolonged period of time. This time it is not only the lawyers, but also staff and secretaries that have to work remote. Where all lawyers will have an office laptop, most staff and secretaries will not. Also access to broadband internet might not be equally available for everyone. It goes without saying that everyone working from home introduces new substantial cyber security risks. Some of these are already actively being exploited. So be vigilant.
After you have these basics covered it is time to focus on workflow and communication. It is important to understand that working remote incidentally, is very different from doing it structurally for a long period of time. An office provides workers with a structured workday, a social network, short and informal communication, the possibility to easily brainstorm or bounce ideas. Working from an office will make it easier to separate work from private life.
Working from home could not be more different. Today many homes will be far from quiet as the whole family will be at home. Depending on their age, personality and number children will distract and demand attention. It could also be tempting to constantly check the news or do some domestic work. Being ‘locked up’ for a prolonged period of time with your family might create tensions. These will come on top of the anxiety and stress over the virus and the health of friends and relatives.
In order to create a virtual law firm where everyone works from home, we suggest the leadership of the firm to create structure and create a sense of belonging. Our experience with Chinese law firms over the past two months has learned that it is important for the leadership to be visible. A tool that works particularly well is to record a short daily video message for everyone. For individual partners and their teams, we suggest to have 3 conference calls every day: one early in the morning, one at lunchtime and one at the end of the day. This creates structure and gives a sense of purpose and belonging. We would suggest to include the secretaries in the early morning call to give them an idea of what will be expected. Creating structure and a good workflow have proven to be very important. Some staff like facilities and catering will not be able to work at all and might be sent home. Please don’t forget these colleagues.
If you need help and advice how to create structure and create a sense of belonging, please let us know. We will help you - also if you are not our client - at no charge. Please do not hesitate to reach out.
Consider stop putting your clients’ interests first.
There probably is not a single business law firm on the planet that has not released by now an avalanche of Corona Bulletins. It is the same knee-jerk reaction as with Brexit and GDPR. The thing is that Corona is not a marketing opportunity. It is not even a legal issue. We are facing a major existential crisis. People and companies and even economies are fighting for their lives. There will be no outcome where one party wins, and the other party loses. What we need right now are creative solutions that will spread the burden and the pain. Lawyers are primed to look after the best interests of one party: the client. A lawyer is not supposed to take the interest of other parties into account. If we only keep focusing on our clients’ interests, we might accidentally help destroy the economy along the way.
This is the time for law firms to rise. In the economy everything is interconnected and interdependent. Never in history has there been a situation where the entire global economy has come to a (near) standstill. This is not the time to litigate on the execution of a contract. This is not the time to terminate a lease if payments are not made in time. This is not the time to hold someone responsible for the damage caused by the effect of the virus. (in the US already, lawsuits have been filed against cruise companies and even against the state of China)
This the time to put the common interest before the interest of the individual. This will require a different mindset from lawyers. We will have to start cooperating with other disciplines and experts and to find new, creative and fair solutions that will create the best possible conditions for as many companies as possible to navigate through these harsh times. We need Swarm Intelligence to get through the darkness or the night and find our way from dusk to dawn. If we do not act selfish but care for each other (also in a business sense) we might get a new ‘Roaring Twenties’ once all this will be behind us.
The coming weeks Your Friday Insight will be focusing on topics that will help law firms navigate the crisis. Next week we will look into how to prepare for the economic effects