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    Impact of the Pandemic on Law firms

    Several industries are devastated because of the coronavirus induced recession in the economy. Industries such as Aviation, Tourism, Hospitality, etc have taken huge hits and currently have come to a screeching halt. Every sector of the economy is suffering because of the pandemic and the legal services sector is no exception. I am penning this blog after examining how the pandemic is affecting the business procurement and continuity at major law firms around the world. We will also be able to see if smaller law firms can weather out these times of crisis.

     

    There has been a huge impact of the pandemic on the customer demand which was earlier there in the market. For the Law Firms situated in the United States, there has been a notable shift in the dynamics, where the clients have preferred to pursue only those matters which are extremely crucial. Clients have become more high-strung about the practice area they are filing litigation for and are usually seen converging on some specific issues such as Labour, Employment, Healthcare, and Aviation related Laws. Overall, the entire industry, as far as the practice areas are concerned, has seen a negative impact of at least 18%, and litigation in some areas, such as Energy, Financial Services, Technology, Media and Telecom has seen a sharp decline of at least 22% this year. Also, an apparent decrease was observed in the Corporate M&A, Capital Markets, Venture Capital and Corporate Financing, with major law firms turning only towards some of the practices stated above.

     

    However, from previous periods of crisis, a trend has been observed that law firms and law practitioners are generally good at handling downturns in business and are at greater capabilities of weathering out the economic shifts. During the 2008-09 economic crisis, it was observed that the top 100 Am Law Firms were productive in countercyclical practice areas and were very good at making advances towards a wider range of scenarios. However, during the ongoing Covid-19 Pandemic, there has been seemingly perpetual retardation in the court systems, owing to the less technologically advanced state of affairs and the initial closure of courts for hearing, investigation, and dispute resolution. Law firms that have Global Finance as one of their major practice areas are more likely to get affected by the crisis because of the nature of the business. Firms that are more locally operated, such as the ones in the state of Texas and Washington have even observed profit gains. On the other hand, firms headquartered in New York are more likely to get affected by the crisis by losing a share from the profits by at least 3%.

     

    Keeping in mind the lessons learned from the previous crisis and the ongoing pandemic, there could be various things that the law firms could focus on, to maintain a grip on the market and to keep generating revenue. As a paradigm shift has been observed in several business practices, law firm operations should be more client-oriented, and law practitioners should more concentrate on how these unprecedented times are testing their client's businesses. Clients should be reached out at least once in a day by dropping them a personalized email if possible, even of a line or two, so that if there are any legal challenges faced by them, those could be uncovered and a clear nexus could be established between the client and the counsel. Lawyers should focus on learning more about crisis advisory and how the same could be turned beneficial for the clients.

     

    Lawyers could also make a difference by sharing relevant articles which contain intel for their customers regarding the various business and practice areas in which they operate. This would initiate the flow of information and also help the existing clients and new customers gain some trust in the law firm. New publications such as blog posts and newsletters should be circulated, free of cost so that the knowledge of all law firms in a particular practice area could be established and impacted to the masses.

     

    Another aspect by which the law firms could be more useful in these testing times should be the pricing that they are quoting to the clients and they should be very competitive about it. This plan of action if more relevant for the global law firms that are facing multifarious business outages, and by the means of competitive pricing, they may attract new customers and even venture into new practice areas. During the ongoing pandemic and a few more months to come, pricing can break the shackles of discipline and they should be more catered towards the needs of the clients and attracting new prospects. Firms may even offer one-time discounts such as Proof of Concept, Calibration Period, etc. so that they may venture into new markets and acquire new business.

     

    It is still highly uncertain till when these times are going to affect the business, but law firms can weather this crisis out by developing a far-sighted approach to tackle the situation, and it is also quite certain that these things are going to become the new normal and law firms should be keen in developing the practices where they may keep their existing clients and also acquire new customers from the market.

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