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5.19.20: COVID-19 Crisis Series CLIENT-SIDE

As its first topic of focus, the Council of Luminaries has decided to have regular meetings to discuss the effects of the COVID-19 pandemic on the legal industry as they materialize. The objective is to identify developments in the market, at both clients and firms and to explore potential solutions and make predictions on where things go from here. Key takeaways from each meeting will be published for the public following each discussion.

The below meeting was conducted primarily with the client-side group.

This Week's Temperatures

Each week we ask the Luminaries to answer these four questions, on a scale of 1-10 with 5 being what would have been their pre-COVID response.

Are We Settling In?

It seems we are settling in to a new normal. The companies that are doing ok feel lucky not to have been impacted, and the ones that have been affected in a big way already asked for discounts and extended terms and have managed through that initial wave.

It seems we are accelerating trends already in place and reemphasizing initiatives (such as AFAs) that were already in progress.

Companies entering a budget phase soon may start to feel pressure all over again.

Law Firm Outreach

One Luminary said that firms have started pitching run of the mill, “We want to be one of your preferred providers” pitches again. But this was not common among the other group members.

Firms were expecting flat demand before this started and are now worried about a suppression in demand. They also are concerned about what law department priorities will be and they are especially worried about the industries that have been severely impacted. There are an increasing number of discussions going on within law firms around those topics.

At corporations, everyone is still expected to deliver on objectives that were put in place early in the year. But that may not be true at law firms. Rather, they are often hedging their bets and shifting resources into practices that are expected to do better. Also, law firms are not public companies and therefore have not made promises to Wall Street they feel the need to try to keep.

Some were wondering what firms were seeing from their smaller clients, but most believe that

Issues are likely more industry dependent rather than size dependent.

Return to Work

Most of the group members’ companies have offices that are ready for return to work, but none have moved back yet. Most are working on return-to-work plan. The basics, such as distance requirements are in place, but a lot of factors are still up in the air such as including if and how often knowledge workers will need to be in the office at all.

There was general consensus among the group that employers are taking a cautious, ‘employee health and well-being first’ approach to return to work. Companies are looking more at what their employees need to feel supported and to be most productive regardless of whether that productivity is going to come from an office or home setting.

At manufacturing companies and others where workers must be on site there are phased plans for workers to return, but the legal department will probably be among the last. It seems the doors will be unlocked long before knowledge workers are required or expected to come in.

The group wondered about what the law firms were feeling, specifically the extent to which, if any, the ability to deliver service has been compromised. Consensus among the group is that there’s been little or no impact on service delivery from firms, although no one had specific data against KPIs or from 360 scorecards.

As one Luminary described it “it’s like the definition of pornography…I know it when I see it. I’m not hearing any pushback from my attorneys.” Work might be getting done while some lawyers are trying to decipher 3rd grade math, but the work is getting done. Also, it’s democratizing firms. It’s been an opportunity for younger attorneys to help older ones because they understand the tech. The concern tends to be among relationship partners, who are accustomed to managing clients and developing business through “the steak lunch and the golf game.” There are some firms where there will be a push back to the office because that’s how they are used to doing business, that’s the culture. But overall, we seem to be seeing less hierarchy at firms.

We are also feeling a more human connection as so many are working through the same issues, like having kids at home and having them show up in the background on a Zoom call. “I know co-workers kids now and they know mine” one luminary said.

All of this may change, however, if people stop making their numbers and start blaming it on work from home.

Firm Resiliency and Succession Planning

Law firms often struggle with succession planning, but this is an opportunity for firms to advance those top senior associates and showcase them to clients.

One group member pointed out that two firms have recently improved their standing with their company by exposing them to that talent. Others agreed and pointed out that there have often been times when a relationship partner left or took on additional responsibility at the firm without properly deputizing others and it became a major problem. Especially with COVID-19, it’s a resiliency issue.

This is countercultural for law firms to do, however, and it makes those relationship partners uncomfortable, so clients need to request more face time with top associates. “If you articulate it, you’ll get it. If you leave it to the firm, you won’t.”

It does seem like this could be a differentiator with certain clients. ‘Older lawyers’ (eg GCs, Heads of Litigation, etc.) like hearing from ‘young lawyers’ when appropriate and especially when that lawyer is contributing significant value. Unfortunately, this may lead to stories of ‘back when I was a ‘baby lawyer’’ but everyone has had dinner with their grandparents, so it’s ok. The key is showcasing the investment the firm has made in developing and retaining key talent and showing how the firm is prepared to provide excellent legal representation now and in the future.

Some group members have written this into their agreements with panel counsel, in one case requiring 3 defined relationship partners, a diversity candidate, a tech lead, and a business/pricing lead. “But it was by us pushing that and it took 2 years to get it all done. We had to explain that firms who gave us more contacts got more opportunities.”

Client Portals and Other Collaborative Technology

Some firms—and ALSPs—are offering client portals and dashboards. The idea is to give in-house lawyers the ability to put their finger on the pulse of the matters anytime. But adoption lags among in-house lawyers themselves.

Ease of use (or lack of it) is one factor, but the bigger issue seems to be that each firm has its own, and it’s too hard for in-house teams to get up to speed on 10-15 different tools, remember login credentials, etc.. A better strategy is for the law department to build something and then to externalize it to all its firms.

With firms moving away from brick and mortar, we don’t seem to be going back to a model where the second biggest cost is real estate. The question is what role will this type of technology play and what will be its lasting impact on the industry.

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