In just a few weeks, a legal industry that seemed cautiously optimistic about the year ahead changed its tone drastically, as law firm leaders quickly shifted focus to the new coronavirus—first complying with measures meant to limit its spread and then preparing for any number of potential economic outcomes.
While those evaluations and decisions haven’t been easy, industry watchers say they may lead to some constructive long-term changes.
Matthew Haverstick, a managing partner at Philadelphia-based Kleinbard, said recent events have been “vindicating” for his firm’s leadership, reinforcing their decision to “be disciplined in good times.” And transitioning to remote work has helped the firm identify some strategies for the future.
In the past six months, for example, the firm was struggling to determine whether it needed additional office space.
“We’ve now quickly discovered we don’t need more real estate, we don’t need more space,” Haverstick said. “Some lawyers probably prefer to work at home, and I think we can accommodate that.”
Kleinbard, and most other U.S. law firms, are going through a forced experiment with remote work that is making them rethink how they typically do business. That may seem to have only negative outcomes—including furloughs and layoffs of employees whose work is only relevant in the traditional brick-and-mortar office. But it may also simply accelerate some changes that the industry was already calling for.
“I do think firms and attorneys are getting more comfortable with the working from home aspect of it,” recruiter Jason Mandel, of Alevistar Legal Group, said in an email. “I view it in two ways—yes, you can certainly work from home very effectively in these times, but will the desire to interact with people on a day-to-day basis top that?”
Grant Walsh, the Dallas-based founder and managing partner of Culhane Meadows, where all the lawyers and staff work remotely, said the current situation has pushed the most traditional law firms to try a model they have long eschewed. And they may be surprised by the results.
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“You’re going to see an entirely new acceptance of this approach. It’s going to legitimize what we’ve been saying for seven years” since Culhane Meadows was founded, Walsh said. “Lawyers who previously thought they couldn’t function from a home office will suddenly feel different about it.”
Even those firms that place a heavy emphasis on face time will learn that they can get a lot of those meaningful interactions in a virtual setting. Walsh said his firm has long depended on occasional in-person meetings and socials, but also on more regular virtual meetings and gatherings via video conferencing. For instance, this week the tax practice hosted a watch-and-learn program, in which participants streamed the movie “The Laundromat” on Netflix, and tax lawyers answered questions about the legal issues that arise in the movie.
Walsh said he also hopes more traditional law firms will notice that offering remote work flexibility may come with some gains for gender equity. Some firms limit the partnership opportunities for lawyers who want to work a flexible schedule or partially remote, he noted. But now that they’re forced to work remotely, those firms may realize that offering flexibility to those lawyers—often parents, and more often mothers—does not have to come with a career trade-off.
He’s hopeful they will now see, “She was just as productive remotely when she was homeschooling her kids … so maybe we weren’t quite fair to think she couldn’t make partner at our firm.”
That potential for lessons learned also extends to staffing.
“It’s forcing firms to rethink the way they use staff,” Steve Kruza, of Kruza Legal Search, said, “with an eye on efficiency.”
Maura McAnney of McAnney, Esposito & Kraybill Associates agreed. “With so many people working at home, what will happen with support staff, people who got used to using support staff?”
Paralegals will likely continue to be in demand, however, because firms can bill for their work, she said. For other staff, she said, how they are utilized at their firms will likely change for the long term.
Haverstick said his firm, which has around 30 lawyers, was already staffed leanly, so it hasn’t seen any redundancies yet.
Even if some firms identify opportunities to be more lean, Kruza said, those that are instituting partner pay cuts instead of layoffs are doing the right thing for the moment. Particularly at highly profitable firms, it’s better for a partner making seven or eight figures a year to take a temporary cut than for an employee making much less to lose their income and benefits.
“It’s good for your business, it’s good for the culture of your company … and you don’t want to lose good people,” he said. “This is a horrific issue, but it is temporary, and this will be a memory at some point.”
‘Wait and See?’ Or Seize the Day
But there’s one change recruiters hope will be temporary: law firms have largely paused hiring.
Kruza said large firms especially are freezing hiring, unless a move was already far along. But he doesn’t expect that to last forever.
“It’s not that those deals are dead … it’s just wait and see,” he said.
Mandel said the same, though candidates who were scheduled to start in the last three weeks have been successfully onboarded. His group has made a few placements as well in that time, but not as many as normal.
“Other than that it’s really a standstill. To the extent that there are strong bankruptcy candidates out there I think there’s an interest in speaking to them,” he said.
But it’s not just bankruptcy practices. Haverstick said his firm is open to opportunities for hiring young lawyers, especially if the Big Law firms that would have normally hired them are now pausing their recruitment efforts. Because the firm is “measured” in making partner distributions, and keeps a healthy amount of cash on hand, it’s able to seize on those opportunities, he said.
Culhane Meadows, too, is looking at opportunities to hire now. It recently added intellectual property partner Christopher Rothe in Philadelphia, bringing him over from RatnerPrestia.
And among other law firms too, Mandel said, there seems to still be hope that lesser activity as a result of the coronavirus is a short-term issue.
“It really feels like everyone is just holding their breath. It feels like we’re all holding our breath and hoping we make it through this without too many adversities,” McAnney said.
In any case, McAnney noted, there’s a big difference between the current state of things and the Great Recession, which creates hope for a bounce-back: “This was not a crisis caused by the economy … it was caused by a virus.”