This article represents a collaboration from authors across McKinsey’s Financial Services Practice, including Todd Babbitz, Albert Bollard, Alex D’Amico, Gabriella Garbasz, Suhrid Gajendragadkar, Aisling O’Rourke, and Chandni Sachdeva. Fast-changing consumer behaviors influence the future of the CPG industry. hereLearn more about cookies, Opens in new As client agendas and priorities shift, be ready to pivot your client-service agenda to match them—for example, by introducing new partners or expertise in a pertinent area. Covid-19 is proving to be the impetus the legal industry needed to embrace remote technologies, Merchant & Gould attorneys write. On premises technology has made way for virtual private networks and online collaboration. Two general principles apply if firm survival is not at stake: examine all levers first before turning to compensation and let partners “take the hit” before nonpartners do. But given how much is at stake for them—client relationships, people and culture, near-term resilience, and the ability to accelerate out of a downturn—those that can maintain a long-term perspective while moving aggressively on near-term priorities will be best positioned to prosper in the next normal. The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms. Regional exposure matters. A group of London firms has written to ministers calling for financial support for the rail firm. Like so many aspects of legal education during the COVID-19 pandemic, the largest annual law school gathering has gone virtual with a five-day slate of online programs. The future: Legislative Reform and Deregulation as key to recovery. But COVID-19 and our societal responses to it are in the process of crushing our slow, creaky, in-person justice system, and the lessons here about human-centred design are suddenly far more urgent. With fewer people in the office to receive mail or hard copy documents, the focus has shifted to digital solutions to accommodate traditional paper-based activities. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. All the latest developments on what firms are doing in response to the coronavirus spread. Resources for your U.S. firm and clients* during COVID-19 Firm of the Future Team Note: The Paycheck Protection Program Flexibility Act (PPP Flex Act) was signed into law on June 5, 2020. Zachary Strebeck, Attorney at the Strebeck Law Firm “The future of the legal industry is about flexibility for both the attorney and the client. Covid-19 has moved such an evolution into a revolution, as we are forced to make rapid and immediate changes to how we socialise, live and work. Coronavirus: full details of how law firms are reacting. In some cities, offices are reopening, albeit with scaled back occupancy to support social distancing requirements. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. The firm is concerned the Covid fines are issued arbitrarily. An issue that will likely be considered by researchers is how COVID-19 will potentially permanently change firm financing. INSIGHT: How Covid-19 Changed the Future of Litigation. Here’s what you need to know - and how it will affect you. 6. In the current downturn, law firms less tied to global financial markets may feel less of an impact because of the nature of their businesses (such as less exposure to a decline in cross-border activity) and because virus mitigation may be more disruptive in densely populated cities or transit hubs. The next normal arrives: Trends that will define 2021—and beyond. Use minimal essential Others have but they’ve got a plan for dealing with them, and people are just cracking on and getting through the work. Resilience measures can fund priorities not just for the near term but also to help with acceleration out of the crisis. Law firms are seeing major slowdown in business because of COVID-19, data shows The shock to the global economy stemming from the COVID-19 pandemic has produced a 40% drop in the number of new legal matters being opened each week in the U.S. compared to late February, according… Law firms are seeing major slowdown in business because of COVID-19, data shows The shock to the global economy stemming from the COVID-19 pandemic has produced a 40% drop in the number of new legal matters being opened each week in the U.S. compared to late February, according… Over time, law firms can capture growth from three sources: underlying market expansion, gaining share from competitors, and M&A. 2. Although COVID-19 cases in parts of the world are still surging and we’re not out of the woods yet, it’s still not too early to imagine the future infrastructure of a more agile law firm. Firms of the future: COVID-19 prompts more law firms to pursue real estate downsizing. Above The Law In your inbox. But leaders will be creative in providing pricing or volume relief. These laws are ripe for modernisation.” 6. Some law firms handle downturns much better than others do. The future … To find out more, download our instant survey results, The Impact of the COVID-19 Crisis on Law Firm Support Operations. So far it appears to have gone reasonably well. Ready or Not. Most fee earners and their support staff are working from home. Some of … Subscribed to {PRACTICE_NAME} email alerts. This article highlights five lessons from previous downturns, outlines potential implications for client demand across practice areas and sectors, and suggests priority areas of focus for law-firm leaders. They are flooded with information. A third set of sectors that are not directly affected by COVID-19 but feel the impact of a general slowdown or a moderate uptick as people’s lives change at work and at home (such as home improvement, landscaping, and consumer electronics) are experiencing muted or lumpy demand. Briefing Sep 10th 2020 edition. As a last resort, enact nonpartner-compensation reduction, deferrals, or furlough or layoffs. Conversely, participating in underlying market expansion can be a source of sustainable growth, which makes it imperative that firms have or build capabilities in service lines that are seeing rapid expansion. This time around, expect that procurement teams will play an even larger role and that there will be a greater focus on commercial arrangements that provide clients with greater cost certainty, either through a fixed or capped arrangement or through one that more closely aligns fees to the outcomes achieved. If done in a strategic and controlled fashion, those actions can be effective ways to meet clients’ needs while reinforcing a law firm’s value proposition and positioning the firm well for when the economy recovers. Processes will be centralized with more support functions virtualized and outsourced to less expensive onshore and offshore locations. Her course requires her to do an internship. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. It is easy in these times to let pricing discipline slip. Our research across industries demonstrates that sustained growth from gaining share from competitors is extremely difficult, particularly in mature, highly competitive sectors (such as high-end legal services). They look at how law firms are adjusting to new technologies now and how courts may adopt new technologies going forward. Our flagship business publication has been defining and informing the senior-management agenda since 1964. Next year, she was due to do a study year in Lebanon - where her boyfriend lives - but it's unclear if travel restrictions will allow it. The coronavirus pandemic is forcing retailers to rethink the role of the brick-and-mortar store. In line with the lessons from past downturns, Exhibit 5 outlines an early view on potential demand implications across both select practice areas and sectors over the remainder of 2020. Although the majority of countries and businesses are still very much in the crisis management phase of COVID-19, ... which is why we must start reframing the future today. “There is however a significant increase in claims farming activity focused upon Covid-19 and we can expect these numbers to start to surge, not least if the earliest cases are successful.” Earlier this year, fellow defendant firm Kennedys highlighted how claims farmers and law firms were eyeing up the opportunities that the pandemic may offer. But the current downturn may turn out to be unprecedented in the postwar era, so law firms must prepare for a wide range of scenarios. Anyway, now you know the value of my predictions. Technology was on premises and many firms hesitated to adopt cloud-based technology for security reasons. Try to move beyond the basics to the best practices of widespread and varied communication, weekly war-room reviews, impact tracking of initiatives, and rebalancing for short-term coordination and priorities as needed. Our research shows that in past downturns, law firms continued to increase their standard rates but then partially offset those actions through an uptick in client, matter, and one-time discounts; strategic investments; and work-in-progress and accounts-receivable write-offs. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings. Lawyers at large law firms aren’t worried, as many Americans are, about job security while the coronavirus pandemic continues to upend everyday life. our use of cookies, and After coronavirus: The office of the future is the office of the past. Many law firms have conducted surveys to better understand the needs and concerns of their staff. In-flight or established strategic initiatives, particularly those that link to immediate client needs, should be continued, perhaps even accelerated in some cases. Of the nine HR trends, some represent an acceleration of existing shifts; others are new impacts not previously discussed. Subscribe and get breaking news, commentary, and opinions on law firms, lawyers, law schools, lawsuits, judges, and more. That means being innovative but also accepting that the law firm of the future should not be just run by lawyers at the senior management level but also by software specialists, finance or … Remote support normally only extended to IT. Firm with links to Gove and Cummings given Covid-19 contract without open tender This article is more than 5 months old Research company owned … 3. supported by. Strategically show strength through extending the firm balance sheet for clients rather than gradually losing ground through a lack of pricing discipline. If you disable this cookie, we will not be able to save your preferences. Law firms weather downturns better than the overall economy does. Working practices and the law evolve through time. Grouping Am Law 100 firms into quintiles based on where they entered the 2008 financial crisis in and where they exited in 2012 shows the magnitude of the dynamics involved (Exhibit 4). Please use UP and DOWN arrow keys to review autocomplete results. Big Law Firms Prosper Despite Covid-Impaired Economy Varied client bases, lawyers’ ability to work remotely has kept revenue stream—and extra bonuses—flowing Prioritize initiatives based on time to release, typical size of financial impact, and risks to a firm’s long-term health and performance from pulling that lever. COVID-19 UK: Technology - Future Fund Scheme: Orrick Collaborates on Law Firm COVID-19 Task Force Advising HM Treasury on New Loan Package for Start-Ups - Update April.20.2020 Facebook Decisions made now may well shape a firm’s direction and culture for the long term. Flexible working, due to millennial and gen-z lawyers entering the workforce, was gaining traction, but was not considered for supporting roles, such as secretarial, e-billing and marketing. Almost half (46%) of UK manufacturers say their Brexit supply chain plans have been damaged by the coronavirus pandemic. 6 mins ago. What innovative channels, beyond the standard articles or emails, can you use to get your perspectives to clients? If the plan succeeds, Michelin may win a seat at the table with construction companies, public transport agencies, mobility-as-a-service start-ups and other entities with a stake in understanding and managing mobility ecosystems holistically. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful. The future market for Covid-19 vaccines could be worth more than $10bn (£7.6bn) in annual revenues for pharmaceutical companies, according to industry experts, even … 2. Coronavirus: Its Initial Impact on Law Firms How has the pandemic impacted lawyers and their law firms? To do so they will need systems to manage secure messaging, video With that in mind, law firms should complement belt-tightening initiatives with plans to attract lateral talent with well-aligned practices and reforms to firm decision-making and people processes, such as placing greater emphasis on collaborative entrepreneurship in annual partner reviews. The High Court has awarded a law firm damages of £25,000 for a defamatory review on Trustpilot posted by a disgruntled former client who paid £200 for advice. Remote delivery of processes and tasks is exposing pockets of inefficiency, as some support staff don’t have enough to do when working remotely. Law firms are looking at centralizing functions to reduce costs through economies of scale, drive growth, and improve their bottom line. collaboration with select social media and trusted analytics partners We'll email you when new articles are published on this topic. We’ve looked at four key aspects of the workplace – people, place, process and technology. The view apparent from the discussions around the room is that firms should be more progressive in our thinking. And in some cases, COVID-19 has forced the pendulum of a long-observed pattern to one extreme. The Covid-19 lockdown has accelerated many law firms three years into the future, according to national audit, tax, advisory and risk firm Crowe. Client demands and competition from alternative legal-service providers will also likely pressure high-cost real estate, staffing pyramids, and other elements of the traditional service-delivery model. Download the Future of Work Trends Post-COVID-19 eBook Of the nine HR trends, some represent an acceleration of existing shifts; others are new impacts not previously discussed. This website uses cookies so that we can provide you with the best user experience possible. May 7, 2020, 8:01 AM. And is this even possible under current employment law? “VRS has been there, but because of the business repercussions due to Covid-19, such offers are being given more frequently and overtly,” said Anshul Prakash, partner at law firm Khaitan & Co, who is a specialist in employment and labour law. Our research tells us there is no doubt the COVID-19 crisis has altered the law firm operating landscape. Of the past three downturns, only the global financial crisis of 2008–09 resulted in a decline in aggregate Am Law 100 revenue (Exhibit 1), in part because of countercyclical practice areas and prices continuing to advance (see lessons two and four). Some law firms handle downturns much better than others do. However, among trainees — the lawyers of the future — “there is certainly a willingness to come back into a physical location and learn”. 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