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April 16, 2020

What's Working? Midsize Firms Count Wins—and Lessons—During Coronavirus Closures

This article originally ran in The Mid-Market Report, an ALM publication, on April 16, 2020.

 

News out of law firms during COVID-19 restrictions has been both good and bad—from layoffs to unequivocal reassurances, and much in between—and many firms have experienced some of both. But in seemingly every case, victories aren’t being taken for granted, and lessons abound.

“It’s a challenging time, it’s a difficult time. But we are learning so much about our workforce and our space needs,” said Barbara Duffy, president of Lane Powell, based in Seattle—which has been among the nation’s harder-hit areas in the novel coronavirus pandemic, forcing closures of offices, schools, stores, restaurants and many other establishments.

“We closed out 2019 as one of the best years in at least a decade,” and “we had the wind at our back,” Duffy said, noting that revenue per lawyer, profits per equity partner and other financial metrics had improved markedly year over year. The firm also made significant investments in information technology.

Those investments included a shipment of new laptops that was delayed because of disruptions that have become common with the pandemic. But the firm’s IT department was able to adapt, though it did have bring back some recently retired equipment, she said.

And the firm quickly deployed 95% of its workforce to work-from-home status last month, doing so in phases. The firm’s systems have since held up, she said.

When it comes to maintaining a strong connection, Duffy’s initial expectations were “pretty low,” but reasons for optimism quickly developed: “we were busy in March … and we were busy across different practice areas,” and billing—both outgoing and payable—has been proceeding in a timely way.

“People get that it’s time to pay attention to the fundamentals,” Duffy said.

There has been some good news, aside from operations going smoothly, as several practice groups have been doing strong business so far, namely creditors’ rights, financial institutions, tax, labor and employment, and a specialized senior living and long-term care practice group, she said.

There haven’t been any cuts, but Duffy acknowledged uncertainty over whether its staffing needs might change, and firm leaders have delivered that message of uncertainty to attorneys and staff. ”In terms of overall morale, it’s just hard to measure that.”

Minnesota, unlike King County, Washington, so far has not suffered a severe COVID-19 outbreak. Still, businesses have been affected by closures, according to Heather Kliebenstein, litigation practice chair of Minneapolis-based intellectual property firm Merchant & Gould.

The firm, which also has offices in Atlanta, Denver, Tennessee and Washington, D.C., began preparing in late February for its attorneys and staff to go remote, and “the biggest hiccup we had was waiting for additional technology tools for our support staff to take home”—about 20 laptops that got held up but ultimately took “just days” to arrive, she said.

“We’re a midsize firm, but we have a big geographic footprint,” so the firm is used to maintaining good working relationships remotely, Kliebenstein said.

And IP, particularly litigation, has been very busy, she said, noting that she currently has a litigation team handling a two-day remote hearing, and is holding weekly virtual meetings with partners, associates and staff to discuss what technologies are functioning best for remote depositions and other sorts of legal work.

Unlike the 2008 recession, “I think a lot of our bigger clients look at this as a blip, so they continue the investment in the lawsuits,” she said.

Like Kliebenstein, William Sasso, chairman of Philadelphia-based Stradley Ronon Stevens & Young, recalled the Great Recession.

“Those were some of our best years ever,” as institutional clients, namely in the financial services industry, “were very heavily involved in that crisis … given the amount of regulation they have in their business,” he said, adding, “we saw a dramatic uptick in work.”

The firm is now “seeing the same thing,” Sasso said—”the institutional clients we represent in this area are on the phone constantly, making inquiries about federal legislation … how these circumstances are impacting their business. Our mutual fund people are on the phone constantly with clients in that area.”

The firm also is answering a lot of labor and employment questions, as well as inquiries on the federal CARES Act passed earlier this year and businesses looking for information on exemptions from ordered closures, he said.

In terms of staying connected, Stradley developed “an intake system” for questions, and assigned specific contacts for different types of questions, with some queries going straight to the management committee, Sasso said.

The firm so far is “not laying people off or doing anything drastic like that—we just don’t like the idea that any of our employees would suffer,” he said.

“The worst thing that’s going to happen to us is, we’ll go from making a very comfortable living to just a comfortable living … We’re going to hang in there as best we can,” he said.

Robyn Henry, director of administration at Conrad O’Brien, also based in Philadelphia, said there have been no layoffs, and “all staff working remote has worked surprisingly well.”

“About a week or two before everything happened, we scheduled a test,” she said. “While our IT folks were in the office, we worked out those kinks.”

“We’re a small-to-medium firm, so that’s really important to our culture—staying connected and meeting with people,” Henry added.

The firm also has been working to keep to the wellness events it had been doing, running them remotely.

“On the lighthearted side, we did a breakfast and brunch cookbook,” she said. ”People seemed to like that and get a kick out of it.”

“What [we] also learned in this time is that people have so many talents you’re not aware of,” Henry said.

She added, “We also do weekly newsletters—those we’ve always done, but we’ve really added context.”

Meanwhile, firms aren’t just thinking about the now. In the midst of the current situation, several said they’re thinking more about their real estate investments, as well as looking toward the potential for a pickup in certain practice areas and continuing ongoing c-suite initiatives.

At Lane Powell, for instance, diversity and inclusion efforts have gone on—the firm recently hired a new D&I director.

“We just haven’t stopped,” Duffy said. ”We really focus on what we want to look like when this is done.”

And Merchant & Gould’s Kliebenstein said the crisis can be expected to lead to big strides in technology and medicine. That could make for some work in IP.

“Whenever there’s a huge market disruption, what comes out on the other side is significant innovation,” Kliebenstein said. “There are definitely going to be winners and losers at the corporate level.”

She added, “I’m excited to see what we’re working on a year from now.”

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