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Law firms and the Covid-19 pandemic: Lessons and notes

A major impact of the lockdown and Covid-19 has been, one that most shy away from admitting, the cash flow crunch.

Ajay Bhargava

Published

4:28 am IST

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The novel coronavirus has resulted in people being locked down in their homes. Notwithstanding the widespread health concerns attached with Covid-19, it has been able to instil, in the minds of people, fear. The world is panicking at a rate faster than the spread of the virus. These unprecedented times have not only brought the world closer, more rapidly than the modern means of communication and technology, but have also unified the world, in a way not seen or heard of before, in its fight against the novel virus.

The virus has not discriminated, and its impact has been felt by one and all, businesses and individual alike, across the globe–mentally, emotionally, physically and financially. There is no right or wrong way of dealing with the present situation and each entity is doing its level best to manage the circumstances for its own preservation and those it is responsible for. When it comes to a law firm, clients and resources are quintessential. The wellbeing of a law firm’s clients and its resources is paramount and in dealing with the impacts of Covid-19, the wellness of the clients and resources is central.

In order to understand the means adopted by a law firm to survive, and ultimately, thrive from the present situation, one needs to understand and acknowledge the impact of the novel virus on the legal industry. A major impact of the lockdown and Covid-19 has been, one that most shy away from admitting or at least explicitly acknowledging, the cash flow crunch. Cash flow may not necessarily be a direct consequence of the pandemic but, in most cases, a subsequent one.

For a lawyer, and on a larger scale, a law firm, apart from issuing advisory and opinions to clients for the various activities undertaken by the client, there is also involvement in the dispute resolution process of the disputes that have arisen out of the transactions undertaken by the clients. Dispute resolution has been on a backfoot with the courts only taking up matters being urgent in nature, which most often than not do not include matters involving disputes between parties at a personal/ commercial level.

Moreover, with businesses shut due to the lockdown and only bare minimum and essential activities being allowed by the governments, the opinions sought by the clients have also declined. Resultantly, the incoming work has been restricted leading to lower revenue generation and along with outstanding invoices. Another major impact for the industry has been the morale level of the individuals. A law firm is only as good as its representatives.

In other words, if the overall morale of those responsible for running the various dayto-day affairs of the firm is not high, the natural consequence of the same would be lower morale of the firm. Therefore, tackling with the affected morale of the members has been a key challenge for law firms. Yet another challenge faced by law firms has been simply coping with the prevalent situation caused by the pandemic. There has been a lot said and spoken about the present times being to tackle and deal with a pandemic and not a “productivity contest”.

However, what people do not realise is, for an entity in the service sector, it has to live up to the expectations of the client, providing them with full support and catering to their requirements during the harshest of times and those who are able to do so, are the ones who are distinguished and leave a mark, for it is only a select few that meet the phrase “when the going gets tough, the tough get going”. In order to combat the situation caused by the rampant spread of Covid-19 various steps and measures have been implemented by law firms.

A major policy decision has been to ensure the health and safety of all members of the firm. Khaitan & Co has been in the forefront of ensuring that its members are protected from the virus and stay safe. It is one of the first few firms to set in place a “100% Work From Home Policy” which was enforced in letter and in spirit. This was a pre-emptive measure adopted by the firm, notably days before the national lockdown announced by the Central government.

Another major step taken by the firm was imposition of travel restrictions, for both client and personal travels, which was initially for international travel and later extended to domestic travel. Client engagement and interaction has been another important aspect during the lockdown, by sending regular updates, personal phone calls and conducting webinars.

A law firm has a wide client database and to prevent loss of business, it is imperative to periodically touch base with that database. Instead of shooting out generic emails about the various developments taking place with regard to Covid-19, which are already floating in abundance, the clients should be sent more personal emails updating them with those facets that influence and impact their business.

One more means of client engagement is reaching out to clients, to check up on them and enquire about any difficulty they might be facing and providing specific solutions to those. A common way of doing this has been conducting webinars on latest developments and client specific industry to converse, update and address queries of the clients. With the change and shift in the needs of the clients, firms have to be on their toes to address the concerns of the client and provide them with crisis management advisory.

Professional and personality development of the members of the firm has been another step taken to survive and get past the present situation. This has a two-fold benefit, the members are able to hone their skills and, at the same time, are occupied. Keeping members of the firm occupied in discussions on current and important legal topics and asking them to attend webinars on a variety of themes and subjects, apart from carrying out the usual work, helps in maintaining sanity and a healthy mental state.

Further, intra-team interactions and HR engagements to redress any concerns members of the firm might be facing have also turned out to be fruitful. To stay abreast with the present times, one has to be technologically advanced. Most law firms already have a dedicated IT team and a decent technological infrastructure. This existing basic or intermediate IT infrastructure has allowed law firms to operate remotely. The ability to work remotely, owing to the incapacity of working from office, has aided, and continues to aid, in serving the clients through this phase of the national lockdown.

Alongside, the firm has been able to improve, enhance and transform upon its IT infrastructure with the IT team working relentlessly through remote access. A strong and advanced IT infrastructure will go a long way in achieve the object of digitisation. Additionally, owing to the virtual hearings being conducted and it being anticipated that a certain category of hearings may continue to be held through virtual courts, law firms, lawyers and clients are required to have adequate and sufficient technology in place.

Furthermore, for appearing before the virtual courts, the conferences with senior counsels and clients are also being held through video conferences. Lawyers and clients, alike, are adapting to the current system of justice dispensation and keep themselves adept with the guidelines and standard operating procedures issued by the courts from time to time. Apart from these, law firms are periodically amending and introducing policies to tackle the pandemic and the diverse consequences it has brought with it.

One such measure has been the introduction of a dedicated Covid-19 resource centre on their websites. By means of this Covid-19 resource centre, law firms are regularly updating and posting about legal, regulatory, statutory developments. Various articles and information are also being posted to provide the clients and other visitors on the websites with a view on the key developments and the responses to the Covid-19 pandemic. The evolutionary theory propagated by Charles Darwin spoke of “survival of the fittest”.

The present times have demonstrated and showcased a different scenario. The key qualities being talked of and required for emerging from the present circumstances are: resolve, resilience, return, reimagine and reform. Turning over a challenging situation, like the present one, requires innovation, a cohesive team, and leadership (both in those managing and those implementing).

The lockdown has given an opportunity to halt for a moment to rethink, realign, strategise and prioritise the adoption of an inclusive approach that focuses along with professional growth, on the overall and personal growth of the entity in order to become leaner, agile, and adaptable. It is these measures that have supported the survival and will ultimately provide a base for blossoming.

Ajay Bhargava is a Senior Partner of the Dispute Resolution Team at Khaitan & Co, specialising in civil, criminal and corporate litigation. His fora of practise include Supreme Court, High Courts, Arbitration (International and Domestic) and various quasi-judicial tribunals.

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