Business of Law: Nine Months Later, Managing Partners' Concerns Have Evolved

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In late November, our Law Firm Leadership Round Table met again for the fourth time since the pandemic began in March. This group of forward-thinking partners support one another in a most the collaborative way sharing ideas and identify key issues law firms are grappling with as we approach year’s end. Our members come from Am Law 100 firms, midsize and small firms.

Most Practices Coming Back

The partners shared the fact that most practices seem to be coming back with good speed. Some, such as tax, labor and employment, insurance coverage and risk management, have been quite busy during most of these past nine months. Many members agreed that litigation is slowly coming back as courts grow in virtual capability. Some have trial dates extended into 2022 or beyond. Most firms are encouraging clients to settle, mediate or hire a private judge to move litigation matters to a close. A lively discussion ensued about virtual depositions and court appearances, which most agreed will become a permanent situation.

Cash Flow Better Than Anticipated

For many of our members, both partner and associate pay were uniformly cut for a time. Some firms are preparing significant holiday bonuses and some are reinstating salary cuts.

Cash flow is better than some of the partners anticipated due to PPP loans, other programs, as well as an increasing amount of new matters. And a few firms gave out early distributions during the summer recognizing great efforts on the part of their attorneys and staff.

A Mixed Report & Positive Outlook on Associates

Associates’ hours were discussed. Some partners reported their associates had light billing periods due to a lessoning of work coming into the firm and/or work not being pushed down. A few commented that their lawyers continue to have their same strong ethic working remotely. Several of our members already have, or are preparing to have, a few attorneys or staff move out of state, but keep their positions. Many agreed that partnership opportunities still exist, but that it will be harder to accomplish. One partner stated, “We have been more effective than we anticipated – things are going quite well.”

Office Space

A topic that seems to get air time at every meeting is questions about office space and rent issues. As a whole, the group feels their attorneys and staff will continue to work remotely well into 2021. Some anticipate that not all workers will ever come back to work in their offices. Those firms that had not taken steps to work remotely before April are now over those growing pains.

There was much interaction concerning how much space each firm will take once their leases are up. Those firms which had to find new space, or had to renegotiate their leases, reported landlords seem to be willing to give more concessions for things like tenant improvements or additional free parking but are not yet lowering rents.

Hiring & Retention

Lateral hiring and retaining quality attorneys were areas of concern. Most of the represented firms plan to continue their virtual communication meetings with partners, associates and staff. Keeping firm culture front and center was important to the attendees. More than a few partners expressed a small concern about not being able to train associates and interact “on the spot.” But most agreed that there are many less interruptions and that they are able to get more accomplished.

Client Needs, Response Time, and Boundaries

One source of frustration was the increased pressure from clients and their associates to get quick responses to every question or problem – even more pressure than before March. Some firms created definitive boundaries about response time while working remotely.

Ongoing COVID-19 Concerns

And it is no surprise that firms remain concerned about the possibility of the virus directly impacting their members and staff. Everyone is anxious for a vaccine to become available for all. The group members are all optimistic and looking forward to 2021.

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[Merry Neitlich, Managing Partner of EM Consulting, is located in Irvine, California. We assist law firms with strategic business development, branding, websites, legal operations, and client enhancement programs. Merry can be reached at 949.260.0936 or merry@EMconsults.org]

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