LAW FIRMS AND COVID-19 – WHAT HAPPENS NEXT?
Many businesses are now planning for a return to work as the UK Government further lifts restrictions on the movement of people and the re-opening of businesses, with a phased return to “normality”. What will the new normal look like, especially for those involved in providing Professional Services?
Survival – business continuity planning
So you’ve survived. The Partners or Directors of your firm have made sure staff are safe and well, most likely working from home; you’ve battened down the hatches where necessary, examined the cash flows of your business and contacted the courts, clients and colleagues to determine which legal services you can continue to provide during lockdown. You may also have taken advantage of government support by deferring personal tax payments and VAT liabilities, claiming employment grants via the Coronavirus Job Retention Scheme and requesting support from your bank through government-guaranteed business interruption loans.
However, do you know exactly what’s going on in your practice now that it operates from multiple locations, with people in relative isolation working on a variety of devices?
Certain risks associated with operating a legal practice during lockdown are increased, since having more people work from home presents new issues of basic record keeping, data protection and confidentiality (especially the latter for those professionals sharing accommodation with non-lawyers).
Remote-working lawyers may be more susceptible to phishing scams and cyber-crime if there is no-one nearby in a supervisory capacity to consult with. Anti-virus software may be out of date on home computers, leading to increased risks of your client information being accessed or compromised.
During this survival phase the Solicitors Regulation Authority (SRA) has indicated that it will “take a pragmatic view” of compliance with the Accounts Rules – for example where for practical reasons you are unable to bank client money as promptly as normal, or if furloughed cashiers are unable to write up the ledgers contemporaneously. Yet the protection of client money must remain of paramount importance for all legal practices and the SRA will not permit the Coronavirus pandemic to be used as an excuse not to maintain basic controls, such as the performance of three-way bank reconciliations at least every five weeks. At present there is no formal relaxation of the requirement to obtain an Accountant’s Report within six months of the year end as usual, which for some will present logistical problems.
The next priority will be to manage the phases of revival of your business, and then make sure it thrives in the new environment.
Revive and Thrive
Some areas of the law have suffered more than others; residential conveyancing, for example, and corporate transactional law teams have fallen victim to a significant slowing down in activity. Court cases and investigations may have been able to continue up to a point, but then social distancing measures may have delayed or even prevented medical reports, hearings and judgements taking place.
Certain areas of the law, conversely, have experienced a boom during these difficult times, and sadly those involved in wills and probate may see an increase in the number of new instructions to deal with.
Tempting though it may be to instruct your fee earners to re-train at a time when certain areas of the law seem to appeal more than others, the professional indemnity insurance risks of such a strategy should not be overlooked. As we come out of the crisis there will be a number of businesses and individuals seeking redress from those who have given poor advice, although this, in itself, will present opportunities for lawyers specialising in negligence claims!
On a related note, keep an eye on insurance premiums as the renewal date approaches; engage in dialogue with your insurer early, so there are no surprises.
The world of work – never the same again
Now is the time to plan for revival: a time to reflect on how you’ve coped with a radical change in circumstances, and to think about your professional services business model going forward. Leaders in law firms should be considering:
- Which service lines will our practice offer?
- How many people do we need to retain in the business?
- What skill sets will staff need and how will this impact on the firm’s training requirements and future recruitment?
- How will we deal with the inevitable backlog of case files that now need to be progressed?
Also consider the employment law angles – for your own staff and from the perspective of advising clients, as future generations of employees request increased flexibility: to work from home, to operate varied working hours to accommodate childcare arrangements, to stagger their start times in order to avoid commuting in rush hour. The past few months have demonstrated that home-working is possible – and in many cases more productive – than being office-based from 9 to 5.
I find it interesting, too, to think about the image of the future professional: will we still engage in a handshake greeting? Will formal business dress become the exception, reserved for court work only, rather than the norm? Will firms continue to operate from prestigious offices in city centres, or will there be a general down-sizing?
Flexibility is the key
Professional practices may not need to re-invent themselves completely, however it is likely that those firms offering the most flexibility to their staff and to their clients will experience greater success. Those embracing the changes brought about by the increased use of technology to collect information, organise workflows and communicate with clients and staff are also expected to do well.
Most of all, we would encourage you during this period – whilst the world is re-awakening and as we adjust to a new “normal” – to do what you do best: be there for your clients at their times of ever-changing need. As professional service people ourselves, we at Wilkins Kennedy are doing just that in support of businesses and business owners as they Survive, Revive, and go on to Thrive.
We are here to help.
If you would like to discuss the support available, or have any other queries, please get in touch with your usual Baldwins contact.