Roundtable participants were Kerry Jardine of Burg Simpson, Pat Linden of Linden Law Partners, Rehan Hasan of Hasan LLC and Steve Shapiro of Shapiro Bieging Barber Otteson. Law Week managing editor Tony Flesor moderated the conversation.
LAW WEEK: To start off, I am curious in hearing how you’ve all been weathering the storm, so to speak. How have you changed what you do?
LINDEN: We were having a great year, actually. At least our first quarter was, by far, the most solid practice I’d had, and I think as a firm, since we’ve been in business, so that was terrific.
That was right up until about March 15. I had a lot of different transactions going on. I don’t think we really anticipated that it was going to go from what it was — which was sort of this passing joke of this major flu — to there was a specific day where I felt like the world was ending. So, it’s amazing to think of how life has changed.
I’m in the capital market space, largely. In the M&A world and the venture capital world, deals really don’t happen unless there’s some connection to different private equity investors, and then they’re connected to bank facilities and what have you. So, we saw a dead stop in my practice for about a good six-week period, which I think was just largely because we’re capital-markets-focused. And I think in a deal environment, things just changed, and everybody sort of reassessed.
That was a little nerve wracking, at first, to see how we went from full speed to almost zero. And then we decided during that time frame that we were going to really start working on the business and letting our clients know that we were learning as much as we could, pretty much in real time, on the PPP programs and trying to be a resource. So I think as things are opening up in general, things have really changed.
I would say we’re back to about 80% of where we were, and you know, I think the situation at large has really given me an opportunity to focus on the business. You get so busy practicing law, I think we’re better off in the perspective that we’ve been adaptable to working at home. And that’s proved to be easier than we thought it was going to be.
I think money’s going back to work. I think there’s a lot of pent-up activity. So we’re excited about that.
SHAPIRO: We expected that, but it didn’t occur. It changed a bit, it slowed down. We used to have some predictability in terms of deal flow, especially for our transactional group and M&A and securities, and deals stopped because the economics changed.
So we went more short-term in our projects. They would just pop up and they’d be shorter term projects. You open in the morning and we’d have a handful, but nothing we had anticipated or planned for.
And now, at this point, the deal flow is returning. For our clients and folks in the marketplace, I think they are starting to feel the way around the new situation and are more comfortable than I think proceeding with deals. We do a lot of loan documentation for banks — that slowed way down. Banks became very tight with lending. Litigation is staying robust. I thought mediations would come to a halt, but I’m still doing mediations. We’ve switched to Zoom for mediation, which worked much better than I anticipated. Today, I actually had my first in-person mediation in three months, which was great. I had to take a shower and shave and put on some clean clothes. So, I can feel it shifting back.
And I feel everyone has different risk tolerances to COVID. I never missed a day in the office; other people we can’t drag back. So that’s challenging to deal with that. But I feel like we have some forward momentum. But then every time you watch the news, you don’t know if you should have forward momentum. I’m hoping that we will continue forward and won’t go backwards. I think the economy has suffered enough, and small businesses like us have suffered enough, and, hopefully, we will do a better job of balancing people’s financial wellbeing along with their health.
HASAN: I’ve experienced something very similar to what Steve was describing. I was expecting a banner year — Q1 was extraordinarily good. And then obviously, with the global pandemic and the stay-at-home orders, I’ve found transactions halted. And that was more a product I think of everyone just trying to see what’s happening in the world. But I’ve always very consciously strived to nurture a mix in the practice of transactions and what I call day-to-day legal.
So when the transactions stopped, I found a lot of the more day-to-day legal matters kind of popped up, which was quite nice, and I think a part of it was companies having a moment to take a breath — whether they liked it or not — and be able to say O.K., well all that’s always put off, we can do that now. So March was just fine. April, slowed up a little bit. May picked right back up. And then this month has been just as hectic as before.
I’ve also had a number of transactions now restarting, as well as a number of clients getting back into the swing. I think there’s a level of comfort now with the world as it is. So we’ll be having those transactions start to pick up again, for sure.
JARDINE: Burg Simpson is a trial firm. We don’t do any transactional work. The majority of our revenue is contingency-based, so we’re not heavily involved in hourly work, and we’re not heavily involved in resource revenue areas that are disconnected from major corporations or major insurance companies.
So, for our particular practice area, these dislocations have not had a significant financial impact because, at the end of the day, your major insurance companies and your major corporations tend to have a lot of excess cash. And so that has enabled Burg Simpson to weather the 2008-2009 dislocation and the current dislocation without any significant disruption in terms of our revenue sources.
Now, having said that, Burg Simpson — and I’m sure every other law firm in Colorado and the country — in March was trying to figure out what was going on and what the impact would be. At that particular point, there was a tremendous amount of uncertainty as to exactly what the impact would be on our firm and what the impact would be on our revenue. How would trials be handled? And one of the big concerns is whether there was going to be any liquidity in March.
The big downturn in the market was a result of liquidity issues. So the first thing that we were concerned about was are we going to be able to access our lines of credit. So, for a couple of weeks, we were engaged in the process of determining how our lines of credit would hold up and how the banks would hold up and would they be able to fulfill their responsibilities on lines of credit.
As it turns out, the Fed stepped in and solved the liquidity issues. We never had any issues with lines of credit. And so that all worked out perfectly fine, but at the time, we didn’t know how that was going to work out.
The next major dynamic that we faced was we’ve got our Denver offices, we’ve got multiple out-of-state offices, and how are we going to make sure that everybody can be productive? So we ended up in a situation where we had to really focus on how do we make sure everybody can work from home and work from home at a very high level.