The economic consequences of the new coronavirus pandemic seem to increase by the hour, and law firms are having to adjust their business practices beyond remote working. For solo lawyers in particular, the sudden disruptions have them reflecting on how their practices have to respond, whether it’s with increased flexibility in payment arrangements for clients or looking back on lessons from the financial market crash of 2007 to 2008 that led to the Great Recession, the last major economic catastrophe.
Jay Kamlet, who has a solo real estate practice in addition to managing legal coworking space LawBank, said within the past several weeks he has begun offering fixed fees to some clients in transactions such as representing landlords in lease negotiations. He said he decided to take that approach around early February when he realized the scope of the coronavirus’ impact was likely to be significant.
He said the model works in transactions where the work has some repetitiveness to it, such as when he knows a particular landlord will have a certain number of leases to do. With the capped-fee arrangement, he may lose money on a negotiation that takes several weeks but knows he’ll make up for it working on another lease that doesn’t take a lot of time or complex negotiations.
“I can still feel like I’m bringing in the revenue that I need,” he said. “I felt like it was important to be proactive on it.”
Kamlet said he has seen a drop-off in LawBank clients coming in light of government recommendations for social distancing, but he believes clients still feel the office is safe to use. He said LawBank has pressed pause until May on in-person group events, such as sponsored lunches that bring together lawyers in particular practice areas and roundtables involving businesses and consumers.
Damian Arguello, a lawyer who represents both corporate and individual insurance policyholders, said he doesn’t expect the coronavirus’ economic impact to have an immediate effect on his cash flow.
But he also does expert witness work in insurance cases, and he said he does anticipate that will slow down in the near term with courts postponing jury trials at least for the next few weeks.
“Deadlines are getting pushed out; people don’t need to hire experts quite as quickly. They can push off expert reports, discovery cutoffs, things like that. So I would expect a little bit of a slowdown.”
In an email, he said one insurance-related concern he has heard businesses express recently is whether they should increase cybersecurity-related insurance coverage.
Employees working from home may not have the same technology safeguards as their employers have in place at the office.
Rehan Hasan, a corporate attorney who has had a solo practice for a little more than a decade, said the small-firm model allows him to give clients flexibility in fee arrangements and payment schedules during strained financial circumstances.
“That’s not so different from what I do already. I think there are a lot of hard lessons that the profession and the business of the law learned in the financial meltdown of 2007,” he said.
Hasan started his solo practice late in 2009 when the perception was that the well of corporate and transactional legal work had dried up. He said stepping out on his own during that period helped him realize businesses still had day-to-day legal needs that don’t go away even though they expand or contract in different economic circumstances.
“When all this was consuming us on a day-to-day basis, it was up to me not to panic,” Hasan said. “I’ve been practicing for 20 years. There’s not a lot I haven’t seen.” He added the lower overhead costs of having a solo practice compared with a large law firm helps to pass on financial flexibility to clients.
Other lawyers echoed the comparison to the financial market crash in anticipating the ripple through to law practice of the coronavirus’s economic fallout. Kamlet said the development of the coronavirus’s consequences seems to be changing more quickly than during the financial crash.
Lawyers said they are setting aside the trickle-down of the coronavirus’s economic fallout on their businesses. Right now they believe it’s important to understand how they can serve their clients in ways that are most sensitive to their circumstances in the current uncertain times, and goodwill efforts will pay off in their relationships with clients. Kamlet said this is a time for lawyers to be “giving and not getting.”
“A big function that I’ve been serving is not legal, lately,” Hasan said. “It’s really being an open ear to listen and give counsel. They call us counselors at law, and times like this certainly turn us into counselors.”
—Julia Cardi