4 Challenges for Law Firm Management In 2020

It's been more than 15 weeks since COVID-19 hit pause on what seems like the entire world. When firms were in the thick of it, dealing with government-mandated office closures, Back in April, I wrote an article for Marketing the Law Firm's ALM sibling The Legal Intelligencer about how law firms could navigate the delicacies that came with the global pandemic (see, "Navigating the Changing Landscape Caused by COVID-19." In March, we were paralyzed as we began quarantined life only to be shocked to our cores in late May as our nation became embroiled in social unrest due to continued systemic racism that can no longer be tolerated. Fast forward to now as the country begins to slowly reemerge from quarantine and reevaluate our fundamental values and beliefs that got us to where we are today. Law firms and other businesses alike are defining what will become our new normal. Challenges facing us in 2019, while seemingly very distant, deserve attention in addition to the new obstacles our firms face during what may be a temporary flattening of the COVID-19 curve. Here are four areas that law firms must continue to address to remain on the right side of 2020.

1. Reopening Office Space and Managing Client Expectations

Many firms around the country jumped at their first opportunities to have offices reopen and become fully staffed. At Griesing Law, we are taking a different approach. The health and wellbeing of our entire team and their families is our number-one priority. Yes, we are fortunate that pre-COVID-19, most of our team was already enabled with the tools for remote work. When the forced closures hit, we had very minor hiccups in getting those last few team members onboarded with the right tools to work remotely. Today, even though the closure order has been lifted, we continue to be fully remote. It's critical for us as a firm to support our team while still supporting our clients and communities. For us, client service has not waivered regardless of the location of our team. As client customer service issues in recent years have caused many clients to jump ship from their firms, it's important for law firms now to continue to strive to meet client demands despite office disruptions.

2. Reevaluating Budgets and Partner Compensation

If COVID-19 has taught us anything, it is how to better tighten our purse strings. Budget issues are facing businesses around the country and law firms are no different. From across the board pay cuts to permanent furloughs, law firms have been scrambling to stop the siphon of cash flow at a time when many clients are struggling to pay bills, let alone unwanted legal expenses. With continued budget cuts expected, many firms will also be continuing layoffs. While removing the livelihood of any individual is never something management looks forward to, the coronavirus has shown law firms many things — including that it is possible to be lean in some departments while stilling running efficiently. But I would be remiss to not discuss another area where firms can trim budgets to avoid significant layoffs that could overextend remaining staff: partner compensation — a topic floating around before the pandemic. Small businesses and corporations alike are no longer willing to pay excessive hourly rates especially when the customer service often doesn't match the value paid. In addition, almost every client regardless of size wants to feel the value for every dollar they are spending and no more so than in a pandemic that has affected every person and business around the globe. While high hourly rates for your top partner or associate may not be leaving law firms just yet, a reevaluation of partner compensation must take place. The rise and elevation of a few at the expense of many hardworking subordinates should no longer be tolerated. Those firms who may feel that permanent adjustments to partner compensation are the last avenue to take are presumably more likely to also have law firm cultures with wide-ranging internal competition and discord among colleagues—environments that often exclude women and minorities from rising to the top.

3. Law Firm Culture

And speaking of law firm culture, the topic couldn't be any more relevant today than before. Cultural issues facing law firms were around long before a global pandemic but with the social uprising across America only getting stronger each day, it's more important than ever that firms act — and act now. We already know that clients are taking their business elsewhere when firms are not diverse and inclusive. We also know that some corporate clients could be pulling work from longstanding outside counsel based on their responses to the pandemic (recall my "optics of the pay cut" section in my last article). Firms need to take swift action by not just standing behind a carefully curated statement that on its face shows an inclusive and equitable culture for all. Firms instead must reassess hiring practices and annual reviews, create diversity policies and actually follow them, provide educational content year round and implement and enforce disciplinary policies for those who violate these policies. As more and more Generation Z (the least tolerant generation of inequality) begin to enter our workforces, employers must realize that a zero tolerance policy on systemic issues like gender equity, pay gaps and institutional racism are essential. For any naysayers, simply look out your window.

4. Succession Planning and Thinking Ahead

Many lawyers spend their careers building huge books of business, amassing fortunes and notoriety along the way. But, what good is all that success if there is no one to pass the torch and carry the legacy on? COVID-19 has illuminated what is really important for many people, causing reevaluations of priorities and what now belongs in the back seat. As we emerge from this pandemic, it is a good time to assess our succession planning. Does your firm, or do you individually if you run a solo practice, have plans in place to pass that torch? If not, consider implementing now sponsor programs to build up junior associates to take over or create a networking group of others outside your firm who you can refer your clients when you do decide it's time to put down the legal books.