Posted September 15th, 2021.
The return to normal expected by now did not come to be. Law firm leaders have learned now to deal with that challenge.
By Andrew Maloney
What You Need to Know
- Most firms’ expectations for what the pandemic would entail did not match up with reality.
- Law firms and surveys suggested the industry would be back to normal by the second or third quarter this year.
- Analysts and firm leaders say the legal industry should continue embracing flexibility and change to continue making the most of a tough era.
Eighteen months into a worldwide pandemic that forced them to innovate and overcome unprecedented challenges, many law firms remain staggeringly profitable. Firms and their lawyers have not only been resilient, they’ve been nimble, adjusting to a new way of working and setting records for productivity in the process.
The question that remains is whether they will stay flexible after the crisis has passed. Some firm leaders indicated that the pandemic has permanently changed their mindset around planning and experimentation with the business.
While defying expectations with big gains is a win, firms have also underestimated COVID-19 at times, punting on vaccine measures that ultimately became mandatory, and delaying office reopenings due to lingering uncertainty and staff resistance.
Multiple firm leaders and analysts said the latest wrench in their plans has been the delta variant. The increased spread of the virus—and resistance by many to the rollout of vaccines—has thrown off many firms’ expectations.
About 75% of big law firm general counsel in October 2020 said they expected a “return to normal” in either the second or third quarter of 2021. An additional 12% said it would happen by the fourth quarter. It would be hard to argue that’s gone according to plan.
But what counts as normal, anyway?
“Did we return to normal from an economics standpoint, or did we exceed it? What do we mean when we say that?” said Scott Yaccarino, a partner at Empire Search Partners in New York. “It’s such a moving target. I think I and a lot of others have started to let go of the assumption that how we used to define normal is how we’re going to define normal in the near future, too.”
Indeed, successful companies in tech, life sciences and other industries have thrived by accepting they won’t get everything right, and operating in a sort of constant “beta” mode.
Some law firms have adopted that mentality, embracing openness and trial-and-error when it comes to things like office reopenings. David Sanford, chairman and co-founder of the 50-attorney plaintiffs’ firm Sanford Heisler Sharp, noted earlier this year that his firm’s office-return policy, which uses attorney tenure as a variable in how many days lawyers should spend at the office, is “definitely an experiment.”
Freeborn & Peters co-managing partner Joe Fogel also said his firm was “beta-testing” its in-office policy, and acknowledged many of their previous forecasts for how the virus would behave and how people would respond to it were off.
“We spent a lot of that time trying to predict where things were going to be two or three months out,” Fogel said earlier this year. “While we were well-intentioned, we were also almost always wrong about where things were going to be.”
Harris Kay, Chicago office managing partner at the financial boutique firm Murphy & McGonigle, said one of the key lessons he’d learned from opening the firm’s Midwest outpost during the pandemic last year was to be flexible.
“I think that you have to be flexible because it’s not just the lawyers, it’s also the clients, and they’re making their own decisions on working from home and how to handle that and maintain security. And that’s been very much a part of it—counseling clients on those issues too,” Kay said. “So, I think you really just have to be flexible.”
Rick Ginsberg, partner in charge of Cooley’s Chicago office, noted another relatively unforeseen consequence of the pandemic is that work between offices across the country has gotten much more seamless. That increased collaboration is a benefit for firms and firm leaders who embrace flexibility.
“It’s hard to disagree with that. You have to be flexible, more so than ever, in order to survive. But not just to survive—to thrive,” he said.
For better and for worse, most law firms didn’t imagine they would be where they are right now. What does that mean for an industry in which predicting and projecting the future is so crucial?
Firm leaders and analysts say it’s more important than ever to embrace flexibility, be opportunistic, and work at letting go of old assumptions.
“Firms at the end of the day are subject to the successes and failures of their clients, right? It’s still a service business. And the same question you’re asking at the firm level exists at the client level, too,” said Yaccarino, of Empire Search.
He added, “I don’t think banks and private funds and the people involved in capital markets two years ago thought that this is what the world was going to look like, either.”