Commercial awareness – COVID-19 (part 1)

In the first of our commercial awareness series, we talk about how COVID-19 has changed the legal industry as we know it.

Introduction

COVID-19 has caused major disruptions to pretty much every economy and industry in the world, and the legal industry is no exception to the effects of COVID-19. Thankfully, due to the nature of the job, lawyers have proven to be very adaptable and resilient to the current circumstances. With firms, lawyers and clients now adapting to the “new normal”, this article explains how the legal industry is coping and the trends that we are likely to see within the sector.

Flexible Working

With the majority of lawyers being forced to work from home since early 2020, the days of 5 days in the office are likely to be over. Historically, law firms had always been reluctant to embrace remote working due to the perception of lack of productivity and a fear of diminished quality of work when lawyers are allowed to work from home. What recent experiences with COVID-19 have demonstrated, is that lawyers are billing just as much (market conditions aside), and indeed, more likely to work longer hours at home than at work, while delivering top quality work to clients all the same.

Equally, working from home has proven to be an easy way to help with the work-life balance of lawyers, particularly those who are parents. From hours saved from commuting to increased facetime with family, remote working clearly has its benefits. Whilst office working is unlikely to be eliminated in its entirety, it is probable that law firms would start to allow its employees to work from home 2-3 times a week. Indeed, as at the time of writing, Linklaters had already implemented an agile working policy which allows its employees to work remotely for between 20-50% of their time – other firms are likely to follow suit. However, whether cultural attitudes and traditional hostility in Hong Kong towards flexible working would shift remains to be seen.

Client meetings

In the last six months, the majority of client meetings have gone virtual. Whilst it is impossible to replace human interactions in person, COVID-19 has demonstrated that many meetings can take place online effectively. However, this presents a number of problems for law firms and their clients. Will the lack of face-to-face meetings affect a law firm’s anti-money laundering obligations? Will such virtual meetings change the place of central management and control of a company, and thus unintentionally altering the tax residence of the company? These are questions that lawyers will need to be conscious of in our “new normal”.

Remote Hearings

Similar to commercial and corporate lawyers, dispute resolution lawyers, barristers and judges have also had to adapt to the challenging circumstances arising from COVID-19 with hearings moving online. In response, both the Hong Kong and English Courts have issued guidance on remote hearings. Zoom and Skype for Business have also become the go-to venue for arbitration hearings, with leading institutions issuing guidance notes and protocols on virtual hearings addressing topics such as security breaches, procedural issues and service of documents. Many of the technologies and case management techniques are not new, but COVID-19 has served as a reminder that the parties, their counsel and tribunals have these tools at their disposal to improve efficiency and mitigate potential delays (even those caused by the pandemic).

Building new and existing relationships

From a business development perspective, COVID-19 has certainly made it more difficult for lawyers to maintain existing relationships with clients. Whereas previously it is commonplace for lawyers to go for coffees and dinners with clients, it can be observed that law firms have made a conscious effort in holding more webinars on topics that are relevant to existing and prospective clients. Similarly, publications and insights on legal developments have increased during the pandemic such that clients can stay abreast of the ever-changing legal landscape.

COVID-19 has also presented significant challenges for vacation scheme students, trainees and lawyers who are starting at new firms, many of whom have had to start remotely without knowing anyone at the firm. To assist with the integration of new joiners, many teams within law firms have been holding virtual social events (e.g. quizzes and virtual wine tasting) so that new joiners are not hung out to dry. In any event, for vacation scheme students and trainees who are joining a new team, it is always advisable to reach out to others in the team and introduce yourself!

Graduate recruitment

Perhaps most importantly for aspiring lawyers, the most important issue relates to ongoing graduate recruitment and how COVID-19 affects the number of training contracts in the market. Depending on how long it takes for the economy to recover, the number of training contracts may be reduced for the foreseeable future. It is therefore crucial that prospective applicants prepare the best they can before they apply for vacation schemes/training contracts to ensure they are in a position to succeed despite current market conditions.

To find out how we can help you, please get in touch here.