4 Ways Legal Firms are Feeling the Brunt of COVID-19
The pandemic has extended its tendrils into every industry on the planet, and yet while the likes of transport, tourism and retail may be hitting the headlines more frequently for the challenges that they have faced as a result, legal firms are also facing coronavirus-related conundrums of their own.
With that in mind, here are a few of the complications caused by the circumstances surrounding COVID-19 which those working in law have been forced to confront.
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Increased staffing costs
The cost implications of staffing your law firm during the pandemic will no doubt have been noted by many decision-makers, especially as during the height of the restrictions put in place by many governments globally, resulting in a downturn in legal work.
Keeping on full time team members who are not able to earn the firm money when there are slow days can make many think twice about expanding their operations, and is likely to continue to cause reduced demand in this sector for some time to come.
Delays to cases caused by the pandemic have hit those firms which operate on a contingency basis the hardest. The longer cases drag on, the longer it takes for a resolution to be found and the more time firms spend twiddling their thumbs waiting to get the go-ahead to take payment when a settlement is finally reached.
Similar complications have faced firms that predominantly focus on business, since the global economy was effectively put on hold for several months in 2020 and all of the mergers and acquisitions which they might otherwise have been paid to oversee have not come to fruition.
Most law firms have not just decided to tread water and wait for the current crisis to blow over; they have been forced to adapt to this brave new era that has emerged now that more is understood about the virus, which means embracing digital tools to carry out their work unhindered.
In a way this can be seen as one of the positive effects that COVID-19 has had; because face to face meetings and in-person court appearances were made impossible, plenty of firms were dragged kicking and screaming into the age of online communication, embracing video conferencing services and other solutions to cater to the needs of their clients and colleagues while working remotely, regardless of the specific discipline they favor.
At a time when demand for certain legal services is down, the temptation to either drop prices dramatically to coax in more customers, or to narrow your client pool and only focus on a smaller subset of high value clients, can be great.
Evidence has shown that the firms which manage to thrive in the wake of past crises, including the 2008 financial crash, tend to be those that are more flexible when it comes to pricing, neither committing to long term discounts nor putting all of their eggs in one basket. A mixed approach, which can include different pricing strategies, will be necessary for many to adopt.
The COVID-19 pandemic looks set to continue shaping events across the board for years to come, and the most important thing for legal firms to do is track the impact it is having and be ready to respond rapidly to new challenges, rather than being overwhelmed by them.
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