After Coronavirus Crisis Passes, Lawyers Expect Financial Stress, Wider Use of Tech

After Coronavirus Crisis Passes, Lawyers Expect Financial Stress, Wider Use of Tech

3.24.2020

By Kathleen Lynn

No one knows when, but at some point the coronavirus will recede and the law profession will emerge into a changed world:

• With legal activity choked off by the pandemic, law firms may be forced to lay off — or delay hiring — attorneys and other staff or may even shut their doors.
• Some types of firms, such as bankruptcy firms, may end up with more work if the pandemic throws the nation into a recession.
• And – on a more positive note – attorneys and courts will be more at ease with technology and more willing to hold conferences and hearings by phone or video, after being forced to do that by the virus.

Those were some of the predictions offered in recent interviews about the likely longer-term impact of the coronavirus.

“The scale of the crisis and the impact on the economy – we have not experienced anything like this, I believe, in American history,” said NYSBA President Hank Greenberg of Greenberg Traurig in Albany. Even catastrophes like the Sept. 11, terrorist attacks and the 2008 financial crisis didn’t force an abrupt halt in business and social activity worldwide, he pointed out.

If the business shutdown pushes the national and possibly global economy into recession, the legal profession will likely lose significant revenue. Greenberg said it is too soon to predict whether there will be job cuts, but he sees a profound impact on the profession, both in the short term and the long term.

“Lawyers are hurting, like every segment of the economy, especially solo practitioners and lawyers in small firms. This is having a dramatic impact on them,” Greenberg said. “I think many large law firms have reserves and rainy-day funds that will help them weather the storm.”

 NYSBA President-elect Scott Karson of Lamb & Barnosky in Melville also sees difficult times ahead, with the potential for layoffs, lower incomes for partners, and even firms shutting their doors.

Many businesses and individuals won’t be able to retain lawyers “because everybody is taking a big hit,” Karson said.

Other lawyers speculated that law firms serving hard-hit industries, such as hotels or restaurants, are especially at risk, and could fail or be forced to merge.

“This reminds me of early 2009,” after the financial crisis, said Sarah Gold, a solo practitioner specializing in business law in Albany. “A lot of firms put the brakes on everything and said we’ve got to wait to see how this plays out. A lot of firms now may have to wait for the business to come back in the door, and they may not be in a position to hire right away.”

Gold expects her own practice to feel the impact.

“I have a lot of clients in the process of doing things that will have to wait — like leasing a space or selling their business,” she said. “While I’m still getting new work, it’s going to be limited and may dry up.”

In the face of these challenges, Gold will rely in part on her income from a side job as a lecturer teaching business law and ethics at Rensselaer Polytechnic Institute in Troy.

She predicted that the law firms dealing with the fallout from the pandemic will be the busiest after the crisis passes.

“There’s probably going to be a huge uptick in bankruptcy filings, and possibly commercial litigation because of deals that can’t go forward,” Gold said.

Michael Billok, a lawyer representing employers at Bond Schoeneck & King in Saratoga Springs, also expects more bankruptcy filings, as well as an increase in employment law work as employers try to adapt to changes that emerge from the crisis. For example, he said, the Americans with Disabilities Act generally forbids employers from taking workers’ temperatures, but that’s now allowed in the face of the coronavirus. That raises the question, he said, of whether workplaces could take temperatures during future flu epidemics.

Tara Anne Pleat of Wilcenski & Pleat in Clifton Park, chair of NYSBA’s Elder Law and Special Needs Section, said that in many cases, attorneys will have to use their best judgment to handle matters under current conditions, then revisit them when the pandemic is over.

For example, Pleat said, she has clients who want to write or update their wills. Normally, they would come to her office to sign the wills in the presence of two witnesses, but now clients are restricted to their homes. So in some cases, clients are signing their wills at home, in video consultation with the lawyer and witnesses. Once the pandemic passes, Pleat said, the wills can be re-executed with proper formality in person.

The pandemic is likely to make courts and attorneys more willing to conduct legal work by telephone, email, video conferencing and other technology, according to most of the attorneys interviewed.

“What the crisis is doing is accelerating changes within the profession that were underway, most notably from a paper-based profession to an electronic one,” Greenberg said. “Lawyers, by force of circumstance, are going to have to be communicating with clients and interacting with courts online.”

“I think the major change will be less travel and more people working at home and working remotely,” said Dan Kohane of Hurwitz & Fine in Buffalo. Attorneys and judges will become more comfortable with technology during the pandemic, and continue doing business that way even after the danger of infection has passed, he predicted.

“It’ll be just as effective once we get used to it, just as powerful,” Kohane said. “It makes sense. Why is it better for me to get on a plane to travel to New York City to argue an appeal, when I can do it less expensively and just as effectively from my office?”

There is a cost to remote work, Kohane and others acknowledged.

“The only thing you miss is the interrelationship between the attorneys at the office,” said Kohane, who says he enjoys working with younger associates. “Mentoring is much easier face to face,” he said.

That issue will have to be dealt with, but there’s no going back, he added: “We have to change. We have to recognize the beauty of technology.”