Much thought has been given to the current moment. So many elements of this pandemic are unprecedented, so it deserves every drop of ink spilled to examine it. But what happens next? What will law firms need to do to be successful in 2021? Are they hurting their cause now by being reactionary and carrying out layoffs?
Firms would be wise to not listen to the panicky devil on their shoulders. All economic indicators suggest that this downturn, while catastrophic for many workers, is very different than the one we experienced in 2008–2009. Therefore, the reaction also needs to be different.
In 2021, there will be hiring. By my estimation, layoffs that are occurring now are not in line with the dip in business/collections. I am seeing firms in San Francisco that have fought tooth and nail to hire a certain type of associate—patent litigators, corporate mid-levels—but are now letting them go. I fear this is shortsighted. The cost of hiring for these roles in a few months may significantly exceed the holding cost of these associates for the near term even if they are underutilized. We must learn from the last downturn. When firms have asked me to locate class of 2010–2013 real estate associates for them, there are only a handful in the state of California. Firms didn’t bring associates in to do real estate for several years or laid off or retooled them. This wasn’t so long ago. Firms would be wise to avoid these same mistakes and protect the talent they’ve worked so hard to attract.
There will be litigation. To be fair, there’s always litigation. But I foresee that it will continue to tick up, as companies fight for their piece of the shrinking pie. The litigators I have spoken to have, as a group, expressed that they continue to be working to their full capacity. One aspect of litigation that is worth considering is the potential health risk involved in appearing in person in court. There may be associates who are no longer willing to do so, including those with pre-existing conditions. Firms may have to shuffle their teams depending on willingness to both travel and appear in person.
There will be M&A activity related to distressed assets and sectors. There will be bargains to be had. As the smoke clears, companies that are feeling stable will be able to acquire assets that were previously pipe dreams to diversify their portfolios. Even in the absence of traditional M&A transactions, those lawyers will likely be kept busier than they are now by strategic alliances. Current M&A associates should be actively learning from their peers who are familiar with the other side of the balance sheet.
Privacy is going to grow as a practice. As the world exists even more online than it was before, concerns about breaches, data security and the simple sanctity of the one-to-one video call are taking center stage. Privacy was gaining steam as a critical piece of every firm’s arsenal before this; that is dramatically truer now. It seems that many of a firm’s technology transactions lawyers should be working on their CIPP qualifications ASAP.
The battle for tech-forward clients will heat up. As a result, partners may play musical chairs as they are (virtually) wined and dined by competitors willing to pay handsomely to bring them and their clients onboard. While representing bold name tech companies (or those on the cusp of becoming so) has always been worth bragging about, many firms are telling both potential joiners and current lawyers that they are well-positioned at the moment because they represent these behemoths whose services are in unprecedented demand. An associate at a Bay Area indigenous firm told me, “We have a lot of Amazon’s work, so I think we’re OK.” And he’s probably right. Associates considering a new firm would be well-advised to start by looking at the population of clients served by the group they’d be joining.
It appears that 2021 will be much closer to “business as normal” if firms are thoughtful and agile enough to make the small pivots necessary to deploy and retain their talent.