Amid the fast-paced consequences of this global COVID-19 pandemic, it is already a given that every law firm must now adapt to dramatic and rapidly changing circumstances. Nowhere is that more evident than with the client industries that your firm has been serving as this crisis winds down.
For many of your clients, the scale of change is unprecedented. The world may be embarking upon a Great Reset in which the status quo of nearly every industry will be called into question. This crisis has upended everything, including your clients’ mindsets, and this means that in order for you to be an effective and trusted adviser to those clients, you need to have members of your industry team glean what is changing and identify specific insights that will help your clients either adjust or completely pivot their business strategy.
Monitor Your Client Industries
Whether you’re ready for them or not, being aware of emerging trends and new developments and can keep your industry group responsive. Indeed, the type of research your team need to be constantly conducting can give your group the knowledge to make decisions, but also move your firm past the competition. To stay on top of industry-related market information, your team should be:
- reading relevant industry journals and industry association newsletters;
- surveying your clients to solicit first-hand feedback, and maintaining your network of experienced industry advisors.
- keeping an eye on data and other market reports released by industry analysts, and listening to what large consulting, accounting, and executive search firms are identifying as key industry trends; and
- following any statements or interviews done by key industry leaders, as well as their podcasts and videos.
Have each member of your industry group voluntarily select some of these ways to invest time in monitoring. Then initiate an organised monthly discussion among your team to formally organise, codify, and analyse the trends they discern as most important to their clients. Then, determine action plans around them.
Looking at what has been transpiring over the past few months, here are some of the trends that I have detected and been monitoring.
Overall Business Climate
A troubling new survey by CEO Magazine reveals how deeply the impact of COVID-19 has spread through American businesses, with 68% of the CEOs polled experiencing declines in revenue so far this year, and a stunning 84% expecting declines in April.
Meanwhile, a new poll from Deloitte, conducted between April 8 and April 10 of chief financial officers in the US, found nearly 60% of CFOs thought their operations might return to “near-normal” by the end of the year; with only 12% being bullish enough to anticipate a recovery by the end of June. A concurrent survey by PwC showed that two-thirds of their respondents may defer or cancel planned investments in facilities, IT, and workforce through 2020.
The realistic threat of a prolonged economic downturn and the uncertainty it brings are significantly influencing overall client attitudes. This may well lead to a disruption of normal buying behaviors as clients become more restrained about how, when, and where they spend their money. Uncertainty about the future will be paralysing for some and motivating for others — but everyone is re-evaluating what truly matters to them and why.
Potential Impacts on Your Firm
There’s no definitive playbook for our current scenario, and no one knows for sure what the world will look like after this crisis has abated — but we can likely expect an accelerated evolution of the current trends in the legal industry to continue, albeit on a more rapid timeline.
Working from Home — The most obvious of changes may already be evident to lawyers currently working from home: The realisation that long-term remote working is both technologically possible, more cost effective, and seemingly more productive. Counter this to the time and cost wasted commuting back-and-forth to some high-rent downtown structure.
Don’t stop engaging with your teams; don’t stop engaging with your clients; don’t stop having client meetings or client conferences or continuing legal education or insight sessions — just convert the way you do it to the virtual world. Pursue shorter and more frequent communications, particularly to celebrate a success and let people feel there is some business-as-usual going on. Ask your team: “What’s everybody doing today? And is everybody okay? And what do you need to get done that might be challenged because you’re working from home?”
Travel — We will dramatically change our views on how, when, and where we need to travel, and remote meetings will soon evolve into remote trainings and event attendance. This will be the beginning of a totally new era of remote participation — Zoom will become the new YouTube.
Virtual Reality — While virtual reality (VR) has thus far struggled to go mainstream mostly because of the high cost of headsets and the technical idiosyncrasies associated with virtual designs, I expect to see a renewed emphasis on VR programs to help with everything from socialisation and substantive skills training to mental health support.
Digital Literacy — Because of our social isolation, digital literacy has jumped dramatically and digital marketing will likely follow. That means you need to research where your clients can be found online, and how different approaches and tactics might impact your success in reaching them. If digital isn’t already a fully integrated part of your client outreach plans, you should start now.
Right now might be a good time to develop your plan for when things start turning around — because they eventually will. Here are some suggestions and some questions to ask yourself:
Assess the Impact — What is the new economy and how will it impact our client industries? How will specific clients be impacted in the mid- to long-term? What have we learned?
Your industry group and your firm should immediately initiate a special cross-departmental task force to identify, codify, and consider what the firm has specifically learned from this disruptive period and how it can strengthen its market position and business operations going forward.
Develop your Growth Strategy — How can we grow and be profitable in this new environment and outperform competitors? How should we reposition our investments into the right growth initiatives?
This pandemic will force companies and their law firms to be more efficient when it is all over. The disruption of the current situation is going to accelerate change around digitisation and automation, and any tech-enabled tasks. Think about what your clients will need going forward, whether it is to take advantage of a business opportunity or deal with the downturn on their business, be that through a merger or restructuring, or through regulation.
Go on the Offensive — How can we best develop new business that’s driven by the new behaviors of our clients? How can we identify good organic growth as well as merger opportunities?
Start thinking about what the new normal is going to look like, how and where you might seize the best opportunities, and how you could refocus your resources to capitalise on those opportunities. Many are going to use this time to launch entirely new services to address entirely new client needs — will you?
This article was written by Patrick J. McKenna, an internationally recognised author, lecturer, strategist, and seasoned advisor to the leaders of premier law firms. Patrick’s article was originally published in Legal Executive Institute, a Thomson Reuters publication.