In times of economic uncertainty, it is tempting to focus attention principally on business resilience measures. Disruptions in the world around us are causing a number of law firms to ‘hunker down’ and focus on short-term management. This creates the risk of strategic drift at a time when a clear strategy and direction has never been more essential. Not only do firms need to continue to make progress on strategic initiatives in order to avoid falling behind the market and competitors, but they also need to think about how their business and the business of clients will change as a result of the pandemic.
For many law firms, the month of June marks the halfway point in the firm’s fiscal year, a time when leaders begin to more closely assess year-to-date lawyer performance trends, refine year-end financial projections, and evaluate the the need for mid-year partner performance messages. Of course, this June is unlike years past. This June, we face a tremendous amount of uncertainty in the broader economy and also within the legal industry.
Law firm leaders are currently focused on business resilience measures – making the business decisions that will help the firm get through the trough of the pandemic and the resulting impact on the economy, as well as initiating planning for a safe return to the office environment. While these immediate issues are critical and pressing, leaders would be well served to start thinking now about the medium- and longer-term impact that the current situation will have on the legal industry and on their firms.
Today, perhaps more so than ever before, law firm leaders are under pressure. As new and unprecedented world events arise on a nearly daily basis, law firms as businesses and service organizations require new, untested, and unproven leadership approaches. These approaches range from moving the firm’s entire workforce to a remote working environment, to virtual people management, to remote staffing and team coordination, to creative and proactive client service and retention strategies, and to making hard business decisions to preserve the stability of the firm without a clear picture of what the future holds.
In the second and third quarters of last year, economic advisers warned of a potential mild to moderate economic downturn in 2020 or 2021, and in light of those concerns we wrote our July Insight, Managing in a Downturn. At that time, no one anticipated the rapid series of events which have impacted the world over the past 4-6 weeks and the global recession we will likely face over the coming months.