Many lawyers are worried about the future. They are worried about their practices, which are their businesses, and whether they can survive the current pandemic.
Others are confident that they can keep their practices intact, or at least continue at a reduced level, but are concerned about what the future will look like. How will their practices be affected when we return to some form of normalcy? What should they be planning now to take advantage of the opportunities that will be presented by this change?
I was asked these questions this week at the Wisconsin Bar Practice Management Discussion Group, and of course I am always willing to voice my opinion.
The current situation is different from the great recession in 2008-2009. While many law firms stopped hiring at that time, and even had layoffs, the legal system remained open and operating. This pandemic has at least partially closed our legal system.
Courts are moving trials and hearings out into the future. Some actions cannot even be filed. For example, Wisconsin Emergency Order #15 prohibits the filing of foreclosure and eviction actions through May 26. Federal laws are curbing the enforcement of student loan and mortgage defaults.
What this means is that a return to normal will also unleash pent-up demand for lawyer services, especially litigation. This does not mean that there are no lawsuits being filed now, only that there will be a substantial increase once Stay at Home Orders are lifted.
We can expect to see contract disputes dealing with defaults due to coronavirus. Will the virus fall under force majeure clauses? Will the pandemic be considered an Act of God, justifying non-performance?
Similarly, we can expect to see increased litigation over insurance coverage. Many policies include business interruption coverage, and courts will be left to decide whether a pandemic qualifies for such coverage.
Labor and employment lawyers will be busy. Layoffs and workforce reductions almost always bear claims of discriminatory or unlawful filing. This pandemic will no doubt give rise to lots of safety issues.
Many of the fatalities from coronavirus are clustered in nursing homes and assisted care facilities. We can expect a rash of negligence claims being brought against such institutions.
These may include class actions. We can also expect class actions to be brought against cruise lines, airlines, and a number of employers.
Predictions are that divorce filings will spike sharply. People who are remaining together because of economics will be much more ready to take action once they have income again.
My practice area, bankruptcy, will undoubtedly be a busy one. Right now I am counseling people and businesses about how simply to survive the Stay at Home period that will require liquidity and cash.
I have encouraged both clients and lawyers to apply for the Payroll Protection Plan (PPP) and moderated Virtual Town Halls through the Wisconsin State Bar to share my knowledge. You can read more about the PPP loan here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program or in the attachment provided by treasury.gov: https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses.
Once our businesses re-open I will focus on financial health, getting people solvent again and re-structuring debt so that re-opened businesses will be able to stay open.
COVID-19 is a change for us all. But change always provides opportunity. We have to look for it. Please share your ideas.