The longer you do this job, the more your mind wanders to the big moments – recessions, terrorist attacks, political shocks, wars. Yet as I sit here typing this leader in a near-deserted London office, the majority of our team working from home as we try to put this issue to bed, it is a struggle to recall anything that compares to the coronavirus pandemic spreading through the world.
We face unprecedented times – hyperbole typically flung around with abandon until you realise with shock that this time it applies. As I write, London and New York, those famous global cities and the world’s two dominant legal hubs, look within days of total lockdown.
But since people cannot get by mentally without context and narrative, I’ll use the banking crisis more than a decade ago as the anchor, the closest touchpoint to what the profession now faces. The rolling sense of fear and uncertainty is certainly familiar.
At the time of Lehman’s collapse, the profession went in fat, complacent and inefficient and came out shell-shocked and lean. Debt was cut, balance sheets cleaned up, operational management improved. Few law firms failed. That period cut a swathe through the profession and led to job losses on a scale never before seen. Client expectations changed – whether they changed enough is open to debate – and law firms partially listened. In retrospect, there was more nervousness among law firm leaders back then than now – with their biggest clients being the first hit in the post-Lehman age. In many regards, the law currently looks like one of the least directly-impacted industries. But perhaps managing partners have yet to catch up with the speed of this crisis, and the looming threat to cash flow. The relevant point here, obviously, is how the huge promises of state aid for business will work and whether it can keep money flowing to bill-paying clients.
Like the banking crisis, this is an inflection point that will change the world, change business and the profession with it. There will be a sharp economic shock and what emerges at the other end will mean many received wisdoms on issues like globalisation, open borders, state intervention and the role of business are up for revision. We entered the coronavirus crisis as a society dominated by division and identity politics – will we emerge with these concerns seeming as anything more than the trivialities of post-capitalism complacency?
At the prosaic industry level, law firms are now already well into an unprecedented experiment with remote working. It is probable that major changes to the dominant business models of the law will emerge.
Returning finally to the lessons of the banking crisis, this will be another period in which institutional illusions will be brutally stripped away, elevating some firms and individuals and diminishing others. Recent years have seen law firms often badge themselves on soft issues and lofty values. This crisis will put those sentiments to the test. I have covered the legal industry long enough to know that some will fall far short of their rhetoric. But I also believe many will distinguish themselves in how they treat staff, colleagues and clients (and it should be in that order). In 20 years of observing the industry, I still find more angels than devils. The days ahead will determine whether that is wishful thinking or not. Either way, we’ll strive to keep you informed. Take care.
For more details on how the virus outbreak is affecting the profession, see: ‘City leaders take drastic action as coronavirus spreads turmoil across European states and economies‘
