Small Law Firms

How Small Firms Are Dealing With COVID-19

Many small firms are experiencing a number of unique consequences from the COVID-19 pandemic.

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It is hard to overstate how significantly the ongoing COVID-19 pandemic has affected the legal industry. Most courts are all but closed, and many states are suspending jury trials for both civil and criminal matters. In addition, numerous law offices are shuttered as attorneys and staffers are forced to get by from working at home. Firms of all sizes are being impacted by the COVID-19 pandemic, and many small firms are experiencing a number of unique consequences from the unfolding crises.

Impact Of Court Closures

As many people within the legal industry are already aware, most courts have suspended in-person appearances for the foreseeable future. The last court appearance I attended in person was on March 13th, and the courthouse at that time was so deserted, it looked like The Shining. Although many courts are still deciding motions on submission, and are holding hearings, conferences, and the like through remote means, court appearances are not happening in all but emergent matters.

Most big firms can get by without court appearances. Indeed, many Biglaw firms and other larger shops do not rely on court appearances for significant billable hours and rather churn their bills mostly on memos, letters, and briefs that need to be written even if physical court appearances are suspended. However, a number of smaller firms rely on volume in order to make money, and need physical court appearances, and travel time to and from those appearances, for a huge chunk of their billable work.

When I was a “street lawyer,” I regularly had three or four court appearances a week, and a deposition every few weeks. Since most of my 44 cases were not too complicated, the vast majority of the hours I billed on these matters were related to court appearances. The average court appearance would take two or three hours, and usually I could bill at least half of my travel time too, so I ended up billing a substantial sum for each appearance. In addition, there are numerous per diem attorneys that almost exclusively rely on court appearances to make a living. Without physical court appearances, many small firms and per diems are only going to bill a fraction of the hours they billed during normal operations, and such attorneys are going to be hardest hit by the COVID-19 pandemic.

Increases In Certain Types Of Work

Although many firms are experiencing business interruptions and other negative effects from the COVID-19 crisis, ironically, one type of legal work has seen an uptick of activity in recent weeks. Many businesses and people hoped to hold events over the next several months, whether it be conferences, weddings, or other types of gatherings. Because of crowd restrictions that have been put into place in many jurisdictions, and other impracticalities, numerous parties are attempting to terminate a variety of event contracts.

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Most landlords and licensors have been relatively agreeable to cancelling events or postponing them free of charge to a point in the summer or fall. However, some of these parties are less willing to cancel agreements to hold such events. In addition, even if parties are willing to cancel events, there are oftentimes disagreements about how much deposit money should be refunded because of the COVID-19 pandemic. My firm and other small shops have seen an uptick in inquiries about event cancellations, and this work can somewhat help blunt the immediate financial impact of the COVID-19 pandemic.

Business Development

The COVID-19 pandemic is also having a substantial impact on the way that small law firms conduct business development. Under normal circumstances, small firm lawyers will typically take business contacts to coffee, lunch, or dinner in order to talk about the potential client’s legal needs and how the firm can help. Now that most restaurants, coffee shops, and other establishments are closed because of the COVID-19 pandemic, face-to-face meetings to discuss new business have become extremely difficult to arrange. Of course, this development is also impacting larger firms, but bigger shops are more likely to have a few large, institutional clients who may go through a traditional request for proposals and pitch process. However, smaller firms that often rely on a variety of clients in order to stay busy are facing a number of challenges in developing new business.

Better Ability To Adapt

It should be noted that on a certain level, smaller law firms may be able to better adapt to the COVID-19 pandemic than many Biglaw shops. For instance, numerous solo practitioners and small firm lawyers already work from home to save on real estate costs and because of convenience. As a result, the home confinements required by the COVID-19 pandemic may not create as much of a disruption for small firms as many Biglaw shops currently face. Furthermore, smaller law firms often have fewer redundant employees and are financially leaner than many larger shops. This may allow smaller firms to better deal with harsher economic realities that everyone may soon face as a result of the COVID-19 pandemic.

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In any case, the COVID-19 pandemic is affecting firms of all sizes, and each shop faces its own challenges based on its practice area, size, and a number of other factors. Solo practitioners and small firm lawyers are facing unique difficulties due to the pandemic. However, because smaller firms are often more flexible in their operations, these shops may be better able to weather the storm caused by the COVID-19 pandemic.

Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

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