Covid-19 Has Disrupted the Legal Industry

• Publication year: 2020
• Author: Carolynn Beck and Conor McDonough

COVID-19 Has Disrupted the Legal Industry

Carolynn Beck and Conor McDonough

Carolynn Beck is an experienced commercial litigator licensed in California, the District of Columbia, New York, and Virginia. She handles a wide range of matters, including complex business litigation, and labor & employment litigation and counseling. She has counseled and advised business owners and employers, and has represented clients ranging from individuals to Fortune 500 companies.

Conor McDonough holds a Ph.D. in Neuroscience from the University of Pennsylvania, along with a J.D. from Fordham University. He focuses on IP litigation across a range of diverse technologies and has also represented clients in trade secret/ trademark/copyright litigation, commercial contract disputes, and class actions with a view to promoting social justice.

There is no doubt that the COVID-19 pandemic has had a significant impact on the legal industry. At the beginning of the pandemic, law firms who had failed to adopt remote working technology for their lawyers and staff grappled with new social distancing limitations on their traditional approach to practice. Some firms were forced to furlough or lay off their people, and many well-established firms braced themselves for the predicted lack of productivity in the months ahead by reducing partner draws and cutting associate salaries.

Compounding these issues, courts varied in their approaches to the pandemic, requiring multi-jurisdictional attorneys to adjust to more than one new litigation normal.¹ Some courts quickly transitioned to virtual hearings, while others simply shut down for months and forbade new filings. Some court systems had previously adopted electronic filing methods, or quickly adjusted to allow attorneys to do so, while others required lawyers to submit their filings by mail, causing additional slowdown in the progression of cases. Outside of court, prudent lawyers started conducting depositions and witness interviews remotely to observe social distancing rules. The increased need for remote depositions, typically conducted via videoconferencing software, presented, for some lawyers, novel logistical and security challenges.

In other words, the legal landscape has changed rapidly in the last few months. Distancing requirements have forced a decade's worth of technology transformation in the legal industry into the span of mere months.² Some firms are finding the adjustment easier than others.³ A May 2020 survey from Martindale-Avvo found that 81% of surveyed law firms had decreased revenues in the wake of COVID-19. ⁴ Of those firms, 27% reported that revenue had declined by more than half since the start of the COVID-19 pandemic.⁵ It is not all bad news, however. It is too early to predict with any certainty whether the technology changes will be permanent, but initial data and anecdotal evidence seems promising—a recent survey conducted by MyCase indicates 80% of law firms have transitioned to working remotely, 64% of law firms have been using videoconferencing tools since the beginning of the pandemic, and 25% of law firms upgraded hardware (such as laptops and phones).⁶

A majority of surveyed law firms reported transitioning to working from home in a week or less, with 6% taking two to three weeks to adapt, and 4% still transitioning.⁷ Some are predicting the COVID-19 experience may motivate previously skeptical law firm employees to buy into legal technology.⁸ And where advances in computer sciences have led to technologies that may supplant or heavily supplement certain aspects of legal practice, being aware of technology developments can provide lawyers access to tools that allow them to stay nimble.⁹

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All Law Firms Should View This as an Opportunity to Make Long Overdue Updates to Their Legal Technology

The COVID-19 pandemic has already been a catalyst for change to firms who resisted updating their data and staff management practices pre-pandemic. And law firms who had prepared their employees to work from home long before nationwide lockdowns and closures of office spaces continued with business as usual in March of 2020.¹⁰ Though the legal field is steeped in tradition, it is not without its fair share of disruptors who have long been pushing for a change in the way legal work is done. As observed during the aftermath of the 2008 financial crisis, many law firms on the forefront of innovation, technological or otherwise, saw significant successes.¹¹ Similarly, the COVID-19 crisis has led to a reassessment of law firm structure and culture by law firms and clients alike, including, most obviously, the viability of remote work.¹² The pandemic has taught us that simply adopting established, tested technologies can result in significant operational resilience and competitive advantage. In addition, there are reasons to consider the ethical obligations of competence as related to technology. A majority of jurisdictions have adopted recent amendments to American Bar Association (ABA) model rule 1.1, comment 8: "a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology."¹³ Theoretically, the failure to implement basic technology measures allowing for more secure storage and/or transmission of confidential client data could see attorneys running afoul of this rule.

The May 2020 Martindale-Avvo survey has indicated that more than 50% of lawyers are planning to allow their staff to work remotely in some fashion once the pandemic is over.¹⁴ For firms that have been forced to pack a decade's worth of adoption of technology into a span of mere months, the prospect of making these changes permanent may be daunting. However, being properly equipped for remote work allows firms to implement overhead-cutting measures—most significantly, the real estate demands of most traditional law firms, along with the attendant costs associated with providing office space to all their lawyers.¹⁵

As Law Firms Update Their Technology They Must Do So Thoughtfully

There are a multitude of relevant security and ethical considerations law firms should be prioritizing now that the dust is starting to settle and remote working legal technologies are becoming more prevalent. In addition to rule 1.1, ethical rules relevant to consider as attorneys adopt such technology include ABA model rules 1.6(c) (lawyers must "make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client"), 5.1 (Responsibilities of a Partner or Supervisory Lawyer), 5.2 (Responsibilities of a Subordinate Lawyer), and 5.3 (Responsibilities Regarding...