Chameleonic law firms: adapting to a crisis
With economies at a standstill, companies fighting for survival and vulnerable local communities in need of pro bono counsel, the work of law firms has taken a drastic turn in recent weeks. Latin Lawyer speaks to law firm partners to learn about what measures they have taken to manage the crisis in the two months since the first covid-19 case was detected in the region.
Many law firms are busier than ever helping clients adapt to new realities in the covid-19 era. But in the wake of national lockdowns and economic instability, firms, just like their clients, are having to change their colours to safeguard their own operations. “Our economy is much more vulnerable and has fewer tools to implement stimulus plans to overcome the economic stagnation that will follow the crisis,” says Javier Patrón, managing partner at Marval O'Farrell Mairal, of the unique challenges facing Argentina. “The crisis will also bring social unrest, as the unemployment rate is expected to reach at least 10% because of bankruptcies and layoffs. This will of course also impact our firm – so we have to protect ourselves against it.”
Law firms have had to take numerous actions to adapt their workforces to lockdown measures, while keeping up with growing client demand. They have also had to rejig their focus to meet increased demand in specific areas – such as labour, litigation and restructuring, all while financially safeguarding their firms.
When the pandemic hit, the region’s top law firms knew they needed an effective action plan in place in preparation for countries and cities being locked down. “As we monitored the spread of the disease and its very real effects, we started to talk internally about the best actions to be taken. On the day that the World Health Organisation (WHO) declared covid-19 a pandemic, we already had an action plan ready, which was being adapted to events as they unfolded,” says Paulo Rocha, managing partner at Brazilian firm Demarest Advogados.
First on firms’ to-do list was to make sure their workforces were set up to effectively work from home and continue their legal work. Ensuring lawyers had the correct software set up on their laptops, as well as making sure office phones were rerouted to lawyers’ mobile phones so they would never miss clients’ calls, were essential. “We adapted ourselves on all necessary fronts to go on delivering quality services to our clients,” says Pinheiro Neto Advogados’ managing partner Alexandre Bertoldi in Brazil.
Ensuring internal IT departments had the best possible resources to address any queries from lawyers regarding technology was also key to guarantee connectivity issues did not hinder firms’ productivity. “Practically all our lawyers and staff went immediately into remote working mode and making sure everything was fully operational in terms of technology was the number one priority,” recalls Francisco Illanes, partner at Chile’s Cariola, Díez, Pérez-Cotapos. Brazil’s Demarest moved over 700 employees to work from home across the five cities where it has offices: São Paulo, Rio de Janeiro, Campinas and Brasília, as well as New York. Other firms have done the same.
The covid-19 pandemic has made businesses and law firms more vulnerable to cyber-attacks. To protect their operations from hackers or phishing scams, Brazil’s TozziniFreire Advogados invested in its IT system to protect itself from scams. The firm has also trained its staff on how to recognise fake content. “Many people are trying to benefit from the covid-19 pandemic and attract attention through cyber scams, such as phishing and advertisements about fake apps. We have adopted all necessary measures to guarantee our clients’ data privacy,” says partner Fernando Serec.
Other firms have prioritised creating specialised committees that solely focus on crisis management. These committees have helped them implement the right measures at the right time, including making sure health and safety standards are watertight. Teams such as these are generally in charge of updating the rest of the firm with news regarding covid-19, whether that means relaying new legislation, answering questions or sharing information about how the pandemic is impacting the firm.
“We assembled a special covid-19 team made up of partners and administrative staff across the firm, who created a section on our website with daily government measures, articles and FAQs updated on a daily basis,” says partner Guillermo Quiñoa, member of Argentine firm Pérez Alati, Grondona, Benites & Arntsen (PAGBAM)’s covid-19 committee. “This team is also in charge of answering client questions and updating our lawyers on new government measures. All the information is then circulated through our social media and email channels.”
Communication is key. Like PAGBAM, other firms say their website and other technology have been essential in answering questions from clients about the firm’s operations during lockdown. “We are constantly reporting the status of our operations, by mail, telephone, virtual meetings and social networks to our clients as the authorities update quarantine measures,” explains Cristián Barros, managing partner at Barros & Errázuriz Abogados in Chile. “We also created a section on our website, covering all the current legal news with regards to covid-19. We also hold regular webinars for clients.” Many Latin Lawyer Elite firms are also contributing to Latin Lawyer and LACCA’s covid-19 information hub, which brings together legislation and official communications issued by governments across the region.
On the upside, some partners highlight that the rapid move to remote working for Latin America’s lawyers is a sign of how far firms have come in recent years in terms of their use of technology. “The crisis is a window into the future where firms can work 100% remotely, all of which will improve our future operations,” says Marval’s Patrón. “It is a working example of the increasingly competitive advantage law firms have through their use of state-of-the-art technology.”
Some firms are increasing their focus on certain practices that are experiencing spikes in activity. One such area is restructuring, which some firms have decided to strengthen. For example, Brazilian firm Veirano Advogados poached a restructuring partner from Cascione Pulino Boulos Advogados earlier this month.
To accommodate a rising workload, TozziniFreire has increased its practice focus on areas like labour, crisis management, civil and commercial litigation, and consumer law. “As we closely monitor all changes in legislation as well as impacts of other natures that companies are experiencing, we have been able to help our clients navigate this crisis and prepare for an uncertain future,” says Serec. “Some practices are experiencing a slowdown, while several others are highly sought after.”
Barros & Errázuriz is going one step further and trying to anticipate which areas might experience an uptick in the longer term. One such area is M&A, which has experienced an overall slowdown worldwide – but certain deals are likely to increase once the pandemic slows, such as the sale of distressed assets. “In the mid-term, we envisage that M&A transactions will increase as a consequence of the economic crisis,” says Barros. “We expect extensive acquisitions of companies by foreign investors and consolidations in certain industries, which will require substantial antitrust work.”
Other firms have bulked up their accounts capabilities. As the pandemic is restricting some clients from paying their legal fees in full, law firms’ management committees are instructing their accounts teams to analyse matters and fees on a case-by-case basis. “Several of our business partners and clients are suffering from the liquidity crisis and requesting more flexibility in payment terms due to the situation, which in turn is requiring a lot of work from our accounts team to examine cases one by one,” says Demarest’s Rocha.
Some firms are making sure they dedicate time to pro bono work and help their communities when they need it the most. Beneficiaries include hospitals and other parts of society that are heavily affected by the crisis. For example, Bruchou, Fernández Madero & Lombardi helped the Argentine Ministry of Health implement a project to raise funds and strengthen local hospitals by providing equipment to fight the covid-19 pandemic, while Ferrere (Uruguay) was the first local firm involved in the #NosCuidamosEntreTodos (“we take care of each other”) initiative, which aims to raise funds for the national health system in Uruguay. “The firm is currently taking a conservative approach on spending and investments, but we have always encouraged maintaining pro bono work and community commitments,” says Agustín Mayer, Ferrere’s managing partner.
Health above all
Besides technological upgrades and adapting to new working norms, looking after the physical and mental health of employees has been an immediate concern for firms. Galicia Abogados in Mexico sent a survey to all its employees at the beginning of Mexico’s lockdown, with questions about how the firm should address topics like isolation, adapting to remote working and emotional support. From there, the firm implemented an online psychological and emotional support programme for employees, where they can access webinars and exercise programmes to stay healthy. “We’re staying true to our people-centred culture and staying in touch with our employees,” says managing partner Manuel Galicia.
Before the official lockdown was imposed, Brazil’s Demarest began encouraging employees to refrain from things such as face-to-face meetings, and - if recently back from abroad - to self-isolate. "We also tested our communication system to make sure it would work during lockdown. Doing so before the lockdown was made mandatory on 24 March allowed a smooth transition into remote working without disruption” says Rocha.
Though the covid-19 pandemic has done its utmost to leave societies teetering on the brink, law firms are doing all they can to safeguard their operations and come together in this challenging time by uplifting each other through wellbeing programmes and constant communication. “We believe that these are difficult and challenging times for everyone, but most of all we think that when this is over, this experience will make us stronger and even more capable of advising our clients,” concludes Galicia.