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Public health

How can law firms survive the novel coronavirus crisis?

Image from Shutterstock.com.

When it comes to figuring out what to do with your law firm in the midst of the COVID-19 pandemic, lawyers should think about two things: who has legal needs and the ability to pay.

“The first thing you need to do is determine if your business is a viable model right now. Marketing something that people don’t need or can’t afford is very problematic because you’ll be turning the wheels, ”says Lawrence Kohn, a Los Angeles-based business development coach who works with lawyers.

If you are a lawyer whose practice is frozen in light of on-site accommodation orders across the country, or if you have a job but your clients have lost their ability to pay you, now is the time to make a decision. brainstorming, focusing on how you can keep your business afloat.

Staying in business can include negotiating with creditors on your own behalf and tracking new grants and business loans, according to Jialan Wang, professor of finance at the University of Illinois at the Gies College of Business in Urbana-Champaign. .

“It really is an unprecedented crisis. Keep as much money as you can, but if you need a loan, get one and take care of everything else later. The no. 1 priority for a small business is to stay alive, ”says Wang.

She also advises asking homeowners and creditors to negotiate payments, and setting aside some time each day to track information services to see what kinds of small business grants related to COVID-19 are available from municipalities. , states and federal agencies.

“Maybe smaller law firms can come together and have a Google document or an email distribution list to stay on top of the really important policies being rolled out,” Wang suggests.

Larry Kohn

Laurent Kohn.

When it comes to business loans, she says creditors usually want to see applicants’ credit history and how much money their businesses have made. Additionally, as law firms tend to be light on collateral, lenders may consider partners’ personal assets.

Additionally, she says community banks and credit unions might offer the best business lending options, and lawyers might consider alternative lenders as well.

“Think otherwise. Amazon and PayPal have become huge lenders for merchants on their website. They could be a lot faster than banks,” says Wang.

According to Lucian Pera, a non-traditional loan would violate the rules of professional regulation of lawyers. In Memphis, Tennessee, a partner at Adams and Reese, he frequently advises attorneys on professional liability rules and previously served as chairman of the board of directors of the ABA Center for Professional Responsibility.

“Assuming these are simple loans, with ordinary business terms, I see no problem that would be different from a loan from a traditional lender. However, I would see the opportunity for lenders who handle payments from clients to lawyers to come up with creative terms or tools that might go against certain ethical rules, ”he wrote in an e -mail to ABA Journal.

If you already have a cash flow problem, sometimes taking on more debt is a bad idea, depending on loan terms and cash flow expectations, says Robert Markoff, a Chicago lawyer who represents creditors.

“If you’re in a hole, stop digging,” he advises, saying negotiating forbearance with creditors is a better idea. Additionally, many creditors stopped outgoing collection work this week, and lawyers might consider taking the same approach, Markoff said.

“We must understand that the number one concern of consumers is their safety and that of their families. We’re talking about food and shelter, ”says Markoff. “Don’t just think of today, think of tomorrow. What will give you a better relationship with your client? Give them a bit of a break if they have problems.

In terms of attorney downtime, given that most courts are closed and deals have ceased to be closed, Markoff advises reaching out to former clients to see how they are doing and to find out if they have. legal needs. This is something Kohn suggests as well, but he advises to be careful.

“It’s a balance between being compassionate and helping people, but not getting sucked in by people who can’t pay you,” says Kohn, whose website includes an app that helps people with things like innovation skills analysis.

“We teach people to document all the possible ideas you can come up with, not ‘I’ll think about it later’. You won’t do it; our minds are rushing now, “says Kohn, adding that its app asks basic questions about ideas, such as” Why do you think this is a good idea “and” Is it a good idea at the moment. , or maybe later? “

In addition, good ideas could be improved by discussing them with others.

“You need systems to stay engaged in the brainstorming process. The most important thing is to talk to people you trust. It means calling everyone you can and ranking all the time available with it, ”says Kohn, adding that brainstorming could be combined with networking.

“Create brainstorming videoconferences, get five or six people together and make an appointment to share ideas,” he advises.

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