From Legal Adviser to Crisis Manager: How Lawyers are Responding to Clients' Pandemic Panic

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Lawyers assisting clients in times of crisis is nothing new. Clients have long encountered major issues such as cyber attacks, product recall notices, and whistleblowing matters.

But the COVID-19 pandemic presents huge, unfamiliar challenges. With the global economy being plunged into turmoil, business leaders are facing a potentially terminal threat, and clients are dealing with what one Magic Circle partner calls “a new anxiety… one that most have never felt”.

Quinn Emanuel Urquhart & Sullivan London partner James Bremen adds that lawyers are facing a crisis “unlike any other”, and that ​”clients across the globe are dealing with unprecedented levels of stress”.

It is now falling to legal advisers to introduce a degree of calm, and help clients respond to the unprecedented upheaval.

Unfortunately, however, while it’s useful to learn from past crises, “there’s no rulebook for COVID-19″, according to Joanna Ludlam, disputes partner and in the crisis management team at Baker McKenzie.

“Clients across the globe are dealing with unprecedented levels of stress”.

For Reed Smith’s EMEA managing partner, Tamara Box, contractual issues such as force majeure are “being reviewed and considered like almost never before”.

Claire Wills, Freshfields Bruckhaus Deringer’s London managing partner, says major areas of concern for clients are: the urgent need to establish how best to ration scarce goods; managing unanticipated costs or declining revenues; and navigating challenges around business continuity.

But the pandemic has also generated questions around future planning, and adapting to a what the Magic Circle partner called “a new post-pandemic world”. As Quinn’s Bremen says: “The commercial landscape is likely to be very different.”

Areas of concern

For most lawyers Law.com International spoke to, client concerns tended to fall into three main buckets: contractual; regulatory; and business continuity.

Quinn’s Bremen thinks claims around parties being prevented from performing contracts (force majeures) and termination notices have inevitably shot up, as questions around contract frustration abound, with many parties on the wrong side of contracts claiming “economic hardship”.

But for many corporate clients, concerns centre on the international nature of contracts.

Bremen says: “What’s striking is that governments are often putting in place hurdles in relation to enforcement – for example of debts – between domestic parties. But very little is being done to respond at an international level.”

Freshfields’ Wills says, one key area of concern for many is “the limited extent to which businesses are able to collaborate without infringing antitrust laws”.

“The ways in which authorities are responding to the crisis are developing rapidly, with some granting exemptions in specific cases or issuing guidance for companies that are cooperating to deliver essential products and services to consumers.”

“Businesses also want to know what they can do, as well as what they cannot, so that they can formulate strategies to respond.”

But just as important are the immediate regulatory emergencies law firms are having to respond to. Bremen says, as global commerce comes to a halt, “regulatory issues require very significant, immediate, advice”, with international lockdowns having “an immediate and critical impact on businesses of all sizes”. He adds: “Businesses also want to know what they can do, as well as what they cannot, so that they can formulate strategies to respond.”

Baker McKenzie’s Ludlam says one of the biggest concerns clients have relates to employment issues. Clients ask: What do we do if the workforce can’t work from home? And how can they access government funding? 

Similarly, a Magic Circle partner says his firm is regularly asked about how to deal with staff restructuring to adapt to the ongoing crisis.

How are firms responding?

As one U.S law firm partner says, a lot of what firms are doing now involves “talking clients through their options and scenarios and providing a calm, experienced sounding board to chart the waters ahead”.

A wide range of firms have put together taskforces comprising partners from individual sector groups, such as for retail and travel and leisure.

But as clients come to terms with high stress levels, lawyers, who are also subject to lockdown, are required to be on hand to respond to these deep and complex worries. So law firms are deploying technology at a rapid rate.

One key means for delivering crisis management while everyone is confined to their homes have been platforms like Zoom, which enable virtual face to face meetings.  

“It’s often hugely helpful to have a video call with someone whom has seen it all and can be objective and present the available options.”

Quinn’s Bremen says: “People managing these issues are often sitting at home, unable to leave, trying to manage what seems an unmanageable situation. It’s often hugely helpful to have a video call with someone whom has seen it all and can be objective and present the available options.”

Quinn has also produced a series of short videos on key issues for clients that will be coming onto its social media in the next week, and will be made available on the firm’s LinkedIn and YouTube channels. His firm’s crisis management team, led by firm founder John Quinn, also meets virtually every couple of days. 

Baker McKenzie’s crisis management team is hosting webinars and conference calls and has established an “in-depth employment law support platform”, while U.S. firm Wilson Sonsini Goodrich & Rosati and its technology subsidiary SixFifty have worked to develop a set of free automated legal tools to help clients navigate coronavirus-related employment issues. 

The toolkit takes advice from the firm’s employment lawyers and combines it with a questionnaire system to gather information from employees impacted by COVID-19 in order to help clients manage tasks and automate important communications.

Technology has allowed adaptable firms to stay nimble in this time of crisis.

But more important is the need for firms to ready their lawyers to respond to crises within moments. For Covington & Burling partner Dan Feldman, it is critical that his firm’s taskforce is structured to be responsive to evolving client needs.

“While we might not know what they are at this moment, we have that dynamism to move into action,” he adds. 

Lessons of the past

Keeping records of decision-making processes from past crises are essential, Ludlam believes, so that clients “don’t have to re-invent the wheel”. She and her team are currently looking at how France is dealing with its lockdown to inform any strategy they embark on for their U.K. clients.

Meanwhile, Ashurst’s London managing partner, Ruth Harris, said that “sharing best practice” and “being honest” with clients is key.

Colin Passmore, senior partner at Simmons & Simmons, agrees that learning from others and from lessons of the past are now crucial. His team has “dusted off a lot of lessons” from the 2008 financial crisis.

A Magic Circle partner also thinks that “many of the challenges the 2008 credit crunch threw down are now present today”, adding: “Crises often create similar sorts of legal challenges, complex though they are.” However, he concedes that what we are now witnessing is “too uncertain, too widespread, too colossal to call with any confidence”.

But the lessons of right now are just as, if not more, important. Ludlam suggests “the best insight right now is to follow the news and see what’s happening abroad to anticipate what’s going to happen here”.

With reporting by Varsha Patel, Hannah Roberts and Simon Lock.