All of us expected 2020 to be a big year. And then Covid19 happened.
For the last ten weeks, we’ve been bombarded with stories about redundancies, reduced hours and mandatory leave. As we start to transition out of lockdown, concerns about the job market are beginning to resurface. Although it’s been a difficult situation all around, there are still positives.
Several areas of law remain busy, including:
- Environment & Planning
Tax is seeing an uptick in work assisting companies to sort through government entitlements, but this is expected to drop off soon.
On the other hand, transactional areas of law including corporate and banking and finance have seen a drop in work.
Across the sector, larger firms are starting to feel the squeeze, whilst boutiques which run a leaner model are finding themselves quiet but managing to survive.
While many firms are only making critical hires, we have seen some firms successfully onboard new employees virtually. Interviews are being conducted over video conference. Later start dates are also in effect.
Many companies are now realising that working from home is not only possible, but for many people, leads to greater efficiency. As a result, we’re seeing more partners embracing flexible work arrangements.
However, moving the office into the home hasn’t stopped lawyers from working long hours. In many cases, it becomes harder to “leave” at the end of the day, creating an increased risk of burnout. Continuing to ensure that lawyers sign off at the end of the day should be an ongoing priority for both firms and senior lawyers.
Like many industries, lawyers in some firms have been asked to reduce their hours or take annual leave, regardless of area of practice. Partners have taken reduced draws, while some graduates have been made redundant or asked to come back next year. In addition, bonuses and promotions in lots of firms are off the table until next year.
With State and Federal governments announcing stimulus packages across the industry, this is an area expected to remain busy throughout the downturn, as well play a pivotal role in carrying the reopening of the economy in the months following.
Top tier practices are still hiring into their front-end and back-end teams. In house, some teams have put a hold on short term hiring, but many are beefing up their teams in an effort to reduce their future external legal spend.
Insurance is a counter-cyclical area of law which, unlike many industries, can often be busier in a downturn.
Boutiques and in-house are still hiring, but insurance teams which sit within full-service firms have been subject to hiring freezers.
The Covid19 pandemic, however, involves some specific developments unusual to regular downturns which are significant to the insurance industry.
- Fewer motor vehicle accident claims with less people on the road
- Fewer personal injury and catastrophic injuries claims as less people are working outside of the home
- Fewer Workcover claims, especially with the shutdown of certain workplaces like hospitality
- More business interruption claims
- More claims specifically regarding Covid19
Partners with practices will always be in demand, particularly in those areas mentioned above. For those is more transactional areas of law, it may be necessary to go down a tier.
Clients in the bigger firms are taking this opportunity to push for changes in law firm pricing structures. With this development, some partners and special counsels are looking into the second-tier and mid-tier firms where they can continue to take care of their clients at a more reasonable hourly rate.
Senior lawyers are putting their heads down and getting billables up, mostly with great success. On the other hand, juniors are struggling, and those senior lawyers who take the opportunity now to offer their support will find themselves in a better position when the begin building their team in the future.
Some junior lawyers in transactional areas of law have been moved into litigation, insurance or employment teams, leading to a sense of career derailment. Nevertheless, juniors who still have jobs are in a much better position than those who don’t. Those who use the opportunity to show their adaptability, initiative and enthusiasm will become invaluable team members.
Unfortunately, we’ve heard of junior lawyers who have been let go. For those lawyers, now is the time to become active on LinkedIn and reach out to their networks for referrals and to start discussions.