The Legal World Will Never Be the Same After COVID-19

The Legal World Will Never Be the Same After COVID-19

4.22.2020

By Kathleen Lynn

The changes forced on New Yorkers and the legal profession by COVID-19 have been more radical than anyone could have imagined, and they’re likely to last longer than anyone first expected.

Because of social distancing measures, courts and lawyers are doing businesses by video, lawyers and legal staff are losing jobs, and new graduates can’t start their careers — and these effects will probably persist for months, maybe years.

And even when workplaces and public spaces are reopened, it’s likely to happen gradually, with fewer people allowed to gather at offices and restaurants, and a regimen of testing to see who’s immune from the coronavirus.

“The realization is sinking in that this is going to last longer than we expected,” said June Castellano, a solo practitioner in Rochester and co-chair of the NYSBA  Emergency Task Force for Solo Practitioners and Small Firms, created in response to COVID-19.

Brad Karp, chairman of Paul Weiss Rifkind Wharton and Garrison, sees no relief anytime in 2020.

“I don’t expect life to fully return to normal until there’s an effective vaccine,” he said. And the medical community does not forecast a comprehensive vaccine until spring 2021 at the earliest.

Since the virus first erupted, the pain has quickly spiraled, both medically and economically. Tens of thousands of people have died and more than 22 million Americans have filed for unemployment. Economists now predict that the national and global economies will shrink this year at rates not seen since the Great Depression.

In the legal profession, there are almost daily reports of layoffs, pay cuts, and other cost-cutting at large firms. The situation may be even more dire at small firms.

“I’ve heard from attorneys who haven’t had a single dollar come through the door in weeks,” Castellano said.

The situation is different from the 2007-2009 recession, she said, because “this is a life-and death issue.”

“People are saying, ‘Okay, we want to be able to go back to court and meet with clients again … Well, wait a second, is that going to kill somebody?’” she said. “The stakes are very different than they were in the great recession.”

With attorneys forced to work from home, the legal profession has increasingly turned to technology. Although for the most part courts are closed to prevent the spread of the virus, New York’s Unified Court System in March began to implement a system of virtual courts to handle essential and emergency matters. That system has been gradually expanded to include some non-essential matters as well.

Even the U.S. Supreme Court has announced that it will hear arguments by teleconference.

NYSBA had already improved its technology and website to create a “Virtual Bar Center” before COVID-19 hit. The new digital platform has put NYSBA’s services, information and benefits in easy reach of attorneys who are now forced to work remotely, said NYSBA President Henry M. Greenberg.

Since the COVID-19 shutdown, NYSBA has moved all continuing legal education programs online and recently held its first-ever videoconference House of Delegates (HOD) meeting, which drew 207 members — the largest turnout ever for an HOD meeting.

Once the legal profession makes it to the other side of the virus, most observers agree, there’ll be much greater use of technology.

“We’re going to see judges who are comfortable with video conferencing,” said Mark Berman of Ganfer Shore Leeds and Zauderer, co-chair of NYSBA’s Committee on Technology. “Court conferences and hearings may be done remotely.”

Berman said he recently took part in a remote mediation, with seven participants joining a videoconference group meeting, then periodically dropping out to speak one-on-one with other parties by phone or videoconference.

One lesson of the pandemic, Berman said, is that lawyers need to be able to work entirely from home, by having billing records and legal documents available digitally.

“If you tell a client, ‘I can’t get to my documents because they’re in the office,’ the client is going to go to a lawyer who can get their documents 24/7,” he said.

Although many law firms are already feeling the pain, the effects of the virus and the recession will not be spread equally across practice areas. Estate lawyers, for example, are expected to see a bump in activity.

“Many people are wanting wills these days, for obvious reasons, especially people who work in health,” Castellano said.

“With the unfortunate rise in deaths, you’re going to see a lot of trust and estates work, a lot of wills to probate,” said Patricia Salkin, provost for the graduate and professional divisions at Touro College in Central Islip. Salkin is also a law professor and former dean of Jacob D. Fuchsberg Law Center at Touro.

Karp expects an increase in legal work related to financing and restructuring, as companies stressed by the recession assume additional debt, causing some to file for bankruptcy. He also expects litigation as parties invoke force majeure to avoid contractual obligations and material adverse event clauses to scuttle deals, lawsuits concerning the scope of insurance coverage for coronavirus-related losses, and borrower/lender disputes.

Karp also said that private equity firms with billions of dollars of cash are purchasing distressed debt and looking to acquire companies at more reasonable prices as the result of the market downturn.

Aside from COVID-19, Karp expects increased regulatory oversight over corporations and financial markets if the Democratic candidate wins the White House in November, leading to more work for lawyers.

Even so, many law firms expect that the economic downturn and limits on in-person court activity will sharply curtail many types of legal work in the coming months. As a result, a number of large firms have laid off or furloughed employees, cut salaries for employees and partners, and frozen contributions to employee retirement plans.

Solo practitioners and small firms have applied for unemployment insurance, as well as federal aid programs to small businesses, but many found the process very frustrating, Castellano said. The two major federal programs — the Payroll Protection Program and the Economic Injury Disaster Loan program — were quickly swamped with requests for help. As of mid-April, Castellano didn’t know of anyone who had received any federal assistance.

“These programs that were supposed to help folks have not helped; they have just given false hope,” she said. And they took up time, since “smaller firms don’t have accounting or finance departments who could take care of the paperwork.”

The pandemic and recession are hitting just as graduating law students were preparing to study for the bar and start their careers. But the New York State bar examination has been postponed until September.

“There’s a lot of uncertainty with the class of 2020,” said Salkin. “Job offers are being rescinded and start dates for class of 2020 are being delayed.”

There have been calls for alternative routes to license, such as practicing under supervision for 12 to 18 months.

Students still in law school are affected, too, with summer associate programs being canceled or delayed. And after the March LSAT was canceled, law school applications dropped, Salkin said.

“Everybody is nervous about what’s going to happen with fall enrollment,” she said.

To help people hurt by the pandemic and economic lockdown, NYSBA and the state court system have established a pro-bono network of lawyers, being coordinated by former Chief Judge Jonathan Lippman, of counsel at Latham & Watkins.

The network has started by assisting New Yorkers who need help securing unemployment benefits through the appeals process, and  Lippman expects that there will be a need for legal help with issues like foreclosures, insurance, consumer credit and domestic violence.

“As courts start to ramp up, there’s going to be a tremendous surge in cases,” Lippman said. “Our obligation as lawyers is to help people and think about all the vulnerable and poor who have been traumatized by the pandemic. It doesn’t have anything to do with the bottom line. It has to do with our moral obligation as lawyers.”

Kathleen Lynn is a freelance writer.