The next new normal law firm - does it meet clients' needs?

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Rapporteur

Gábor Damjanovic
Forgo Damjanovic & Partners, Budapest; Secretary-Treasurer, IBA Professional Ethics Committee
damjanovicg@fdlaw.hu

Session Co-Chairs

Anne Louise Macdonald  Harper Macleod, Glasgow; Chair, IBA Law Firm Management Business Development and Marketing Subcommittee
Alvaro Mateo  Gomez-Acebo & Pombo, Madrid; Chair, Young Lawyers’ Working Party, IBA European Regional Forum
Annalisa Reale  Chiomenti Studio Legale, Milan; Communications Officer, IBA Women Lawyers’ Interest Group
Stephen Revell  Freshfields Bruckhaus Deringer, Singapore; Co-Vice Chair, IBA Law Firm Management Committee
 

A virtual conference session organised by IBA Closely Held and Growing Business Enterprises Committee and held online on 24 March 2021.

The session began with Nicole Van Ranst, Conference Co-Chair, making short introduction and mentioning that the session is supported by the IBA Law Firm Management Business Development & Marketing Subcommittee, the IBA European Regional Forum, the IBA Women Lawyers’ Interest Group and the IBA Law Firm Management Committee.

Annalise Reale shared with the audience that today’s discussion will focus on law firms and how they have been affected by Covid-19, answering questions such as: will Covid-19 change the way we work and the organisation of our firms in the future, and to what extent? And, if so, how does it meet our clients’ and our own needs?

Questions had also been put together prior to the session by Anne MacDonald and Stephen Revell and the answers would be explored during the virtual event.  

According to the responses to the questions, remote work is here to stay but not totally; a hybrid model is expected to be the new normal. Some clients like it, whereas those, who are more old-fashioned and prefer to close a deal in a golf club or during a lunch, don’t. Needless to say,  high tech and younger clients are fine with the current state of affairs.

It also very much depends on the type of work involved, as we have for long carried out due diligence exercises online (via virtual data rooms), whereas major sale and purchase agreement negotiations may often need a table to sit around and discuss.

Our work (including the techniques we use, a lot of videoconferencing, the way we try to build/keep the team together, and so on) has changed a lot and we need to reinvent the role of the office. We all miss the personal interactions with colleagues/clients, as well as international travel. We have human needs and collaboration often suffers.

As regards diversity, working from home (WFH) has changed the way how we work and somewhat levelled the playing field, as men are often seen as being better at networking. The role of social networks has valued and this may result in more inclusion for women.

Anne shared with the audience that according to 94 per cent of the answers, we will not WFH permanently.

87 per cent answered that they have a plan on how to return people to the office, but only 59 per cent answered that they have consulted with staff on such return. Anne believes that the discrepancy between these two numbers (87 per cent having a plan to return to the office, while only 59 per cent having consulted with staff on that) is worrying. She says that people like to be heard and probably should be heard even if the decision may actually be different from what they would prefer.

Regarding the question ‘Have you communicated the return to the office to your staff and your clients?’, 45 per cent answered yes. Anne mentioned that the two biggest assets a law firm has are its people and its clients and she believes that we should probably cherish them more and inform them accordingly.

According to the survey, currently 20 per cent of lawyers are in the office five days a week and those who answered, expect this number to go up to 35 per cent in five years’ time.

Currently, 28 per cent of lawyers have a freedom of choice as to whether they WFH or work from the office (WFO). This number is expected to go down to 20 per cent in five years’ time – Anne summarised that this shows a hybrid model.

According to the survey, currently 31 per cent of support staff are in the office five days a week and those who have answered, expect this number to go up to 54 per cent in five years’ time.

Currently, eight per cent of support staff have a freedom of choice as to WFH or WFO.

Stephen mentioned that it will be interesting to see the long-term effects of the pandemic. The answers received show a good cross-section of various geographies, so we can regard them as a world view. The difficulties (first, second and third waves of the pandemic, lockdowns, etc.) certainly differ country by country and there have been particular challenges for litigators. He then summarises that we are all on a journey towards a potential new normal, but not yet in a position to determine what such new normal may be; the future still looks very uncertain, but what seems likely is that we will have greater flexibility (WFH/WFO – hybrid model).

Stephen highlighted that there is a danger of a ‘them & us’ culture developing, whereby those in the office may get betters training, better mentoring, better jobs, better promotions, etc. This is one concern with the envisaged hybrid model.

It is expected that by 2025, international travel will be at 70 per cent of the pre-Covid levels. This shows that we will be back to the old normal except for some discretionary travel; the latter being the result of us having got used to Zoom and the like. On the other hand, clients have their own agenda and if they believe they need their lawyer to sit by their side then and there, then we will do so.

As for client meetings, virtual meetings are expected to stay and be a feature of our practice in the long run. Thus, lawyers will need a good IT kit (screen, etc) at home to establish a suitable hybrid environment. Most firms have not talked to their clients on whether they expect the lawyers to actually have a physical office (80 per cent believe they do, but many have not consulted their clients and are just assuming) – please, do speak to your clients on this and on the new normal!

Anne summarised a few issues brought up in the chat box during the session:

• collaboration within the firm is essential;
• culture of firms is diluting due to the pandemic;
• mentorship of trainees is often lacking;
• maybe there are lessons to learn from recently set up virtual law firms; and
• clients need to know that even when WFH, we are actually collaborating with each other internally and we are serving the clients the best way we can.

Stephen added that after distilling and extrapolating the comments, the lesson for law firm partners is that we should rethink our role as leaders to lead into this journey, to lead into the new normal and to realise that different answers can be good for different law firms. Leadership skills may never have been as important as now. We have to get all parties row in the same direction and support this journey into the new normal; lead them towards a goal that is accepted by all. And very important: talk to your clients about what they want.

Annalise agreed that we need to be leaders. It is challenging and involves setting new habits (eg, setting up weekly calls on a certain day with certain teams, colleagues, and so on) – these ones have proven useful during these troubled times. Soft skills such as communicating, managing and, most importantly, being leaders is essential! 

Then attendees were then distributed into Zoom breakout rooms.

Gábor Damjanovic, a breakout room moderator, described the conversation they had in their breakout room and questions they discussed.

Question one: how are you ‘persuading’ people to return to the office?

• It depends on the country and the waves of the pandemic they face; we often do not encourage, but rather discourage colleagues from coming to the office when the situation is so dire
• Those colleagues who have young children tend to come and WFO
• As for specific practice areas, litigators prefer to WFO, others less so
• In Mumbai, public transport is used by many and that should be discouraged until all colleagues are vaccinated
• Some firms have drastically reduced office place when they realised that WFH is a real option for many and opted for sharing offices. This is a new way of doing business and results in considerable savings
• A colleague from the United States argued that when we support WFH, then we undervalue human relationships, which are the ‘intangible glue’ of our profession
• It was agreed that remote work has been accepted as a way of doing our jobs, but some believe that we will go back to the old normal, though with more inherent flexibility

Question two: how are you changing the ways you service your clients and is it working?

• Some said that there is too much Zoom, and the line between work and free time has been blurred which is not good.
• Fewer Zoom calls, but deeper discussion could be a better option

Alvaro Mateo Sixto greeted the participants after returning from the breakout rooms and asked the selected five room moderators to share the lessons learned.

Yosbel Ibarra told the attendees that the answers to question one were all over the place and very much depended on the jurisdictions involved. For example, those from the United Kingdom agreed that we should get back to the office soon, while in Luxembourg (where there was no strict lockdown), the rotating model has been working fine.

Generally speaking, younger people want to come back to the office, because for them, working from home (typically with smaller flats or flat sharing) is more difficult, plus they often miss the social interactions. In addition, lawyers are often afraid that they may lose soft skills (eg, business development skills) without being able to go back to the office and meet people.

The almost universal answer to question two was ‘yes, it works and is easier’, as it is easier to get on a Zoom call than to hop on a plane to Brazil, clear immigration and customs, take a taxi to central São Paulo for a meeting and lunch, and then head for home. Zoom is great, but extremely exhausting jumping from one call into another one and into a third one afterwards.

The third question some breakout rooms discussed was ‘Wellness – how are you looking after your people?’ It was agreed that the level of lockdown had a significant impact on this. Communication is essential and pairing up partners with associates was often a good idea.

Rebecca Normand-Hochman mentioned that working parents (especially with young kids) have often had difficulties WFH and were happy to come back to the office.

As regards serving clients, 80 per cent of clients have already had some kind of experience working remotely with their lawyers when the pandemic started. Working on client matters was often seamless, unlike business development, marketing and meeting (prospective) new clients, which presented a lot more hurdles.

Regarding wellbeing, more frequent communication has been a key.

Moray McLaren shared with the audience that discussions were similar in his breakout room, ie, that people want to go back to the office, especially the younger generation and law firms are working on that. From his group, one firm has already made that decision to go back to the office, but the others have not yet done so. Strong views are often expressed by the different partners – some want all lawyers to get back shortly, whereas others would prefer a hybrid model. Many see the challenges arising from a hybrid model, especially in relation younger lawyers.

It has also been discussed that the culture of firms is of course diluted. Their group does not expect radical changes as the new normal – maybe one or two days WFH per week.

Ralf Morshauser added that his group consisted of five lawyers from continental Europe and one from the US, and that this had clearly divided the views – a headline finding. In continental Europe, there is no need to try to convince lawyers to go back to the office, as they want to go back. Some European firms’ offices have even been refurbished during the pandemic, awaiting lawyers back and creating space for them. In the US, offices have almost fully been vacated.

What is expected to remain with us is some flexibility, but not dramatic changes, something like one to three days of WFH per week.

There had been a huge learning curve at the beginning of the pandemic in Europe, whereas colleagues in the US had already got used to remote working long before the pandemic started. WFH is expected to be kept post-pandemic; this has been agreed by all and seems to be a clear lesson. Dealing with clients has worked well remotely, often even difficult negotiations were well handled.

As for wellbeing, firms had done a lot at the beginning to make lawyers’ homes suitable for remote work. Regarding health and safety, there have been firms who tested all colleagues once every 48 hours in the office (Ralf added that, unfortunately, this did not take place in Germany, though it should have). In relation to mental health issues, initiatives such as making food deliveries to associates, whiskey tasting and happy hours have been mentioned.

Christine Blaise-Engel agreed that it is very important for young lawyers to be able to go back to the office, and also the different practice areas vary in this respect – eg, litigators typically need physical presence. Our partners are basically our clients and this should not be forgotten (eg, cross-selling has decreased a lot during the pandemic as a result of partners not being able to have a coffee together, and so on.).

It has been observed that clients often want to Zoom for everything and this is often felt as an intrusion into our lives; we lose our lives and are trapped on Zoom.

Clients have not yet asked to lower our fees as we continue to work for them and maintain our offices (overheads), but that may change by time and budgets may get re-written.

Regarding wellbeing, some firms have setup one-on-one mentorship programmes, group meetings, and some provided 24/7 psychologic assistance to their colleagues or simply helped younger (and less well-to-do) associates with screens and other similar equipment to be able to work from home seamlessly.

As for the final poll, Annalisa summarised the lessons, as follows:

• Generation matters a lot – younger generations are better at remote working and this should be taken into account when we build our strategies
• Different countries and cultures also matter a lot. As discussed, what had already been a good practice in the US before the pandemic started was new and a major learning curve for most of us in Europe (we often regarded remote work as a monster earlier)
• The pandemic has changed the way we practice and we almost all expect a hybrid WFH/WFO model
• We are often prisoners of Zoom and, while the right to disconnect is a huge discussion in the world nowadays, it is not very often discussed in our circles. Breaks, lunches and chats over a coffee are highly missed

Stephen summarised the poll results, whereby there was a degree of pessimism as to how quickly we can get back to ‘normal life’. 75 per cent believe that we will only get back to our offices in Q1/Q2 of 2022.

According to 70 per cent of the answers, we will switch to a hybrid model and WFO three to four days per week and WFH one to two days per week.

It is essential to avoid a ‘them & us’ or split culture to develop in a hybrid model.

According to 73 per cent of the answers, productivity has not decreased due to remote work; however, it has to be noted that a strong minority (27 per cent) believes that it has.

According to 84 per cent of the answers, client service has not decreased due to remote work; however, it again has to be noted that according to a sizeable minority (16 per cent) it has.

Anne summarised the outcome of the second poll, whereby according to 79 per cent of the answers, the change is here to stay and we will use the hybrid model.

According to the polls, clients do not care much if we WFO or WFH, as long as we serve them as usual.

Lawyers should be encouraged to come back (partly) to the office and they actually would like to do so.

According to the poll, WFH will not kill the chargeable hour, which is here to stay.

Alvaro closed the session with the following comments:

• we are comfortable with the new normal;
• different firms need different solutions and so do different jurisdictions;
• there are huge differences on the effect of the pandemic on junior and senior lawyers; and
• some lawyers (often depending on their specialisms) have no means/chance to adapt to the new normal and be successful.