A new normal or the end of normal?
Cambridge Strategy Group, London
Will life be back to normal in a couple of weeks? Is there a new normal? What does that even mean? In most countries in Asia, Europe and North America, where Covid-19 infection rates are slowing and beginning to decline, the lockdowns will probably begin to be lifted soon. People will be able to return to work and businesses will begin to open. The pressure to ease lockdowns is inexorable, driven far more by a need to reignite the world’s economies than by people desperate to return to crowded cities and public mass transport systems. It will not be long, now.
It is worth taking a moment to consider the Covid-19 pandemic from a broader perspective. It is not unprecedented, though the response across the world has been so. There have been four global (pandemic) outbreaks of coronavirus infections in the past century, the others being in 1918-20, 1957 and 1968, and at least three other notable coronavirus epidemics that failed to reach the scale of pandemics. This recurring theme has to be viewed against the massive increase in global airline connectivity that emerged in the past two decades. Passenger airline travel nearly doubled from its peak before the 2009 global financial crisis to 2019 (see Figure 1). Air travel might not return to normal until the pandemic is completely conquered and international borders are reopened. Then, human nature being what it is and for lack of alternatives except where videoconferencing suffices, it is likely to rebound. Can we close the world down every time a pandemic emerges? What alternatives exist for law firms with global client bases and practices, and their clients? These questions will feature in law firm strategy discussions in coming months.
Figure 1: link between airline traffic and
Fear of contagion will persist for months but, in time, other concerns are likely to overtake Covid-19 in the public psyche. Global warming, nuclear proliferation, natural disasters and other deeply existential concerns that pre-existed the crisis still persist. Cyberattacks and terrorism also remain significant threats to law firms and their clients. Opportunities will emerge to be seized and exploited. Life will go on. The pandemic is likely to leave a permanent mark, though. It would be surprising, for instance, if Londoners fully embrace a return to sheep-pen passenger densities on the Tube and commuter train services. Working from home (WFH) has proven that an alternative exists. Remote working technologies can be expected to accelerate as demand for them drives innovation. Virtual reality and holographic-enabled video-collaboration might be closer than we think.
While firms are heavily focused on short-term survival work such as cash-preservation and engaging with clients to help them to solve their own challenges, we should not lose sight of how this might play out as firms reopen their offices as some semblance or normality returns. Life and work will begin to feel normal again, to the great relief of most. In time, some might begin to intellectually minimise the deep effects of Covid-19 and deny their permanence. This would be a mistake.
It is often said that the word ‘crisis’ in Chinese consists of a combination of ‘danger’ and ‘opportunity’. Elegant though this may be as a motivational epithet, it is a slight misquote. The Chinese term ?? (pinyin weiji) is more accurately translated as ‘danger at a particular juncture’, that is, a point in events or time. For some firms, the return to the office will mark the onset of that critical juncture. Not the end of their crisis, but a change in its nature.
Covid-19 is deeply shifting the way that people think and behave and indeed the world in which we live. Several months of WFH with no commute and ample time spent with family will have fundamentally shifted perceptions about work–life balance. The impact of the countermeasures on industries that we took for granted before might have radically changed our economic landscapes (not only for airlines but also the hospitality, restaurant and retail sectors, for instance). It is difficult to accurately predict the effect that the end of the ‘sudden economic stops’ that have been imposed will have in the medium term, to say nothing of longer term geo-economic and sociopolitical shifts that might occur. Governments will find themselves with borrowing at record levels. Disrupted supply chains might take some time to return to normal. Will inflation remain under control? Will the rate at which the technology industry is producing new tools accelerate or slow down? How will taxation be affected? Immense scope exists for new, important legal needs to be solved.
Leaders need to be alert to opening faultlines, especially when tensions strike to the core of the firm’s business model. We are hearing of clients requesting very sharp reductions in fees, justified by the effects of the virus on their businesses. Metrics driving partner compensation might not make as much sense as before. High-quality talent will be in demand and perhaps more likely to shift firms if they lose confidence in their own. If our world before was ‘volatile, uncertain, complex, ambiguous’ (VUCA) then, as we move towards and into 2021, our experience of VUCA might be at an entirely new level. Business continuity will be heavily on radars, not just as a response to Covid-19 but as a permanent feature of law firm management.
For firms looking to address business continuity risks in a more formal way, several useful tools exist. Perhaps the most relevant is the ISO 22301 (Security and resilience – Business continuity management systems – Requirements). Updated in late 2019, the standard is structured in a similar way to the other business management system standards published by the International Standards Organization, including ISO 9001 (Quality Management) ISO 14001 (Environmental Management) ISO 45001 (Occupational Health and Safety) and ISO 27001 (Information Security Management) already being used in many organisations. This makes it easier to integrate business continuity into firm-wide management systems, following the sensible and well-proven ‘Plan-Do-Check-Act’ framework that, if properly implemented, constantly improves and refines the management system that it addresses.
Using an internationally recognised standard as the template for the firm’s business continuity management also provides clients and regulators with assurance that the firm will be resilient in the face of the next crisis, and the next. In a VUCA world, there is no next normal. There will be more pandemics, and other kinds of crisis. The only normality on which anyone can rely is its absence.