Inside Track: COVID-19 and Legal Trends: Finding Opportunity Amidst Downturn:

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  • Inside Track
    May
    20
    2020

    COVID-19 and Legal Trends: Finding Opportunity Amidst Downturn

    Joe Forward

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    A recent legal industry trends report found that new matter creation dropped by nearly 40 percent in April as individuals and business defer legal matters. But those matters aren't going away, and lawyers must find innovative ways to serve clients.
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    May 20, 2020 – Sarah Ruffi, a solo practitioner in Wausau, was off to a great start in 2020. Then in mid-March, when the safe-at-home order came down, it all changed.

    “It was kind of like entering the twilight zone,” said Ruffi, who practices mainly the areas of business, real estate, and estate planning. “The phones went silent.”

    She’s opening more real estate files now and advising clients on efforts to reopen their businesses. And she’s bolstering and retooling her own business practices.

    “I chose to look at it as a way to clean up things in my practice, make sure my systems and processes are working and updated,” Ruffi said. “I’m using this pause button as an opportunity rather than a death sentence. That’s the message I’m sending clients.”

    New Matters Down

    Ruffi’s experience is likely similar to other solo and small firm practitioners in Wisconsin. A recent report from Clio, a practice management software provider, highlights the trends that have occurred in the legal industry through a snapshot in April.

    Clio, a State Bar of Wisconsin affinity partner, surveyed COVID-19’s impact on law firms nationwide and held a webinar to discuss and analyze the findings in its recent report.

    Sarah Ruffi

    “I’m using this pause button as an opportunity rather than a death sentence,” says Sarah Ruffi, a solo practitioner in Wausau. “That’s the message I’m sending clients.”

    Using aggregated and anonymous law firm user data, as well as a survey of nearly 500 lawyers and more than 1,000 consumers in April, the report uncovers the reality: compared with February numbers, new weekly matters dropped by nearly 40 percent.

    “For us, this is a very clear early indicator that law firms are going to be in for a tough few months,” said CLIO founder Jack Newton.

    “One silver lining around all of this is that we do believe that this new matter creation is not necessarily new matter creation that has been cancelled, so to speak, but simply deferred. There is a backlog of new matters that are waiting to be created.”

    Navigating Uncertainty

    A stay-at-home and social distancing environment is not conducive to business dependent on face-to-face interaction. Many individuals have lost their jobs and many businesses are struggling, if not closing shop, and law firms are feeling the pain too.

    Even though law firms were deemed essential businesses when Wisconsin safe-at-home lockdown took effect in March, many consumers were likely not aware of that and many others likely deferred legal matters to save money during uncertain times. Stay-at-home orders are now lifting, including Wisconsin’s order, but uncertainty will persist.

    According to the Clio survey, almost 50 percent of consumers agreed they would defer a legal issue until after the coronavirus pandemic, largely because of costs.

    “So the default state for consumers of legal services and a COVID-19 landscape is to defer taking action on a legal issue,” Newton said. “As legal professionals, we need to think about how we counter this as the default state of behavior. But there is a gigantic opportunity for lawyers that respond in the right way to this crisis.”

    What’s clear is consumers still want legal help if there’s a way to get it. The report noted that 60 percent of consumers said they would prefer a lawyer’s assistance in dealing with a legal issue, and 75 percent of consumers deem lawyers as essential.

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    “There is a gigantic opportunity for lawyers that respond in the right way to this crisis,” says CLIO founder Jack Newton.

    Consumer Expectations

    One of the keys for lawyers and law firms, Newton says, is to understand consumer expectations for legal service delivery as this ongoing pandemic unfolds. Consumers cite cost and accessibility as major barriers in the delivery of legal services.

    “Perhaps surprising to some and not to others is that there’s actually a huge divide between consumer expectations and what lawyers expectations are,” Newton said.

    Consumers may seek alternative payment plans, for instance. As social distancing becomes the norm, almost 70 percent of consumers say they would prefer working with a lawyer who could share documents electronically through an online portal. 

    Consumers may also be fearful that dealing with a legal issue now, especially contested matters of litigation, will hurt their cases. In Wisconsin, like many states, in-person proceedings are still suspended and all hearings are being conducted remotely.

    According to the report, almost 40 percent of consumers believe a remote hearing – as opposed to an in-person hearing – would negatively impact the outcome of their case.

    “Much of marketing needs to tell a message that you should still be advancing your legal matters,” Newton said. “This comment is reinforced by a very surprising data point for me, which was that despite the fact that the majority of consumers thought that lawyers were an essential service, 22 percent of consumers believe that lawyers have stopped offering legal services over the course of this pandemic.”

    Newton said the legal industry will see an entirely new category of legal matters emerge as a result of COVID-19, and lawyers should be ready to deal with the backlog.

    Explore Technology, Stay Connected

    Accessibility to legal services during the pandemic is also a barrier for consumers, but Newton says lawyers have pivoted quickly to using technology tools.

    Joe Forwardorg jforward wisbar Joe Forward, Saint Louis Univ. School of Law 2010, is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by org jforward wisbar email or by phone at (608) 250-6161.

    “We are seeing very positive impacts in terms of technology accelerating in law firms,” Newton said. “We are seeing 5 or 10 years of technology adoption and change happening in the legal space compressed into five or 10 weeks.”

    “The profession has taken a quantum leap of how aggressively it is adopting technology and leveraging technology to provide legal services amidst this crisis. So we see 83 percent of lawyers now agree that cloud technology is fundamental to survival.”

    Newton said lawyers realize this is a matter of survival and no longer just a matter of getting more efficient or getting a little better at delivering a client experience.

    “This is about surviving an entirely new world. A large majority of lawyers agree there’s going to be a profound and lasting change as a result of this pandemic,” he said.

    Newton says state and local bars associations, and other legal communities, can help lawyers stay connected with one another and offer the resources they need.

    “One of the most important things that has gone away during the crisis is a sense of community and social interaction and connectedness,” Newton said. “Bar associations, more than ever, need to look at themselves as providers of that community … create at least a sense that everyone is in this together and navigating this crisis together.”

    Find the Need

    Ruffi, who practices in Wausau, agrees that staying connected is important. “This has given us an opportunity to rethink how we stay connected with people,” she said. “Just because we are separate doesn’t mean we have to stay separated. Our contacts are just different.”

    Ruffi also has a message for fellow solo and small firm lawyers. “Get comfortable being uncomfortable,” she said. “I have done a lot more Facebook Lives and webinars for estate planning. You still have to do client development, you still have to get out there.”

    She said lawyers must think about the practice areas that people need at the moment and explore how their law practices fit in with the current need. “Don’t give up,” she said.

    Turbocharging Change: Who are Wisconsin’s Legal Innovators?

    wisconsin legal innovator banner

    Within a matter of weeks, the COVID-19 pandemic has turbocharged the legal industry’s transformation, say legal experts. It has propelled the legal profession to move to remote work and distance learning. And, it will change forever how the legal system serves the public.

    The profession has taken a quantum leap in aggressively adopting and leveraging technology to provide legal services amidst this crisis,” says CLIO cloud-based technology founder Jack Newton in a recent InsideTrack interview.

    “We are seeing 5 or 10 years of technology adoption and change happening in the legal space compressed into five or 10 weeks.”

    This is no longer just a matter of getting more efficient or getting a little better at delivering a client experience,” says Newton. “This is about surviving an entirely new world.”

    Who are Wisconsin’s Legal Innovators?

    Who is embracing current challenges, looking for opportunities to do it better? Tell us about the people and ideas that are changing Wisconsin’s legal landscape.

    Through the “That’s a Fine Idea: Legal Innovation Wisconsin” initiative, the State Bar of Wisconsin is asking the legal community to help it tell the story of legal innovation. The Wisconsin Lawyer will feature the people behind the best examples of legal innovation in the November 2020 issue.

    Innovation can come in many forms. It could mean:

    • New ways to use technology to improve client service or serve a new market

    • New ways to support virtual workforces to improve job satisfaction, increase productivity, and increase internal operating efficiency

    • Best practices for promoting workplace diversity

    • New marketing/business development strategies

    • New ways of providing pro bono or reduced-cost services

    Learn more or find the nomination form at ThatsaFineIdea.com. The deadline for nominations is June 30, 2020.




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