COVID and Law Firms

Consider these headlines from the ABA Journal:

May 2020 – Law firm revenue takes nosedive during COVID-19, new survey data shows

  • Roughly 81% of law firms have seen their revenues drop during the COVID-19 pandemic
  • 27% of firms experiencing loss of revenues saw business decline by more than half
  • Nearly 20% of firms have been forced to shrink their staffs
  • More than 60% said they believe it will take from four months to a year for their firms to revert back to their financial positions before COVID-19

June 2020 – Top law firms fared surprisingly well during COVID-19 pandemic, survey says

  • Demand for the first five months of the year was down only 1.4%
  • Cash collections were up more than 3% through May
  • Expenses were essentially flat as law firms reduced discretionary spending
  • 54% of the law firms reported increases in client requests for discounts in May, compared to the previous month
  • 52% reported more requests for extensions the same month
  • Lawyer layoffs have been modest
  • Layoffs of nonlegal staff members have been concentrated in jobs that don’t lend themselves to remote work
  • Transactional practices, such as corporate and real estate, were most affected by the slowdown
  • Practices have been active in bankruptcy, banking, labor, and employment
  • Liquidity is good, with almost 90% of law firms having the ability to cover at least three months of monthly expenses, excluding partner draws
  • More than 50% of the surveyed law firms cut or delayed partner contributions, which gave them more cash on hand

So… which is it?

Good question! There’s a difference between a nosedive and faring surprisingly well, although the devil is in the details.

The top law firm data is based on a survey of 52 of the nation’s top 100 grossing law firms and 20 midsized and regional law firms. Such a list would include very few, if any, offices with a presence in Oregon.

Additionally, the data was gathered four to five months ago. Measured in COVID time, which eerily resembles dog years, the survey feels outdated. Notice too that the firms judged to be “doing well” nonetheless laid off staff and reduced spending. Half received requests from clients asking for discounts and extensions, which were no doubt granted.

Either way we know our truth. Oregon is a state largely comprised of small firms and solo practitioners – lawyers who make a living but aren’t among the nation’s top money-wise.

So as we work to restore our livelihoods and practices, what should we keep in mind?

Five thoughts to keep in your head

  • We can and will bounce back.
  • Continue following COVID guidelines and don’t let your guard down. Staying healthy ensures that your practice remains open.
  • Deal in facts. Know the economic indicators for your firm.
  • If you have been neglecting marketing, you absolutely, positively must get going.
  • Make a plan and take action. Now might be the time to consider other practice areas.

What to do next

Work on your mental mindset

You are more resilient than you think.

Consider the tough times you’ve lived through. Losing someone you loved, struggling over student loan debt, or ending a relationship. It felt bad at the time, and I am not minimizing how bad. However, you did survive. You are here. You moved forward.

Furthermore, I am willing to wager that you had help. Someone supported you. Said something or did something that made you feel better. Reach out to those people today. Reach out to the attorney counselors at the OAAP for free, confidential assistance.

Your physical health

If you don’t take care of yourself, you won’t be able to help others.

You know what to do to stay physically healthy, so you won’t see it repeated here. Mental health is another matter. If you are struggling, pick up the phone and call the OAAP. They can help.

Just the facts mam

What are your outstanding accounts receivable? How many clients are 60 or more days overdue? When did you last compare your actual income and expenses against budgeted projections? Do you have a budget?

Financial management may not be fun, but we have to deal in reality. You can’t guess who owes you what or how much, you’ve got to know. Start now.

Begin by adjusting or creating a budget for the remainder of 2020. Yes, I know we only have four months remaining in the current year, so this is a task you could easily procrastinate about. Don’t do it. Face the numbers now while time remains to make a plan and take action.

On the expense side, ask for no-penalty extensions, negotiate new rates, request discounts, and get tough on discretionary spending. You may need to collect retainers for litigation expenses you previously fronted.

On the income side, get on top of overdue accounts. I’ve said it before: the most effective thing you can do is pick up the phone and talk to your clients. Screw up your courage and do it. Accepting monthly payments or a discounted amount due is better than no money at all. Offer contactless payment through your website or Square account, accept Zelle or Venmo. Be flexible. Find out what works best for clients.

Marketing

I devoted the month of July to marketing tactics centered around the new normal of COVID-19. If you didn’t catch those posts, or need a refresher, access my blog archives from July. From the home page, locate the sidebar on the right portion of your screen. The archives are midway down the page.

Make a plan

You are in control. Make a written list of what you will do differently, starting today and in the future. Be specific and lay out next steps. For example:

  • Read up on COVID and marketing. Identify 5 or more ideas you want to pursue. Set timelines for each and execute your plan.
  • Prepare a budget-to-actual comparison. Identify what you need to adjust, and act accordingly.
  • Review accounts receivable. Decide on a strategy for each overdue client and begin making calls.

Commit by scheduling out each planned activity. Allow adequate time to get tasks done and don’t overcrowd your calendar.

Scheduling isn’t busy work. It protects your intentions to follow through on your plan and increases the likelihood you won’t brush tasks off.

If you really want to ensure success, find an accountability buddy. Another lawyer is nice, but not necessary. Anyone who is willing to partner with you in goal setting will work. The purpose is not to critique, but to incentivize you to follow through because you’re answering to someone other than yourself.

Once you have a buddy, schedule weekly phone appointments. You won’t be sharing confidential client information. This is a “how did you do this week?” type of conversation and it doesn’t have to be a major time suck. If you want the exchange to go a bit deeper, obviously it can. You can ask for feedback and offer suggestions. It’s up to you.

All Rights Reserved 2020 Beverly Michaelis

Procrastination in the Time of COVID

procrastination31

Do you find yourself avoiding work? Feeling anxious or stressed? Dreading what you might read in emails or hear in voicemails?

You are experiencing procrastination. And possibly depression. With the upheaval COVID has brought to our lives, getting up in the morning may feel challenging.

Understanding and addressing procrastination is difficult. One of the better explanations appeared in a post on The Productive Mindset:

  • Procrastination is not a time-management problem.
  • Procrastinators often have anxiety or doubts about their abilities, or about the perception others have of their abilities.
  • Many procrastinators would prefer others think they lack drive instead of providing the opportunity for others to question their capabilities.
  • Underlying fear of failure or fear of success is common among procrastinators.
  • Depression and procrastination go hand-in-hand.

Fear, Anxiety, and Doubt

While the original Mindset post is no longer available, Googling “the psychology and behaviors of procrastination” reinforces that fear, anxiety, and doubt are major players here. Factor in a major life change – like a pandemic – and the stress ratchets up threefold.

Does This Sound Like You?

  1. Do you put off taking care of important things to the point of jeopardizing relationships, career, finances, or health?
  2. Do you put off doing what you need to do until a crisis develops?
  3. Do you put off doing tasks unless you can do them perfectly or until you can find the perfect time to do them?
  4. Do you hesitate taking necessary action because you fear change?
  5. Do you think about things you’d like to do but rarely get around to doing them?
  6. Do you believe that projects or tasks will somehow take care of themselves?
  7. Do you overcommit yourself?
  8. Do you tend to do only what you want to do instead of what you should do?
  9. Do you tend to do only what you think you should do instead of what you want to do?

Adapted from It’s About Time, by Dr. Linda Sapadin with Jack Maguire [Procrastination Self Test.]

Ending the Paralysis and Self Sabotage

We all procrastinate occasionally. But if putting things off is affecting your practice, home life, health, or finances – don’t struggle alone. Oregon lawyers are encouraged to contact an Attorney Counselor at the Oregon Attorney Assistance Program (OAAP) any time for help with this issue. The OAAP is free and confidential. They are an excellent resource if you are experiencing depression, which is often the real story behind procrastination.

You can read more about the paralysis of procrastination here.

All Rights Reserved 2020 Beverly Michaelis

Coping with Holiday Stress

You may feel there’s nothing you can do about stress. The bills won’t stop coming, there will never be more hours in the day, and your work and family responsibilities will always be demanding. However, you have more control over stress than you might think. No matter how stressful your life seems, you can take steps to relieve the pressure and regain balance.

How? By using the four A’s: avoid, alter, adapt, or accept.

For specific advice on how to cope with holiday expectations and holiday-related stress, review these articles from the Oregon Attorney Assistance Program:

All Rights Reserved 2019 Beverly Michaelis

You Can Take a Vacation

Build time off into your work schedule now to take a vacation – no excuses!  It takes some effort and organization, but your body and mind will thank you.  Three-day weekends – like Memorial Day – aren’t enough. We all need true recuperative time away from the office. This is my annual nudge to encourage you to take time from for yourself.

Budget now to go on vacation later.

“If I’m not at the office, I can’t bill.  If I can’t bill, I won’t get paid.” True enough, but there is a solution: budget for your vacation.

First, calculate your vacation expenses. Next, quantify the lost revenue you need to replace during your time out of the office. Now that you know how much you need, begin setting aside funds every week to meet your financial goal. If necessary, find little ways to cut back that can really add up: like bringing your lunch to work, deferring your daily Starbucks fix, using public transportation, or telecommuting.

Saving weekly will keep you on track and help manage expectations. If you’re just getting started, then your plans this year may be more modest. Next year, you can begin saving for your summer vacation in January.

Clients are important enough to schedule.  So is your vacation.

Work will never go away, but I guarantee that if you look ahead in your calendar you will find a block of time with no commitments. Even if you haven’t made plans yet, block the time out now before your calendar fills up. If you have a habit of backsliding, enlist your family as enforcers. If you need an extra incentive, consider non-refundable travel reservations.

Preparation is key!

If you’re a member of a firm, going on vacation is a matter of meeting with other lawyers who will be covering cases during your absence.

If you are a sole practitioner, use the buddy system.  Find a colleague who is experienced in your practice area and willing to cover for you.

This arrangement is usually reciprocal and is helpful if you have an unexpected absence from the office due to injury or a medical condition.

Vacation Checklist:

  • Notify clients, opposing counsel, judges, or other appropriate parties that you will be out of the office;
  • Prep your files.  They should be well-organized and current, with status memos so your buddy can easily step in if needed;
  • Create a “Countdown Schedule.”  Identify what needs to be done when and whether certain tasks can wait until your return;
  • Allow for wind down.  As your vacation approaches, leave time in your schedule to finish up last minute work.  Reduce or refer out new matters;
  • Train staff.  Do they have a clear understanding of office procedures?  How will they screen client calls during your absence?  Give them parameters for contacting you or your buddy in the event of an emergency.
  • Resist constantly checking voice mail, e-mail, or text messages.  Technology is a God-send, but part of rejuvenation is taking a break from our instant Internet society. Checking in is okay, but stick to a schedule to avoid obsessing over what is going on back at the office.  Remember – you have an emergency plan in place.  If something happens, staff or your buddy will get a hold of you.
  • Avoid post-vacation overload.  Just as you blocked out dates to go on vacation, allow yourself time to get back up-to-speed.  Otherwise, you’re right back where you started.

All Rights Reserved 2019 – Beverly Michaelis

 

Well-Being Template for Legal Employers

The Policy Committee of the ABA Commission on Lawyer Assistance Programs (CoLAP) and the ABA Working Group to Advance Well-Being in the Legal Profession developed a Well-Being Template for Legal Employers to provide suggested guidelines to legal employers for responding to an employee who is experiencing impairment due to a substance use disorder, mental health disorder or […]

via New: Well-Being Template for Legal Employers — CoLAP Cafe