Pandemic Economics: How the virus is being felt across the legal profession

Lawyers agree it has caused irreversible changes to their practices

Pandemic Economics: How the virus is being felt across the legal profession
Christopher Devlin practises almost exclusively in Indigenous law, representing First Nations, Metis groups and Indigenous-owned organizations.

The COVID-19 lockdown has affected every area of law differently. In some, work has remained consistent and in others, business has slowed to a trickle. The pandemic has left its mark on the types of services clients want and the way it is delivered. 

Businesses began shutting their doors in the middle of March and by April 1, 1.1 million Canadians were out of work. On April 5, the Globe and Mail reported widespread salary cuts at large law firms. For solo practitioners and small firms, COVID’s economic impact means a significant number of lawyers and law practices will be put out of business, says Jordan Furlong, a lawyer and global legal market analyst. Many of the 1.1 million are clients or potential clients whose unemployment means they no longer need legal services, he says.  

“They are not buying and selling houses. They are not updating their wills. They are not starting small businesses. If they have small business, they are probably closed,” Furlong says. “Self-employed individuals, among other things, were keeping a ton of law practices busy, especially solo and small-firm practices.” 

“I think there is a significant threat to the livelihoods of a whole lot of lawyers.” 

Christopher Devlin practises almost exclusively in Indigenous law, representing First Nations, Metis groups and Indigenous-owned organizations. Most of Devlin’s clients live in remote, rural communities. Since the pandemic hit, many have gone into self-imposed lockdowns to prevent the virus from entering. Prior to COVID, Devlin had clients on the verge of filing major litigation asserting s. 35 rights, others in the process of filing claims with the federal government. Business owners with advisory needs have seen revenue dry up and First Nations have had internal governance issues with elections, ratifications, referenda and other matters put on hold because members cannot participate in person.  

“There's just a huge amount of activity that First Nations engage in that is affected by the COVID-19 crisis,” Devlin says.  

Band councils and administrations are usually overwhelmed with requests from Crown officials and resource developers to meet for consultation on the group’s traditional territory, he says.  

“These days, people are more concerned about making sure that there is sufficient personal protection equipment in the communities and that people have enough groceries and firewood for their wood-burning stoves in their homes.” 

The extent to which COVID-19 has impacted Indigenous communities has meant DGW has had to make salary reductions. It is not alone, and for the widespread business slowdowns, the government has stepped in with the Canadian Emergency Wage Subsidy. But Devlin says the program is less helpful for lawyers because of their higher-than-average incomes. The subsidy pays 75 per cent of wages, up to $50,000 per year. The market rate for some of Devlin’s lawyers is “well over $100,000 a year,” he says.  

“There's a big gap between what the CEWS will pay me as an employer and what I would otherwise have to pay those employees, so I still have to roll back wages. We're very unsure about what our revenues are. And we're a small firm. . . . Wages are a huge percentage of our monthly expenses.” 

At the time of writing, the Canadian government had received 2.7 million employment insurance claims. In the U.S., that number is more than 25 million. The unemployment uncertainty means, that for family law specialist Kelly Jordan, it is a difficult time for clients to negotiate on financial arrangements. Business has suffered as a result. 

“These are very challenging times financially for family lawyers,” says Jordan, who runs a three-lawyer firm in Toronto.  

For criminal law, the courts have postponed all trials and appeals, handling urgent matters remotely, where possible. Lockyer Campbell Posner managing partner Richard Posner says that, while his firm has suffered from lost revenue, it is taking the time to do some spring cleaning.  

“On the positive side of the ledger, our firm has been able to clear up significant backlog in terms of the perfection of appeals and the writing of factums,” he says. He adds that it has been able to resolve more cases and secure the release of more people on bail, as the courts recognize that detention facilities are a breeding ground for the virus.  

Legal business is not suffering everywhere. In estate planning and administration, Jessica Lyle, co-founder of Touchstone Legal Inc. in Dartmouth, N.S., has seen a steady flow of business.  

“I'm fortunate — as much as I hate to say that — in terms of the area of law that I practise in. . . . [Clients] recognize moreso than ever that they probably need to have their documents in place,” she says. 

The pandemic has also given Lyle’s clients greater recognition of an aspect of her services of which they often fail to see the importance. Borne primarily by the elderly, COVID-19 has made the helplessness of disease and vulnerability of old age more visible. Lyle says clients seem always attuned to the need for after-death planning, but before-death planning — health-care decisions, banking, mortgage payments, taxes, redirecting mail — are less on their radar. Planning for possible loss of capacity seemed overcautious to some of her clients before, but it no longer does. She is having less resistance and seeing more interest in powers of attorney and personal directives. 

“A lot of people come in really thinking they're just worried about what happens when they die. And when I suddenly say, ‘Yeah, but what happens to you and your affairs while you're living, but just can't tell people what to do if you want to have some control over who it is stepping into your legal shoes?’ Then, all of a sudden, we get into a very different conversation.” 

In employment law, COVID-related business closures, layoffs, furloughs and salary cuts have meant most employers have legal questions, as they adjust and adapt and implement temporary measures while trying to avoid litigation down the road. 

“One thing that most businesses have in common is a question mark about what is happening with their employees right now,” says Lisa Cabel, national leader for employment and labour law at KPMG Law LLP.  

Cabel’s practice typically involves litigation, appearing at tribunals, collective bargaining, arbitration and solicitor work. She has been advising clients on how to implement work-from-home policies, options for reduced work hours and salary cuts, as well as on the ever-changing government assistance programs. 

A large portion of Cabel’s practice is litigation. When the courts closed, several matters were up in the air. Law, like every knowledge-based industry, has moved to remote work. Video-conferencing app Zoom had 10 million daily users in December and 300 million daily users by late April — a rise of 2,900 per cent. The company’s stock is up 400 per cent since its IPO one year ago. Since social distancing came into effect, Cabel has been conducting mediations virtually.  

“From my own experience, and I've heard this from colleagues, virtual mediations are actually not a bad way of conducting mediations. And, so, I think we may actually out of this see that happening more often,” she says.  

Cabel’s most recent mediation — hours before she spoke with Canadian Lawyer — consisted of a mediator and an opposing counsel in Ottawa and she and her client in Toronto. Pre-COVID, Cabel had planned to travel with her client to Ottawa to take part. 

“It does reduce the travel time and the costs and hours that counsel has to put in,” she says.  

Devlin’s firm, DGW Law Corporation, shut down in mid-March. The firm’s network is cloud based and, because of the nature of its practice, going remote was an easy transition.  

“Because we work for Indigenous communities, we’re already quite mobile. We go to our clients, they rarely come to us,” he says. “Most of the lawyers and some of the legal assistants are already portable and can work remotely.” 

But while his lawyers are comfortable going remote, not all his clients are.  

“Some clients are more inclined to use online platforms than others, and in many Indigenous communities, people gathering and coming together in person is actually quite important,” Devlin says.  

In estate planning, physical distancing has made effective connection with clients more difficult, says Lyle. Her office has been “relying heavily” on web conferencing because phone calls cannot suffice. With older clients, statistically more likely to have memory loss, dementia and other health issues, seeing the client while speaking to them is important, she says.  

Jordan agrees. Virtual mediation in her family law files raises a host of concerns. In high-conflict cases, the ability to read body language is largely sacrificed in web conferencing. As a mediator, it’s Jordan’s job to ensure that it’s a safe environment and navigating power imbalances and intimate-partner violence during an online mediation is currently a “huge learning curve,” she says.   

Lyle and co-founder Jamie Angus opened Touchstone Legal in October of last year, partly with the purpose of creating a more mobile practice management style. Angus is a mother of five and a flexible work arrangement was integral to their objective and allowed them to pivot when COVID hit. 

“On one hand, it's completely terrifying to start up a practice right when this is happening,” says Lyle. “At the same time, I'm in a much better position because of this new firm than I would have been had this happened this time last year.”  

Although the utility of working from home has long been apparent, Lyle says it has been tabooed in an industry focused on appearances. She sees that changing. 

“There's going to be a lot more openness to people working from home without judgment from clients as well as others,” Lyle says. “In the law firms — certainly in the bigger law firms where optics are ever important — people working from home all the time is not something that's necessarily favoured by some of the older-school lawyers and some of the younger ones, too. . . . I'm hoping this will change that sort of optic for everybody.” 

Eventually, social distancing and mandatory business closures will be over. But, according to Furlong, the legal profession will never be the same.  

“What we would have called normal back in January, February — by the time this pandemic has truly run its course — will be gone,” says Furlong.  

“We're not going back to the way things used to be. And that applies politically. It applies economically. It applies environmentally. And it applies to a much smaller and less significant part of the world called the legal sector.” 

For example, working from home will fray the tie between the legal profession and the billable hour, says Furlong. He believes there’s a correlation between lawyers working from home and lawyers docketing fewer hours.  

“There are all sorts of structural and cultural systems in place inside a law firm that are constantly reminding lawyers to docket their time and pass in their dockets,” he says. “By the way, the fact that we need to have so many different systems, forcing lawyers to write down how long it took them to do their work and to pass it into a central billing authority should tell you just how unnatural and how unnecessary it feels to the lawyer. Lawyers are not fundamentally clock punchers. 

“There's a reason so many lawyers keep leaving more lucrative jobs in law firms and going in-house with a company or in-house with a with it with a government department” 

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