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Now that we’ve collectively lived through the most unpredictable year in recent memory, it might seem a little ambitious, even reckless, to make predictions for 2021. After all, no law firm leader likely had “figure out how to respond to a global pandemic” on their list of action items as 2019 ended.
Even before COVID-19, however, law firms were already in a period of unprecedented change brought on by advances in technology and a shifting market for legal services. There’s also the ebb and flow of the economy to consider, and the rise and fall of practice areas new and old. Responding to the unexpected is nothing new for most firms these days – it just reached another level in 2020.
Whatever 2021 brings, firms will have to be nimble, ready to address the challenges and opportunities ahead. For that reason, it’s more important than ever to examine trends we might expect in both the legal sector and the wider business world next year. Here are five to consider.
In addition to COVID-19, another scourge spread across the United States in 2020. According to the FBI, there have been an average of 3,000-4,000 cyber-attacks a day during 2020 ¾ an increase of more than 400% over previous years. Much of this was driven by the massive shift to remote working due to the pandemic. All those devices using less-than-secure home Wi-Fi were irresistible to hackers.
Another troublesome trend is the rise in ransomware attacks. In the typical ransomware attack, hackers gain access to a victim’s systems through a vulnerability, encrypt their data, and then demand a ransom paid in Bitcoin or another cryptocurrency in exchange for unlocking it. Law firms are not immune to this, and it’s not just a problem faced by Big Law. In fact, firms with fewer than 20 lawyers account for half of all ransomware attacks in the legal industry. Entire court systems have also fallen victim to ransomware in the past year.
For this reason, cybersecurity experts are advising law firms of all sizes to focus even more on securing their data in 2021. And, if firms haven’t already, they should definitely be working cybersecurity expertise into their budgets for the coming year, and beyond.
While hacking threats present obvious challenges for firms, they also present opportunities. Cybersecurity attorneys are in high demand in the wake of the pandemic and the trend has created a lateral hiring spree among midsize and boutique firms, with many launching new practices. For law firms that already offer cybersecurity counsel, it might be a good time to double down on marketing and business development in that area.
The wave of lockdowns and restrictions in response to the pandemic sent a ripple through the economy that will likely be felt for years to come. Already, commercial bankruptcy filings are up by at least a third over last year. This will likely continue well into 2021 as stimulus measures expire, PPP funds run out and the availability of additional government relief remains uncertain.
All of this means bankruptcy lawyers will be busy for the foreseeable future. In fact, law firms with bankruptcy practices were already preparing for a flood of work as early as last May. As with cybersecurity, bankruptcy lawyers are now a hot commodity, with laterals in high demand.
The events of 2020 also brought into sharp focus the importance of diversity and inclusion in all facets of American life, and the law is no exception. Many firms issued statements this past summer denouncing racial inequality.
The Minority Corporate Counsel Association’s 2020 Inclusion Index Survey Report provided some data to back up the mixed diversity message coming from the legal industry. Survey respondents agreed that “law firms and corporate legal departments cultivate a number of positive cultural elements.” However, the report notes that “the data shows that these organizations continue to struggle with improving leadership diversity and inclusive cultures.”
It's clear that firms must take more concrete steps in this area, and many are doing so. At least 117 firms have signed on to the Mansfield Rule initiative, which provides a certification program that helps law firms establish hiring and promotion protocols to increase diversity in law firm leadership ranks.
There are an estimated 57 million freelancers, or “gig workers,” in the United States, with some saying they account for 35% of the American economy. And, while many people do freelance work because of the freedom and flexibility, it can also be a vulnerable way to earn a living, something that has been underscored during the pandemic. There has also been controversy around whether some gig workers should be eligible for benefits and sick leave available to other types of employees.
All of this has led to a push to reclassify gig workers as employees. President-elect Joe Biden made it a campaign promise, and the federal government intends to issue a proposed rule next spring outlining how to determine if workers are independent contractors or employees under the Fair Labor Standards Act.
This issue could heat up in 2021, and law firms will likely be asked to help guide clients through appropriate procedures and policies to ensure they are compliant with any changes.
The unprecedented shift to working from home in 2020 led to empty offices across the United States this past spring. And while many people will be returning to their brick-and-mortar workplaces, it’s not likely that commercial buildings will be at full capacity for some time.
As a result, we will likely see shifts continue in the commercial real estate space through 2021. Already some are predicting an increased availability of flexible or short-term leases. Subletting could also be on the rise as companies cut back on their footprint temporarily while holding space in reserve to meet growth needs. All of this likely means commercial real estate lawyers will be called upon to help their clients, both landlords and tenants, get creative to respond to this new reality. Law firms themselves might also want to examine their office needs and make changes.
Few would want to repeat the last twelve months, and hopefully, 2021 will help everyone, including law firms, to turn the page on 2020. But the challenging year we’ve been through did provide lessons in law firm management and the importance of maintaining a solid business foundation. That, along with keeping an eye on potential trends, can only help managing partners and others to survive whatever the next year brings.