Analysis

EU Travel Bar Adds To BigLaw's COVID-19 Headaches

By Natalie Rodriguez
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Law360 (March 12, 2020, 8:08 PM EDT) -- The government's new restrictions on travel from Europe due to the novel coronavirus outbreak are expected to add to the mounting logistical obstacles facing BigLaw attorneys and could impact key practice areas by adding to a larger cocktail of economic instability.

New U.S. restrictions on European travel are likely to interrupt things like client meetings and deal closings in the short term, but could also contribute to economic troubles that may impact parts of the legal industry down the line, experts say. (AP)

On Wednesday evening, President Donald Trump announced he will suspend travel from much of Europe as part of the administration's effort to contain the outbreak of COVID-19, the disease caused by the novel coronavirus. And while the impact will be limited compared with other problems the pandemic has caused for the legal industry, experts expect it to further complicate certain matters.

In the immediate future, key client meetings, trial matters and deal closings are likely to be sidelined, experts say. The larger impact, however, may be on economic activity and planned deals, while adding to pressures already faced by the hospitality and transportation practices.

"I think [the travel bar] will be inconvenient for some firms, but I think the larger issue is the negative reaction the markets have had," said legal industry consultant Kent Zimmermann. "The negative market reaction could cause some transactions in progress to pause or get derailed."

J. Gray Sasser, co-chair of Frost Brown Todd LLC's blockchain and digital currency team, also said he expects to see some logistical issues with deals, but is more optimistic that the travel suspension will not slow the rate of transactions.

"Travel concerns are delaying scheduling of in-person closing, but deal pace has not slowed," said Sasser.

Sasser noted that his team is currently working on a deal involving a U.S. client selling shares to a large Brazilian retailer. Even if the travel ban is extended to Latin American or if Brazil imposes its own travel ban, he expects the transaction to move forward, as there is an option to sign documents remotely.

"Thanks to that, we are hopeful there will not be a material impact at this time," said Sasser.

Zimmermann, however, said the travel bar could be just one ingredient in a larger economic maelstrom that could cause some deals to be thrown off course. He added that some practice areas already under pressure from the spreading coronavirus — including transportation and leisure and hospitality — will likely see further distress.

The travel bar has already led to the postponement of a major travel insurance conference — just when insurers in Europe and the U.S. were working with the travel industry and regulators to address issues arising from the impact of COVID-19, noted Greg Mitchell, member of Frost Brown's insurance regulatory Industry group.

For now, many attorneys say the more pressing issue will be trial matters and planned client meetings.

"Many of the cases I work on require depositions outside the country," said Mike Arias of litigation firm Arias Sanguinetti Wang & Torrijos. Yet he added he expects clients to understand the public health need for potentially delaying certain trial matters in the near future.

Yet for some, the impact on such matters will be relatively limited, given that many firms and businesses have already started adopting voluntary travel restrictions and imposing certain social distancing measures.

"We are also significantly restricting in-person consultations with foreign-national clients to protect our staff and amping up video conferencing and staff working from home," said Mitch Wexler, managing partner of Fragomen Del Rey Bernsen & Loewy LLP's Southern California offices.

Arias noted his firm has begun discouraging face-to-face meetings over safety concerns and is remotely preparing clients for depositions or otherwise conducting business from afar when possible.

For some lawyers, there is also some immediate concern for clients who might have trouble getting back to the U.S.

While the travel suspension does not impact U.S. citizens and permanent legal residents, those with work visas who are currently traveling abroad may be affected, and some clients are rushing to get home before it goes into effect on Friday, according to Wexler, who works with companies and high-net worth individuals on immigration and visa matters.

--Editing by Philip Shea and Michael Watanabe.

For a reprint of this article, please contact reprints@law360.com.

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