By Aebra Coe

Law360 (July 10, 2020, 8:15 PM EDT) -- After a wildly tumultuous first half of 2020, law firm leaders are now preparing to take on whatever the second half of the year has in store.

The legal industry in 2020 has already faced a pandemic, along with the resulting need for firms to transition to remote work and all of the complications that brings with it.

Firms have also encountered the economic impacts of the pandemic, including work slowing down in certain practice areas and clients finding it harder to pay their bills, with some firms responding by laying off or furloughing staff and attorneys.

Could the second half of the year be worse?

While law firm leaders say they are looking ahead with cautious optimism, they still have some major concerns for the welfare of their businesses, their people and their clients.

Here are three of the biggest worries on law firm managers' minds for the remaining months of 2020.

Clients' Ability To Pay

As the full economic force of the pandemic is felt during the second half of the year, businesses' struggles will directly impact law firms' ability to collect on their legal bills and get new work from clients that have ratcheted down spending.

That is a major concern for Angelo Genova, managing partner and chairman of midsize law firm Genova Burns.

"We are an extension of the success of our clients and the businesses they're in," Genova said.

Genova said that as the first loans provided through the federal coronavirus aid package for small and medium-sized businesses begin to dwindle, the clients that have made use of those loans could very well begin to struggle.

"We're going to find out whether the CARES Act was a bandage over a wound or whether it was curative [for the economy]. My instincts tell me that it was a Band-Aid on a wound that has a risk of expanding," Genova said.

The moment is one where law firms will need to be "true partners" with their clients, he said. That will mean finding ways to share risk, accommodating clients and thinking about clients' long-term viability rather than just short-term returns on legal work.

"We can look at fees and explore solutions. It affords us the opportunity to assist in a way that helps clients survive in the hope that engenders loyalty and commitment to the relationship over the long term," he said.

A Decline in Diversity

As law firms look at their personnel in the midst of the pandemic, they'll have choices to make about who to let go in potential layoffs and how to manage and evaluate attorneys who may have been working at home without adequate child care or other caregiving resources due to the coronavirus.

And one concern among management is that if diversity is not made a priority, people of color and women could bear the brunt of those decisions.

"For some, remote work has eased commuting challenges, enabled focus and sped adoption of new technologies. For others, productivity has proven uneven at best and efficiencies hard to gain despite great effort," said Beveridge & Diamond PC chairman Ben Wilson. "Like other societal pressures, these issues tend to disproportionately affect diverse lawyers and staff, parents with children at home, and those who must care for loved ones in their homes or communities."

In response, Wilson said his firm has increased its focus on making training and development opportunities available to all lawyers and staff. It's also scheduling regular virtual meetings to bring people together, nurture the firm culture, and continue its diversity and inclusion programs.

Edelson PC founder Jay Edelson said that diversity is a concern for him as well during these times.

"With most law firms focused on efficient business practices, teleworking and finances, diversity is ranked at the bottom of the priority list for many," Edelson said. "As seen in the last recession … women and Black attorneys are the most likely to be laid off and have their salaries reduced. With that in mind, we are focused on continuing our efforts to diversify our team, and the legal field more generally."

Trouble Training Associates

According to Alexander Thomas, global managing partner of Reed Smith LLP, one challenge many law firms face during the COVID-19 era is making sure that junior lawyers are "staying busy and are expanding their skills," even as firm leaders are not able to mentor them face-to-face and as business slows in some practice areas.

"The circumstances of this unique time require that we be much more active and deliberate in engaging with our lawyers and providing them direction," Thomas said.

As certain practices become more busy than others, Thomas said his firm has tracked that movement and shifted junior lawyers to where the demand is high. It has also relied on some of those associates to help advance the firm's so-called knowledge management efforts, creating new career paths for some attorneys, he said.

The knowledge management projects the associates have helped advance include a database of appellate punitive damages, a roundup of best practices for global regulatory investigations, a guide to multijurisdictional price-gouging and the drafting of model corporate forms.

"In this way, we are providing a great opportunity for our junior lawyers to broaden their skills and work with lawyers and on teams that they otherwise would not have the opportunity to do," he said.

Edelson said he expects the pandemic to last well into next year and is adapting to that by shifting the firm's policies on remote working, saying a flexible approach could help retain associates.

The firm has encouraged existing employees to work from other locations if they want, and for the first time in its history, the firm is recruiting laterals with the explicit understanding that they don't have to be in the cities where the firm has physical offices.

"Our experience thus far with remote work has changed our view going forward," Edelson said. "We now are comfortable that the majority of people can work as well, or better, from a remote workspace."

--Editing by Aaron Pelc and Michael Watanabe.

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