The Pandemic Effect

I Took A Chance During COVID-19

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Since opening her own law firm in the middle of the coronavirus pandemic in 2020, employment lawyer Dawn Knepper says she's now busier and working harder than she has in years.

But it's not to find business; it's to manage the number of client requests she's receiving — largely for help with issues stemming from the pandemic and the current at-home work environment, including layoffs.

About six months into the pandemic, Knepper left her job as a labor and employment shareholder at Buchalter PC on Sept. 10, and the following day opened the virtual doors of Knepper Law in Irvine, California. She has since taken on more than 40 clients to help them with their cases of harassment, discrimination, retaliation and wage and hour issues, as well as a flurry of employment concerns resulting from COVID-19, such as renegotiating severance packages.

"This has been a big lesson in underestimating your own capabilities," she told Law360, adding that she wasn't expecting "that volume all at once."

And she says she's happier than ever.

Despite the naysayers who questioned her decision to leave a full-time job and reliable income, she said she has learned to trust her gut.

"In my heart I knew I could be successful," she said. "I just knew that I had to work hard and be diligent and I felt like people will come."

But she admits there were challenges and hesitations about starting a business during an economic downturn — risks often underscored by people close to her — and realizes she doesn't have a crystal ball to show her what the future holds for her practice.

Knepper is among the lawyers who took a chance during the pandemic either by leaving their full-time jobs in private practice and opening their own firms or by branching out to other cities in 2020 — and who now say business is booming in the current environment despite the associated risks and worries.

Dawn Knepper in September opened Knepper Law in Irvine, California, with a plan to focus on equal pay issues. (Courtesy of Dawn Knepper)

"If you're in the right practice area, you're just cranking and you're having one of your best years ever," said Jeff Schwarz, principal at legal consultancy Concata LLC. "If you're in the wrong practice areas, it's just tanking and you're just having problems keeping up."

Working Through Logistics

Last year brought pivotal and disruptive changes to the legal industry, as the majority of firm leaders were forced to rapidly embrace technology and remote work.

When the pandemic hit the United States in March, intellectual property ethics veterans Michael McCabe and Emil Ali were already deep in the planning stages of merging their solo practices to form McCabe & Ali LLP. They say their most frustrating experiences during the pandemic came from unexpected delays that popped up.

Registering a limited liability partnership, which is required to begin operations, is usually a simple and mundane task that can be done online in a few minutes, McCabe said. But thanks to COVID-19, it took about two months for the firm, which is based in Maryland and California, to be formally recognized by the states.

McCabe listed the reasons that contributed to the delay: "Because of COVID. Because the offices were closed. Because everything had to be done by snail mail. Because things were getting lost and we couldn't get people on the phone to answer questions for us because they weren't around."

In opening their firm — which represents patent and trademark attorneys who face ethics complaints and disciplinary proceedings filed against them by the USPTO's Office of Enrollment and Discipline — McCabe and Ali also came across delays in opening a bank account. 

"It took a longer time to get some of these little formal things that you need organized and set up right," McCabe said. "That was a little bit frustrating, but I think we were able to use that time wisely."

Michael McCabe (left) and Emil Ali had already begun their discussions about forming McCabe & Ali when the coronavirus arrived in the U.S. in March. (Courtesy of Emil Ali)

Without the complications that McCabe said were out of their control, the two partners think they would've been able to start their operations in June, two months earlier than their official launch in August. They say they used the additional time to create a game plan for marketing the firm, finalize the website design and their goals, and deepen their own relationship.

"That downtime allowed us to 'hit the ground running' much more quickly," McCabe said. "We had gotten much further down the road in our planning that the rest of the rollout of the law firm actually happened relatively quickly and seamlessly after that."

But other than the logistical bumps along the way, both men said the pandemic didn't cause them to pause in their thinking about their venture. Instead, they say they saw the economic downturn as a reality they could experience whether they were practicing solo or together at their new firm.

They acknowledged that all areas of the law haven't been affected equally by the pandemic. But as ethics attorneys who specialize in a narrow area of the law and have existing and new clients, COVID-19 has "tremendously increased" their practice, Ali said.

Because of the economic crisis, some attorneys have been taking on risks they wouldn't ordinarily encounter, something Ali and McCabe predicted would lead to an increase in the amount of ethics and malpractice work the firm handles for its clients.

Knepper also had to work through her own administrative issues. Over the summer, she made a business plan, built a budget and determined which resources she needed to provide comparable legal advice as she did in her role at Buchalter.

"It's all things you don't think about, like, 'Oh, I have to have terms and conditions and a privacy policy for my website?'" she said.

After she dropped her own lawsuit accusing a former employer, Ogletree Deakins Nash Smoak & Stewart PC, of sex discrimination in January 2020, Knepper thought about opening her own firm. But when the pandemic hit, she initially hit pause on leaving her job at Buchalter.

"I was like, No, I can't quit my job. What am I thinking?" she said.

But as the pandemic progressed, Knepper says she continuously received calls from individuals in need of help. She decided to take the leap of faith after two women contacted her accusing the same employer of wrongful termination based on their gender.

"The fact that I was getting a referral like that when I [wasn't] technically doing the work made me decide that now was the time and people needed help more than ever," she said. "I decided I just need to do it."

The attorneys at financial law firm Murphy & McGonigle PC also recognized an opportunity in the pandemic.

As hundreds of firms cut staff, compensation, benefits and growth projections in the first half of 2020, firm chairman James Murphy and his team developed a plan to expand in two U.S. cities — including attracting top lawyers who were contemplating an exit from their big firms.

"We thought about it and concluded that this was a great time for us, because while most of the firms in this industry were in retrenchment mode, we believed it was a golden opportunity to establish our brand," Murphy said.

Drawing on its experience from launching in the wake of the financial crisis 10 years ago, Murphy & McGonigle opened a San Francisco outpost in July, followed three months later by a Chicago office, adding to its existing outposts in New York City, Washington, D.C., and Richmond, Virginia.

Murphy & McGonigle hired Harris Kay to open its first office in Chicago — the second outpost the financial law firm opened in 2020. (Lisa Miller Photography)

Murphy acknowledged that the firm's expansion during the pandemic was risky, especially given the cost of two more office leases. The firm currently has more space than it needs, with just two lawyers and an assistant occupying the Bay Area office, and a managing partner and an assistant as the sole occupants in the Windy City.

But the opportunity outweighed the risks, he said.

The retrenchment mode at other firms created a significant opportunity for Murphy & McGonigle: less competition in the lateral market for major players at top firms who were deciding where they would land next, Murphy said.

"Virtually everyone here is a refugee from BigLaw," he said. "They all were looking for something a little bit different, and we are different."

At the firm, for example, a remote management committee doesn't make compensation decisions by "applying unclear criteria" — rather, every partner is paid under the same "simple, productivity-based formula," Murphy said.

"We wanted to create a place where there is a singular focus on just one thing — delivering world-class service to our clients," he said. "For us, that means eliminating all of those distractions that might fall under the heading of 'office politics.'"  

About half of the attorneys at the 52-lawyer firm have spent time at the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, Financial Industry Regulatory Authority Inc. and U.S. Department of Justice, Murphy said. The firm decided to expand to San Francisco after it saw an increase in clients in financial technology and blockchain-enabled businesses in the area, and to Chicago with the hopes of capitalizing on its current clients in the city as well as the connections of its lawyers, Murphy said.

"The business model of having a boutique firm with this really, really deep expertise is getting a very good reception," Murphy said. "Because we're smaller and our overhead is smaller, we don't have to charge people $1,400 an hour, either. With early-stage companies, that's kind of important."

Schwarz pointed out that the security of a firm job has been declining over time as lawyers recognize and act on alternative routes like joining smaller firms or opening their own. That reality became even more apparent during 2020.

"It gives you more control over your destiny and your paycheck ... without having to wait to see if they're going to keep you if you potentially have a bad year," he said. "With the virtual world and the virtual work, there are some people who are just rethinking their quality of life and what's important to them."

Preparing for What the Future Might Hold

Thinking about the year ahead, Murphy said he believes there will be a significant wave of litigation as a result of the pandemic. And consequently, the demand for his firm's services is "highly likely" to continue to increase, he said.

"The litigation wave from the financial crisis starting in '08 is really the tailwind that helped our firm succeed in the early years," he said. "We had more work than we could do quite frankly at that time … I believe that that's coming again."

Murphy said he hopes the firm can continue to be smart with its spending, stay out of debt and maintain low overhead costs.

Schwarz said he knows attorneys who even before the pandemic launched their own private practices and are now able to work about six hours a day earning close to what they made before because there's not as much overhead.

As for Knepper, she said she's simultaneously feeling "unexpectedly delighted" and tired as a solo practitioner. She says one common thread in many of the matters she has handled is long-term employees who have either had a serious dysfunction issue at work or have lost their jobs in cuts related to COVID-19.

To keep up with the work, she said, she might need to seriously consider hiring a paralegal or another attorney.

"I think the pandemic is only creating additional situations where people are seeking legal advice," Knepper said.

Knepper has largely built her practice through personal and professional referrals, and has generated enough income to cover her expenses right away, though she doesn't want to be overconfident.

"Who knows what lies ahead?" she said. "But the level of activity that I've had over the initial two months has not dropped off whatsoever."

And she said she feels more excited, energized and fulfilled than she has for years.

"I feel like I should've done this a long time ago," she said.

--Editing by Alanna Weissman.

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