The Financial Impact of COVID-19 on Law Firms

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COVID-19 has had a massive effect on the world economy. From small businesses to large corporations, everyone has had to make adjustments to stay afloat. Law firms are no different and have seen many changes caused by the pandemic.

Revenue

For many firms, monthly expenses have not changed much despite there being less inflow of money. The main reason for this is because the majority of costs are for salaries, office rent, and other expenses. These expenses still need to be paid despite entire countries being on lockdown.

Many cases are postponed because courts have to be closed. Also, clients may not be able to pay their legal fees because they are in financial strain themselves. The legal fees make up most of the income for a firm, so many firms will likely experience a downturn in revenue very quickly.

Pro Bono and Bursary Programmes

Many large firms can give back to the community through charity and donations. Many people who are still studying law or need legal fees to be covered rely heavily on this charity. Usually, a yearly payment is made to finance these programmes.

Having to continue putting money into the programmes will end up being a financial burden. By not putting money into these initiatives, many people who have been benefitting will be left behind and feel the strain.

Changing Operating Techniques

Law firms that are still able to operate are doing so remotely. Like many others, they have had to adapt in a short amount of time to keep everything running smoothly. Many firms already have multiple forms of communications but are expanding to make provisions for more clients.

Typical consultations with a lawyer are done face to face in an office. Being able to speak in person is more comfortable than having to communicate through messages and emails. Diamond and Diamond Lawyers say that to give the best alternative to an in-person meeting we should look to video conferencing alternatives.

Opening up communication options will allow law firms to continue working. Being able to operate means law firms will continue making some money and continue to stay afloat during financially uncertain times. A small change like this could be the difference between making it through the pandemic or closing doors for good.

Conclusion

There’s no way to correctly see how businesses are going to recover from the pandemic. For the time being, law firms are going to have to find ways to continue operating at minimal cost to lower any negative financial impact.

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