Several law firms introduced wage cuts, layoffs, and other austerity measures in the spring and summer in reaction to economic stresses created by the coronavirus pandemic. They either rolled back any austerity steps months later or made extra cuts or some combination of the two.
Especially for the economy and for facets of the legal system, the COVID-19 challenge is noteworthy. Members of law firms must brace for a wide variety of situations, the probability of which will depend on the success of policies both in public health and economic policy.
This article highlights five insights from recent downturns, examines future repercussions for consumer demand across fields and sectors of practice, and suggests priority areas of focus for law firms’ leaders. In a “through-cycle” mentality, the most successful businesses can handle, giving enough attention to near-term pressures while setting the foundations for long-term growth.
Lessons from previous downturns
Several law firms introduced wage cuts, layoffs, and other austerity measures in the spring and summer in reaction to economic stresses created by the coronavirus pandemic. They either rolled back any austerity steps months later or made extra cuts or some combination of the two.
Especially for the economy and for facets of the legal system, the COVID-19 challenge is noteworthy. Members of law firms must brace for a wide variety of situations, the probability of which will depend on the success of policies both in public health and economic policy.
This article highlights insights from past downturns, discusses future consequences for consumer demand across fields and sectors of practice and suggests priority areas of emphasis for law firms’ leaders. In a “through-cycle” mentality, the most successful businesses can handle, giving enough attention to near-term pressures while setting the foundations for long-term growth.
However, as industry challenges, policy reactions, stimulus measures, shifts in jobs, and other stressors offer alternative drivers of demand for legal services, economic downturns do not directly translate into a reduction in transactional activities. There has been a wide variance in effect across the global economy to date to the COVID-19 crisis.
Although most businesses face pressures, there are unprecedented decreases in demand in specific sectors specifically impacted by physical distance interventions (such as airlines, hotels, and storefront retail). Other industries see sharp rises in demand (such as medical supply, sanitation, food, and in-home entertainment).
The third set of businesses that are not explicitly impacted by COVID-19 but feel the influence of a general slowing or a mild uptick as people’s lives shift at work and home (such as home renovation, landscaping, and consumer electronics) experience subdued or lumpy demand.
Downturns speed up secular, long-term patterns. Plan for continuing pressure on pricing and changes to new methods of distribution. Standard prices tended to increase by 3% a year in the last slowdown, on average, but there was still pressure on collections.
The fraction of regular premiums not collected more than doubled from 2007 to 2012 (to 16.4%, from 8%) due to rises in discounts, write-downs, and write-offs, which left comparatively stable net costs.
This time around, expect procurement departments to play an even more significant role. Market agreements that provide consumers with greater cost certainty will be more oriented, either through a fixed or capped contract or through one that more closely aligns fees with the performance obtained.
Such law firm in Manila, Philippines deal much more with downturns than others do. Grouping 100 businesses into quintiles depending on where they entered the financial crisis in 2008 and where they left in 2012 illustrates the severity of the complexities involved.
About half of those companies remained in the same relative position throughout the span, calculated by earnings per equity partner. The remainder of this paper outlines an early view of the factors of demand and leadership goals that will decide which various law firm in Manila are most competitive in the current situation of COVID-19 in the Philippines
Potential consequences for the market of clients
While there are likely to be precise market changes across industries in specific practice fields, such as labor and housing, transactional activities, in particular, are likely to concentrate on very different conditions in more troubled sectors such as tourism, transportation, and leisure than in areas such as healthcare. For the markets, consumer groups, and activities to which they have the most significant exposure, each firm should establish a perspective on the market outlook.
Law Firm in Manila, Philippines
We propose six trends for law firm in Manila, Philippines to explore based on the lessons gained from past downturns, current demand forecasts, and our background as a professional-service firm. In the short term, these through-cycle goals seek to preserve value and create value over the long term.
Focus on Clients, Clients, Clients
Now is the time for the customers to be present. Their corporate background has drastically altered, posing unparalleled difficulties. Law-firm associates should communicate proactively with consumers and their needs and genuinely listen to them.
Even a personalized email with two lines will deliver the correct message. Be prepared to pivot the customer service plan to fit them as customer agendas and preferences move, such as adding new partners or skills in a relevant field. Invest substantially inapplicable information, crisis advice, and other confidence-building resources.
Operate on Importance at A Pace
Useful facts, hard evidence, and unbiased advice are looked for by clients. With knowledge, they are flooded. What will your law practice’s appropriate plan on the issues you have specific skills. What creative channels will you use to carry your views to consumers, outside regular posts, or emails? That is too long in this fluid time, whether it takes more than a week from design to publication or a consumer conversation.
Embrace Your People
Your law firm in Manila involves your people. Acknowledge and work empathically with the humanitarian and personal components of the COVID-19 crisis. Support the independence, teamwork, and connectivity of workers by technologies and regular contact with business leaders.
Look for ways to quickly reallocate any surplus capacity to develop new business resources or pro bono programs. Each employee of the company can see clearly how critical their role is during this time.
Be cautious about costs
In these days, it is simple to let the discipline of pricing slip. Analysis indicates that law firms have tended to raise regular prices in previous downturns but partly reversed such acts by raising consumer, issue, and one-time discounts; strategic investments; and write-offs work-in-progress and accounts-receivable.
If performed in a deliberate and regulated manner, these acts will be successful ways to satisfy consumers’ demands while strengthening the value proposition of a law firm in Manila, Philippines and preparing the business well for the economy’s rebound. But in offering price or volume relief, leaders can be innovative.
