Long-Term Impact of COVID-19 Disruption on The Legal Industry

Last updated: 25 Sep, 2023By
Legal Industry

 The COVID-19 outbreak has brought a drastic change in the working patterns of the legal industry. Embracing remote work, legal back-office services, and other techniques is now becoming prevalent in the legal arena. Still, firms should stay vigilant amid the current crisis. It seems that  the pandemic can cause lasting damages to the way legal professionals operate.   

For example, the work-life balance may further disintegrate in the long-term due to the COVID-19 pandemic. We can see many seasoned attorneys who have been around are prioritizing work-life balance more. 

 The Impact of Covid-19 on the Legal Sector   

 The SRA data shows the number of regulated legal firms decreased by 1.9% between December 2019 and December 2020 (from 10,278 to 10,080), with 539 firms closing and new 426 openings. However, Legal Aid firms have suffered the most, with over 70 shutting down since April 2020. 

Legal IndustrySource

In addition, the CLC has reported that they regulated 11 fewer practices by the end of 2020 more than earlier. The latest ONS Monthly Business Survey reported that turnover of other UK services decreased by 14% in 2020. Still, the annual turnover of legal services in the UK remained the same. 

1. Transactional Practices to Suffer the Most 

 The cuts due to the covid-19 disruption affected support workers a lot. Many legal firms had to close their offices following state governments’ orders when the nonessential industries were shut down. This created doubt in many law firms whether they will ever reopen or not.

 Restructuring-based practices may see an incursion in business requirements; however, transactional practices may be the ones to suffer the most. Additionally, litigation lawyers who handle contingency cases will be hugely impacted. How? The hearings, depositions, and the general legal office processes cannot take place physically in courts.

This may create hindrance in settling cases, resulting in the financial unpredictability of law firms dealing in contingency cases. Reason being that contingency lawyers can only charge fees once a case reaches its conclusion. Other stranded law firms are the ones that specialize in business mergers and acquisitions as most business owners are waiting for the ongoing crisis to pass for making any potential merger or acquisition. 

A 2020 April survey conducted on legal professionals concluded that most of the respondents agree COVID-19 would have lasting impacts on the working methods of the law firms. Furthermore, over 620 of the surveyed legal professionals admitted that Covid-19 would make a lasting impact on how their firms utilize technology.

The COVID-19 crisis is eccentric for both the economy and the legal industry. Therefore, law-firm leaders must stay ready to tackle various scenarios, the probability of which will largely depend on the interventions of public health and economic policies.

This blog highlights significant learnings from previous plunges and shapes valuable suggestions for client demand in various practice areas for legal professionals to focus on. In order to be effective, firms must attain a “through-cycle” mindset and give suitable attention to near-term hindrances while framing a plan of action for long-term success.

Also Read: Must-Read E-Discovery Trends & Insights for Lawyers & Law Firms

2. Remote Work and Distance Learning is just the beginning 

 Due to the pandemic, the virtual workforce and distance learning are coming on the front stage of the legal arena. Offices and schools have closed; social distancing and stay-in-place measures are being implemented using technological tools, which have helped to adjust to the new operating procedures rapidly.  

The legal industry may not have received enough time to process all this, but it has shown potential signs that it can alter the long-established methods of educating staff and clients and providing legal services. 

 3. Law Firms and Legal Departments will Evolve

Competition for acquiring talent and customers will increase in the post-covid world. Business owners will give their attention to providers who could deliver intelligent solutions to business legal challenges. Exclusive legal expertise will be on the rise, but the customers will decide what it will be when required and how the results will be measured.  

Specialization and differentiation will be key players in determining a firm’s future, and so will be the ability to collaborate with others in the supply chain. For example, many law firms have already started obtaining legal support services to lighten their burden of back-end work. 

4. Law firms will go Digital 

It would be disheartening if legal firms decided that they would like to save costs on travel, networking events, and other social activities to improve their bottom line once things start getting back to normal. Reason being that such events are a significant way to acquaint with different legal and other professionals within an industry.  

Furthermore, these events also act as a solid source of referrals for people who have just entered the business world. Training institutes, conferences, and other related sources can act as an excellent medium for talent acquisition. 


Effects Beyond COVID-19 in the Legal Industry

If the legal industry wants to avoid lasting damage, the law firms must evolve their administrative staff once things turn back to normal and people start returning to offices. Also, the support staff has borne pain the most compared to all legal professionals due to COVID-19. 

The reason being unlike everyone who was working from home, the support staff did the printing, mailing, copying, and other administrative work that was important for the operation of many law firms. Furthermore, as attorneys were working remotely during the pandemic, they completed the work themselves, which was usually the responsibility of administrative professionals.

Hence, there have been multiple positive signs that the practices which the law firms were compelled to follow through this crisis should have already been implemented in any case. Many of the legal firms have shown their sprightliness in adapting to a new atypical normal, and the firms which will pull through will be leaner, more competent, and well-furnished to serve the clients from any location once all of this is over.  

In the vast legal services market, we will likely witness the closing of some firms in this period. Also, the market will undergo some consolidation. However, as an industry, we must hope that everything will turn out well and all will return in the best of their health to normality as soon as possible, but till then, we must observe, measure, and stay vigilant for the worst-case scenario. 

At Legal Support World, we have been looking at and analyzing such impacts of COVID-19 on the legal sector. Based on our research, we are continuously improving our legal back-office solutions according to the changing industry and market trends. 

To learn about our legal support services in detail, get in touch with one of our experts today! Call at +1 646 688 2821 or send your queries at info@legalsupportworld.com. 

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