SME law firms should take a leaf out of Winston Churchill’s book and recognise that, despite a new recession and JobKeeper soon to end, there are opportunities abound.
When the global coronavirus pandemic hit, McDonald Murholme managing director Alan McDonald quoted former British prime minister Winston Churchill to the firm’s staff: “Never let a good crisis go to waste”.
In conversation with Lawyers Weekly, Mr McDonald said that JobKeeper has provided a six-month window of opportunity for law firms to prepare for an economy that will go into recession – most likely a deep one over the next two years, he mused.
“Like all recessions, there will be winners and losers, law firms can represent both the winners and the losers. Tax advice will be a key area of enquiry as some clients record serious losses, while others make exceptional profits,” he proclaimed.
Law firms must be ready to take advantage of the six-month adjustment period that the government and the banks have presented via JobKeeper. With less than three months left on the scheme, the window to leverage that advantage is closing, he warned.
“Many clients will receive a generous payment from JobKeeper. While the lawyers will remain in the main part active and busy it will be the managers who may suffer,” he noted.
“Regrettably, there will be redundancies when people are not working in offices in the conventional way – that is unavoidable even with JobKeeper – structural change is inevitable. This is an ideal time to drive efficiency.”
Many law firms will not receive any money under the JobKeeper program, Mr McDonald said, “but that is not the point, opportunity abounds”.
“The biggest is the opportunity for employees to work from home, that transition has gone well in most places because those who have attended their work as an essential requirement have enjoyed a quite open [workplace], often driving to work and with low traffic levels until recently,” he explained.
“Those that have worked at home have loved the flexibility and the increased recreational time, law firms will face a challenge in getting people back to the office, many will resist returning to the office.”
COVID-19 has provided a welcome opportunity to stress test the fundamentals of boutique law firms, Mr McDonald argued, and in particular the external providers to those businesses.
“I’m sure many law firms have done exactly that – not everyone passed the stress test. Typically, now may be a good time to change your IT provider as we have done – we have ended up with a better service at half the cost,” he said.
“But those that have passed the stress test will be set to earn higher incomes in a more efficient working environment in the future. At McDonald Murholme, we have flattened the curve on mistakes being in our practice management system. That will continue post-pandemic.”
Law firms can also learn from accountants, Mr McDonald added, by way of reaching out to clients, strengthening communications and engagement with them. As a result, a boutique is likely to make more money in the process, he advised.
“Strengthening the bond between lawyer and client because all clients will have issues dealing with employees, and in a very different marketplace for their product or service, they will be keen to listen to [advisers] and lawyers that have a good sense of business,” he concluded.
“This will enhance their relationship with clients – there’s the Churchill opportunity.”