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Practicing Law in an Uncertain Economy

by Chris Stiegemeyer, Director of Risk Management, The Bar Plan Foundation

While there are unquestionable differences between the 2020 coronavirus pandemic and the financial meltdown of 2009, history would indicate there will be similarities as well. So, the good news, if there is any to be had in this current situation, is that there is a path forward for your law firm’s financial success. However, it won’t be accomplished without some diligent effort, nimbleness and creativity.


This article assumes you have already taken the required steps to ensure your firm’s lawyers and staff are able to work remotely from the office securely from a technical perspective. That is, all virus and security firewalls are updated and being implemented on all the remote devices in use. Firm laptops, phones and other devices are inventoried and their use is monitored. Clients have been informed of your arrangements and how this health crisis may affect their matter.

A component of electronic security when working remotely is the work space environment, often a home office, but perhaps simply the dining room table. The unique circumstances of “sheltering-in-place” require lawyers and staff to not only be diligent in securing client information but also to educate the family members sheltering with them of the importance of the confidentiality of the lawyer’s work and remind them that computers should not be accessed inappropriately and physical files need to be left alone. This is also a good time to update your passwords.


What is the current financial health of your firm? Is your firm over or under budget at this time? You may be able to allocate budget resources from less important to absolutely critical functions or prepare to cut future expenditures to offset potentially reduced income.

Budgeted activities designed to increase demand for your services (marketing, client development) may need to be increased while those targeted to increase supply (new lawyer recruiting) may need to be reduced. New IT investment may have to be postponed provided the firm’s service capabilities are not threatened in the interim.

Loan help may be available with new programs from the Federal and state SBA which expand both the Paycheck Protection Program and the Economic Impact Disaster Loans. Eligibility criteria has become less strict and may provide opportunities that did not previously exist. In addition, there are changes to the Business Tax Rules including a payroll tax credit, changes to the Net Operating Loss rules, Alternative Minimum Tax rules and more.

Finally, check your Firm’s insurance policies to see if you have coverage for business losses incurred for interruptions related to COVID-19.

Strengthening Current and Former Client Relationships

A truism of business is that it is always easier and less expensive to keep the clients you have than cultivate new ones. So get to it! Get in touch with current clients and let them know you’re here for them. Remember, they’re going to be under just as much stress over their uncertain future as you are. Bring solutions to them to alleviate their anxiety and you could have a client for life. But be careful not to get pulled into providing free legal services.

Cultivate New Clients

Direct contact with new potential clients is subject to more strenuous ethical constraints than contacting current or former clients. Before diving into that kind of direct contact approach, first review the advertising Rules of Professional Conduct (4-7.1 – 4-7.4 particularly), second, develop your plan and then discuss it with the Legal Ethics Counsel’s Office to make sure you’re not crossing into prohibited conduct.

That said, this is probably a good time to review your advertising and marketing efforts to see where you are getting the biggest bang for your marketing dollar and focus your approach to maximize new-client outreach.

While it is not currently possible to engage in the single most recommended approach to generating new clients, i.e. taking a colleague to lunch to develop (ethical) referral pipelines, maybe virtual lunches are a possible option. Many restaurants are offering creative pick-up and delivery options. Consider picking up the tab for a colleague’s lunch and then meeting virtually to discuss possible areas of collaboration.

Beware of Scams!

There is, right now, a criminal scheming to separate you from your trust account money by posing as a potential new client. Don’t allow the pressure for fees to override your diligence in identifying people attempting to defraud you.

Expansion into New Practice Areas

Don’t Dabble! If you believe you need to expand the areas of law your firm works in, get the order right. Before bringing in any client outside your firm’s customary practice areas first develop the necessary expertise or co-counsel arrangements, update your risk management processes to address the issues inherent in the new area, especially your scope of representation engagement letter and calendaring procedures, assign sufficient lawyers and staff to diligently manage the representation and after having done all that, go get the new practice area client. All of those necessary components become much more difficult to manage “on-the-fly” in an ongoing matter.

Importing New Practice Areas

You may decide that rather than developing a new practice area from the ground-up you’ll instead import the practice area by hiring a lawyer experienced in that area or getting into Of Counsel arrangements.

From a risk management perspective, lateral hires create issues because of a lack of buy-in into your firm’s processes and procedures. The solution is to train them well in your expectations, assign sufficient staff to support them (especially in their “break-in” period), and them keep a thumb on them.

Neither space nor propriety (this is a family publication after all) allow me to go into the total boneheaded-ness that is the typical Of Counsel arrangements. Just read Indy Auto Mann, LLC v. Keown & Kratz LLC, 114 N.E.3d 32 (Ind. Ct. App.2018), transfer denied, 123 N.E.3d 140 (Ind. 2019), and you’ll get the drift of the possible ways this relationship can go wrong. Most lawyers will be much better served by establishing a co-counsel relationship with a written fee sharing agreement per Rule 4-1.5(e), since that’s what most “Of Counsel” arrangements are anyway.

Sharpen Firm Risk Management Procedures

“Historically, the volume of malpractice claims against lawyers rises during economic downturns.” - Michael Furlong, Senior Vice President in the legal business division of Swiss Re, Oliveira, Denise. “How to Steer Clear of 2009’s Legal Malpractice Suits,” Law 360, 12 Dec. 2008, (2 Jan 2009).

Don’t let you be that quote! Take time now to look hard at your risk management protection procedures. Tighten up any ambiguous language in your fee agreement’s scope of representation description, take extra steps to keep communication going between you and your clients, document more assiduously, be ruthless in your calendar and docket control procedures, monitor client receivables more diligently and be prepared to withdraw from problematic cases sooner, and when your role in the representation is concluded, confirm that act in writing.

Extra Vigilance on the Trust Account

Difficult economic times create added financial stress. Review your firm’s trust account handling processes and when you’re satisfied that they are sufficient, consider adding another couple of sets of eyes to the accounting process anyway.

Risk Management Help

If you or your firm have any questions about the ethics and malpractice risks of practicing law in and uncertain economy, contact the appropriate ethics authority in your state or contact us at Additionally, we have created a Resources for Lawyers section on this website, specifically geared for law firms during the coronavirus pandemic.