How Could Coronavirus Affect the Legal Services Industry?

The Coronavirus has been a shock to the system for people and business across the board. We are in the midst of a public health emergency, daily freedoms have been significantly curtailed, and a bubble of uncertainty has engulfed everything in sight. We previously explored how the spread of the virus has affected – and might continue to affect – the global economy. But how could it affect the Legal Services Industry specifically?

Client concerns

Freshfields Bruckhaus Deringer’s London managing partner, Claire Wills recently said that major areas of concern for their clients include the urgent need to establish how best to ration scarce goods; managing unanticipated costs or declining revenues; and navigating challenges around business continuity.

  • Contractual Matters and Supply Chain

Many businesses are becoming unable to perform their contractual obligations and are looking for ways out. One way is by relying on ‘force majeure’ clauses. These clauses allow parties to limit their liability for not performing their contractual obligations if there are unforeseen and unavoidable events that interrupt them from being able to do so. These clauses often include natural disasters and civil unrest, but the exact wording can vary greatly. It is possible that a global pandemic may constitute a force majeure event but this depends on the construction of individual clauses.

Companies also need to prove that such external circumstances are causally linked to them being unable to carry out their duties and that they would have otherwise been able to perform their obligations. A company may also need to comply with other conditions before relying on a force majeure clause – for example, implementing any back up or business continuity measures.

Most major law firms operate within an international setting, which adds an extra layer of complexity given that different jurisdictions interpret legal principles differently. For example, force majeure events automatically apply to commercial contracts governed by Chinese law – particularly interesting given that many force majeure notices are currently being issued by Chinese suppliers.

  • Regulatory Enforcement

James Bremen, London partner at Quinn Emanuel Urquhart & Sullivan, speaking to International, said that, in the context of forced lock downs, “regulatory issues require very significant, immediate, advice” because businesses want to know exactly what they can and cannot do. According the another major law firm, specific areas which can give rise to regulatory issues include:

  • Financial Services – (including operational resilience and market reporting);
  • Insurance – (including the extent of cover and exceptional circumstances);
  • Real Estate – (on the applications of rent holidays or break periods);
  • Data Privacy and Cybersecurity – (including conditions for processing personal data in exceptional circumstances).
  • Employment Rights

Employment lawyers are also being looked to for guidance. Many employers will want to understand the effect of the pandemic on their employment contracts – such as the position in relation to sick leave, statutory sick pay, tax, discrimination, communication or to deal with issues around quarantined employees who cannot physically enter the workspace.


Law firms as a Business

Something that students – and even junior lawyers – often forget is that, like all professional services entities, law firms are businesses, and they can be affected at a business level in similar ways to their clients.

  • Business Liquidity

Some accounting firms have previously warned that law firms do not hold sufficiently large amounts of cash reserves within their businesses to allow them to weather major external shocks. It has also been reported that the period of ‘lock-up’ – meaning the time taken between a law firm issuing an invoice to a client, and the time it is paid – can average 121 days (and that’s when things are going smoothly). In a downturn, clients may become even more sluggish in making payments as they focus on paying suppliers of more urgent services, such as I.T. Firms may therefore have to reduce how much cash leaves the business in other ways. For example, several magic and silver circle firms have recently announced that they will be freezing partner and associate salaries.

  • Remote Working

Lawyers across the country are now working from home. In some cases, firms already have a sophisticated I.T infrastructure in place, which has allowed them to easily shift their employees to a remote working arrangement. Even then, larger firms may struggle to accommodate international transactions, which will require seamless interactions across a remote global workforce.  Firms which have been unable to set up a viable agile working system will inevitably be more badly affected.

  • Gearing

As is often the case in times of major shocks to the economy, ‘full service’ firms which offer a range of services, are often best shielded from outward impacts because they operate in counter-cyclical practice areas, as well as traditional ones.

Although the Coronavirus pandemic is different to a typical economic downturn, some firms are already shifting expertise to more in-demand areas. recently reported that CMS is relocating lawyers from across the firm to its restructuring and insolvency practice in anticipation of greater demand there. Further afield, The American Lawyer even reported last month that for some practices, coronavirus uncertainty was ‘bringing a spike in demand’, in particular in the areas of employment, cybersecurity, health care, and insurance.



All universities and professional training institutions in the U.K have had to cancel person to person sessions. Work experience schemes have also been interrupted and, in some cases, cancelled altogether. This can understandably lead to a lot of anxiety. However, law firms have been at pains to reassure students and allay these anxieties as far as possible, and there is no reason students should feel overly concerned about how current circumstances could affect their long term goals.


Expert Tuition Legal Training provides 1-to-1 guidance at all stages of your vacation scheme or training contract applications. All of our tutors are either former practising lawyers or current offer holders – including with U.S, magic, and silver circle firms. 

To find further resources about the impacts of Coronavirus, or other topics relating to securing your training contract, please see our other blogs here.

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