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Ethical considerations for law firms in the context of Covid and beyond

Posted on 07 July 2020

Alongside “social distancing” and “lockdown”, one of the terms that has become ubiquitous in these strangest of times is the concept of the “new normal.” Many of us have now got used to the working challenges presented by lockdown, learning to use new technologies, balancing work around home schooling and dealing with the challenges of changing procedures. In some cases, this has accelerated ongoing moves to more agile, paperless working, but the speed at which these changes have been forced upon the profession has been – to employ another much-overused term, at present – unprecedented.

As I write this piece in May, talk about easing the lockdown abounds but although there is now more of an idea of what the next steps of easing the lockdown might look like going forward, these are all conditional measures depending on the further spread of the virus. There is a sense we might be soon be moving from the “exceptional” situation of lockdown towards the “new normal.” I wanted to take this opportunity to reflect on some of the ethical issues that the Covid-19 pandemic has raised for law firms, and look ahead to what more long-term changes we may (and should) see in the legal sector.

Perhaps the most significant ethical issue that firms have had to face is how to prioritise the interests of partners, clients and other stakeholders, particularly their employees. The key debate has, perhaps unsurprisingly, revolved around firms’ finances, in particular the ethics of cutting staff pay, reducing working hours and using the government’s furlough scheme. Firms have had to make some very difficult decisions as they try to ensure that their (metaphorical) doors stay open during lockdown and beyond: protecting the firm’s bottom line is clearly part of this consideration.

However, there is a risk of perception that some firms may be using these measures to protect partners’ profits at the expense of the taxpayer or more junior staff. With reductions in new file openings and cash flow difficulties, these measures may well be necessary, even for big firms. But those firms that have engaged transparently with staff and have sought to explain the impact of their strategies on employees at all levels might well see an “ethical dividend” in the months and years to come, both in terms of staff commitment and external reputation. Ethical management of finances is thus closely linked to the ethical management of your people, a theme I will return to later on.

The financial squeeze created by the Covid-19 pandemic will no doubt affect some firms more than others. Some areas of practice are facing a decline that could continue long beyond the end of lockdown. Even where firms see a surge in enquiries as a result of the pandemic, the profession as a whole may face increased costs in the medium-term such as higher insurance premiums, as well as the financial effects of longer timeframes for matters as courts work through backlogs. While some small firms have adapted well to the challenges posed by the pandemic due to their smaller and more agile workforces, they may well find themselves significantly affected by increased costs.

With so much at stake, law firms should take this moment to take stock and think about the best – and safest – way to respond to new and different pressures and opportunities, both right now and looking into the future. Some firms might alight on a plan to redeploy staff with lighter workloads or consider branching out into a new area of work. Firms will need to think carefully about the regulatory risks of doing so, particularly keeping in mind capacity and competencies. The implications for training and supervision will need to be considered, as will the need to inform PII insurers. With the situation rapidly evolving – as science provides more information about the virus and the government changes its guidance – firms should make such reviews a regular part of their strategy to make sure that they are not missing novel risks or opportunities.

As financial uncertainty seems set to persist, it is no surprise that firms are considering making some aspects of changed working practices more permanent in order to minimise rental costs and overheads. This, too, should form part of a wider process of adaptation where firms evaluate new practices, differentiating those which have helped to improve efficiency and can be refined or retained from those which should be discontinued as we emerge from the crisis.

But adjusting to a new normal – and the sigh of relief once adjustment has been successfully negotiated – should not mean relaxing our vigilance. Many firms have approached the regulatory challenge of promoting remote working and using digital technologies with zeal, and this should be continued into the next phase, whatever that may look like. Different regulatory risks are posed by different ways of working – for example with remote working, the risk of physical documents being lost, stolen or leaked to the public is lower, but the risk online data breaches has gone up – and firms need to make sure that their compliance systems remain fit for purpose and their staff adequately trained. Much like reviewing risks and opportunities, this should be an ongoing process. And we all need to engage in a wider debate around what constitutes best practice in the post-Covid era.

Part of this effort will be in making sure that ethical management practices continue beyond the current crisis. In many firms there will be examples to celebrate: managers who have stepped up to the current challenge, showing leadership, promoting transparent lines of communication and supporting their staff. Firms should make sure such behaviour is encouraged even after the eventual end to restrictions. Such practices certainly take more time, but will pay back in spades. Particularly those firms that embrace homeworking moving forwards should give thought to how to retain sufficient supervision of staff and how best to communicate with staff on firm-wide, departmental, team and individual levels to ensure people remain engaged, accountable and clear about their responsibilities. Mistakes will continue to happen but, often, it is how they are subsequently handled where things can go wrong, even more so when you are managing from afar.

Beyond that, ethical management also means putting the welfare of your people at the forefront of your decision-making. We have all had to adapt and be flexible in this difficult period, empowering people to fit their work schedules around caring responsibilities, and checking in on a regular basis to make sure people are mentally and physically well. Some of us have been working in less than ideal conditions – at kitchen tables, in bedrooms, with children and other family members needing our attention – and this has also made it harder to separate work life from home life. Some of us may feel we have gained back time usually spent sat on trains, ironing shirts or making ourselves presentable for the office, but it is important to find new ways to differentiate time at work from time at home and make sure you are switching off. This goes for partners too - leaders should be checking in on each other as well as their teams.

When the restrictions finally ease, some of us will rush back to offices with a sigh of relief, while others may not feel able to do so. This may be because they themselves are vulnerable, they are living with vulnerable people or have children unable to go back to school, or they may just feel very anxious about the risks of returning to work. One of the major challenges going forwards will be how to manage different modes of working without discrimination to make sure that all your people can continue to provide the best service while looking after the physical and mental health of themselves and their families.

The sweeping changes brought in by the Covid pandemic offer an opportunity for firms to change and improve their working culture, embedding ethics more centrally in their approach. It’s an opportunity we must all grasp, putting us in good stead for the “new normal”, whatever it looks like.

Gideon Habel is a partner and head of Leigh Day’s regulatory and disciplinary team. Special thanks to Fiona Barsoum, paralegal in the team, for her contribution to this piece.

A version of this article was first published in the June/July 2020 edition of the Solicitor’s Journal (Volume 163 No.6)

Meet the author

Gideon Habel November 2021
Regulatory and disciplinary

Gideon Habel

Gideon acts for regulated professionals in disciplinary investigation and prosecution matters