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Interview with Shawn McNalis, Shareholder, Practice Advisor Trainer, and Curriculum Director at Atticus, on how law firms are responding to the COVID-19 crisis, strategic downsizing, and how they can change their organizations to go from struggling to survive to thriving during an economic downturn.

Q: This is a very stressful time for many. The Coronavirus has ground the economy to a halt and created a lot of uncertainty. How are law firms managing the crisis?
A: No one is handling this well.

How they manage depends on how vulnerable they feel they are. Those who have a large financial cushion, a lot of files in their WIP, and the ability to operate virtually are the most secure, though the unpredictable nature of this crisis has them nervous as well. Firms that have no financial cushion, not a lot of work to do and who struggle to operate virtually are the most vulnerable. They will get help in the form of disaster relief loans, but that is also a confusing process.

Q: Many firms are having to make tough, and often emotional calls. Some are considering reducing their operational overhead through layoffs and furloughs. What is the best advice you can give?
A: Put the people you want back, on furlough. Layoff the ones you’re not sure about. If you like everyone, consider an across the board pay cut or apply for the Paycheck Protection Loan which helps you retain your workforce.

Q: How do you make the choice of who stays and who goes? Is there a formula for determining who is irreplaceable in the organization?
A: Keep the high-performance team members who are usually good revenue producers and/or have special skill sets that are hard to replace.

Q: Many firms will have to part ways with cherished employees. How can firms preserve relationships while also looking after their best interests?
A: Put them on furlough or get the PP Loans.

Q: What are the indicators or signals that tell a firm that downsizing is necessary?
A: The amount of financial cushion that exists or the firm’s ability to get money through loans. When both of these are lacking, that’s going to be the indicator.

Q: When making cuts are necessary, what is the best strategy to follow?
A: First, apply for loans. Then, if not qualified, discuss pay cuts across the board, then go to furloughs or layoffs.

Q: The downturn isn’t going to last forever. At what point should a firm consider rebuilding their team?
A: When the demand for their services begins to pick up. Staying in close touch with current clients and referrals sources will help.

Q: Many younger firms weren’t around during the 2008-2009 Recession. What are the most important lessons they should learn at this time?
A: Have a financial cushion or a line of credit for emergencies.

Q: What do you feel will be the legacy of COVID-19 on the legal practice?
A: They will operate with more virtual employees and perhaps reduce their need for so much space.

Struggling with knowing when to part ways with a staff member? Read our article “The Termination Process“.


Shawn McNalis

Practice Advisor Trainer / Curriculum Director

Shawn McNalis is a former Imagineer with the Walt Disney Company and credits her 15-year career with Disney for her creative, collaborative approach to advising attorneys. In partnership with Mark Powers for 20 years, Shawn is a senior practice advisor, director of curriculum, and a trainer for Atticus.

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