A TIME LIKE NO OTHER: A LETHAL PANDEMIC GRIPS THE WORLD
We suddenly find ourselves in a dire and unexpected crisis. A lethal, novel virus is spreading like wildfire around the world, leading to social policy decisions that radically change the way we work and live, which in turn are wreaking havoc with the world economy and financial markets, and having other grave consequences.
I have decided to devote Legal Services Today for the next few weeks to discussing how law firms work through this crisis and prepare for what follows. Law firms are the dimension of legal services I know best, having spent a quarter century leading one. In that time we confronted some very challenging times, though none as challenging as this one.
Law firms will be profoundly affected for the duration of the crisis, and beyond. The way law firm leaders execute their responsibilities during this time will make a big difference on how the firms, and all who depend on them, fare.
This week I will address the unusual and complicated nature of this crisis. In the weeks ahead I will discuss specific facets of law firm leaders responsibilities in the crisis, including:
- Leading stakeholders through these risky and uncertain times;
- Managing operations in a suddenly-imposed remote format;
- Balancing financial and other vital considerations; and
- Distilling lessons from the crisis to make the firm stronger when it is over.
Here is the first installment:
Understanding the Unique Nature of This Crisis
This crisis is unlike any other we have experienced in modern times. Before leaders can chart a course to navigate it, they need to take stock of its causes, elements, trajectory, and dynamics. Any plan of action must be guided by its unique characteristics.
The crisis began with and is propelled by a pandemic disease, Covid-19, caused by a newly discovered coronavirus. It is highly contagious and poses a lethal threat to anyone infected, particularly the older and infirm. Covid-19 is so contagious and dangerous, it creates a risk of overwhelming our health infrastructure. Because it is a novel strain, we have no vaccine or therapy, and we can’t predict how it will behave as it moves through populations around the world.
Governments are responding to Covid-19 with actions designed to reduce, or at least postpone, its spread. Increasingly, particularly in the hardest hit regions, this has meant formal directives commanding nearly all citizens to stay at home. As of this writing 32 of the 50 US states have adopted such orders.
This social policy response has caused an immediate, multiple shock to the world economy. As employees no longer can show up for work, many of them lose their jobs, and businesses reduce operations or close altogether. As a consequence, the demand for goods and services declines, both because the businesses buy less and employees lose their jobs and they buy less. Simultaneously, business reductions and closures reduce the supply side of the economy. In turn, the capital and financial markets have gone into a tailspin.
The crisis is further complicated by political division. In this highly partisan time, particularly in the United States, governments have difficulty deciding and executing policies that will influence the course of the crisis. This is most obvious in reconciling health and economic considerations, both in substance and duration.
The nature of the crisis also generates anxiety and other psychological effects that exacerbate its impact. It starts with the uncertainty about the disease: how one gets it, what precautions to take, and how long the pandemic will last. The anxiety is heightened by the very real risk of death if you, or your parents, get the precautions wrong.
Then there is the financial uncertainty. People are worried about their jobs, their companies, and how they will pay their bills.
Finally, there are the effects of social isolation. For most people being confined to their homes, unable to interact with others is a rare and undesirable experience. As it goes on day after day and week after week, it takes a toll, including psychological impact, such as anxiety, depression, and substance abuse.
We cannot address this crisis like a traditional economic downturn. It is far more complicated, and has elements not normally present.
I think it is critical that everyone in leadership develop their own detailed sense of what is going on here. And keep that sense in mind at every stage of the crisis: planning, communication, and execution. All of the firm’s stakeholders will be struggling to understand and cope. The more the leaders words and actions reflect a grasp of the nature of this unique, dangerous, and uncertain time, the better everything will go.
In upcoming posts I will explore specific issues that law firm leaders will need to address. In each one the unique nature of this crisis will influence what the leaders should do.