COVID-19 Impact Survey by Morrison & Foerster

Amid the COVID-19 pandemic and heightened concerns about employment issues, contracts and broken supply chains, it appears that general counsels are paying less attention to cybersecurity.

Only 29% of the 110 in-house leaders at global companies who participated in Morrison & Foerster's survey examining the business impacts of the coronavirus outbreak cited data security as being a major risk, while just 18% said privacy was among their top priorities.

"That wasn't a surprise because there's so much going on that's front of mind. But it's definitely something that we try to highlight for clients as a risk," David Newman, a partner at MoFo in Washington, D.C., said in an interview Friday. He heads the firm's coronavirus task force of more than 60 lawyers.

"As difficult as things are now, it will be even more challenging if they have a major data breach," Newman added.

Of all the legal risks that in-house leaders are facing in the midst of the COVID-19 outbreak, none are more important than employment and human resources issues, according to the report. The survey took place between March 20 and March 24 and involved firms in a wide range of industries, including finance and insurance, technology and manufacturing. 

More than 85% of the participating GCs listed labor law issues as their top legal risk, followed by contract-related issues and supply chain disruptions. 

"Although it feels like we are in uncharted territory with regard to employees, the good news is there are some well-established legal principles in employment law that offer guidance on how to approach this issue," Janie Schulman, a Los Angeles-based MoFo partner who specializes in employment and labor law, said in a statement. 

"Among others, one very important guiding principle for employers to consider in this unprecedented situation is the need to be flexible," she added. "Employees have long memories and they will remember how you treated them on this occasion and it will likely have an impact on their loyalty and their morale."

Corporate counsel are always busy. But now they're juggling more than ever, from poring over contracts and analyzing force majeure provisions to deciphering leave and sick pay policies and considering murky employer guidelines for potential layoffs, all while trying to make corporate law departments function with remote employees.

Nearly 65% of the survey respondents said their biggest challenge at the moment was being asked to provide advice on unprecedented issues. The second-biggest challenge? About 55% said it was "making decisions in an uncertain environment." 

"It's almost impossible in these times for companies to be fully in accord with their contracts, their privacy obligations, their labor law obligations," Newman said.