Closing a deal. Photo: fizkes/Shutterstock.com

Law firms that serve mid-market businesses have been kept busy in the last couple of weeks not just by the transition to working remotely, but with questions from distressed clients, some of which are also eager to close nearly completed deals before things get worse.

Several firm leaders said that while larger combinations have slowed and early stage talks have largely stalled, deals that have been in the works for a while are moving full steam ahead.

Just over a week ago, Ballard Spahr chairman Mark Stewart said that while mega deals have stalled, smaller combinations are moving forward, sometimes with increased momentum, because mid-market clients are "eager to close."

"We are closing deals like crazy here," Stewart said. "The best thing to happen is we have discovered in this past week that we have a great ability to get up, work remotely and close deals."

John Raftery, managing principal of legal operations at mid-Atlantic firm Offit Kurman, said clients who have already done their due diligence are still moving ahead with transactions.

"The deals that are far enough along where the financing has been secured, they're still going forward including the hospitality deals," Raftery said. "The business attorneys are pretty busy with the deals they thought were going to close in the next 30 to 60 days."

David Pudlin, of Philadelphia-based Hangley Aronchick Segal Pudlin & Schiller, said the same.

"With respect to transactions, it appears that many clients are taking a 'wait and see' approach, at least on deals that are in early stages, and we are beginning to receive more questions on restructuring debt obligations," Pudlin said in an email. "For deals that are further along, there appears to be a rush to get them closed quickly, with a bunch of 30 to 45 days closings."

'Commerce Is Pretty Much Coming to a Halt'

Lawyers have said they're getting questions about extending lines of credit and other measures they will need to take if the economy continues to suffer for a long period of time. They're also dealing with endless questions about labor and employment issues related to layoffs, furloughs and shifting to remote work.

And they're preparing for a pickup in their bankruptcy practices. Those with hospitality clients are seeing those concerns develop in real time.

"I'm sure you're going to see bankruptcy in the future, especially in Florida where there's a large tourism and hospitality economy," said Dean Cannon, president and CEO of GrayRobinson.

Mark Silow, chairman of Fox Rothschild, said the firm has a lot of middle-market clients in the hospitality industry, and work has picked up in that area related to forced closures and resulting layoffs and dislocations.

"It's been sort of an immediate hit on the hospitality industry since many of the restaurants and food services businesses shut down [over] a week ago," Silow said. "It'll eventually ripple through every industry. My observation is commerce is pretty much coming to a halt right now."

Bowman Brown, chairman of Florida-based Shutts & Bowen, said the same, noting the importance of travel, leisure and tourism business to the local economy there.

"We've had clients call us for assistance for evaluations on government and state programs to provide support to various industries. And we anticipate that we will be, that's going to be a very busy area," Brown said.

Pudlin said clients have been presenting questions about work restrictions, layoffs and benefits, as well as landlord-tenant obligations and environmental compliance issues.

"We even are beginning to hear from clients who are rethinking their business models, including more work from home," he said.

Dylan Jackson contributed to this report.