Law firms have always counted on bankruptcy as a countercyclical practice in hard times. Now, those that prepared when the economy was booming may be about to get their reward.

A number of Big Law firms have been shoring up their bankruptcy and restructuring groups over the past two years, anticipating a surge in work as a cyclical economic downturn loomed on the horizon but never materialized. As the coronavirus outbreak has shut down much of the world and tanked the economy seemingly overnight, they are poised to be busier—perhaps far, far busier—than expected.

"Not surprisingly, given the unprecedented scale and scope of the crisis, I've never seen anything like it. It is resulting in an enormous increase in the volume of activity from our clients as everyone tries to figure out how to triage and deal with this crisis," said Abid Qureshi of Akin Gump Strauss Hauer & Feld. He said clients that normally work with other groups in the firm, including tax, labor, public policy, corporate and energy attorneys, who also have experience doing restructuring work for their respective industries, have been asking for advice.

"We're hearing from clients who a month ago were not expecting to need to look at restructuring alternatives and contingency planning," he said. "We're hoping the crisis will be a short one, but responsible companies need to look at all scenarios."

Kurt Mayr, head of bankruptcy and restructuring at Morgan, Lewis & Bockius, has also seen increased client activity in recent weeks, and he said there's been more and more cross-practice collaboration as the firm works to provide the best service possible to clients.

"There certainly has been an uptick in client inquiries, many of which are less immediately restructuring-related," he said. "Certainly there have been a lot of calls to our finance colleagues that don't immediately involve us, but could be harbingers of what will come."

Mayr, who joined Morgan Lewis last September to lead its bankruptcy and restructuring practice, said the coronavirus pandemic will likely affect different industries in waves that will ripple through the economy. Restaurants, hotels, airlines and other hospitality clients are feeling the immediate effects of the crisis as many cities and states have mandated that nonessential businesses close and residents stay in their homes, while suppliers will soon feel the strain of decreased demand.

"There are so many different levels being affected. The layers of the onion on this are nothing like I've ever seen before," Mayr said, adding that depending on how long the crisis continues, real estate, oil and gas and other industries will also be affected to varying degrees, keeping busy the bankruptcy teams that have recently deepened their benches.

In 2019, there were 550 lateral moves involving bankruptcy and restructuring attorneys, according to ALM Intelligence data tracking U.S.-based partners, associates and of counsel joining Am Law 200 firms. That was an increase from 413 such moves in 2018 and 364 in 2017. Since 2017, the list of firms with the largest number of bankruptcy hires has included Kirkland & Ellis; Baker McKenzie; Akin Gump; Sidley Austin; and King & Spalding, according to ALM data.

So far in 2020, there have been 69 lateral bankruptcy additions in Big Law, including Bruce Zirinsky's move back to Greenburg Traurig, but as law firms in recent weeks have shifted to remote work and begun reevaluating their budgets, that number may not increase considerably in the immediate future.

"What I'm seeing from clients is that they first had to overcome this huge challenge of how to work from home, and now that they're working from home, the focus is on what to do for clients and how to talk to them about continuity of service," said Mary K. Young, a consultant at Zeughauser Group. She said that while she's seen various bankruptcy practices gear up to handle an increased workload, the already established groups are best positioned to handle the immediate fallout.

"Certain firms are already established as bankruptcy and restructuring powerhouses," Young said. "These are established practices out doing what they do, and they're well-positioned for the work. I don't think a lot of people are thinking about [lateral hires] right now."

John Truster, co-head of lateral partner placement at Greene Levin Snyder, said that lateral movement hasn't totally ground to a halt, as some firms have continued conversations with candidates over the phone and via video. Still, with human resource officers still grappling with the logistics of having existing attorneys and staff working from home, he said, it's just not the ideal time to be bringing new lawyers into the firm, even those with valuable restructuring experience.

"I don't know if many firms have made hires in the last month or so," he said. "The firms that are mostly in place and ready to go are going to be the initial beneficiaries—think Kirkland & Ellis; Weil, Gotshal & Manges; Akin Gump; and Milbank."

At Akin Gump, Qureshi said the firm is well-staffed to handle both the immediate uptick in work as well as increased volume down the road. But the far-reaching implications of the pandemic and uncertainty about how long it will last place a big question mark on hires down the road, he said.

"This is different from other crises. Compared to the 2008 financial crisis and the Lehman Brothers bankruptcy filing, the scope is far broader. The longer it persists, the more sectors of the economy and industries will be affected," Qureshi said. "Another factor has also emerged, in that we fully expect a massive government intervention, not only in this country but across the globe. Since not much is known at this point, exactly how this all plays out is yet to be seen."

But as Ross Weil of Walker Associates pointed out, law firms will eventually adjust to the new normal. And when they're ready to ramp up hiring again, restructuring will be at the top of the list.

"During this chaos, there are still law firms that are in the process of hiring and looking to get over the finish line and get new attorneys started in the next couple of weeks," he said. "Law firms will continue hiring, but we have to reassess the new normal."