Editor's Note: This is the first in a series of articles from LawVision consultants outlining a path forward for law firms in the post-Coronavirus economy. This article explains how LawVision's playbook works and what firms should do as we await the viral peak. Subsequent articles will outline tasks leaders should take in ensuing phases of the Covid-19 recovery.

In our initial commentary on the impact of Covid-19 on the legal marketplace, we communicated our firm belief that the legal industry will emerge from this terrible experience and related business downturn having learned several important lessons and ready to forge ahead under a "new normal" business model.

Right now, while most law firm leadership teams are necessarily focused on cash flow, revised budgets and communications, we are looking further into the future, but getting through this crisis and coming out the back end in a better position than you started in will be a journey, not an event. To help all members of the law firm leadership team move seamlessly toward its next, most-important areas of focus, LawVision's strategy team offers the following playbook.

Working Toward the New Normal

Here are the top 10 features of the post-Covid-19 legal marketplace that you will see reflected throughout this playbook:

1. We start in the same place as with all prior change management lists for the industry: Now is the time to be as close to your clients as you possibly can to both a) protect and enhance the relationship and b) learn from their thinking so you can revise your budget and your delivery of legal services based on what they need now, soon, and long-term. Don't avoid difficult discussions with them right now. There are many willing competitors who won't avoid such conversations.

2. Despite your best efforts on the first point, loyalty rises and falls with liquidity so expect client demands related to fees/rates to be much more severe than those experienced during the last economic downturn. This will be particularly true for firms supplying relatively fungible services or lacking unique client connections. Great service, while critical, may not be enough.

3. As a result of these client pressures, the need to understand both your value proposition and the profitability of your clients and matters will be more important than ever before as the industry battles self-commoditization.

4. For those matters where profitability will be unacceptable using your normal approaches, a basic understanding of process improvement combined with out-of-the-box thinking will be required to get back to an acceptably profitable position.

5. While some law firms had already proven the point quite well, the industry can now agree that legal services can be effectively and efficiently provided from a remote team and clients will use this rapidly developing phenomenon as part of fee/rate discussions. It is also entirely possible that this experience will create an increase in client expectations for cross-firm teaming, as the benefit of being in the same place are increasingly questioned.

6. Firmwide practice group leaders need to know how to lead and manage in a virtual world—a goal that requires a whole new set of skills.

7. Given all of the preceding points combined with not knowing how strongly Covid-19 will resurface next winter, as some experts predict, part of managing in a virtual world will be a trend toward staffing for the "valleys" and creating an on-demand element of talent for the "peaks" (via legal talent services such as Lawyers on Demand or Hire an Esquire).

8. Innovation and a culture capable of sustaining a high rate of change must be concepts with which any competitive law firm must be comfortable. Right now, consider everything as being "broken," so "fixing it" is an ongoing opportunity.

9. The concept of winners and losers that we identified coming out of the last recession will be accelerated now as those partnerships that are unable to evolve will rapidly lose market share first, followed by a loss of control of their destinies.

10. At the appropriate time, most law partnerships will need to create a new strategic direction that takes into account all of the preceding points and positions itself for a new set of market conditions.

Structure of the playbook (the columns)

Our playbook is structured as a matrix, in which the areas of focus for each of the key leadership tasks/administrative teams will shift over time. We start with the horizontal axis, which includes each of the following four stages of the coming recovery for the legal industry:

• Description of each stage in the recovery process: Reaching the Viral Peak (timing = ?) – while we are not the right organization to predict when the onset of new cases in the United States will peak (we all hope it will be sooner rather than later, and the most recent University of Washington models predict the peak point in the United States to be in mid-April assuming strong intervention continues), in our thinking this will be the point where true confidence in the return of some semblance of normality to our way of life, including business activity, will begin to change for the positive. Until we reach this point and can recognize that it has actually passed, we will experience a great deal of fear and uncertainty, which requires a limited and focused set of actions to maintain as much confidence in the law firm as possible.
• Cautious Recovery of Business Confidence (estimated timing = 1 to 3 months after recognized Viral Peak)—once a peak is reached, the severity of this experience combined with the concern for new outbreaks and the liquidity level of each business, will cause each business owner to take a cautious approach toward ramping up staffing and production. Even a minor setback during this stage will cause setbacks as we search for the next, and hopefully last, viral peak.
• Recovery of Business Activity (estimated timing = 2 to 4 months after the Cautious Recovery period starts and proceeds without setback)—once the situation feels secure (and this may vary from state to state), business activity will resume and those types of legal matters that disappeared or were severely depressed during the outbreak will return. (Reopening of court systems to more "normal" operations will be a major signal.) Most importantly, as cash flow becomes more predictable in the business community, receptivity to paying legal expenses, including for services provided during the outbreak, will return, which sets the stage for the last stage.
• Return of Revenue and Profitability—The new normal and regular payment of legal bills will be the clear indicator that we have reached this final stage of recovery, during which planning activities can finally be focused on the long-term future and cementing the lessons learned from this terrible episode into the culture and the DNA of the law firm. For planning purposes, it is important to note that we may not get to this stage until early 2021. Our recovery clock doesn't start ticking until we reach the Viral Peak.

After we add the key leadership/management teams into our thinking, the following high-level matrix emerges:

Managing Until the Viral Peak

As we work toward the viral peak, and the economic bottom, here are a series of tasks various firm sectors should focus on.

Firm Leadership

• Operate a daily virtual war-room and constantly reprioritize based on input received from all other firm leaders.
• Continually assess the firm's financial performance and cash flows using multiple scenarios based on some structure (like our playbook) combined with various dates for reaching the viral peak to honestly communicate with, and manage the expectations of, the partners (first) and then the rest of the firm.
• We assume that aggressive actions have already been taken with respect to discretionary spending and obvious (albeit painful) cost reductions by now. If not, these should be a priority.
• Further adjustments to draw policies/compensation plans may be required.
• Take all steps necessary to realize all possible benefits from the Covid-19 stimulus package(s).
• Work with practice/team leaders on monitoring key performance indicators for demand, productivity and pricing under remote operations.
• Ensure that the appropriate partner is staying in contact with each of the firm's Top 100 clients.
• Remind the entire organization to thank the IT staff for all of their invaluable (and often invisible) assistance. (And don't forget to thank everyone else too!)

Partners

• Ensure, above all other issues and concerns, that the quality of the legal services provided stays at least at pre-Covid-19 levels. Wherever possible, enhance service levels, particularly around response times and on assuring that your advice to clients is succinct, and helpful for your client's needs of the moment.
• Be as close to your clients as you possibly can to both a) protect and enhance the relationship and b) learn from their thinking so you can revise your budget and your delivery of legal services based on what they demand.
• Don't avoid difficult discussions with clients right now. There are many willing competitors who won't avoid such conversations. Identify which clients are most likely to be severely impacted in the short term and talk with them about their needs.
• Design special (not discounted) offers that better integrate and work in partnership with key clients.
• Monitor contacts at other law firms for signs of distress or receptivity to acquisition discussions (at the firmwide, group, and/or individual level) and report each to firm leadership.
• There will be an uptick in merger and lateral activity as a result of this unfortunate event. While we are hunkered down, we do need to be opportunistic with respect to developing strategic growth opportunities.
• Regularly monitor the morale and well-being of all lawyers and staff members with whom any partner has contact (within reason).

Talent/HR

• Work closely with firm leadership and the accounting & finance team on budget scenarios and related staffing outcomes.
• Re-affirm with firm leadership the role of culture with respect to staffing decisions.
• Is there a culture and history of never terminating staff due to situations such as this? Is this "rule" still in place?
• Make/update recommendations to firm leadership on associate and law school hiring for 2020 and 2021 and coordinate decisions with law schools.
• Over-communicate as honestly as possible, with lawyers and staff.
• Schedule at least one regular, weekly virtual meeting with nonpartner timekeepers and then with staff. (The talent/HR team manages this, but firm leadership should be front and center.)
• Respond in real time (as best you can) to all questions and concerns.
• Ensure that all essential staff who are required to be in any office are protected and are following all guidelines with respect to the transmission of Covid-19. This includes providing disinfectant wipes and hand sanitizer.
• Check-in with labor & employment counsel regularly to stay abreast of any changing laws related to staffing issues and potential reductions in force.
• Work with practice group leaders, who need to know how to lead and manage in a virtual world—a goal that requires a whole new set of skills.
• Focus practice leaders on assuring as much available "downtime" on their teams as possible is put to productive use. If client or BD activities are impractical or exhausted, help each team member identify learning or other investment activities that will create long-term benefits for the individual and/or firm, while absorbing demoralizing downtime. (Continue as long as needed with valuable team members.)
• Keep firm leadership one step ahead of developing situations in the firm or specific actions that require approval from the leadership team.
• Act on staffing decisions for 2020 made prior to the onset of Covid-19.
• Regularly monitor the morale and well-being of the Talent/HR team.

Accounting & Finance

• Support firm leadership's key task to "continually assess the firm's financial performance and cash flows using multiple scenarios", as described above.
• Monitor cash flow daily, and provide projections based on the best possible information.
• Secure, increase and/or drain a line of credit.
• Make recommendations to revise the partner draw schedule/cut or freeze draws until clarity emerges.
• Advise partners on tax planning.
• Regularly provide firm leadership with updated budgets and scenarios including a worst-case assessment.
• If needed in a virtual structure, create more central oversight for pricing, discounting, and write-downs.
• Ensure any client concessions are done thoughtfully so the firm doesn't get stuck with a permanent below-market discount.
• Regularly monitor the morale and well-being of the finance & accounting team.

Marketing/Business Development

• Ensure the firm stays visible and produces the appropriate market messaging around the pandemic, including your firm's unique position in serving the needs of the market.
• Assist firm leadership and the partners with staying connected to the clients and learning as much from them as possible for planning purposes.
• Be the central repository for the "clients' voices" throughout this event.
• Coach all partners with available time on how to direct that time to its greatest ROI level.
• Regularly monitor the morale and well-being of the Marketing/BD team.

IT & Operations

• Ensure that remote working technology works optimally without further significant investments.
• Drop physical operations down to bare essentials.
• Work with talent/HR to ensure that all essential staff who are required to be in any office are protected and are following all guidelines with respect to the transmission of Covid-19.
• Remind firm leadership of any leases due to expire within 2 years.
• Regularly monitor the morale and well-being of the operations team.

The second article in this series will examine the tasks each of these leadership teams should focus on during the "cautious recovery of business confidence" phase.