Jonathan Harmon, chairman of McGuireWoods.

McGuireWoods chairman Jonathan Harmon is used to working in courtrooms across the country, but since mid-March he's been working at home like so many in the legal industry. And he's been doing it in a full house whose eight members include his four children plus two of their girlfriends. In this interview, he discusses the challenging decision-making process firms are facing right now, an anticipated "avalanche" of litigation, and how his firm has responded to getting punched in the mouth by the pandemic, so to speak.

Ben Seal: What has surprised you most about the way the coronavirus has affected your firm and the legal industry thus far?

Jonathan Harmon: When the crisis erupted, it felt to me like an unexpected military deployment, like what I had been through years ago for the Gulf War. Once we decided we had to go remote, there were so many different orders out there, so with synchronizing that and getting people working incredibly hard, the movement out to home felt very much like a deployment.

I was very pleased with how flexible and diligent and persistent our folks were with all the different changes required to move folks remote, and particularly as those in high-density cities were dealing with a whole bunch of issues.

I was surprised at how quickly we were able to pivot, and folks who had no expertise on legislation that was coming out became experts on it, particularly on the corporate side and somewhat on the litigation side. Every client call was almost an emergency. They were facing survival—many of them—of their businesses. Our lawyers are very used to doing things at a breakneck speed but it was even faster. Everything was an emergency they had to respond to. They were moving at warp speed, and I was so pleased with how they were able to do that.

BS: What's the next phase in the decision-making process for you and the firm in response to the virus, and how have you approached the various decisions to this point?

JH: We have an awesome senior leadership team, so we've been navigating this as a senior leadership team in each phase. We wanted all of us to stick together. We drew a line that we didn't want to have to furlough or lay anyone off. When we were talking about what we were going to do for cost-cutting, all our partners were unanimous that the leaders and the owners and the partners were going to bear the brunt. So our cost-cutting has centered around our leadership; they stepped up in a big way. Consistent with that, we wanted to keep our summer program. It's not exactly the same, but we're still having a summer associate program. Those are the things we did, and all those things were done as a team.

The next step for us, as the country is starting to reopen, is navigating the reentry. We kept a skeleton crew open in all of our offices. The overwhelming majority of our folks were working remote, and now because we have very different venues across the country, there are some who slowly want the option to come in, and there are other places where they won't be in for quite some time. So we're figuring out how that next stage unfolds and how to do it in a way that you're not drudging up division.

Just like every firm, we've got people on every end of the political spectrum opinion-wise, and we've been very sensitive to the fact that there are some people who feel very strongly one way and other people who feel very strongly the other way. And we're not jumping on either bandwagon. We want to continue to provide excellent services to our clients and our firm family. So we're developing that next step in a way that allows everybody to be heard. Our managing partner, Tracy Walker, sent a survey to all of our people to get their opinions on coming back. Everyone isn't going to be pleased, in a sense, but everyone had an opportunity to be heard. I think the next step of coming back very slowly and in different phases is what's on the horizon for us.

BS: As a litigator, how has your work been affected?

JH: There's been a burst of work on the class action litigation side relating to the CARES Act, and in labor and employment and in bankruptcy, particularly in hard-hit areas like health care, retail and travel. I was supposed to begin a fairly lengthy trial out in Milwaukee in a few weeks and another trial in the fall. Everybody is grappling with how in the world are you going to be able to do a jury trial in this environment. There was one virtual trial done. The courts where I have cases pending for trial have largely pushed those down the road. One court in particular, in Miami, set it far enough in the fall where it plans to be past [the pandemic]. Litigation work in court has slowed down, but there's been an increase on our end in other areas, with a bigger increase coming when we get past it, particularly in the regulatory space and the financial institutions sector and broker-dealer work. As the capital markets crater, unfortunately, investigations and claims will arise.

BS: Do you anticipate a surge in litigation when courts are fully reopened?

JH: Come the fall or a little bit later, I think there's going to be an avalanche in the litigation area. There's a whole bunch of cases that are supposed to be either going to trial or going to resolution that to a certain extent have stalled, and when the gate completely lifts, those cases are going to need to go forward, but then there are cases that are COVID-related. The litigation around the CARES Act and the loans, unfortunately for some of our clients, is going to increase dramatically. And then, with respect to what's going on in the financial sector, I think there's going to be a significant increase of litigation in that space.

Many firms like ours are preparing for a big year in bankruptcy, unfortunately, in 2020, and probably even bigger in 2021. We have been, as have others, marshaling all of our litigators, some who are in areas where it's not as robust right now, to be able to assist with some of the more robust areas, like bankruptcy.

BS: Your firm was one of a handful that seemed to find opportunity in the last recession, and grew quite a bit as a result. Do you see similar opportunity in this crisis?

JH: I do. We're in the first year of our strategic plan that we rolled out, and our plan and our vision is to become a national powerhouse. We laid out five areas of emphasis where we feel like we can have the greatest return on our investment—high-stakes litigation and investigations; private equity; financial institutions and alternative lenders; energy; and health care.

When I laid out the plan and spoke to all the partners about it, I quoted an old boxer who said, "Everybody has a plan until they get punched in the mouth." I said there's no question we're going to get punched in the mouth, but just like we have in the past we'll navigate and go forward. [The pandemic] is a punch in the mouth for everybody, but I see opportunities consistent with what we said we wanted to do.

We talked about specific geographic areas we wanted to build and bolster and I think there are going to be opportunities for us to do that. We've pruned, but we are in the mode that we want to acquire and grow in the right places. I think there are going to be some wonderful opportunities for us coming out of this. I know all the good firms are doing this, but we have some very long relationships with fantastic clients, and when you're in a foxhole with somebody in a war, if you go through it with them it strengthens the bond. That's how I view what we're doing now. Our lawyers are doing some incredible things to stay connected with and to help our clients solve some big problems, and these deep-seated relationships during a time of trial and tribulation will help us do better work for them and more work in the future.

I've said this from the first moment I started talking to the firm related to this crisis: We're going to come through this better and stronger. And it wasn't just hype, I really believe that. Pressure and difficulty can bring out the worst or it can bring out the best, and I'm very excited that our focus is bringing out the best. In 2008 and 2009, there were changes the firm made, things the firm did to come out strong, and I think we're going to do even better this time around.

BS: McGuireWoods has had a consistently strong growth trajectory in terms of head count and revenue over the past decade, but at least in terms of head count, that's leveled off in the past couple years. How do you approach the firm's growth?

JH: We're about 1,000 lawyers, give or take. I don't think there is a magic number. What we did in putting together our plan, which we're fully engaged and committed to following, is identify our strengths and our core areas, and some of the geographies where as a firm we want to become stronger and provide better client service. And these are all places where we are. So for instance, Texas, Washington, D.C., and California, we identified in our strategic plan as areas where we wanted to grow and build, possibly through a merger or an acquisition, consistent with the five areas I mentioned earlier. And there are some areas we want to bolster, and those cities were Chicago, Atlanta and New York. Coming out of this crisis and even in it, I believe our plan has positioned us well to move forward. We did something just a little bit different than we'd done in the past. We made it very simple. I got input from every office, all the partners, but our plan is two pages, you can read it in 10 minutes, because we really want to be able to execute.

Like other firms, we were preparing for some type of recession. It's hit everybody and there are a lot of things that are difficult about it. We are all very sorry about what's happening to so many people inside and outside the legal industry, but the country and the industry are going to come out of it and we're leaning forward.

BS: Last year your firm brought on Rich Davis as chief operating officer, someone with a background outside of the legal industry. What has Rich brought to the firm in the months since he came on board?

JH: Rich has done a fantastic job, both in terms of helping and leading the staff through all the different challenges and keeping us up to date on all the different issues we are dealing with in every office and all the operational issues. Even before the COVID-19 crisis, Rich, you could see, is adding a perspective on client service, on what clients are dealing with and seeing in the marketplace, that we're really excited about. Rich's predecessor was a unique hire for us because he hadn't worked in the legal field and Rich hadn't either, but he has picked it up quickly and he's paid dividends in the five months he's been here.

BS: Do you think that more law firms should look to people with a nonlegal background for ideas about how to operate more efficiently as a business?

JH: I don't want to suggest that having a COO who's been in the legal field for 20 years is not a great thing. For us, though, having someone who has a different perspective, who hasn't been in the space, who can ask why you do that, and it's not just a matter of, "Well, we've done it that way, everyone in the legal industry does it that way." Sometimes that's not the right answer. When you get somebody who hasn't been in the space but has been in client service, it helps bring perspective that I think makes us better as a firm.

BS: Do you expect the firm to continue expanding its use of alternative fee arrangements?

JH: I'm not sure what the Am Law 50 or 100 averages on alternative fees. Our percentage is usually somewhere 23% to 24%. My understanding is that that is probably higher than others. I don't think this is a COVID-19 issue. Client are demanding more and more for less, they're aggregating their legal services, and with the entry of alternative legal service providers, there's more pressure to do things differently. I think there will be, over time, even more who look to various forms of alternatives fees, and I'm not just talking about discounting off your standard rate. I don't think there's going to be a light switch. Some people years ago predicted the death of the billable hour and I don't believe that, but I do think you're going to see more clients packaging their legal services and wanting fewer firms that can handle the whole bundle of work they have, and they'll be looking at it on some type of alternative fee basis.

BS: What has been keeping you up at night?

JH: I get up really early and I tend to fall asleep at the drop of a hat, and I'm not a worrier, so to say anything is keeping me up, my wife would say that's not true. But besides the typical things all chairs think about if we weren't in a COVID crisis, there's several things I think about and even pray about. One is the people, our firm family who've been negatively impacted. There are folks who've lost a parent and couldn't be with them. I have other people who've lost a spouse. The list of challenges our people have had to deal with, it's something that I think a lot about and it concerns me. I spend a lot of time on that piece and trying to reach out to folks.

The other thing is, you could not have told any of us three months ago that some of our clients would be in such dire straits. So how do we help our clients? Some of them are coming to us in a do-or-die situation. I do spend a lot of time thinking about how we can make sure we are doing everything possible to help our clients in what for some is the most difficult time they've been through.

Thus far through these 13 weeks I've really felt people have done a remarkable job of being creative and staying connected. I had a partner who did a comedy hour on Zoom. I had another partner who got his old band and did a concert on Zoom. I just really want that to continue so that everybody will come out of this well mentally, emotionally and, of course, physically.