The world's largest law firms can breathe a collective sigh of relief. What looked like a catastrophic event for the legal industry when the pandemic took hold amounted to little more than a change of scenery, sending lawyers to do their jobs at home.

Instead of law firm collapses caused by severe economic contraction, transactions picked up, litigation largely continued, and the finances of most firms emerged from the pandemic intact—better than intact, in fact. The performance of the Am Law 200 in 2020 was strong and cost-saving initiatives such as withholding partner distributions and freezing salary rates only served to leave firms with lots of cash on their balance sheets. One auditor says that U.K. law firms found it easier to pay their annual tax bills in January than in any previous year thanks to those moves.