The coronavirus pandemic has placed enormous stress on the economy and challenged companies to respond to an evolving economic landscape. In-house lawyers remain a cornerstone of corporate efforts to navigate these turbulent times. We have some tips to help corporate counsel emerge stronger from the crisis.

Our firm wrote an article addressing potential coronavirus-related fraud schemes in late February. In our experience, unfortunately, fraud and litigation usually follow any disaster. As cities shut down across the country and courts closed, our firm adjusted to a new normal. Like other lawyers across the country, we began working from home and using technology to communicate with clients (sorry Zoom, we're partial to Google). We also expanded our role from lawyers counseling clients to part-time schoolteachers.

We told clients that we'd help them free of cost with coronavirus-related issues. With small businesses across the country shuttering and weekly mind-boggling unemployment numbers, we focused our efforts on small businesses—first helping a few friends of friends who we knew, and then creating a blog focused on state and federal relief and helping numerous companies in several states apply for relief.

These companies were not current or potential clients. They were restaurants, theaters, wineries, schools, some nearly 2,000 miles away. We tried to take one of the things we have done well—taking complex legal requirements and making them simple for clients and juries—and applying it quickly to the CARES Act. We answered questions about LLCs, employment, leases, supply chain, and government bureaucracy. It remains an exhausting, yet very rewarding exercise.

With the relief applications underway, we've had some time to reflect upon the governance and litigation challenges we believe corporate counsel will face the remainder of the year:

Budget. Forget about the budget you started with in January 2020. Find ways to cut it. Look at the three large buckets—headcount, travel, and supplier spend. Travel will be an easier one, but you should lead the business with thinking about budget. The impact of the energy crisis and COVID-19 will hit every aspect of the economy (notwithstanding what the stock market would have you believe—show of hands, who still believes in the efficient market hypothesis?). It is unclear how people may change their habits post lockdown/social distancing. Even we discover a vaccine, which of our new habits stick? And how will these impact businesses? Some businesses may face pressure to reduce headcount. Start with unfilled positions. If a position has remained open in the legal department through this crisis, maybe the company doesn't need it. Work with the business to evaluate what the business will look like post-pandemic and design an organization that best supports it. Outside counsel and supplier spend are other areas to cut. Law firms are facing significant unforeseen cost pressures for 2020, but by having candid conversations about budget numbers, it will help the firms adjust their approach to your business and identify how best to support the company (e.g., reduced rates, flat fees). Identify projects that you can put off and those that are critical. The best suppliers focus on long-term relationships and will understand the new economic environment.

Risk Management. Every company has a different risk tolerance—the amount of risk the entity is comfortable taking within their operations. Enterprise risk management will typically evaluate: (1) risk appetite and strategy; (2) risk governance; (3) risk culture; (4) risk assessment and measurement; (5) risk management and monitoring; (6) risk reporting and insights; and (7) data and technology. In difficult economic times when business forecasts are upended, it's important to ensure that the risk tolerance level is consistent across an organization. Is there pressure on business units to close deals that otherwise may seem like a pass based on legal and compliance due diligence? In other words, the audit committee's understanding of risk tolerance and risk profile should align with company leadership. Prepare company leadership to have these discussions with the board with data across the company's enterprise risk management system.

Litigation and Fraud Risk. Lawsuits and fraud investigations are coming. Securities litigation about what companies disclosed and when. Employment litigation related to working conditions, employment decisions—when people are let go, underlying issues often surface. Litigation risk across the supply chain. Fraud perpetrated by vendors who needed to inflate invoices to make numbers. In-house counsel should work with finance or treasury departments to ensure the process for scrutinizing invoices will be scrutinized—the normal process may not be sufficient to identify creative fraud schemes. Ensure that your enterprise risk management model identifies and plans for these risks.

Business-Specific Compliance Issues. Depending upon the company, different regulatory compliance risks that may be lower during normal times may increase during this pandemic. Look at how your employees are working differently and how your business is operating differently (or not) to assess which subject matters may pose greater or less risk than contemplated by the normal compliance risk assessment process. This inquiry overlaps with your litigation and fraud analysis, but some risks may be reputational. The typical risk assessment process consists of (1) legal analysis and risk identification; (2) risk scoring and calibration; (3) business partner engagement; and (4) mitigation plans and execution. In the last three months, your risks may have changed, new legislation may be on the horizon, or different enforcement risks may arise. If you have planned a risk assessment process for your business operating outside of the pandemic and do not revisit the process in light of the changing business and regulatory environment, the process may be ineffective.

Strategic Planning. As you think about how your legal department and company have responded to this crisis (even though we do not yet see the end), what are some planning opportunities to internalize within your organization? What has changed? What did you do that you thought would work, but didn't? Is there anything the organization has changed that is a better practice than before (e.g., many companies are rethinking working remotely)? Any opportunities for cost savings based on the way you are operating now? What are the opportunities to grow as a department and emerge more efficient and effective?

If you think about these issues now, the rest of the year and next will be easier.

And, if you want to do something outside your company to help your business, challenge your suppliers to devote some of the effort they spend preparing marketing materials (including articles like this) to help small businesses. They need it. It is difficult to imagine some of the pain that most of the country is going through today. Helping smaller businesses is a key ingredient to keeping our economy going. We can get through this together.

Ryan McConnell and Meagan Baker Thompson are lawyers at R. McConnell Group—a boutique law firm that focuses on litigation and governance issues. McConnell is a former assistant U.S. attorney with a background in criminal and civil trial work who taught four different law school classes at the University of Houston Law Center (Crim Pro I, II, National Security Law, Corporate Compliance). His practice focuses on advising company leadership and corporate boards on a range of litigation and governance issues. Thompson is a thought leader on corporate governance and compliance issues, having taught corporate compliance at the University of Houston Law Center and helped numerous Fortune 500 companies navigate complex compliance and investigation issues. If you have a small business that needs help, Judy Liu ([email protected]) is leading the effort for our firm in helping a number of businesses, and we are happy to share the way we have approached different issues.