The global coronavirus pandemic serves as a timely reminder of the important role that lawyers play in our society, writes Henry Kalus.
We started our firm in the early 90s just after “the recession we had to have”, and to this day I’m convinced I learned more during that period than at any time since. And, while we are again staring down the barrel of economic upheaval because of COVID-19, my daily interactions with clients and colleagues are reminding me of what it really means to be a lawyer. And how different it is being a lawyer in difficult times.
Let’s face it. If you’re a transactional lawyer, life has been pretty good over the past 25 years. Apart from a couple of temporary bumpy periods, deals have just got done.
Sure, as lawyers we have worked hard to negotiate the best deals we could and after due diligence and negotiating agreements to bring them home to completion. And, in really buoyant markets, some clients as buyers don’t even want too much legal advice fearing the seller might sell to someone else if they don’t get the deal done.
Of course, there are always exceptions, but deals haven’t been a matter of life or death. Everyone and everything has just kept moving forward.
But in the early 90s values plummeted by 50 per cent and so many people lost so much under the burden of debt. Both financially and personally. And, while that was a different time under different circumstances, there are noteworthy similarities with today’s crisis.
These are the times for us lawyers to step up and show our true value.
In the early 90s, with clients facing collapsing businesses, mortgagee sales and bankruptcy, I remember how much responsibility I felt for their welfare. And yes, I know we are always responsible for the advice we give, and sometimes for outcomes but that period was different. And so is this. It was their lives, their legacies and their homes we were talking about. At times I felt like a marriage counsellor or therapist.
And what I realised then, and what has stayed with me today, is how influential we can be as lawyers, and how much difference we can make by fighting for clients, by not accepting the obvious, by coming up with creative solutions and by taking the heat off our clients.
Young lawyers will come out the other end of this pandemic with a wholly different perspective.
Let’s all hope that it doesn’t get too bad and that government measures will soften the blow but, in the meantime, we are seeing low valuations, withdrawal of funding, contracts that can’t be completed, and businesses fearing collapse.
But there is so much a hardworking lawyer can do to navigate this complex terrain. It’s about much more than what a contract requires a party to do. Right now, contracts are there to be rewritten and new deals done because we are operating by a whole new playbook.
We need to be looking at each deal in the context of a much bigger picture.
Both sides to every deal will have to manage their risks. Optional arrangements, conditional contracts, vendor terms and creative provisions will be back in vogue. And on the human side, just like in the early 90s, a client’s wellbeing can’t be taken for granted. And the same applies to the lawyers we deal with.
And we hope that this time around lessons learned from the 90s and government support will cushion the potential for collapse.
Interest rates of 18 per cent then, versus low rates now will help both financially and psychologically. Recovery in the early 90s was delayed because… well simply put, there was no money and no appetite.
My sense is that this time, once rentals are reset, trading patterns re-established, and values understood, money and buyers will re-emerge. Business will bounce back.
We are hearing that we are all in this together. And it’s true. Lawyers who care for their clients and colleagues, who solve problems, and who fight hard to make a difference will show their true worth and will learn lessons that will stay with them forever. Okay, sadly some clients will just not be able to pay us for everything we do. But reputations will be made, and careers built, by supporting clients and each other through these difficult times.
And lessons will be learned.
As the treadmill stops, we should all be realising what is important to us as human beings and as professionals.
Lawyers will now understand that, essentially, we are in a people business… that what we do isn’t just about documents and legal outcomes. We play an important role in the lives of human beings. We are entrusted to make peoples’ lives better. That lesson has to be good for the profession.
Henry Kalus is a partner and co-founder of Kalus Kenny Intelex.
As published in Lawyer’s Weekly April 23, 2020