Law firms across Asia have adopted novel strategies to deal with the pandemic, but how have they handled the pressure? Which changes will remain and what will be cast aside when the crisis subsides? Our survey delves into the impact of the crisis on your colleagues, consultants and law firms around the region. By Putro Harnowo
Compared to the rest of the world, many Asian jurisdictions have been praised for containing the number of coronavirus infections, while others are still struggling with rising cases. Around the region, the pandemic has taken its toll on businesses and economies, and the legal market has been no exception.
To measure its effects, Asia Business Law Journal conducted a survey of law firms throughout the region. Hundreds of law firms were invited to complete a survey on our website in November, which set out to assess business sentiment, changes of revenue and billing rates, working arrangements, as well as the trends in practice areas and workloads during the global pandemic.
The disruption has changed the demand for legal services, with certain areas of law becoming more important than ever. Meanwhile, limited mobility has transformed lawyers’ traditional workplaces into virtual spaces.
Some have lost, while others have won. “We see an increase in bankruptcy and dispute resolution,” says Ma Jiangtao, a senior partner at Dentons in Beijing. “However, because the pandemic was under control in China very quickly, there was no obvious impact [from it].”
The pandemic “has had substantial effects on client activities, including severe travel restrictions, reduced R&D work, limited access to correspondence, delayed processing of invoices, etc.,” says Li Hui, Beijing Sanyou Intellectual Property Agency’s chairperson and patent attorney.
“We take various measures to mitigate those effects and try to maintain client relationships as much as possible,” says Li. “For example, we held a video conference with each of our major clients last year instead of an annual face-to-face meeting.”
Lalit Bhasin, the managing partner of Bhasin & Co in New Delhi, agrees. “Reduced volume of work resulted in significantly lower revenue,” he says. “We maintain the firm’s client relationships by providing constant advice and guidance on lower fee rates.”
Martin Green, the managing partner of Stephenson Harwood in Singapore, says the pandemic has changed the firm in many ways. “In transactional work, the aviation industry is badly affected,” he says. “In operational, we have been forcing a rapid move to working from home, conducting webinars and virtual meetings, as well as publications.”
Paul Christopher, the managing partner of Mourant Ozannes in Hong Kong, says the firm has implemented “flexible working arrangements for staff, and use of technology to enable non-face-to-face meetings, and a pause in recruitment to understand the market trajectory”.
Nicholas Park, a senior managing attorney at Dentons Lee in Seoul, says the pandemic has created a solid opportunity for recruitment from other firms. “We also actively organise online webinars, conference calls and the provision of online resources to clients,” he says. “We have invested heavily in IT equipment and services this year.”
Cho Sung Keuk, the managing partner of Cho & Lee in Seoul, has been proactive. “We have sent our quarterly newsletter to our clients and we have regularly contributed our articles to foreign and domestic law magazines,” he says. “Further, we have regularly updated our website.”
Tatsuo Murao, the founder and CEO of Tokyo-based CAST Group, says that as everyone has become more tech-aware, “we have maintained the firm’s client relationships and visibility in the market by way of video-conference systems such as Zoom or Microsoft Teams.”
Tightening the belt
Almost half of the law firms across Asia that completed the survey reported a decrease in revenue, while almost a quarter said there was no change in their year-on-year earnings. Looking at the data on a country-by-country basis, Malaysian firms on average reported a 25-50% decrease in their revenue, while South Korean firms enjoyed a 25-50% increase during the same period.
Despite the market pressure, the majority of firms managed to keep their billing rates steady, while 13% of them reported lowering rates by up to 25% compared to the previous year. Against the odds, law firms in Laos, on average, raised their billing rates by up to 25%, while Sri Lankan firms reduced theirs by 25-50%.
“We are unable to close litigation files, as trials are being postponed due to covid-19 movement restrictions, and [we are] unable to travel to court or meet clients face to face,” says Tunku Farik, a partner at Azim Tunku Farik & Wong in Kuala Lumpur.
Dhir & Dhir Associates’ chief executive officer in New Delhi, Poonam Bisht, says that with the courts also being shut in India, litigation faced a direct impact. “Cases falling under the Insolvency & Bankruptcy Code were suspended, which affected our practice, as our core expertise is restructuring and insolvency,” says Bisht. “There has been an impact on the billing or revenue cycle, as clients were requesting discounts in future cases, and deductions in existing billed cases.”
In Beijing, trademark attorney Virginia Zhao, at An Tian Zhang & Partners, says: “The international clients are hesitating to invest in the high-cost issues, and, due to the lockdown, for the unurgent matters decision making takes a longer time.”
Khamphaeng Phochanthilath, a senior associate at Sciaroni & Associates in Vientiane, faces a similar challenge. “Everything is slowing down,” she says. “For example, in case we want to submit any application form, we have to courier it, as the Lao government does not accept an e-signature.”
Lucy Wayne, a managing partner at Lucy Wayne & Associates in Yangon, Myanmar, agrees. “New investment has reduced dramatically due to the travel restrictions and inability of investors to enter the country.”
Saqeb Mahbub, an associate partner at Mahbub & Company in Bangladesh, says the main reason for the slash in his firm’s earnings is “a loss of long-term clients and clients giving up investments, hence affecting our business”.
Gary Hung, a partner at Chien Yeh Law Offices in Taipei, faces a similar issue. “Some of our clients, especially for those doing business in China, postponed their business plans or initial public offering projects to the next year and thus suspended our services,” he says.
Meanwhile, Zippora Siregar, the managing partner of Siregar & Djojonegoro in Jakarta, sees client scepticism as the main reason. “People are holding on their business decisions, so there are not many projects in the market.”
The pandemic has forced law firms around the world to implement work-from-home policies, and lawyers in our survey are adjusting and becoming accustomed to these circumstances. This new working model offers flexibility and has compelled companies to quickly adopt cloud-based productivity tools to support a remote workforce. But how have lawyers in Asia adapted to this sudden change?
Our survey found that only 11.5% of law firms implemented work-from-home arrangements for all lawyers, while 27.7% of firms continued to require all lawyers to work from the office. The most popular arrangement is rotating shifts, which has been implemented by almost 35% of Asian law firms.
Once the pandemic abates, almost half of law firms reported that they will continue to offer flexible working arrangements, while 4% have not yet decided about their future working arrangement. The majority of law firms in the survey reported that their lawyer numbers remained roughly the same year-on-year, suggesting a hiring freeze. On the bright side, 20% of law firms reported adding to their number of lawyers, while just 10% of firms reported the opposite.
Nilo Divina, the founder of DivinaLaw in Manila, finds a silver lining in the pandemic, as “it made us realise that productivity can be attained even while working from home. It prompted us to be more creative in our product and service offering, with the clients’ needs, brought about by the pandemic, as our primary consideration,” he says.
Manisha Singh, the founder partner of LexOrbis in New Delhi, admits that the “new normal” brought major changes in the firm’s functioning. “Most of the work, which we could not even have thought of doing without physical files and documents, is now being done electronically,” she says. “We could not imagine that our office would remain fully functional, without any of our lawyers and staff coming to the office, but that has been happening for almost the past eight months, and we are equally efficient.”
Sunita Sreedharan, the chief executive officer of SKS Law Associates in New Delhi, says the work-from-home protocols brought in a cohesiveness in the entire team, which she adds was a pleasant surprise. “The Indian patent office has efficiently handled filing and hearings through virtual conferencing,” says Sreedharan. “Technology has played a great role in the smooth working of the virtual office, and I expect we shall continue with this work-from-home culture for some time to come.”
Beijing-based patent attorney Guo Xiaojun, at CCPIT Patent & Trademark Law Office, says the pandemic brings him a more flexible way of working at home and in the office. “We contact our clients through meeting apps and we maintain our marketing as usual, except for face-to-face interactions,” he says.
Nini Halim, a senior partner at Hutabarat Halim & Rekan in Jakarta, agrees. “Although working from home and replacing face-to-face meetings with video communication or conference calls needs a bit of an adjustment, this style of working has proven to be more effective for the majority of members of the firm, thus making us more productive and efficient,” she says.
Bilal Shaukat, the managing partner of RIAA Barker Gillette in Karachi, says he started using digital tools, with meetings conducted on Zoom or Microsoft Teams, as a result of reduced client interaction. “However, we consider the physical interaction is considered to be extremely important for maintaining relationships,” he adds.
Seema Jhingan, partner and co-founder of LexCounsel in New Delhi, says she is thrilled with remote working. However, she also notes that it has created some challenges. “Work-from-home created scattered workplaces, so cross-interaction with members of other teams was restricted and regular zoom calls were not the same as face-to-face meetings,” she says. “The firm also noted challenges related to timelines and delivery by some members, while others functioned as before.
“The pandemic also created possibilities of collaboration among team members, which we had not imagined or anticipated. Zoom meetings are now an acceptable way of [conducting] client meetings, and save a lot of travel time.”
Jayesh H, a co-founder of Juris Corp in Mumbai, says that his firm has adapted to tech and is back to normal operations, as in pre-covid times. “Not only client work, but team meetings as well as internal presentations, have all successfully migrated to technology platforms,” he says.
“The data storage system has also enabled us to ensure necessary access is given to all concerned members, keeping in mind that the highest level of security is followed.”
A very different approach is found in Vietnam, which has quickly brought the coronavirus transmission under control. Luu Tien Ngoc, a partner at Vision & Associates in Hanoi, says that the firm “kept our normal operation even during the pandemic, and all lawyers are able to work in office.”
While the global crisis is devastating businesses and economies, the legal landscape, as expected, has demonstrated resilience. Our survey reveals the practice areas that are keeping firms busy, and which others are sluggish performers. As per the variance in Asian economies, we see diverse and different trends for each jurisdiction, on practice areas and investment strategies.
The impact on the aviation sector was truly unprecedented, and resulted in a huge decrease in work for lawyers. On the other hand, e-commerce and tech projects have been keeping many firms busy, as are the bankruptcy, restructuring and insolvency areas.
Most law firms report getting more involved with domestic work during the pandemic, while in some countries, lawyers have seen an increaase in inbound investment projects. Law firms in mainland China, Hong Kong, Indonesia, Singapore and Taiwan, in particular, have reported an increase in work related to inbound investment, while the balance of domestic work and inbound investment has remained roughly the same in Japan, Malaysia, the Philippines and Vietnam.
“The litigation practice has been reduced to a great extent,” notes Anandaday Misshra, a managing partner at AMLEGALS in Ahmedabad, “however, non-litigation practice has grown multifold as the undercurrent of business is very bullish.”
Andreas Hartono, a senior partner at Andreas Sheila & Partners in Jakarta, sees a drastic shift “from corporate and commercial, including capital markets work, in the first quarter of 2020 to bankruptcy and insolvency, including enforcement of securities and other dispute resolution types of work, in the second and third quarter. The business sentiment is getting much better in the fourth quarter, as we saw several capital markets projects come back to us for target completion in 2021,” he says.
Dang Chi Lieu, the founder of DNA Vietnam in Hanoi, says the progress of merger and acquisition (M&A) deals slowed down because of travel bans, so it has taken more time for due diligence, negotiation and closing. “There are very few new company establishment projects, hence any matter related to joint ventures and corporate or licensing are adversely affected,” he says.
Dang The Duc, the founder and managing partner of Indochine Counsel in Ho Chi Minh City, agrees. “Quite a few transactional works were delayed, such as M&A and private equity,” he says. “We have also seen less inbound investment due to travel restrictions.”
The turbulence in M&A deals is also occurring in Taiwan, as mentioned by Taipei-based partner Maxine Chiang, at Chiang & Partners. “The corporate and M&A work from our international clients has sharply declined,” she says.
Peter Shelford, the managing partner of DLA Piper in Bangkok, sees both ups and downs. “The amount of inbound investment work has decreased, but litigation work has increased significantly,” he says. “Restructuring and insolvency work has also increased.”
Enrico Astudillo, the founder of EB Astudillo and Associates in Manila, seems assured. “In our field of expertise, which is intellectual protection law, the pandemic has had no effect.”
Technology begets resilience
It has been almost a year since the first case of covid-19 hit the region, and business sentiment among Asian law firms is optimistic, based on our findings. Some jurisdictions are more optimistic than others, such as mainland China, India, Indonesia, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam.
This optimism may be founded, in part, in the legal profession’s proven ability to embrace new technology, which has enhanced work efficiency and sustained market visibility for law firms. Some firms have organised webinars and online conferences, and sent out legal updates or newsletters to existing and potential clients. With this, legal tech has become something much more familiar for legal professionals.
“This pandemic has not only accelerated the technology wave, but also the firm has shifted its practice of conducting meetings, hearings, arbitrations and mediations,” says Suang Wijaya, a partner at Eugene Thuraisingam in Singapore. “There is now greater flexibility in conducting these events, as everyone is able to participate from whichever country they are in, which is especially important for our cross-border disputes.”
Jirapong Sriwat, a partner at Nishimura & Asahi in Bangkok, agrees. “The pandemic caused us to focus more on technology, which supports lawyers to work anywhere and at any time,” he says. “This will strengthen the efficiency of lawyers’ work, which will reflect in the revenue.”
Tony Foster, a partner at Freshfields Bruckhaus Deringer in Hanoi, says Vietnam has treated the pandemic with a great deal of success and increased its desirability in the eyes of foreign investors. However, technology is still crucial to reach out to international clients. “It is actually not true to say that face-to-face interactions, travel and events have been strictly limited in Vietnam, except for brief periods,” says Foster. “The borders, however, have been largely closed, so we have of course had to use technology for international interactions.”
For Stefano Beghi, the managing partner of Gianni Origoni Grippo Cappelli & Partners in Hong Kong, the global uncertainty has brought a positive rethinking of how to organise the firm’s work. However, personal meetings are still needed in order to generate empathy between the potential client and the service provider. “The business development activity has been affected, but the relationship with existing clients has been very well conducted through phone and video calls,” he says
Hui Huang, a Guangzhou-based partner at Huang & Huang Co, says the growing use and reliance on digital technology has become more prevalent, with “virtual meetings and hearings integrated into our daily workflows”.
Thanathip Pichedvanichok, managing partner at Thanathip & Partners in Bangkok, also encourages his lawyers to adopt the new way of working with and meeting clients via Zoom, Microsoft Teams and others. “Apart from interactions via electronic means, it appears that we have been more relaxed during the past few months, as things are close to normal in Thailand now,” he suggests.
It seems a surety that even though the pandemic will eventually subside, the technology adaptation and approaches that it has accelerated will be here to stay.