Ralph Baxter talks with Mitch Zuklie, CEO of Orrick, who gives his tips on how to manage and lead your firm during this pandemic.
Law Technology Now
Mitch Zuklie serves as Chairman and Chief Executive Officer of Orrick. Under Mitch’s leadership, the firm has...
THE ORRICK YEARS Ralph served as Chairman & CEO of Orrick for nearly a quarter century, leading...
How should law firms react during these turbulent times? Law Technology Now host Ralph Baxter sits down with Mitch Zuklie, CEO of Orrick, to discuss how attorneys can lead and manage their law firms during a pandemic. Mitch explains how it’s important to pay attention to how you respond internally as well as the impact your clients will face while delivering services to them that are relevant to the crisis. He suggests law firms should develop plans and be prepared for uncertain times, but not to overlook the opportunities these moments provide, like permitting your firm to accelerate client relations and prioritize innovation. Times like these are tough to deal with, but Mitch reminds listeners that when the market is back up, there will still be work for everyone.
Mitch Zuklie is the chairman and CEO of Orrick.
Law Technology Now
Leading and Managing Through the Coronavirus Crisis
Ralph Baxter: Welcome to Law Technology Now. I am Ralph Baxter and this is my seventh episode as co-host of the show. Our guest today is the Chairman and CEO of Orrick, Mitch Zuklie, and we are going to talk today about Leading and Managing Through the Coronavirus Crisis.
We are recording remotely today. Normally we record these episodes in person, but for obvious reasons we are recording remotely. Mitch is in Menlo Park, California and I am in Wheeling, West Virginia.
Before we get started I want to thank our sponsor.
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So I have known Mitch Zuklie almost 20 years. I first met him when he was at VLG, Venture Law Group. Mitch has been a star since at least the time he was in law school where he was elected editor in chief of the Law Review at the University of California at Berkeley.
After law school he joined VLG, Venture Law Group, which was truly a unique law firm and in its time, in its history it was one of the most innovative, creative law firms adapting to the new world of technology.
And then in 2005 Mitch joined Orrick as a partner and he quickly became one of our real leaders in Silicon Valley in the world of leading early stage technology companies in their lives and getting them going and he continues to be such a leader to this day.
Early on Mitch distinguished himself as versatile. He was able not only to be a leader in the world of technology, he was a leader in the world of energy, especially in the intersection of technology and energy and ended up being the head of Orrick’s Energy and Infrastructure Group. And then eight years after joining the firm Mitch was elected Chairman and CEO of the firm, a position he still holds seven years later.
And during those seven years Mitch has led the firm to new heights. He has opened five new offices. He has presided over the firm and organized it so that it wins the FT Innovative Firm of North America year after year. He has opened new ideas like Orrick Labs.
One of the things I have found most meaningful is that Mitch has organized advisory boards of groups outside the law firm to see to it that the firm is in touch with what people are thinking on different issues that really matter to the law firm’s ability to do what it does.
And then one other thing that I think is outstanding about the way Mitch is leading Orrick is his client visits. I think Mitch makes more personal visits to clients than any other law firm leader in the world.
So Mitch, it is a delight to have you. You are the first law firm leader I have had as a guest. Normally we would talk about how you are leading the firm and pursuing the imperative for change, but today we have a singular issue that is going to be our focus and that’s how you are Leading and Managing Through the Coronavirus Crisis.
Mitch Zuklie: Ralph, it’s a complete honor to be here. I am excited to spend some time talking with you about this. As someone who is such a well-known commentator about the imperative of change in the legal industry, as you know, this is a moment in which change, profound change, will come to our industry. It will be a major accelerant to the change which I think was inevitable and it is an exciting time for all of us and I couldn’t be more happy to have my first meaningful conversation about the topic with you.
Ralph Baxter: Well, Mitch, what you just said is why I have such confidence in you as a leader and why I think you stand out, because you are just so right, this time is going to accelerate change and for the people whose outlook is healthy, which is an odd word for this being a health crisis-driven crisis, but if you have an affirmative outlook, you will see in it opportunities as well as challenges and we are going to get to that.
All right, so let’s talk about how you are leading and managing through the crisis and let’s start with planning. Can you share with us how you have gone about planning both strategically and in terms of operations to get through this?
Mitch Zuklie: Absolutely. And the first thing I would note Ralph is that COVID-19 has changed landscapes very quickly and there is still a lot we don’t know about the impact that COVID-19 will have, but it’s a perfect storm. Five things are coming together in a way that they have not historically.
We have a worldwide pandemic, coupled with a financial crisis, coupled with social isolation, coupled with an oil and gas problem, and we also have a political environment in the States and I think in many other countries which is quite charged. So there are questions I think about whether we can come together socially and enact appropriate responses that many will agree on.
That’s an awful lot for us to bear as citizens. It’s an awful lot for our clients to handle and it places an enormous burden on all of our teams. Our lawyers and our staff are dealing with challenges they have never dealt with before. The idea of having to not only do client work and think about how to advance our strategy and our client strategy, how to innovate and deliver value is compounded by the need to do remote schooling, worrying about one’s health and your family’s health, perhaps caring for a neighbor or an elderly relative.
That’s compounded by the fact that the ways that we ordinarily interact are deeply curtailed and many of us have family members who are on the front lines either as first responders or as doctors who are the real heroes in this crisis. It’s an awful lot for people to bear and it’s happened very quickly.
As you know, in the middle of January there was still a belief that COVID was not something that was passed on by human to human transmission. The middle of January the World Health Organization wasn’t clear that that was yet the case and five weeks after that period of time we had canceled our annual partners’ meeting; I will give some detail of that.
Another month after that we determined that we would be working remotely in all of our offices and just yesterday and the day before we have done announcements about some pretty radical changes to the way we are approaching the expense side of our year. Amazing how quickly that’s all developed.
I think the key moment for us in terms of responding to the crisis really came with a decision that we made in middle of February. We had a key meeting on Monday, February 24 where we decided to cancel our annual partners’ meeting, which was scheduled three days later. We came into that meeting not certain whether we would cancel the meeting or not.
On the previous Friday, well before the worst of the news hit about Italy, we thought we would go ahead with that meeting. It’s very important to us strategically. At that point I think the death toll was still quite contained; I think some something like less than a 1,000 people had died in China at that point. And we knew of course that our partners from Asia couldn’t join us, that those from Milan and Rome wouldn’t be joining us, but we thought we would come up with content that allowed them to participate virtually, but the rest of us would get together.
And we entered that meeting and we had had a couple of groups looking at the issue early on from a client perspective. Some of our very best lawyers and staff were thinking about the issue of how would this impact our clients and how should we respond to it. And one of the leaders of that effort, Annette Hurst, made an impassioned plea at a board and management committee meeting that we had put together that we should cancel the partners’ meeting.
I must admit that as Annette marked through the data that she had gathered, it became quite compelling and I think we made a unanimous choice that we would in fact not hold our meeting physically, we would postpone it and do it remotely, and that was a moment from which everything else changed for us.
Similarly, that day I remember the US stock markets plummeted. The Dow Jones Industrial Average had its worst day in about two years. I think it went down about 1,000 points. But at that point many firms, many companies were still holding massive events. We are still weeks ahead of South by Southwest being canceled. It wasn’t until mid-March that the NBA, for example, suspended its season.
So that was a big decision for us to stop our most important meeting of the year and ever since that moment we have been focused on paying attention to how we would both respond internally, but equally importantly, how would this impact our clients, how were they responding and how could we make sure that we were delivering services to them that were relevant to the crisis they were facing.
Ralph Baxter: So let me let me just break here for a second and I want to underscore some things that you have said that I think are really important for people who are struggling with this.
The first is the way in which you are in touch as you think about this with all of the many factors that contribute to this crisis. This is vital for leaders in the position you are in to internalize this. This is not simply a financial downturn or simply a health problem. This is complicated. And it has, as you said so eloquently, so many implications for all of the people who will be involved, in our firm, in the clients and everywhere else.
The other is the story you told about Annette’s role in leading to the firm’s decision. That’s collaboration in action and it’s part of what law firms must do is have a conversation together and clearly as you tell the story Annette was ahead of some others in her view of this and we all know people who were ahead of others in it and who were right. And it’s a very important part of running anything, but certainly a law firm that we listen to each other, as you did, to get to the best outcome.
Mitch Zuklie: I think you are right to pause on that point. Annette was clearly ahead of me in her thinking and understanding of the crisis. And when we had a dialogue about it, it became clear that the right decision was to cancel. It seems so obvious in hindsight, but at the time it wasn’t. It was far less clear of the implications of what had happened yet. There was nothing even remotely close to the understanding we have of the disease now. We are just in a very different place.
But we were very lucky that we had real leadership by Annette and others who really understood and were all over the Center for Disease Control and WHO literature. So we were fortunate to have that.
We knew immediately when we made that decision that we would have to come up with a bifurcated approach to this. We really need to understand what this meant for clients and we really needed to make sure that we were making decisions that were thoughtful for us.
If I can I will turn for a second about how we approached the operational decisions that we have made in the past months. I think it was very clear to us that we wanted to make sure that, first and foremost, we were informed. Any decision that we made would have to be one that was informed and I will talk a little bit about how we went about doing that.
The second is we wanted to be decisive. We wanted to at some point make a decision because we thought the consequences of not making a decision were meaningful. The amount of stress people are under while they are waiting for a decision to be announced is substantial.
We just made an announcement about a policy which I will describe in a little bit, but I can say that even for those who weren’t thrilled with the outcome, I think they were happy the decision was made and to know that it had been made and it had been made on the basis of some information that had been shared with them.
The third piece is we wanted to make sure that any decision we made would advance our strategy and be consistent with our core values, and we of course needed to pause and make sure that we understood what the key principles were that should guide us in the decision we made.
The fourth piece was that we wanted to make sure that we would communicate transparently and with enough detail that people can understand both why we made the decision and what we were deciding to do and what we were deciding not to do.
Finally, we wanted to make sure that whatever we did had flexibility, but that it would not be a situation where we were constantly reevaluating it. There is a great cost to constantly reevaluating your decisions, so we wanted to make sure we made the decision that allowed us a natural point to pause and look back.
And I think that flexibility was quite important because we have made a decision right now with imperfect information, none of us know exactly what the economic consequences of COVID-19 will be. We have gone about and I can describe a little bit about how we have approached getting information and insight into it, but clearly today nobody really knows whether this will be a — how long this will go on and whether it will be a V-shaped recovery or whether it will be a U-shaped recovery.
We have spoken with and scoured as much information as we can possibly find. We have talked to economists from leading banks like Citibank and Wells Fargo and studied everything that’s been published by Goldman Sachs and read McKinsey reports and looked carefully at what the World Health Organization predicts and carefully read Jamie Dimon’s letter.
One of the things we know, this is an event-driven bear market; historically event-driven bear markets have about a 30% decline and last for about 15 months, but this is a very different bear market. We got to this bear market in 16 days. The scale of that decline is unprecedented and the volatility which has continued is very challenging.
And the guidance that we received, Goldman Sachs basically something like six weeks ago predicted a 5% pullback in the economy for the second quarter. A week later they came out and said it would be closer to 25%. That level of swing among experts is unprecedented.
So the truth is while we have gone out to try to get as much data as we can about the economy, we certainly know that there is uncertainty about the situation today and so we wanted to come up with a plan which first and foremost gave us flexibility and gave us a logical moment at which we could pause and reexamine whether our decision made sense.
If it’s not as bad as we think it might be, that’s great. We can reverse course. We can pay people money and we will be delighted with that outcome. However, we are planning for uncertainty and to the extent that we can be conservative upfront and convince our team to bear with us while we take some pain because of that uncertainty, I think we will have many more options as additional information unfolds throughout the crisis.
Ralph Baxter: I couldn’t agree with you more. Early on I came to that outlook listening to people who knew a lot about managing health crises, we are better off to be — to err on the side of being too careful and then we can be amused by what we did and we can deal with anything, any consequences we have to fix than the other way around.
I think it’s so important Mitch that you — several times as you went through this, which is — and what you have just described is textbook, preparation for dealing with a situation of this kind, including the dimension here of uncertainty. I think this crisis is unlike anything in our lifetime, I think that is not an exaggeration; normally those words are hyperbolic, but they are not here. And part of it is that we just don’t know where this is going to go, it hasn’t happened before, for one thing, but besides that it’s because there are all of these moving parts. And so the idea that your plan remains flexible so you can continue to reassess, not because you get cold feet, not because you don’t have the courage of your convictions, but because the facts change which they will, right?
Mitch Zuklie: Absolutely right. I mentioned how important we thought it was to gather data and make sure that we were making informed decision and I would like to — I have described to you some of the diligence we have done on looking at the financial markets. Our conversations both with our partners, together with our clients I think have been equally instructive.
Some things are quite obvious. There will be some good that comes out of this event. Those who are practicing in distressed investing or restructuring or alternative lending are going to have an awful lot of work on their hands. Those who are advising around unemployment issues and at how to gain access to things like CARES Fund resources will have a lot of work to do.
And the renewable markets and infrastructure markets will likely have a very different impact than the oil and gas markets do. Those are obvious.
Clearly there will also be financial institution litigation which arises from this, much like it did in 2008. The exact nature of that and how that will develop is critically important. And I know that we have got a group led by Rich Jacobsen, one of our leading partners in New York who is all over the issue of really being in dialogue with the banks and understanding exactly when we think the first wave of litigation will come and the second, so our clients can be well-prepared for it.
In addition, we know that our clients are thinking differently about public policy and understanding that in the world of a massive stimulus here in the States and in another countries, understanding those rules quickly, being able to make thoughtful decisions about them will be an area where lawyers are in great demand.
And obviously one of the things that we feel very fortunate because of the strength of our Global Operations & Innovation Center and our outstanding technology team, which is a legacy entirely attributable to you, we feel that we are very able to work remotely and this remote working and flexibility that comes with it and the ability to have meetings by video and the like effectively and actually do your job while you are at home and not in the office, that’s just going to accelerate. So we think that those things are clear.
It’s also clear that our clients, many of them are going to have challenging times. There is going to be pricing pressure and delayed payments and transaction delays and pieces of litigation that might have gone forward will be scotched and will not go forward.
There will be financial market disruptions, court closures and postponements will undoubtedly change things and many of our clients will face real economic pressures, some insolvency risk and as a result they are cutting spending currently. They are doing layoffs and other forms of adjustments and they will look at every line item of their budget, including their legal spend. Those things are clear.
What is less clear I think, but absolutely true is that much like 2008, the inevitable march toward increased clarity, certainty, value and innovation and deeper partnering from clients and law firms, this will accelerate that. I think that most folks haven’t thought through all those implications. I wouldn’t pretend to have a crystal ball about exactly how that will work, but there is no doubt that this is a moment to be in careful dialogue with your clients about how they have — what pressures they are under, how they plan to respond to that in the short and near term.
And I think those firms that are able to find ways to innovate, to have connections, to think about ways, either that are technological or simply personal, like I think many firms will face — many clients will face hiring freezes and we have some folks who would be fabulous candidates to be seconded virtually or otherwise right now.
Thinking about ways to support clients and develop different tethers to them at this moment, I think is absolutely critical. And we also know that when the markets respond, return to normalcy, there will be work. The fundamentals of the economy and the US in the world are pretty strong before this pandemic.
There is no reason to believe that work will not continue in a meaningful way once we cycle our way through it. That means increased demand. All of us as law firms worked incredibly hard to identify, attract and retain talent, getting up that talent is something that we were not willing to do. So we wanted to come up with a solution that enabled us to keep our team, but also have the economic flexibility to deal with the pressures I have described of slow payments, reduced demand, increased demand for certainty, etcetera.
Ralph Baxter: Let’s just take a brief break here. I hesitate even to break in, but we need to break in for a second because you are going through this in a way that is so helpful to anyone who is listening about how to think about this crisis.
But let’s take a brief break and thank our sponsors one more time, which enables us to do this podcast, and then we will come back.
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Ralph Baxter: And we are back with Mitch Zuklie talking about how Orrick is leading and managing through the coronavirus crisis?
Mitch, I think internally you all have identified eight different elements of your plan to get through the crisis, could you share those with us?
Mitch Zuklie: I will be glad to and also, if it’s okay spend a moment giving a bit more background on the principles that we chose to guide us to those eight actions.
The first, Ralph, was that our priority is to both protect the firm and do everything we possibly can to preserve jobs and health benefits and a sense of community and connection that comes from being part of the firm at this moment. So we think that is a really important part of our decision making. One could choose to cut a bunch of people or one could choose to make reductions to the existing salary of your team. We chose the latter route and I will describe why in just a moment.
We also had a principle that we are all in this together and we wanted everybody from our most highly compensated partner to our lowest paid staff members to all be part of the cost reductions in some manner. The folks who are at the bottom of our chart will surrender about 1% of their income, and it of course will be much higher with those at the top, giving up much more than the more junior members of the teams.
The third is, because, as we have described earlier, we don’t really know and we can’t accurately predict how this will turn out. We want the ability to have a program that we can turn on or turn off as conditions dictate. And finally, we think it’s important to act quickly in this crisis rather than wait and see how things develop because it gives us the greatest flexibility to respond.
Ralph Baxter: Let me just say one thing about what you just said. You are sharing such vital ideas and these are not theoretical in your case. These are ideas that guide decisions you’re about to describe and I want to go back to one in particular.
Mitch Zuklie: Sure.
Ralph Baxter: As you went through what you just described in the first couple of elements that drive your thinking, you talked about including the interests and the responsibilities of everybody in the firm. It’s not just about the partners or anybody else on the burden side or on the opportunity and the concern side. Those are critical elements to leadership in a law firm, in any organization, but in a law firm, empathy for how everybody is doing and calling everybody to action.
I wrote a post this week on Legal Services Today about leadership, and what you just described, exemplifies that critical element that often is overlooked by people running organizations.
Mitch Zuklie: Ralph, thank you for noting that. I actually think a lot of firms right now are taking a contrary approach. They, in fact, are not making clear what is in fact the truth, which is that everyone will be affected by this. Many firms will say, we are not going to touch staff compensation or associate compensation. I don’t think honestly that that’s a likely response to this event.
I think what people will do and did in 2008, in 2001 and other crises, very frequently, they’ll change the standard for what it takes to be employed at the firm and they will get rid of more people and they’ll do it in a way which is, I think, less genuine than to make it clear to people upfront that all of us are in this together and we’ll all bear some of the pain.
And it’s just a stylistic thing, it’s something that’s important to the way that we want to do things and we want our people to feel like they are owners in the business at every level and have responsibility at every level, and we want to be transparent that we think there will be some shared sacrifice by all of us.
Ralph Baxter: So I think this is more than stylistic. You just said a word that is vital. You said, we are going to tell them the truth. I mean, this post I wrote this week, I thought about this a lot during my years at Orrick, about leadership but as bedrock as the other issues we have talked about are so true, is telling people the truth, especially at a time like this. They’re all worried. They all know, they don’t know where this is headed. They all know it could be headed in a bad way. They know jobs are at risk. They know compensations at risk. They know everything is at risk and for the leader to square with them and tell them they can take it, tell them what the range of outcomes are and how it is that you are going to lead the firm in a direction so that we make the best of it, even though we don’t know exactly what’s coming.
I mean, I just think that truth idea is so important. But it’s very hard, it’s very hard to tell people the stark reality of what you’re thinking about, what you’re doing. So, all right, I will be quiet. Go ahead.
Mitch Zuklie: So the first action we took is to make clear we’re doing a hiring freeze. Of course, there are still going to be vital things that have to get done. Someone needs to be replaced or we will continue to hire people. But we are quite serious that we only want the standard of our hiring to be something which is truly urgent.
That involves a hard decision about us, making decisions, to not make investments, which in another environment we absolutely would make and would make us stronger, and we need to continue to invest to become a stronger firm, to better able to serve our clients, but we are really going to try to have a freeze at every level and to really question ourselves so that we are making sure that we are making the most of our existing team.
There undoubtedly will be opportunities that come to firms in this time of turmoil. We don’t want to be out of the market altogether, but we really want to be thoughtful and transparent that we’ve got to hold ourselves to a high bar.
Secondly, we are going to reduce compensation for partners. I’d rather not discuss the specifics of that, but we want to set the expectation about our partners that unlike last year, which was our best year ever financially, we don’t think that will be the case this year and we want to make sure that we are setting an expectation whereby some part of what we would ordinarily distribute to all the partners during our normal compensation schedule, will be held back proactively so that we can reward those who have the best year. That’s important to us.
We think that those who perform will not necessarily bear a close correlation to the way that we placed people in terms of compensation earlier in the year, because circumstances have changed so materially. So having the ability, to have a pool of additional resources to distribute, at the end of the year when we have more perfect information strikes us this is a very fair approach.
Third, we are going to offer everyone who would like to the opportunity to have a full-time employment reduction option. Many folks in our firm, partners, associates, staff, are struggling with real issues right now, family members who are sick, homeschooling, young children, et cetera.
If we think people are going to be comforted by the idea of working at a less than full-time pace right now, we want to encourage that. We want people to be honest and to be able to balance things in a thoughtful way. We want to be able to tailor our team to their availability and want to make sure that we are getting people at their best and our clients deserve that.
So we want to have a lot of conversations with those who would like to go to an FTE program to come up with a way to both understand that, to implement it and to communicate that to the teams and client teams so that people understand who’s available and when.
Ralph Baxter: Right. That is a crisp example of what we talked about before, thinking about the position they are in. Those realities, that suddenly had the fall in all of them and enabling them to manage their lives and their personal responsibilities with the work responsibilities.
Mitch Zuklie: Yeah, I think that’s exactly how we think about it. The fourth piece of our plan is to do graduated salary reductions for the United States — in the United States, for associates and counsel. I’m going to talk about the United States for a couple of moments. I am going to Europe and Asia in a moment and they are somewhat different, not in any way in the philosophy, but only in the implementation because of local requirements.
So I am going to talk for a little bit about the US but because we are a global firm, I will then spend a second talking about what we’re doing outside of the United States. So graduated salary reductions for associates and counsel with the option of having make hollow words if one is fully busy.
The range of those reductions is pretty simple. We are asking folks to take reductions in the order of 5 to 10% on average and making sure that when people are working robustly that we allow them the chance to be made whole immediately and that would be the case in midway through the year. So we will have a moment in June or based on June data, where we’ll award additional compensation to those who have been working at a full-time pace, and will do the same in November.
In addition, folks will be eligible for their normal year-end bonuses, but the idea of restricting compensation having all of us to be in this together was important to us, as is the idea that people can in fact get restored to full compensation if they are working a full load.
And of course, we have many hard-working people who want to be working full-time. You can imagine how hard it is for an eager, driven associate who’s been working on important cases for clients to be told the client has asked us to sit back for awhile until it’s clear when the case is back on, so we are not going to do depositions for a while and those projects that you were so excited to dig into, you can’t do for a while. That’s clearly not that associate’s fault, and no way is that the associate’s fault.
And we feel deeply for those who are not able to get out there and practice law at the highest level and learn and get more exposure and more bats, it’s a very challenging time for them.
We also, 0.5, will do graduated salary reductions for our paralegals and staff and we, as I said, want to make sure everybody who is part of the team is contributing in some way to this reduction in cost. In addition, we’re going to ask for a period of four months. We’re going to — which we can of course get rid of it or terminate more readily if conditions improve more rapidly than we think, we’re going to ask a certain number of our staff members to become FTEs. The largest category of those will be our assistants who will be working at 80% time and receiving 80% pay. We think that actually corresponds to what’s happening in the market right now.
Many things that traditionally our assistants who are outstanding do are just not happening right now, particular a fair number of in-office meetings and a fair amount of travel which are important parts of their jobs just aren’t happening. And as a result, their work is curtailed, by more in fact, I think than 80% is a reality. In addition, a number of our folks who depend on being in the office really to have a full employment pit plate are going to be reduced perhaps more than 0.8 until such time as we’re back together and we’ll see where we stand on that.
Just a reflection of fact that there is a real impact to our business, to the shelter-in-place orders under which we’re operating, and that impacts some people very differently in terms of the work that they are able to do.
Sixth part of the plan, so I mentioned, it’s quite important for all of us to have a consistent approach in the way we’re approaching this and we look for similar reductions in Europe and Asia, but in each country in which we operate, there are different rules and regulations which govern how we can work with employees.
And so in certain of our European locations, we’ll ask people to make voluntary reductions. In others, we’ll make decisions that are in line with regulatory schemes that have come in place to deal with furloughs and other sorts of systems. So the same philosophy will drive those decisions, but the implementation will be it’s something of a patchwork that responds to the fact that we are a global operation in many different countries.
The seventh part of our plan is that our summer program will become a remote program because we do not want people travelling at a time that’s unsafe. And right now, we don’t know when it will be safe. So we’re reducing the duration of that program or making it remote and we’re making permanent offers now to the 2Ls and we’re offering all of those who are 1Ls to come back next summer. The reason for that is, I think, quite simple.
It seems to us to be unfair to use this summer, which is shortened and remote to evaluate folks. We feel like we’ve been able to attract some outstanding summer associates and our track record has been great over the years. We feel very excited about having all of these summer associates join us. In reality, it’s rare for us not to give offers to summer associates. Why try to put the evaluative pressure on folks when they’re doing something that we’re not expert at?
You’ve never done a remote summer program before. Let’s take the pressure off those outstanding students, allow them to do some work, get a sense of the firm, figure out what they are most interested in, do enhanced training, allow them to come back as full-time employees and take away the idea that we’re going to be doing meaningful evaluation over this shortened and remote time period, just seems unfair.
And the eighth part is a series of more expected expense reductions, postponing retreats, reducing some of our training, being thoughtful to curtail things which are non-essential, all of which we think we were prudent to do but given the uncertainty of the market, we’ll just decide to not do those things, which were not absolutely vital and be mindful that that savings gives us greater flexibility.
Those are the eight pieces of it. As I mentioned, it’s designed to be flexible so that we can re-evaluate at some point and say, okay, we’re going to come out of this concept of having a four-month reduction at an FTE program and change that if conditions dictate. But the idea was to make a decision now to give people certainty in how we’re approaching things, including those summer associates, and to do everything we can to give us flexibility to see how the cards turn and the balance of the year.
Ralph Baxter: Mitch, thank you so much for that. That is as granular and complete an exposition of how you grappled with some of the hardest issues that all of your peers around the world are grappling with and I’m sure it’ll be very helpful to them. There are so many issues I would like to ask you about beyond that, but we’re running beyond the time we have.
So I want to close and so maybe in another form and another way we can talk about some of the other things that I would have liked to have asked you about. But let me close by asking you one more question, and I can hear the producer in my ear telling me that we need to keep this concise.
But you have a view of the future and you said something already that I think is vital for everybody to understand. We had a strong economy before this and we will have the foundation for a strong economy afterward. And law will never go out of fashion. The law is necessary to global commerce and justice. Give us an idea of your view of what the new normal may look like?
Mitch Zuklie: Well, the first thing I’d say is I think you’re absolutely right that law will not go out of fashion. Right now, the pace of innovation, business innovation and business model innovation is happening much faster than the regulatory world can keep up with it. That means that we as lawyers are doing some of the most important civil work right now. We are doing socially valuable work and we need qualified young women and men to join the profession and help make sure that businesses are able to navigate that situation.
At the same time, there’s no question that I think that much like we saw in 2008, this crisis will cause another shift, with clients demanding even more distinctive value from their outside advisors that demanding more price certainty, more value and different ways to run their businesses. Most law firms are geared toward providing the company’s solutions, but very few do a great job of running the gamut of run the company, legal solutions. And I think that we are going to see a real continued bifurcation in the way that in-house legal departments solve that problem.
The other thing I would say, Ralph, is I think that this will only accelerate a couple of things that we already probably knew that remote working just-in-time workforces are going to be increasingly important. The enormous amount that all law firms currently pay for real estate will seem strange, having more agile workforces that are remote with more contract attorneys and other experts that are brought to bear and the ability to coordinate across different disciplines I think will only accelerate.
It’s the tip of the iceberg. There’s a whole bunch more we can talk about, about this, but there’s no question this inevitable march, I think, toward a different type of law firm-client relationship will accelerate from this crisis. It will have to because the clients will be under yet stricter budgets once again and they’re going to have to find ways to solve their legal problems.
Ralph Baxter: Right.
Mitch Zuklie: Those aren’t going to go away. They’re only going to accelerate.
An absolute pleasure to talk to you, Ralph. I wish we could continue on the second topic in greater detail. I look forward to a chance to do so.
Ralph Baxter: Well, Mitch, you can count on that. We will have another session and go and do just that. You couldn’t be more right. Law needed to modernize before the crisis. Our clients are going to be more demanding and need more for us, all of us, to modernize. And so I believe it will accelerate the change.
Thank you so much for joining us today, Mitch, and for your candor and the detail you shared, it’s invaluable.
Let me just say a couple of last things here about what we’re dealing with. This is a time like no other.
We are not exaggerating about that and you did such a wonderful job of expressing why it is a time like no other.
This is a time that calls for people in your position and all the other leaders to lead, to really lead, internalize that as it’s their duty and lead as well as to manage, and you have just shared with everybody a textbook example of how to do that. So thank you for joining us and sharing all of that.
To our listeners, we plan to continue to focus on this crisis in the episodes ahead and so do I on my blog post, Legal Services Today, I am two installments into a series that will go at least five, dealing with the different subjects that this crisis raises about how to run a law firm.
But thank you for listening everyone out there. If you like this, if you found this worthwhile, please rate us on Spotify or Google, wherever you get your podcasts, and until next time, this is Ralph Baxter for Law Technology Now.
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|Published:||April 15, 2020|
|Podcast:||Law Technology Now|
|Category:||Best Legal Practices , COVID-19|
Law Technology Now
Law Technology Now features key players, in the legal technology community, discussing the top trends and developments in the legal technology world.