Clients’ spending is linked to company activity (revenue), how stalled their legal issues are, and their future view. Most top legal decision makers tell us they believe the acute phase of the pandemic and its economic consequences will be relatively short term – think months not years.
The implications are many. If you believe this is a 6-month problem you are unlikely to make drastic cuts and more likely to let spending self-adjust to evolving business levels and pressing needs – as long as you have a strong balance sheet and are not facing a crisis.
Clients are tending to all the new issues, potential issues, and the ongoing issues which still have legs – and making other changes to deal with the pandemic. Here are 5 changes and responses rising to the top, starting with outside counsel spending:
1. About Those Outside Counsel Budgets and Legal Spending
It’s too early for draconian cuts and across the board reductions. Clients are largely adjusting spending based on activity. The slowdown in litigation and M&A has more than offset the need for more counsel and strategic advice. So – budgets are still there.
2. New Role for Outside Counsel
A growing number of clients are including one of their trusted law firms (new firms need not apply) to every planning meeting. Few law firms set up or run these meetings, but they are there to provide guidance and trusted counsel.
3. Making Plans for Moving Ahead
Clients want to make sure they understand all the potential legal ramifications of their plans and decisions. This explains why they are including trusted counsel in all planning and brainstorming meetings as well as decision making. This is a rare opportunity for outside counsel to gain deep and penetrating knowledge about your clients – which you can use long after the crisis has passed. Cherish this gift of unmatched insight and use it wisely.
4. Setting Up Their Own Task Forces
The largest companies are setting up their own in-house task forces to evaluate and plan. We recommend attorneys with very large clients determine if their clients have a task force. If they don’t, help them set one up and assume the role of the advisor if not the facilitator.
5. Cybersecurity, Cybersecurity, Cybersecurity
The tsunami of remote workers creates a need for more compliance strategies and cybersecurity prevention. Clients are most worried about hacks and unintended release of information – as in a stray email. Clients are racing to ensure they have robust data governance as they chase the moving target of the expanding remote workforce. These same clients tell us phishing schemes get more sophisticated every day – staying ahead and sensitizing the workforce is more than a full-time job.
You can learn more about client’s spending, needs, and exactly how clients rank law firms in 7 key segments of the cybersecurity market in our just-released report BTI Cybersecurity & Data Privacy 2020. Available now.
Clients are swiftly developing the strategies and tactics to get through the pandemic. Almost all are looking to outside counsel in some way – with more and more bringing their most trusted advisors inside the tent. Short- and long-term, this is where you want to be.
The Mad Clientist sincerely hopes clients’ short-term predictions are right. Be well and be safe.
Forwarded to you?
Get your own copy every week!