By Brian Bandell, South Florida Business Journal | May 20, 2020
Many law firms in South Florida have lost significant business due to Covid-19, which could threaten some of the companies’ survival, experts say.
Layoffs, furloughs and significant reductions in compensation for attorneys have been the most recent effects resulting from the slow down in business.
Greenspoon Marder, Akerman LLP, and Holland & Knight are some of the largest firms in South Florida to make these cutbacks. But some local firms, like Kelley Kronenberg Law, report they have maintained staffing levels or showed some growth.
Etan Mark, a partner at Miami-based Mark Migdal & Hayden, which specializes in commercial litigation, said the firm hasn’t suffered because it has many ongoing cases that are billed in creative ways, such as through monthly fees. Firms that bill by the hour for litigation work will see a big decrease in revenue, he said.
The primary difference between companies cutting back and those that haven’t depends on the firms’ specialty areas, said Bob Jarvis, a law professor at the Shepard Broad College of Law at Nova Southeastern University.
He added that many firms that focus on industries now mostly shut down are in danger of going out of business in the coming months if most sectors don’t bounce back, especially small firms without a bank willing to support them.
“The pandemic will cause law firms that were teetering to fall over the edge,” Jarvis said.
Attorneys who focus on transactions, such as real estate deals or corporate mergers, have little to work on right now as fewer new deals are pursued and those on the table are being delayed or canceled. Even when law firms complete work, some clients may be unable to pay them on time because of financial distress, Jarvis said.
On the other hand, labor and employment attorneys are probably quite busy advising clients on how to operate amid the challenges of Covid-19, or how to reduce labor expenses.
Meanwhile, bankruptcy attorneys are in a holding pattern as companies and creditors wait to measure long-term affects, although Jarvis said he expects more bankruptcy activity soon.