Over the last 4 years, international affairs have become more and more unstable and unpredictable. The combined impacts of covid-19 and the Russian/Ukrainian conflict have had a monumental impact on business operations and law firms. This has led to a shift in the way that the legal industry operates and will undoubtedly leave a lasting impression.
When speculations about the pandemic first began in early 2020, no one could have predicted the sheer impact it would have on law firms. Whilst activity levels remained fairly stable, certain sectors experienced the impact of covid-19 more than others.
In the midst of lockdown, property was the worst-hit area of law. Struggles with obtaining mortgages and delays with lenders were consistently lengthening transactions for conveyancers and solicitors, whilst buyers were prevented from viewing and buying properties on time. Following closely behind property law, the corporate and commercial sector experienced their slowest rate of deal making for 7 years in 2020. This was due to current transactions not completing and was made worse by a lack of instructions. This, paired with wider economic uncertainty and an unfortunate increase in insolvency cases, led to low business confidence. Since then, corporate work, and specifically mergers & acquisitions, has been turbulent. M&A work did pick up due to a peak in transactional demand worldwide but has since decreased again in the face of future uncertainty, especially surrounding Russia and Ukraine.
Conversely, certain areas of law experienced an increase in activity due to the pandemic. On the business side, employment and private client deals spiked. Difficulties surrounding furlough, for example, led to more enquiries, whilst the tragic loss of people’s lives meant that private client transactions increased four-fold. The handling of the pandemic by the NHS and government had similarly led to more clinical negligence claims. One area that had surprising results, however, was family law. Despite speculation that lockdown would create a spike in activity, January (often called ‘divorce month’) 2022 did not experience the same high levels of activity as it had done in previous years.
Russia’s invasion of Ukraine in February 2022 added more fuel to the fire. On the 30th of September 2022, the UK joined the global condemnation of Russia by prohibiting, among other things, the provision of legal advice to Russia. In response, the SRA (Solicitors Regulation Authority) stated that law firms have a key role to play in this situation.
Law firms have therefore been no longer accepting instructions from certain businesses in accordance with applicable rules of professional responsibility, and have been reviewing existing Russian client representations, as well as exiting some of these. For example, Norton Rose Fulbright have complied with professional obligations and not benefitted from working with sanctioned Russians by saying that where they cannot exit current matters, they will donate all profits to humanitarian and charitable causes instead. Further, firms like Latham & Watkins have closed all offices in Russia entirely.
Interestingly, the Law Society has been vocal in its support of firms representing Russian clients, arguing that the rule of law must be upheld regardless of who the clients are. Equally, Emma Oettinger, Ashurst’s head of Financial Crime & Risk, stated that such sanctions could threaten access to justice. It is evident such sanctions will have a negative effect on Russian people unconnected with the war, too. Whichever side of the fence you may sit on, it’s clear that the war in Ukraine has had a major impact on the legal industry, regardless
Overall, whilst the future remains unknown, it is clear that recent and ever-changing global affairs have led to unprecedented impacts on the legal industry.
Posted 20/02/2023 By Sofie Elliott