Covid-19 Business Adjustments
The UK and many other nations are adapting to being in lockdown in an effort to flatten the curve of the trajectory of Covid-19 infections and deaths. Businesses and individuals are facing weeks if not months of lockdown and, once the existing restrictions are eased, there seems little doubt they will not be fully lifted for many months.
So are law firms and their clients ready for, perhaps, a year or more of Covid-19 disruption?
When considering the impact of any major business adjustments, the fundamental consideration must first be people not business. This is the biggest health crisis that we have ever faced in our lifetime. The whole point of the lockdown is to protect as many lives as possible and to protect the NHS from a surge in capacity of critically ill patients with which it cannot cope.
So law firms must ensure the physical and mental health of their own lawyers and other staff are protected in accordance with government guidance. This means that in the majority of cases they will be working remotely. It is a firm’s responsibility to ensure they have the technology they need to do their job effectively; that there is good communication between them and supervisors/managers; and their mental health and wellbeing are protected.
Communication with clients must be maintained as far as possible as firms make the transition from on-site to remote working. So far, firms are responding well and lawyers are adapting quickly to ensure efficient business continuity and continue to deliver their clients an excellent legal service – despite the Covid-19 environment.
Clients will themselves be under tremendous personal stress as they cope with and adapt to the lockdown. Many will also be addressing the implications for their own business and will be relying on firms for support and advice – quite likely in addition to their primary legal issue.
But while adapting the way their business works, dealing with their workforce and with clients, it is nonetheless vital that firms ensure they remain compliant with their regulatory obligations. If they don’t, they risk investigation and potential sanctions from the Solicitors Regulation Authority (SRA).
That said, the SRA has issued a statement clarifying its approach to compliance, saying it will take a “proportionate approach” both to compliance and enforcement. However, that may be insufficient reassurance from firms who, for example, may now be finding their business continuity plans are not robust enough - the SRA has also made clear that it still expects the profession to meet the high standards the public expects, doing “everything they reasonably can to comply with our rules, and follow our Principles…. we expect firms to have appropriate contingency plans in place for disruption”.
On top of regulatory compliance firms could also face legal action if they do not treat their people fairly. There is the risk of employment claims, contractual claims and even possible criminal charges if, for example, the Health and Safety at Work Act has been breached.
Firms need to take stock early on and keep detailed records of the steps they take in response to the crisis; keep their compliance officers at the forefront of all business decisions; and maintain detailed records of what decisions are made and for what purposes.
It will not be easy, but maintaining communication with all employees, clients and others is fundamental to achieving a smooth business operation to weather the storm ahead. Firms and individual solicitors will benefit from the Law Society’s guidance on Covid-19 related issues which can be found here.
If you would like us to cover an issue in the next NGM Tax Law Newsletter, we would be pleased to hear from you
[text]