COVID-19 and Its Impact on the Legal Industry
Updated: Feb 28, 2021
COVID-19 has impacted and changed various industries and fields. The legal industry is no exception. Forbes noted that COVID-19 is changing the legal field and required the “…legal ecosystem become more agile, fluid, collaborative and fluid”.1
Below, we discuss some of COVID-19’s changes and impacts on the legal industry like the adoption of new technologies, an increased demand for certain types of legal services, heightened risks of fraudsters targeting law firms and a potentially greater number of malpractice suits.
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Adoption of New Technologies
Critics have often critiqued law as an industry that is resistant to change and technology. However, the advent of COVID-19 and the need to social distance, has forced courts to adopt certain technologies. The Ontario Court of Justice states that many court proceedings are now not in person but conducted via audio conference or video conference.2 Related, Ontario now permits lawyers to administer oaths via an “electronic method of communication” and does not require the lawyer to be in the physical presence of the deponent.3
These changes will save time and money for lawyers. However, they will also present new challenges. The Law Society of Ontario notes that online commissioning is associated with a heightened risk of fraud, and identity theft compared to traditional methods of commissioning documents.4 Trials conducted by videoconference present concerns pertaining fairness. A 2010 study noted that people who had video bail hearings were more likely to have higher bail amounts than people who had in-person hearings.5 To address these worries, legal professional associations may provide members with “best-practice” advice pertaining to these situations.
Increased Demand for Certain Types of Legal Services
CLIO notes that a majority of American law firms experienced a decline in billing in April and May but some lawyers’ services might be increasingly in demand over the next several months.6 McKinsey & Company notes that during economic downturns, there is actually an increase in litigation.7 A particular example of this phenomena is businesses suing business interruption insurance providers for not covering them during the government-mandated lockdowns. In Ontario, there have been two class actions against business interruption insurance providers as of October 2020. 8 Insurance defence lawyers might be able to set precedent; does the presence of COVID-19 constitute physical damage to a building and thus is subject to coverage? Other areas where professionals expect increased litigation include medical malpractice. Stressed health care professionals are more likely to make errors.9 This is in addition to the various lawsuits that have been launched against long term care homes.10
Litigators, in these areas, should not be the only ones to expect an increased workload. There might also be an increased demand for certain solicitors’ services. Some employment lawyers have noted that COVID-19 has led to a greater need for their services.11 Employers might seek the advice of an employment lawyer when laying-off employees or instituting work from home regimes. Additionally, with an increasing number of businesses closing, more businesses might seek the advice of insolvency lawyers compared to previous years. Many suspect an increase in divorces will occur in 2021 which means more work for family lawyers.
It will be interesting to see if there is a migration of lawyers to these areas from other areas of law. Would a lawyer learn a new skill set so they could be in demand? Will there be a greater number of litigators, insolvency lawyers, and family lawyers in 2021 compared to 2019? Relatedly, will 2020 and 2021 law school graduates be more likely to article in these areas compared to 2018 or 2019 graduates?
Increased Risk of Fraudsters Targeting Law Firms
Unfortunately, scam artists and fraudsters do not take a break during pandemics. Fraudsters actually tend to be more active during economic downturns.12 The Law Society of British Columbia noted that in 2020 there has been an increase in phishing and emails from scam artists pretending to be co-workers sent to law firms.13 Additionally, many scam artists are “cashing in” on the COVID-19 pandemic. Fraudsters might use emails with COVID in the title or impersonate health bodies.14
The risk is not just from outsiders. Due to increased personal financial pressures, the Law Society of Alberta states there is a heightened risk of employees stealing from defrauding law firms and impersonating partners’ signatures to write cheques to themselves.15
Law firms will have to proactively reduce their chance of being victim to fraud. They should institute mandatory fraud prevention training programs for employees and send biweekly reports about scams targeting law firms. Additionally, law firms should ensure multiple employees handle book-keeping and frequently review accounts to combat internal fraudsters.16
A Potentially Greater Number of Malpractice Lawsuits
During recessions, there usually is an increase in malpractice suits against lawyers. After the 2008 recession, a spike in malpractice suits occurred and the post-COVID 19 period is expected to be no different.17 During tough economic times, some unscrupulous actors might be trying to make a quick profit and lawyers, due to personal stressors, might be more likely to make a mistake. Additionally, COVID-19 presents challenges that the 2008 recession did not. During the 2008 recession, there was no social distancing orders. A lawyer might mishear a client over Zoom.
Lawyers need to take steps to reduce their risk of facing a malpractice suit. They should consider increasing their LAWPRO coverage limit, buying professional insurance in addition to LAWPRO, confirming client directions in emails after Zoom chats and practise techniques to avoid burnout. During difficult economic times it might seem financially wise to accept any new client but lawyers should avoid retaining clients that seem to be difficult. That could be a future lawsuit.
To conclude, COVID-19 has changed and impacted numerous industries and law has not been immune to this trend. The pandemic has forced the courts to embrace new technologies, may cause an increased demand for lawyers in certain areas and has led to a heightened risk of scams or malpractice suits. It will be interesting to see if in the future, professionals view COVID-19 has a major catalyst in shaping the legal industry.
Authored by Jennifer Lynch and Margot Mary Davis
This article was originally published by The Lawyer's Daily, (www.thelawyersdaily.ca) a division of LexisNexis Canada.