Learning from Lockdown – Positive outcomes from the Covid crisis for legal, accountancy and property sectorsPosted on: January 20, 2021
In the run up to Christmas, I pledged to make a donation to a local mental health charity where I am a Trustee for each personalised email I sent to my clients and contacts. Naturally, we are all saddened by the enormous toll of the Covid crisis – to the economy, to businesses and their owners and the physical and mental health of the nation. So my sign off from each email shared my views on post-Covid strategy and the impact of Covid on marketing and business development. I invited recipients to share with me their learning from lockdown – positive outcomes from the Covid crisis. I was surprised that I received over 30 extraordinarily detailed “final thoughts on 2020” reports from those in the legal, accountancy, property and other sectors.
The main themes emerging from all the responses were as follows:
- Continuing growth – especially high demand in sectors impacted by the crisis (e.g. logistics)
- Improved management and reporting systems
- Accelerated and better use of technology
- More flexible patterns of working including WFH (Working From Home) and diversity improvements
- Stronger relationships with clients and referrers
Law firms – Embracing automation and better engagement with staff
I had responses from both senior law firm leaders and those in marketing and business development teams. A couple said that the crisis and its impact still felt very raw – and that a proper assessment of the upsides may take some time.
Law firm management and finances
Streamlined management – A regional law practice reported that Covid had prompted them to streamline their management structure and processes. The new impetus had improved their financial management significantly – pushing down lock-up and aged debts and converting WIP.
Profitability gains – Another regional practice reported that whilst they may not achieve pre-Covid revenue targets, they were on track to achieve profit targets. This was a result of the savings on overheads. However, some have commented that rent savings may be propping up “zombie” firms. This firm made the tough decision to make some redundancies early in the pandemic – which they reflected were probably long overdue. But it presented the opportunity to ensure that new recruits had new skills sets to better meet the demands of digital working.
Value of a balanced portfolio – Some areas of legal work – particularly employment and residential property – were particularly busy during the crisis. This has highlighted the need for law firms to maintain a mixed portfolio of services – to better weather crises where some services are severely affected. Whilst corporate deals ‘dropped off a cliff’ earlier in the year, there is now a steady stream of good quality work in this area.
Different use of offices – Whilst many firms are now strategically reviewing their need for offices, it was interesting to note that some firms had strived to keep offices open (with the necessary safety precautions). Some ensured daily contact with every member of staff to alleviate the potential problems of living alone or those with domestic issues. I was impressed with that level of attention to the well-being of staff. Yet some rightly pointed out the potential risk to the firm’s culture – and especially to younger staff and new joiners – presented by the lack of office and social interaction.
Law firm technology and data
Improved data systems – Initial brief comments from a barristers’ chambers indicated that the move to digital communications meant that there was “a silver lining to the Covid cloud” in that data systems were now much better. This, in turn, allowed better planning and better measurement of return on investment (ROI) for marketing and other initiatives.
Law firm human resources
Transition to flexible working – Most law firms applauded their IT departments and cloud-based services for enabling everyone to pretty much seamlessly transition to home and remote working.
Some senior leaders expressed their pride in how their people had taken all the changes in their stride and continued to provide a faultless service to clients during the pandemic. A fellow consultant commented that the crisis had “finally dragged law firms into the 21st century to see the benefits of agile working – from both a productivity and well-being perspective”.
Stronger staff engagement – The leader of a network of law firms commented on numerous positives including efforts for remote engagement with young lawyers, increasing Pro Bono activity to support communities in crisis and a new focus on the human capital in the new legal ecosystem.
Easier recruitment of quality candidates – A real estate focused law firm saw strong growth throughout 2020 – with constant recruitment of senior people to continue to meet increased client demand. One Chief Executive revealed that their recruitment efforts were supported by the fact that the Covid crisis had shown many firms to have toxic cultures that treated staff poorly. There were reports of horror stories of unnecessary redundancies and unrealistic workloads on those who were not furloughed.
Law firm marketing and business development
Improved client focus – A high end, specialist law firm marketing leader reported that there was much more focus now on what is important rather than endless events and lunches just because they have always happened. A shift to better digital and social marketing and, most importantly, a better focus on clients. There was relief that lawyers were now actually talking to clients about real live issues that are affecting clients both commercially and personally.
More authenticity – I agreed with the views of a marketing professional at a medium sized firm who said: “People are much more open now, less worried about those “perfect” pieces of content or making it sound “stuffy”. They are aware they have seen many people’s various home décor which has made them more human – they have removed their masks”.
Greater use of social media – A multi-site medium sized law firms reported that it successfully rolled out a major campaign during the year and raised the firm’s profile nationally although not in the way originally planned. It also reported a 20% increase in the use of LinkedIn amongst its lawyers. There was also a range of new online events including networking, quizzes, wine tasting and cocktail making sessions.
Referrer management – Deeper relationships and greater collaboration with referrers and intermediaries were mentioned by a few firms who are heavily reliant on referrals (there are many posts on this topic, see, for example: Highlights from a referrer management workshop (2020) (kimtasso.com))
On the business development front, whilst many said that Covid had led to a greater focus on existing clients and referrers, they were concerned about how new relationships will be formed in the virtual world going forwards.
Accountancy and tax firms – Modifying the client base and service offering
One senior accountant summarised the impact on the accountancy profession:
- Work life balance has improved and there is reduced travel and commuting time
- There will be less use of offices – and those that remain will be remodelled to encourage interaction and innovation. The reduced need for offices offers the potential to help with the housing shortage across the country
- Whole businesses are being rethought and reimagined leading to innovation in service delivery, client value and staff well being
- The Government support means that few businesses have failed and many are now cash rich so there is the potential for significant investment after the crisis
- Some firms are repaying furlough money – showing that social conscience and corporate social responsibility are still strong
- Here’s perhaps a greater acceptance that higher taxes will be required so that the country can invest in necessary public services in the future
Increased demand from OMBs – A Thames Valley accountancy practice – specialising in fast-growing owner-manager businesses (OMBs) – reported above average levels of activity as client demands for raising funds and accessing Government schemes increased. One of the partners commented that clients had realised the importance of high-quality financial information to support fast and confident decision-making.
Towards agile budgeting – As a result there had been more focus on forecasting and budgeting on a more regular basis to cope with the rapidly changing landscape. This firms supports its clients through seven pillars of business success – strategy & leadership, marketing strategy, team, technology, operations, financial & legal and sales. The firm has also encouraged its clients to understand their customers and suppliers better and to review the effectiveness of their internal management systems and meetings. This firm believes that 2021 will be the year of the entrepreneur with an emphasis on collaboration.
Accelerated change programmes – A large, niche tax advisory businesses reported that despite the Covid shock, they were progressing with change programmes in the areas of people and culture, technology and new service development and were seeking Investors in People accreditation.
Client portfolio management – A niche start-up accountancy practice reported generating lots of new bigger clients and shedding some of the smaller clients who “perpetually moan about fees”. A good example of active client portfolio management (there’s a video showing the dinosaur method of client portfolio management).
Surveying firms and Property Developers – Busier than usual
Surprisingly, there seemed to be even more upbeat news from the property sector.
Property sector growth
Growth areas – One surveying practice reported “Despite our initial fears as lockdown descended, we have been very busy across the company – particularly industrial agency, property management, valuation and building surveying. Industrial enquiries in the summer were at the highest levels we have ever seen”.
This practice had scaled back its retail operations prior to lockdown but has seen increased demand particularly for local, High Street retail locations. Although it reported that one client with a handful of retail outlets around the country had all of its tenants entering CVAs.
Growth of logistics – An industrial developer reported higher levels of activity as fast ecommerce growth drove increased demand for warehouses. Yet despite the sharp increase in work this organisation was accelerating its ESG (Environmental Social Governance) adoption.
A sole practitioner structural engineer also reported unprecedented levels of demand to the point that he ended up recruiting several assistants and working most weekends since March just to keep up.
Enhanced value perception of property management – One property management client reported that they had collected the vast majority of rents (or agreed payment plans) aside from the major retailers. The fact that they had worked harder – and often for reduced fees – had meant that many of its clients were realising the true value of good managing agents during difficult times.
Property sector adaptation strategies
A specialist rural practice reported continued growth – to the point where its current structure creaks as it moves to a more corporate framework with refined reward systems and reshaped key teams. Like many property businesses, it transitioned to working from home but found that everyone misses working together with colleagues who are friends too. But the benefits of less travel (and pollution) and time saving suggested that technologies such as Zoom should have been adopted long ago.
Accelerated change programmes – One industrial developer – with many ecommerce retailers and 3PL (third party logistics) in its client base – reported they had experienced a strong year with online purchases leaping from c20% to c30% in the Spring and remaining at between 26% and 36%. This developer reported that whilst it had planned for most of the changes, the Covid crisis moved it all forward five years in five months.
A partner at a Northern-based surveying practice reported the firm had grown by 25%. His co-partner said “I think Covid has forced us to fast track some of the tasks we have been trying to achieve for years. The March lockdown (a pause button) allowed us time to get these tasks complete and made us focus on some difficult decisions”. He also said there was a renewed focus by all on making sure we got the most out of our existing clients and improved performance to ensure we rose out the expected storm – as jobs depended on it.
Property sector human resources strategy
Improved diversity and engagement – A specialist property advice practice reported their best financial year ever – with successful recruitment of further senior and junior advisors and more clients. The have also managed to achieve a 50:50 male/female balance amongst equity partners. And they had transitioned team meetings to the online space – supplemented with lots of telephone calls – and held summer parties online which included an escape room challenge and a Christmas party online.
An industrial developer also commented: “The other main upside is the dismantling of the 1950s construct of working 9 to 5, five days a week in an office and, for millions, slogging into to work on mostly poor public transport and then spending much of the day frantic with presenteeism”.
The implication being that in the future there will be a hybrid route of half time in the office and half at home leading to localisation and ultimately a reduced need for cities and travel, reduced CO2, better work-life balance, more equitable spread of people and perhaps even lower house prices.
A senior rural leader commented that the crisis showed who stepped up as well as those who stayed in the background (both for health and other reasons). Costs have been saved on sponsorships and County Shows and greater use of social media has shown strong results.
Initial pay cuts were accepted and they have now been repaid with the prospect of a greater bonus pot as strong performance is seen particularly in the residential, agricultural and land development markets.
Echoing others in the property sector the over-riding thought was that the crisis had presented the opportunity to reset the business and take a good look at questions such as: What next? What works? What makes money? and How do we exploit what comes next?
A not-for-profit membership organisation reported that the crisis had helped it to refocus on its true purpose and provide solid support for those in the sector affected by the crisis. As well as organising lots more online events and online networking to fill the gap created by not being allowed to go out.
This organisation also found that it was invited onto more influential groups and panels in order to share its research and opinions. The imminent changes from the end of the Brexit transition period was also leading to an increased demand for its advice.
Much of my training and coaching work has transitioned online and I use platforms such as Zoom, Microsoft Teams and Adobe Connect. A fellow trainer commented “Firms have experienced online learning beyond the compliance piece – and whilst I do miss the energy of being in a live room – I think we’ve proved that online workshops can be interactive and engaging”. And I too have benefited from technology enabling me to work with clients in a startling number of new geographical locations including South Africa.
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