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The bad year that wasn’t: COVID-19 has been hard on everything, except firms’ bottom lines

For Missouri law firms, 2021 was a tough year — emotionally, physically, mentally, socially.

But not, to everyone’s great surprise, financially.

Across the board, Missouri’s nine largest law firms had good or even great years by any rational standard. Most saw increases in revenue, nearly all saw increases in profit and on a per-lawyer basis every firm did better in 2020 than in 2019.

“The financial metrics were all positive,” said Mark Hinderks, the outgoing managing partner of Stinson, echoing comments from other firms. “Certainly there were other stories to the year, but from a financial standpoint it was a great year for us.”

Certainly, the numbers are far better than anyone might have predicted in the spring of 2020, when the COVID-19 pandemic brought the world to a standstill, forced attorneys and staff to disperse to their homes and, as of mid-May, killed more than 580,000 people.

So what allowed firms to have such unexpectedly decent years? In part it was due to a reduction in expenses. With travel and entertainment shut down or restricted throughout much of the country, there was simply less to spend money on. It was also because the pandemic, with its myriad rules varying county by county and country by country, demanded a great deal of billable time to decipher for clients, even as firms also were figuring it out for themselves.

“We had to make sure that we could effectively service all those clients from all those jurisdictions as they were being hit with all those challenges at different points in time,” said BCLP co-chair Steve Baumer, who is based in St. Louis but whose firm spans the globe.

It also helped that lawyering, and many of the industries that lawyers serve, found that much of their work could be conducted online more or less seamlessly.

“For about the first month or two [of the pandemic] we saw corporate America stop doing their deals,” said Roman Wuller, chair of Thompson Coburn. “Then they quickly learned how to do them virtually, and our corporate department got quite busy for the rest of the year.”

That’s not to see there were no bad effects. Several firms reported delays in acquiring new offices or hiring new attorneys, driven by the uncertainty in the early stages of the shutdown.

“We tapped the brakes on a lot of recruitment, and the ones we weren’t able to resume we regret,” said Pat Whalen, chair of Spencer Fane. “The timing was awful.”

To some extent, that uncertainty remains. Although all nine large firm expressed a desire to bring staff and attorneys back into the office, none seemed in any rush to do so, with most projecting that a return to in-person work probably will start slowly over the summer. Firm leaders are also keenly aware that some employees are antsy to get back behind a desk while others are perfectly happy to work from home most or all of the time.

“We really want it to be an organic process,” said Lathrop GPM Managing Partner and Chair Cameron Garrison. “We’re not going to flip a switch and require all of our people to be back in the office five days a week all at the same time.”

That process will also mean that firms will have to take special measures to maintain their cultures —perhaps even more than was what needed during the height of the pandemic. With entire firms on Zoom, two partners in St. Louis effectively were no closer to each other than they were with colleagues across the country.

But Chase Simmons, chair of Polsinelli, noted that firms increasingly will have meetings where some participants are in-person and others are remote, which “has never been a comfortable situation.” Broadly, firms will need to use technology and policy to keep everyone together.

“We’re probably going to rely a little less on the magic of the water cooler and almost be formalistic and intentional about some of those things,” he said.

That will be particularly important for new attorneys, whether laterals or new hires, who have spent the last year trying to form relationships through online meetings, as well as for summer associates who, once again, will be taking part virtually.

Allison Murdock, the incoming managing partner of Stinson, said the firm has been relying on “overcommunication” and making partners “overly available” to new recruits.

“You don’t have the ability to walk down the hall and poke your head in and say ‘Do you have time for a quick question?’” she said. By making special efforts, she said, “it gave people the ability to connect across offices in a way I don’t think we’ve really seen before.”

Above all, law firm leaders are aware of the incongruousness of their good financial fortune during a year that was awful in every other way.

“A lot of people lost love ones, lost treasured moments in their lives, didn’t get to have weddings or had small weddings, didn’t get to grieve at funerals, didn’t get to go to graduations,” said Catherine Hanaway, who became chair of Husch Blackwell earlier this year. “It was a terrible year for the world. We were fortunate it was a great year for us financially.”

Armstrong Teasdale Managing Partner David Braswell, weighed the relative lack of disruption in his own life to the major upheavals that others faced.

“It caused me to take into account that my frame of reference, the lens through which I view the world, isn’t everybody’s lens,” he said. “Having empathy in a job like mine is vitally important. It’s one thing to feel it; it’s another thing to show it and demonstrate it every day.”

2021 MOney section