By Emma Cueto

Law360 (June 4, 2020, 4:46 PM EDT ) Although many in the legal industry feel they have adapted well to working from home during COVID-19, there are broad concerns about the industry's ability to innovate in response to the pandemic and its potential long-term fallout, according to a new survey from Legal Decoder.

A panel of industry observers on Thursday discussed the results of the survey, which focused not only on the immediate situation but also the short-term and long-term measures firms, in-house counsel, and others in the legal world should take in response to COVID-19.

The panel echoed many of the concerns in the survey that some might make short-sighted decisions without proper planning, and that many, particularly law firms, may not be able to innovate to the degree necessary.

"What I hope this means is that we won't go back to business as usual," said Nancy Rapoport, a law professor at Ohio State University. "It's a chance to reboot."

According to the survey, most legal professionals say they have adapted well or extremely well to working remotely, though a sizable number also acknowledged that doing so has been challenging.

Respondents indicated, however, that cutting costs and trying to improve efficiency are important priorities in the near-term. Respondents also predicted that going forward there would be more reliance on alternative legal service providers, and that firms would have to compete more for business.

The survey also showed that most believe that traditional law firms will face the worst financial difficulty, and that the top concern for the industry was its unwillingness to innovate.

In discussing the findings on Thursday, the panel, which included Digitory Legal CEO Catherine Krow, UpLevel co-founder Stephanie Corey and Legal Decoder founder Joe Tiano Jr., noted that companies are increasingly trying to cut outside counsel costs, and there are signs firms may be less willing to spend on lavish offices.

However, they also compared the current crisis to the 2008 financial crash, when there were similar calls for the industry to innovate.

"Coming out of 2008, there was a lot of lip service that was given to innovation without a lot of real innovation," Tiano said. "While there might have been a willingness to innovate after 2008, I think there's a mandate to innovate here."

Firms will have to consider how to make themselves more appealing to clients and should rethink their overhead in terms of large, comfortable offices, Rapoport argued. If the majority of employees can do the same work remotely, she said, it calls into question the value of such expenses.

Krow, however, noted that working remotely could be detrimental to associates, who rely on in-person interactions with more senior attorneys around the office to help network, learn firm norms, and grow in their careers. This can be particularly important for diverse associates.

If firms did abandon their offices, the panel agreed, they would need to be more deliberate about succession planning, imparting firm cultural values and supporting diverse attorneys.

Overall, though, most consider the times ahead to be rocky in a post-COVID world, where signs point to firms needing to do more with less, which could be the fuel necessary to provoke innovation in the industry.

"I want to see law firms squeezed so much they have to reinvent themselves," Corey said, arguing that as long as partner compensation remains high, firm leaders have less incentive to change the status quo. 

On the other hand, Tiano predicted that once the dust began to settle and the full economic impact was felt, that there would be a wave of litigation that would create a great deal of work for firms.

"Once people start to see how economically affected they've been, the gloves are going to come off," he said. "I think everyone is going to sue everybody else, and it's going to be a feeding frenzy for law firms."

Even so, Krow argued, firms would still have to figure out how to best position themselves and make themselves the "first phone call" for litigants. This was especially true in cases of novel types of litigation where firms can't stress their experience, she added.

"No traditional law firm can do what they've done in the past, which is say, 'We've tried 50 of these cases,' because it's all novel," she said. "Some are going to take it on the chin and fall by the wayside. Those that can evolve will thrive."

--Editing by Adam LoBelia.

Updated: This article has been updated with additional material from the panel discussion.

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