General counsel braced for six-month shock to their businesses, survey finds
MoFo poll of 110 GCs finds them making unprecedented decisions as HR issues dominate
General counsel in global business are expecting the impact of Covid-19 to be severe for the next six months followed by only a gradual return to normality lasting well into 2021, according to research by Morrison & Foerster (MoFo).
Asked to rate the impact of the pandemic on a scale of 1 to 10, the 110 GCs who took part in the poll rated it at an average of 7.2 today and 7.1 in six months’ time with the threat level falling to 5.7 in 12 months and 4 in two years’ time.
A majority (63%) reported an increase in their workload as a result of the crisis, with a further 20% reporting that their workload has remained the same but changed.
Employment/human resources (85.5%), contracts (67.3%) and supply chain disruption (56.4%) were identified as the main challenges, with other risks, including data security (29.1%) and privacy (18.2%) receiving less priority.
One hard-pressed general counsel complained. “It is impossible to narrow this to three top challenges because there are so many and they are all happening simultaneously and are equally important."
Miriam Wugmeister, co-chair of MoFo’s global privacy and data security group, warned: “Security appears to be lower on the scale likely because the other risks are paramount at the moment. Unfortunately, the number of data security incidents is likely to rise in the near future which may impact many organizations.”
David Newman, head of the firm’s Coronavirus task force, added: “It is clear that regardless of the size or geographic footprint of a company, the COVID-19 crisis will have a long-term impact on the way business is done – affecting everything from the way workforces are managed and how global supply chains are configured to capital structures and corporate governance.”
The top challenge of the GCs surveyed was ‘providing advice in unprecedented circumstances (64.5%) followed by ‘making decisions in an uncertain environment' (55.5%).
Issues they are tackling include: expanded flex-time; allowing equipment purchases for home use; ensuring safety for those who are essential to work in facilities; checking temperatures for employees returning to the offices; continuation of benefits for furloughed employees; and prohibiting children from coming to our facilities.
Popular strategies being deployed included: transparent and frequent senior management communications to employees; placing employee well-being first and foremost; and using online technology to stay in touch and on top of issues.
MoFo surveyed 110 in-house legal professionals around the globe from 20-24 March with revenue ranging from less than $250m up to more than $20bn.
The top three industries represented in the study were finance and insurance (19%), technology (13%) and manufacturing (10%).
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