3 April 2020

In-house lawyers struggle; a tsunami of litigation on the horizon

Insights News

Lawcadia recently caught up with Lionel Hogg, a senior corporate advisory Partner at Gadens. A lawyer for about 30 years, he describes himself as a specialist generalist with a focus on corporate and government clients: he’s known for being a problem solver. From addressing the immediate needs of clients to forecasting key issues for the future, this highly regarded senior lawyer shares his insights into the challenges facing clients, legal teams, and Government, and shares some practical ways Gadens are looking to help.

In-house legal teams overwhelmed

“The key requirement from clients right now is for advice that’s specifically related to COVID-19 issues and how that affects their business, or they’re requiring business-as-usual support while they are dealing with their own COVID response. We’re seeing legal teams being absolutely smashed with queries that they haven’t had to answer before and having to juggle a whole lot of things.”

Regulatory landscape moving rapidly

According to Mr Hogg, the government is responding very quickly to the pandemic and related economic crisis. “New regulations and rules are coming out every day. If you’re dealing with commercial transactions, there are new rules that can affect things that are happening: transactions that have already been signed but hadn’t settled, including incentives and moratoria. There are all these sorts of things happening, which in-house counsel will find difficult to stay on top of.”

Cash is King

“Cashflow is very important, and we’re seeing that everything, absolutely everything is open to renegotiation, even if your contract says that it’s not. There will be a lot of opportunists but there will also be a lot of people who need to take opportunities and we’ve been advising clients in that space.”

Three legal issues forecast for future

Mr Hogg outlines three issues that are expected to emerge over the coming months and even years. “Firstly, Big Government is here to stay and the government is going to get involved in private matters more than it ever has. My experience is that the government is great at public law but is not so good at dealing with private matters and contracts. So, [the fallout of] government dealing with the private sector will be an interesting challenge over the next few years.”

Litigation is the second key issue highlighted by Mr Hogg, who observed that every downturn leads to litigation. “I’ve been through a couple of downturns in my time. This downturn will be different, but what won’t be different will be the litigation that will come out of it. There will be a lot of construction litigation and contractual litigation as well. People will turn from cooperating to being quite nasty.”

The third issue highlighted by Mr Hogg is that, unlike previous downturns, class action litigation will be a new feature for Australia. “My observation would be that the ethical treatment of stakeholders now is absolutely vital to try to minimise your chances of being in the headlights of those class actions.”

Practical solutions devised for clients

To help clients respond effectively to the high volume and complex issues that they are dealing with, Gadens have collaborated with legal tech firm Lawcadia to develop a COVID-19 Legal Workflow that helps in-house legal teams manage the scale of work and also outsource overflow or complex work. 

“Getting on top of things early is critical, and agility is really important”, says Hogg. 

As part of the new COVID-19 Legal Workflow initiative, Gadens is offering interested clients a COVID-19 Readiness Review. 

“We’re sitting down with clients and their legal teams and helping map out exactly the issues that are of relevance for them, whether it’s internal or external, COVID-19 related or not, to ask the right questions to get the workflows right so that the right platform and the right solution can be made available for them.” 

Gadens understands client challenges

When looking to the broader impact of the COVID-19 pandemic on their client base
Mr Hogg acknowledges that Gadens and their clients share similar issues, but each will be affected in different ways. 

“I think retailers are probably not doing very well unless you’re a supermarket in which case you’re probably doing quite well. If you’re in the health care profession, you’re very busy. Some other businesses are being shut down, and so the challenges are different. But fundamentally we all have people to employ. We have rent to pay, we have a bank to deal with, we have clients, we have bills, and we have clients who might not be able to pay bills.”

With a broad practice, Gadens is well placed to meet the changing needs of their clients and Hogg says that it is all-hands-on-deck as they work to provide practical assistance, advice, and solutions. 

Find out more about the COVID-19 Legal Workflow solution here

 

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