With global halt in businesses activities, Coronavirus has forced companies to re-trade between wants, needs and essentials to survive. Businesses both big and small are forced to assess all activities and ensure only essential services that would help them stay afloat are kept running. This has led to elimination, halting or requesting deferred payments for certain business to business service providers like law firms. Many transactions have been postponed to re-assess financial viability in view of current circumstances. The lull in business activity has caused significant reduction in deals, closure of courts and government agencies. This is posing a significant economic threat for law firms. In the midst of all this chaos, I see an opportunity for law firms to transition to new law thinking, and actively utilizing technology in work and client engagement.
I would address the implications of COVID-19 on businesses across three prongs. First contractual obligations, second employees and finally online safety/security.
Despite the coronavirus pandemic, it is important for businesses to note that their legal obligations are not suspended. The first thing to do is communicate with your business counterparts to assess the performance obligations under the contract to explore modifications or extensions of deadlines or moratoriums. It would also be useful for your lawyers to review force majeure clauses in the contracts, and where applicable send appropriate notices. Employers must also maintain a balancing act of keeping their employees and customers safe, and ensure all necessary safety procedures prescribed are complied with. For businesses terminating employees, it should be carried out in compliance with the employment contract that may require notice or payment in lieu as the case may be. All reduction in salaries must also be in agreement with the employee otherwise the employee will be defaulting on their obligations. Employee care and management in this time will save companies a future. With most businesses now operating from home, there lies the risk of privacy and data security of businesses to be compromised. It will be useful to review IT governance policies, data and information management protocol especially for business handling confidential information. Businesses must also deploy heightened cyber and data security protocols as coronavirus themed attacks are on the rise, and any incident could not only jeopardize their finances but reputation.
On Law Firms Helping Businesses
In this time of crisis, when businesses are working toward ensuring that they first survive, law firms have been at the forefront on ensuring that clients are not defaulting on any of their legal obligations, to employees, customers and also with the constantly evolving government regulations. For example, clients with lease obligations or payments due to Banks, are engaging with landlords and financiers to seek extensions or moratoriums. Law firms have also become the repository for providing practical insights on how to comply with government regulations and how to access financing opportunities from the government. With heightened use of online services, tech developers are witnessing an upsurge for licensing requests from companies, especially those developed in this lockdown. Law firms are also providing software escrow services by holding source codes in trust, especially those which have not registered. As a consequence of the great re-trade, many businesses are renegotiating or terminating their engagements with service providers, and law firms provide support in this regard that minimizes risk.
For entrepreneurs seizing the day in this uncertain market, Law firms will continue to be the first point of call in evaluating legal considerations for their ideas. We are already witnessing interesting requests from clients on legal considerations for starting biotech companies in Nigeria, and privacy considerations for contact tracing apps. The market trends will force mergers, takeovers. Law firms have continuously monitored legal trends and provided insights to guide clients in decision making during this period. The opportunities are tremendous and optimism from entrepreneurs in responding to the COVID-19 crisis is very reassuring.
Soaring Through Crisis
This is unfamiliar territory for everyone, and we are all learning in the process. However, two things I have found to be of tremendous value is taking care of the team and communicating with both external and internal stakeholders. In a 21st century world where everyone is online, it is important for businesses to design their systems and processes to be technology-centric and not an afterthought. At Hamu Legal our systems have always been designed for lawyers to work from anywhere in the world so we had a smooth transition to work from home. We communicated this internally and almost gamed out a scenario even prior to the lockdown that allowed team members to communicate personal challenges they may be having and where possible resolve it. For clients, we took care in ensuring we communicate appropriately on how our operations will continue to be, but also personally checking on them to see how they are holding up. Most people’s legal challenges in a crisis are dressed as personal problems, but it is the lawyer’s responsibility to be there, listen, understand and provide appropriate solutions. It will certainly be useful to check in with your clients and your team just to see how they are holding up.
Saadatu Hamu is the Managing Partner of Hamu Legal, an innovative multi-disciplinary firm based in Abuja. Her practice is focused on the intersection of law, policy and emerging technology. With an in-depth understanding of the Nigerian legal system, she has advised clients across various industries including, banking, power, project financing. Saadatu has a cutting edge understanding of regulatory compliance requirements for implementing and operationalizing data security and privacy regulation for companies under both EU and US jurisdictions. Saadatu is also a Global Shaper with the Abuja Hub of the Global Shapers Community, 2016 Associate Fellow of the Nigeria Leadership Initiative (NLI), and also an Alumni of the Nelson Mandela School of Public Governance University of Cape Town Emerging African Leaders Program.