By Brenda Sapino Jeffreys | September 11, 2020 at 02:30 PM – for Law.com/The American Lawyer
The legal work created when the coronavirus pandemic first became a known threat in the United States—securing federal loans, for example—may be quieting down now. But as the country continues to cope with the consequences of the virus, law firms continue to adapt their practice offerings.
Using a well-tested competitive strategy, firms of all sizes are marketing ad hoc multidisciplinary practice groups to meet pandemic-related client needs, a move aimed to boost demand even as the COVID-19 economic downturn takes a toll on revenue.
One example is the Paycheck Protection Program Audits and Investigations Practice launched this month by Houston-based Chamberlain Hrdlicka White Williams & Aughtry. The team will help companies that accepted PPP loans meet their obligations under the law and avoid criminal or civil prosecution for misusing the funds.
Another example is Lane Powell, a firm in the Pacific Northwest, that launched a COVID-19 Landlord/Tenant Response Team to help property owners and tenants understand their obligations and rights as they encounter economic challenges stemming from the pandemic.
Deborah McMurray, founder and CEO of Content Pilot in Dallas, who has led legal marketing departments at large firms, said multidisciplinary teams are not a new concept, but can be very effective today if well-marketed.
“It’s really smart for firms to try to do this in response [to COVID-19 issues] so they can frankly provide better service and smarter service to their clients. The challenge is they have to be super-aggressive and very creative in getting the word out,” McMurray said.
She said she has been surprised that firms have not been more aggressive in general about forming multidisciplinary teams.
“Sometimes the reason is people get comfortable in their own space and they work in sort of these silos, and even if the compensation system [isn’t supposed to] get in the way of sharing and collaborating, we know that sometimes it does. They are just comfortable in their own space, so oftentimes these opportunities are missed,” McMurray said.
Marcie Borgal Shunk, president and founder of The Tilt Institute in Houston, said creation of multidisciplinary practice groups to respond to specific, timely client needs should become more common as clients’ problems become more complex and individual lawyer specialties narrow.
“The fact that the COVID crisis has prompted firms to respond so readily to clients needs is encouraging,” Shunk said.
Clearly, some firms are acting on opportunities.
At Chamberlain Hrdlicka, the PPP audits and investigations practice started after a client needed advice on how to meet the requirements for spending its PPP loan money. The federal program requires that a certain amount be spent on wages.
The firm had assisted a number of clients in applying for a PPP loans, so it was clear that other clients might need help interpreting the rules for spending the money. Quickly, several of the firms lawyers noticed the need for a dedicated practice group to represent clients who might be audited or investigated in connection with their loan, said Kevin Sweeney, a tax controversy shareholder in Philadelphia who is leading the practice group along with San Antonio tax controversy shareholder Chad Muller.
The team includes lawyers in tax controversy and litigation; state and local tax controversy and planning; federal white-collar crime defense; criminal tax defense; internal investigation; labor and employment; and corporate and securities.
Muller said he’s heard that other firms have organized similar PPP practice groups, with many focusing on providing representing clients facing criminal charges for how the money was spent.
On Thursday, the U.S. Department of Justice announced that the criminal division has so far indicted 57 individuals who allegedly committed fraud in connection with PPP loans for a total of $175 million. Also, at that press conference, John Jimenez, a deputy assistant FBI director, said the bureau has identified nearly 500 individuals it believes have fraudulently requested or received hundreds of millions of dollars through the CARES Act.
Muller said he’s not representing any of those individuals already charged, but he expects many more audits and investigations.
“The government will string together wire fraud, for example … then upgrade to money laundering and add forfeiture charges,” Muller said.
While some of the criminal cases filed so far feature allegations that individuals spent PPP money on personal expenses, Sweeney expects many more “mundane” civil audits to be launched where there’s more gray area over use of the funds. “The civil litigation is going to be much more time-consuming,” he said.
It’s not just PPP help that businesses are seeking from their outside counsel.
Lane Powell, which has offices in Seattle; Portland, Oregon; and Anchorage, Alaska, formed a team of real estate lawyers in various areas to advise businesses that are looking to restructure their leases, and landlords and tenants seeking to negotiate, terminate or reassess lease agreements.
Bruce Cahn, a partner in Portland and co-chair of the multidisciplinary practice group, said the firm realized lawyers had been dealing with pieces of the overall landlord-tenant relationship, but more issues were arising because of the COVID-19 pandemic.
“Rather than having it done on a piecemeal basis, we’ve tried to put together a task force to [handle] a spectrum of issues” as a team, Cahn said.
Clients who have turned to his group include national chain retailers, senior housing providers, commercial lenders, high-net-worth individuals and institutional landlords.
Cahn said the COVID-19-related issues are complex. For instance, one landlord client is dealing with a movie theater tenant who cannot open for business right now, but the lease agreement contains a continuing operations requirement.
Lane Powell launched the specialized practice group in August, and has been telling clients about its capabilities to handle unique issues. Broadly, though, Cahn said the firm’s real estate practice has been busy during the pandemic, with lawyers handling a considerable amount of lease modification and termination work. Cahn said the firm is embracing the cross-specialty concept because it benefits clients.
“This is just a way of pooling resources and making sure we are getting all of the people that have knowledge in one place,” he said.
McMurray said other firms would do well at this time by looking critically at what COVID-19 issues their clients may be dealing with.
“The first step is looking at the clients to see what is going on in their companies, and really taking a hard look at where you are providing services to those clients and where you aren’t,” she said. That may reveal ”an opportunity to get smarter about the services you are providing.”