Some people have told me that 2020 was a strange year to start my own law firm, and I tell them that I wished I’d done it sooner. Or, at the very least, while there was some Paycheck Protection Program money available…
Law Firm Financial Planning during COVID. This Nashville Business Journal story, The 20 Nashville law firms with the largest PPP loans, reported that local law firms received more than $48.8 million in COVID related loans.
I’ll steer clear of the optics of the city’s largest and most prestigious firms getting such large payouts. I mean, c’mon, it’s free-ish money and complicated paperwork. That’s sort of a lawyer’s super bowl, right?
All kidding aside, I am confident that all these law firms also instituted financial austerity measures, hiring freezes, and other cost-saving measures to account for the new economic reality and, further, many plan to return most, if not all, of the funds.
And it isn’t just Nashville firms dealing with all this. These are questions law firms all over the country are getting.
To the critics, I guess I’d remind them that law firms are businesses too, with actual employees and vendors and landlords. The fact that these are “big” law firms doesn’t mean that they don’t need financial assistance any less than a small or solo shop.
But, yes, it’s a very fine line to walk, especially with the @washingtonpost tweeting about how “More Americans are shoplifting food as aid runs out during the pandemic.” Hopefully, these biggest borrowers maxed out the program because they needed the cash to survive, not just because they could get it.
So, what happens next? The American Bar Association reports that cost-cutting measures drastically mitigated the impact of COVID on law firms’ profits. In short, it hasn’t been as bad for some firms or the smart financial decisions made in early 2021 are paying off.
And, per today’s news, Boies Schiller Flexner (the big New York firm that received $10MM in PPP funds) announced it was offering a $20,0000 “welcome” bonus for new associates.
Similarly, in today’s Nashville Post, I’m seeing that one of our local big firms at the top of the PPP list announced a bevy of new lawyer hires. So, maybe things are turning around, and the next story will be about how firms are paying it back.Continue reading “341 Stories: PPP Money for local firms, Billable Hours, and the Tweet that Shut the Birch Building Down”