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GCs Forced to Juggle as Legal Teams Face COVID-19 Cuts

Michelle Gorman  | Law360 - June 4, 2020


As general counsel lay off lawyers and other staff to help companies shoulder the economic fallout of the COVID-19 crisis and adjust to operating with leaner departments, they're being forced to reprioritize and find ways to make up for lost knowledge, experts say.

Uber confirmed that in May it had reduced its global workforce by 25%, and its legal department was not spared. Hilton Worldwide Inc. also had to scale down its legal unit, and some staff from the law entity at Marriott International had to move to shortened workweeks.

Experts say that any time an in-house department reduces its ranks, it loses critical institutional and legal knowledge. And the typical challenges that come with layoffs have been compounded by changing rules and regulations amid the pandemic, as well as remote work environments that for some involve home-schooling children.

Additionally, teams are juggling with how to handle different topics such as health and safety, privacy, employment and bankruptcy that have jumped to the fore of high-risk issues and priorities.

To move forward during difficult times, general counsel who have previously dealt with staff cuts or are accustomed to working alone or with just a few lawyers say it's crucial to understand the risk appetite for the business and where legal advice will have the biggest impact.

"You cannot cover everything. You should cover most things and understand what kind of risk the company is willing to take," said Flavia Naves, who as general counsel and chief compliance officer at automated global payments and liquidity startup Qwil operates as a legal entity of one. "If you're going to try to cover everything at 100%, you're not going to be able to do it."

Top corporate lawyers, along with their direct reports and entire teams, if possible, should try to figure out how to reduce workloads in lower-priority areas by taking "smart risks," said Michelle Banks, a senior adviser at BarkerGilmore LLC who coaches and mentors general counsel.

Previously, during her 10-year tenure as general counsel at Gap Inc., Banks experienced two significant companywide layoffs that affected her legal department.

She stressed that, given their training, it can be challenging for lawyers to actively look for opportunities to take risks. But it's critical nevertheless, especially given the staff reductions happening across the board.

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