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Future changes and challenges for lawyers

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Carlos Salinas, Managing Partner of the Barcelona office and Head of the Corporate Law and Commercial Contracts department at Andersen in the Barcelona office analyzes the future changes and challenges for lawyers

There is no doubt that the health crisis caused by COVID-19 has changed our habits on both a personal and professional level. Nor is there any doubt that some of these changes will remain, totally or partially, in 2021, and some will even go further. The practice of law, as a service provider, must adapt to the new needs and requests of its clients. And as an objective of achieving excellence in the provision of services, to anticipate what those needs, and requests will end up being. These are the challenges we have always faced, but never have the foundations for achieving these objectives been so radically altered as they will be once the health crisis is over.

2021 will be a year full of uncertainties for our clients and, therefore, for lawyers. However, the long period of implementation of restrictive and precautionary measures adopted as a result of the health crisis in which we are - still - immersed, leaves little doubt that it will have dire consequences for the economy of the vast majority of entrepreneurs. Especially when the most affected sectors represent a significant part of our economy.

Two are the most obvious and direct consequences: over-indebtedness and insolvency.

To the financial indebtedness prior to the health crisis - which, in general, although its reduction was on the right track, was still at high levels - the debt provided with ICO guarantee has been added to counteract the serious fall in business income caused by the confinement, leading, once again, to a situation of high corporate over-indebtedness. This over-indebtedness will have the direct effect of cutting expenses - with possible effects on employment -, redefining strategic plans and investments planned before the health crisis, and the need to restructure the debt to face a future that will depend, to a large extent, on the capacity and speed of recovery of the economy.

On the other hand, despite the aid obtained in the form of financing with public guarantees, many businesses will not be able to survive the lack of income during this period and the over-indebtedness generated. For this reason, a notable increase in the presentation of tenders is expected in the coming year.

As always happens in these situations, crisis scenarios also generate opportunities for those who have managed to get through this period well from a financial point of view. These opportunities usually materialise in the acquisition of assets or businesses at significant discounts. Undoubtedly, M&A operations will also make news in 2021.

And finally, the announcement of changes in tax legislation in all areas, both in direct and indirect taxation, as well as the foreseeable modification of labour regulations, will also mean that entrepreneurs will need to plan adequately how their income will be recovered and how their debt will be repaid. This task will not be easy because of all the elements involved, and in which good legal and tax advice will be essential.

For all the above reasons, we estimate that the areas with the greatest activity for 2021 will be in the field of financial restructuring, bankruptcy, M&A, and tax and labour planning.

Facing these challenges will not be a problem for our firm. We have the necessary resources to face this new scenario and, above all, an exceptional team. Our extensive experience in restructuring advisory operations (debt refinancing and bankruptcy) and distress acquisitions, in addition to our highly qualified labour and tax teams, allows us to accompany our clients in all phases of their business. In addition, through our international organisation we have the capacity to provide appropriate advice from a national and international point of view, as well as being able to share experiences that each country is experiencing locally and transfer them, as far as possible, to our clients locally.

But it will not be enough to have experts in the areas mentioned. The way of doing business and the way of advising clients has changed and will probably change for good. It is true that once the health crisis has been overcome, the return to the pre-COVID way of doing business will tend to be similar; but not the same.

Anecdotally, a couple of years ago, at an international partners' meeting in Andersen, our partner in charge of the Sillicon Valley office, asked me how important it was to have face-to-face meetings with our clients, to which I replied - without hesitation - that for us (and, I even dared to say, for Europeans in general) it was essential. His answer was that in his case, he had very few physical meetings; almost all were by video conference. The way of doing business in the USA and Europe has little to do with this case, no doubt due to the great distances involved and that marked principle that time is money (which emphasises this way of doing business).

Almost as a premonition of what was to come, we have had to learn and get used, in an accelerated and forced way, to holding meetings with our clients and carrying out commercial work using telematic systems, reducing face-to-face meetings to a minimum. Once the health crisis has been overcome, we will undoubtedly return to promoting face-to-face meetings (social habits do not change from one day to the next), but the aforementioned need to cut costs and the evidence that there are journeys that can be avoided without major consequences will lead us to provide our legal services in a different way, with a very relevant acceleration of the process of introducing the technological world into our services. But not just any technology, but the one that can really allow you to provide a better and faster service.

In short, that the historical moment we are living will have a relevant impact in general, and in the world of legal services, not only for 2021, but for the future.


Read the article in Legal Today

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