11 Sept 2020
Repercussions of COVID-19 pandemic on the legal sector

    The impact of the pandemic in our country started becoming more significant towards the end of February this year, which led various client companies and law firms to draw out plans on how to work remotely from home during the lockdown phase. Since then, many days have passed and many phases of COVID-19 lockdown was witnessed by the nation where shutdowns and stricter health measures were meted out by the Government of India and respective state government under the Disaster Management Act, 2005.

    In the initial days, the government assumed that COVID-19 was more likely to have a temporary impact on the country and the initial lockdowns were announced for shorter time brackets. As the curve of infected people began to skyrocket, it became known to the nation that this phase was here to stay for a while and as a result, lockdowns were extended. This had major repercussions on the economy and it became necessary for the government to partially lift the strict restrictions. While it served as a much-needed relief for the economy, the spread of the virus is drastically increasing by the passing day.

    The immediate impact of COVID-19 required employers to ensure the safety of their workforce without disrupting the machinery. Work from home for a majority of sectors was established. The safety factors were more emphasised with rapidly increasing COVID-19 cases and it necessitated the shift of a physical workplace to a virtual one. Office equipment for setting up a mini cubicle within the confines of the home became necessary immediately. People needed secure internet facilities, a tamper-proof work environment because of company data protection needs. The physical workstations now resemble the look of a hideout which a ghost might use.

    Access to files and library archives in a digitized form was also made possible through a secure Citrix system which was accessible from home and it ensured seamless continuity of work.

    The effect of the pandemic also necessitated the re-evaluation of insurances and policy terms for COVID-19 as this was not explicitly covered before the pandemic phase by any policies currently existing.

    It also demanded a secure and reasonable AV platform for remote communication and meetings. The usage of such platforms has dramatically increased since the pandemic and many professional dealings and services are being rendered over the same.

    The government of India and the respective state governments in India were well-aware of the negative repercussions created by the pandemic and the lockdown phases and increasingly notified the rescheduling of tax and compliance filings under the Income Tax Act, GST laws, Companies Act and other laws which demanded continuous data updates on compliance and tax collections. Almost every fixed tax filling and collection dates stood amended and postponed to provide temporary relief to companies and individuals during these trying times.

    By now, almost all high courts and tribunals have installed fresh equipment to enable virtual court hearings and judges are gradually getting used to the system. Quite recently, a Constitutional Bench of Supreme Court of India conducted a complete hearing through a virtual media.

    Any vaccine being developed to combat this pandemic is not expected to get complete clearance before December 2020 even if all the proceedings are fast-tracked. In the absence of a stable, functioning vaccine, uncertainty continues to loom upon human lives. Several offices and their work strength are insisting upon the continuity of the “work-from-home” concepts to minimise infections that could arise if they have to be physically present in offices. Such situations might cause law firms to cut down the blubber when it comes to physical space to encourage WFH. This might prove to be a good budgetary uptick because rent costs will be drastically lowered on a long-term basis.

    Employment of new lawyers onboard law firms has also diminished as the financial impact of the pandemic is taking a toll upon the legal sector and the situation is, by large, unpredictable. Various assessments conducted by analysts and economists of the country have predicted that our nation will witness a negative growth (less than zero GDP) in this financial year (FY2020-21) and it will take a substantial amount of time before the country’s economic situation improves and is back on its feet.

    Shutting down of factories and the mass exodus of the skilled workforce has impacted the production capacities of the manufacturing sector hugely. With reduced turnover from the manufacturing and trade sectors, the ability of an industry or a trading establishment to pay for both fixed and variable expenditures without impairment can be predicted to be drastically affected. This might, in turn, affect the legal sector companies- especially those who are involved with litigation and other routine company-oriented practices.