💹 5 Key Takeaways: How Legal Can Prepare for an Economic Downturn

The word “recession” is floating around again. For those of us who survived 2008, and even 2020 — just the thought makes us shudder. Our own Matt Margolis spoke with Jared Mermelstein, Matt Lubniewski, and Eric Fisher about the lessons they’ve learned from previous downturns and what legal can do to prepare. In case you missed it, here are our 5 key takeaways.

🦆 Don’t be a sitting duck

3:25 - 14:55 and 49:53 - 50:45

In uncertain times, legal’s role is to spot problems before they happen. We don’t know for sure if a downturn is coming but we can’t wait around to find out.

Here are some action steps you can take right now:

  • Figure out where you’re flexible and what a downturn strategy would look like.
  • Do your homework before setting up relationships with customers and vendors e.g. credit checks, and background checks.
  • Pressure test existing agreements e.g. will this client still exist in 6 months? What are our obligations if things go south? Do we want to renegotiate terms?
  • Keep an eye on the big picture. Legal has sight across the organization. Make sure the right-hand knows what the left hand is doing.
  • When hiring, look for complementary skills e.g. an attorney who’s worked in government could help with government affairs in lean times.

🛤 Say yes, with guardrails

12:30 - 21:22

Legal is sometimes seen as the department that says ‘no’ when all the higher-ups want to hear is ‘yes’.

When bad days are on the horizon, it’s important to:

  • Make the higher-ups listen even when they don’t want to.
  • Find creative ways to get to yes.
  • Let the business folks know you want to help them reach their goals.  
  • Be transparent and communicative.

🦹‍♀️ Back your tribe

21:22 - 25:33 and 42:00 - 44:10

If cuts are coming, you’ll want to fight for your team. Don’t be shy about it. Sing their praises. Show off that performance data. And highlight all the ways you bring in/save money.

When the economy tumbles, you can expect morale to do the same. If cuts are coming, honesty is the best policy. Be open and tell your team as much as you can. Let them know you’ve got their backs. Roll up your sleeves and get stuck into new challenges so they know that you’re all in this together. If team members are let go, offer to write them good references and assist wherever you can. That sends a strong message that you appreciate your team’s contributions. Not to mention, you never know when you need a contact in the future.

🤝 We’d like you to meet someone

  • Meet Tammy! Chief Legal Officer and Head of Business & Legal Affairs of LA-based esports organization FaZe Clan. She’s never been one to shy away from cutting-edge organizations in emerging industries. Throw being a huge sports fan in the mix, and you could say her current role suits her quite well. Join us this Thursday to chat over the ins and outs of the esports industry, how FaZe Clan is building a lifestyle brand for Gen Z, and where her legal team fits into it all.

👉 RSVP here!

💪 Get scrappy

31:15 - 37:58

If you’re resource-poor you’ll want to cut costs and make the most of what you’ve got.

Some things you can do to achieve that are:

  • Renegotiate outside counsel rates.
  • Use smaller (more economical) law firms or firms in geographically cheaper areas.
  • Use freelancers (ahem, Lawtrades 😉)
  • Take a class on a specialist area (e.g. privacy) so you can take on more in-house.
  • Cross-train your team: If you can get your IP lawyers on board with contracting, you can get more done with fewer people and help your staff grow while you’re at it.  

😬 Avoid a PR horror show

37:58 - 42:00

Public mass layoffs can be a PR disaster, especially if Zoom recordings are leaked and founders pen grossly insensitive Tweets.

So what can legal do about it?

  • Make sure all layoffs are legally compliant. Nobody wants an unfair dismissal suit in boom times, let alone in a dip.  
  • Get to know your HR, PR, and comms teams so you’re kept in the loop.
  • Offer advice on press releases. You don’t want your company to come across like a bunch of insensitive you-know-whats.

Enjoy these recaps? Share them with your network!

See you at the next one,

🫶 The team at Lawtrades