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Identifying the markers of GFC and impacts on legal services
Australia never felt the GFC like the rest of the west. However, the trajectories look and feel the same, writes John Kettle.
Jerome Doraisamy
Australia may be experiencing its first recession in a generation and its worst since the Great Depression, but for those of us who worked through the global financial crisis (GFC) in Europe, that experience is coming to the fore.
Australia never felt the GFC like the rest of the west. However, the trajectories look and feel the same. Yes, we are in something of a standstill right now as businesses and institutions, debtors and creditors alike, try to figure out what and where the bottom line is.
Then, decisions will have to be made and the workouts, enforcements, disputes, restructurings and divestments inevitably will begin. But all that needs to happen without hair-trigger sensitivity; orthodoxy does not necessarily work in finding a way forward for economies in deep recessions.
This is where the sangfroid borne out of personal experience of working through debt crisis is so useful to businesses and institutions in having to deal with what is to come. You may call it “Been there, done that, bought the T-shirt”, I call it sangfroid – composure, calmness in the face of adversity.
Life does and will get better, but the working through it needs to be personified by acceptance of the circumstances you cannot control (and not bewailing the why and how – that is for later), and calmness in resolving them as best possible for clients – that leads to the best outcome.
We look at the trends and consider how we pivoted and adjusted to the challenges coming out of the GFC and what the legal industry should be considering as we climb out of a health crisis into an economic one.
Although some very similar hallmarks can be seen now as throughout the GFC, there are some trends which are perhaps emerging that are more unique to this situation and time. For legal services, as with other industries, this period will bring a certain amount of transformation. Perhaps not complete, extraordinary transformation, but the exacerbation of a pipeline of changes already in store, and some of which may be a shock to those unprepared. We will see:
An appreciation that relationships do matter
Even in a world of Zoom, teams and Webex, authentic relationships leveraging trust is a key part of future success. Providing pragmatic, compliant advice with industry insight while maintaining risk mitigation is what we are about, but that is nothing without relationships.
And, it is the genuine relationships that get you through a crisis, as there is two of you in it together, your client and you the adviser, at the side. That is a key experience from the GFC.
Assessment of work/life balance
After months of closer family connection, less commuting and more local lifestyles, flexibility is no longer a “dirty word” and the focus on health and mental wellbeing is a farce no more.
Continued rapid deployment of technology
It does not supplant the relationship, but it surely helps in navigating more efficiently the challenges that lie ahead. This situation has shown those who are truly nimble enough to adjust to new technology and ways or working, and those who have languished, causing significant impact to their business. It has highlighted the need for early assessment and readiness for technology, as a lack of investment will leave you behind the eight ball here.
Understanding the demand
In times of stress and financial crisis, the premium is on understanding that our work is focused primarily on collaboration to achieve outcomes rather than a transaction being the outcome – collaboration between all stakeholders and participants is often the barometer of strength rather than weakness in these times that are coming.
So, as you can see, these trends are not extraordinary and not all unique, but those who waded through similarly unfamiliar, dare I say “unprecedented” territory through the GFC, will attest to the need for sangfroid and cool heads = sound outcomes.
John Kettle is a partner and head of international (corporate and competition) at McCullough Robertson Lawyers.
Jerome Doraisamy
Jerome Doraisamy is the editor of Lawyers Weekly. A former lawyer, he has worked at Momentum Media as a journalist on Lawyers Weekly since February 2018, and has served as editor since March 2022. He is also the host of all five shows under The Lawyers Weekly Podcast Network, and has overseen the brand's audio medium growth from 4,000 downloads per month to over 60,000 downloads per month, making The Lawyers Weekly Show the most popular industry-specific podcast in Australia. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of Minds Count.
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