“For some TMT clients, particular in the media industry, the impact of such issues has been extreme. At the same time, some TMT clients are playing a key role in responding to the effects of COVID-19 and are seeing increased demand for their products and services. This is particularly the case for some of our technology and telco clients.”

The key impacts upon work for lawyers in the TMT and regulated industry spaces, Ms Kennedy noted, have been dictated by these client impacts and issues, such as the need for specialist employment advice, and for advice regarding supply and other contracts.

“In respect of transactional work, we are seeing quite a few TMT deals impacted. Even where target companies are performing strongly, such as in the telco space, long-term valuation uncertainty, regulatory changes (such as the reduced FIRB thresholds), and post-completion issues arising from government restrictions, have caused a number of TMT deals to be abandoned or delayed,” she said.

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Consequences for lawyers in this space

In light of how multifaceted the impacts have been, Ms Kennedy mused, one hurdle to be overcome for lawyers in this space will be to assess and understand how individual clients are being impacted, or are likely to be impacted, so that determinations can be made pertaining to legal assistance.

“This requires us to understand our clients’ businesses and their commercial exposures and drivers. Clients in all industries have been flooded with COVID-19 updates. The information overload is not helpful for clients. A key challenge for lawyers in this space is [to] understand the specific issues relevant to our TMT clients, so we can tailor and filter the information being provided to them,” she advised.

“This is particularly the case in relation to the raft of regulatory changes that [is] being introduced. We also need to be able to anticipate the impacts that our TMT clients may experience in the medium and longer-terms, so that we build appropriate protections into our advice and drafting.”

How TMT and regulated industry lawyers must respond

When asked about the steps lawyers working in TMT and regulated industry must take in order to best serve their clients at this juncture, Ms Kennedy said there were numerous ways legal professionals can do so.

“In addition to advising our clients regarding specific impacts and issues that they (or we) have identified, we also need to keep them informed, on a targeted basis, of issues and changes (both regulatory and market-driven) that may impact them, or present opportunities for them,” she said.

“We should give them information and tools to enable them to adapt, and change their approach or their thinking, to address actual and potential COVID-19 impacts.

“This may involve keeping them informed of the impact of regulatory changes, or advising them regarding the inclusion of contract clauses to address potential long-term impacts of the pandemic, or suggesting different deal structures to ensure transactions can proceed.”

Each of these steps, Ms Kennedy outlined, requires an understanding of what is happening in the market, how it is impacting (or may impact) TMT clients’ businesses, and such clients’ commercial and strategic objectives in relation to such matters.

“The best way to work with in-house teams in relation to the required steps is to have an open exchange of information and ideas based on a good understanding of such matters,” she added.

Emerging opportunities

Despite the difficulties that may lie ahead for lawyers in this space, Ms Kennedy proclaimed that opportunities for said lawyers “will be significant”.

“Although many companies in the TMT space may continue to feel the downward impacts of COVID-19 for an extended period, the opportunities presented to many companies in the space are significant, and there is significant scope for lawyers to be involved in this,” she submitted.

“On a transactional front, there are companies that are performing strongly throughout this period that will become attractive as potential targets once transaction confidence is restored. Changes in work practices may also encourage the trend of non-technology companies acquiring technology assets and companies.

“The current social distancing requirements and restrictions on movement have demonstrated that use of technology can alleviate logistics challenges, facilitate remote working environments and cut cost. Post-pandemic, changes in work practices are unlikely to be entirely reversed. Learnings during this period are likely to encourage companies to look to develop or acquire relevant technology assets.”

Changes in work and lifestyle practices, Ms Kennedy continued, have also benefited and are likely, she said, to continue to benefit a number of TMT subsectors, including the videoconferencing, digital media and “over-the-top” content, e-commerce, gaming, AI, cyber security and healthcare sectors.

“Similarly, remote working and virtual meetings, which are likely to continue in the post-pandemic world, can be expected to result in many technology companies continuing to see increased demand for telecommunications services, hardware, cloud services, and other technology solutions,” she said.

“Automation and robotics, and predictive modelling and diagnosis are also areas that have experienced increased demand or development during the pandemic and are likely to continue to do so in the post-COVID-19 world.”

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