How the pandemic will impact on the revenue and work of Nigerian lawyers -

I have always been of the view that law practice in Nigeria isn’t a very profitable business. Reason being that the supply massively outweighs the demand.

Thread.

1. Like I always say, the performance of the law practice industry is directly tied to the performance of the economy. A poor economy = less demand for legal services. The pandemic is halting economic/business activities. Some lawyers will go hungry.

2. Lockdowns. No cross-border trade. Businesses trying to stay afloat and pay salaries. Travel bans. This is honestly not a good time to call your lawyer, unless you want a force majeure clause review.

3. Litigation lawyers will sit at home for a while, at least for most of the year. They will be punished for the failure of the justice system to go digital. Ignore the AGF, courts won’t sit via Zoom or Skype. If your practice is mostly litigation, prepare for hunger.

4. Sliver lining for commercial litigation lawyers is that demand may scale after the pandemic. Increase in claims from breach and delay of contracts will drive demand up. Commercial litigation skills will be in demand.

5. Arbitration lawyers will witness a similar fate to their colleagues in traditional litigation. Delayed and postponed hearings. Online dispute resolution will be birthed after this pandemic. Demand for commercial arbitration will scale up after the pandemic.

6. Corporate M&A and general FDI work will slow down considerably. Buyers are prioritizing staying afloat. Valuation of targets will be difficult. Buyers will have a difficult time securing acquisition financing. There may be some activity in the healthcare M&A space.

7. Restructuring and distressed M&A and PE lawyers will be big winners after the pandemic. Advice is to build capacity in these areas.

8. Finance work will come in bits. Bank lenders are heavily exposed to oil and gas companies and indirectly affected by the fall in oil prices. Less lending appetite. There may be some work for restructuring of facility agreements, moratoriums etc.

9. Don’t expect any IPO work till at least mid 2021. The equity capital markets hasn’t been a profitable practice area for lawyers and it will only get worse. IPOs in the works will most likely be put on hold.

10. Debt capital markets work will favour lawyers that work for big corporates with good ratings. PFAs will always invest in Dangote etc bonds. Less short term debt work. More bonds work.

11. Upstream oil and gas work will come to a halt. Cost of production is now way higher than cost of sale of crude. Possible rig infections will necessitate that rig workers stay home. I predict less work from this industry till the oil market recovers.

12. Demand for labor and employment work will scale up now and post-Covid. Issues of termination of employment contracts, pay-cuts, furlough, etc. Issue is that you not make a lot of money from this practice unless you are briefed by big corporates.

13. Real estate lawyers won’t see a lot of work in the acquisition and new rentals space. Buyers will prioritize holding cash for now. However, there may be some work related to review of tenancy agreements and mortgage contracts - rent and mortgage payment deferrals etc

14. General business advisory lawyers will see considerable movement as corporates look for help in interpreting force majeure and MAC clauses + general contract reviews for breach and performance issues.

15. Lawyers and firms that can’t adapt to WFH and working solely with technology will go out of business. Older lawyers who aren’t conversant with email and conferencing technology will struggle.

16. If the pandemic continues till June, firm revenues will suffer. Some will cut salaries and lay-off staff. Others won’t pay at all. Expect a freeze in hiring.

17. Concluding point is that now more than ever, the Nigerian lawyer needs a paying side hustle. Unless you work for the very big firms, you need another source of income.

For more practical perspectives on this topic, listen to @BAjibadeSAN speak on today’s learning series.

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