The legal profession serves to maintain social order, safety and stability of transactions, and to protect the legitimate rights and interests of parties. Given such nature, the fact that the COVID-19 pandemic is extensively affecting multiple civil and economic fields at the moment certainly impacts the legal profession both in the short term and in the long term.
With the aim of clarifying what the law practitioners are facing as well as how this position can support the business community and individuals, we had a meeting with Attorney Nguyen Quoc Vinh - Partner of Tilleke & Gibbins Law Firm Vietnam - Arbitrator of Vietnam International Arbitration Center (VIAC).
Sir, as the COVID-19 epidemic is becoming more and more serious, business operations have been hindered recently. So what is the perspective of law firms? Are there any significant changes?
I think law offices and law firms (collectively called law firms) are all affected by this epidemic to some extent and must adapt to the situation. As for working mode, in order to protect ourselves as well as clients from the risk of infection, we have replaced in person contact with communication via electronic devices. In fact, such devices have long been in use before the outbreak. Our lawyers, especially in big cities and provinces, are familiar with the use of electronic means such as composing emails, conversing via Skype or Microsoft Teams, etc. These tools replace the traditional communication methods such as telephone and typewriter; nevertheless, usage of these tools has increased remarkably since the outbreak.
In addition, similar to other professions, when the situation changes, law firms’ way of working also needs to change. For example, we started to get acquainted with how to work from home (working from home). However, since the specificity of our jobs demands confidentiality of clients’ information, this working mode requires decent information technology infrastructures. The world has been utilising cloud computing for about ten years and many law firms around the world have applied this solution as it helps reduce printing and storage costs. Furthermore, lawyers do not necessarily go to the office to read the documents and can work anywhere instead.
Personally, I find that working from home also has certain advantages. First, you are able to fully concentrate in a quiet atmosphere, which leads to higher work efficiency. Second,
you may save time commuting to work. At times, travelling can be stressful. Scientifically speaking, there have been many international analysis papers about the effectiveness of working from home since the outbreak.
However, the above statement does not mean that in person meetings with clients or direct communication between colleagues in a law firm are disappearing. They are only minimized at this point because at the moment we need to comply with "social distancing" for the sake of fighting the epidemic. Maintaining face-to-face meetings with clients or colleagues will always be essential. Clients are diverse and communication via phone or email might be misunderstood.
It is observed that the law industry is very active in adjusting the working method. But is this really reassuring for enterprises? And regarding this situation, what are your comments on the current and upcoming activities of the law industry?
I think the lasting epidemic means we need to stay safe first. After that, we will have to ensure that businesses are maintained and not come to a halt. Adjusting the law firm's working mode is not intended for these two goals. There might be some misunderstanding that working from home means getting rest. This way of thinking is incorrect, we still need to work but from a different location. As stated above, I found working from home somewhat more effective. I can save about two hours commuting back and forth between work and home every day! Instead, after breakfast and coffee, I can sit right at my desk; hence processing speed will be much higher.
In the field of consultancy, the workload of law firms has significantly decreased due to the impact of the epidemic. According to the National Business Registration (under the Ministry of Planning and Investment), the statistics of the first quarter of 2020 show the lowest increase in the number of newly established enterprises, the decline in the amount of capital brought into business and the continuous rise in the number of closed down businesses. In the first quarter of 2020, nearly 35,000 enterprises withdrew from the market (an increase of 0.2% over the same period in 2019). As for foreign investment, the Foreign Investment Agency just released a summary report of (roughly) the first two months of the year. By 20 February 2020, the total of newly registered, adjusted and contributed capital of foreign investors has reached approximately 6.4 billion USD, which is only 76.4% compared to that of the same period in 2019. Capital of foreign direct investment projects was estimated at 2.45 billion USD, equaling 95% that of the same period in 2019.
The above figures partly reflect the activities of law firms; especially of those focusing on investment and enterprises. Currently, the majority of law firms that provide legal consultancy services support enterprises in business establishment procedures, investment procedures, and handling related documents. The sudden change mentioned above is part of the reason why law firms’ revenue sources are now more limited and workloads are also scarcer than before.
Thus, in general, the picture of business establishment and investment has shown certain signs of decline. Perhaps this trend will continue until the end of the epidemic. It is difficult for a domestic or foreign business to consider expanding investment and business operation in the current context.
In the area of intellectual property or drug registration, I find that law firms practising in these two areas will probably be less affected than investment and corporate solicitors. Trademark, patent, and drug registration will remain as clients continue to have products and inventions that need to be registered.
As you just mentioned, it seems that lawyers' consultancy services will be affected in the short term, so what about lawyers focusing on litigation activities?
About the civil and commercial litigation aspects, I think the workload of litigation barristers will increase, not right now but in the long run. The epidemic has brought an unprecedented case at least in decades which is the delay in contractual performance or even inability to perform and failure to make payment of a large number of businesses and individuals around the world. This is the consequence of border closure, blockade, ban on import or export, shutdown of business etc. on a global scale. How “sought after” the force majeure or material adverse clauses are these days! During the recent outbreaks such as SARS or MERS, these terms are not discussed as much as now. The spread of the epidemic on a global scale and a series of "frozen" businesses make it difficult or impossible for the parties to fulfill their obligations, which is the factor that provokes the dispute.
The reason I think barristers’ workload will increase in the long term is that enterprises will first need to concentrate on responding to the pandemic and remaining in the market. There are too many immediate concerns such as revenue, cash flow, payment obligations, personnel issues etc. Disputes are always prolonged and therefore will not be the urgent priority. Nonetheless, with a large number of possible causes of disputes (from the perspectives of the partners, the lessees, the lenders or even the employees), the assistance of a lawyer will be necessary in the near future.
How do you rate disputes arising in this context. From a lawyer perspective, according to you, what support does the lawyer need to support the business to handle the disputes that have occurred and may occur?
I think in the current context, perhaps a reasonable outcome would be for the client's best, which is maintaining a long-term partnership. With the viewpoint of an independent third party with legal knowledge, lawyers are able to advise clients on the scope of their rights and duties and assist clients to find the reasonable equilibrium. A competent lawyer may encourage the parties to reach a mutual agreement, hence avoiding unnecessary disputes. If the dispute is inevitable, lawyers will help clients understand their rights, obligations, what they may request or what is binding pursuant to the contract and law. Consequently, lawyers can help clients understand their position, avoid excessive expectations or overlook their legitimate rights and interests.
Another point where lawyers may also support clients in case dispute is unavoidable is selecting the suitable dispute resolution method. One of the choices is the traditional dispute resolution method which is litigation with its own advantages. However, the current trend around the globe as well as in Vietnam is that depending on the nature and complexity of the dispute, the flexibility and the scope of rights of the disputing parties, the parties can refer to Alternative dispute resolutions (ADR) such as arbitration or commercial mediation. In this situation, both the Court and arbitration institutions are applying multiple options to help facilitate the dispute resolution process. I think such support is necessary and appropriate since it helps businesses reduce financial pressure whilst the dispute resolution progress is not affected for cases where all negotiation options are unsuccessful.
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