The Corona virus disease which emerged towards the end of 2019 (COVID-19), has had a major impact in almost all business sectors in Tanzania, including the service industry in which law firms operate.
Businesses in Tanzania and across the globe have gradually, and to a large extent, been at a standstill since the first case of COVID-19 was detected in Wuhan, Hubei Province in the People’s Republic of China. The consequence of which, most laws firms in Tanzania have seen a decrease in clients’ instructions.
Due to the fact that COVID-19 is a pandemic, all traveling, to and from Tanzania, was suspended, in an effort to contain the virus. The virus has virtually had an effect, in one way or the other, to many law firms, with many of them struggling to continue providing normal services to their respective clientele. As a result, they had to scale down their range of services and adapt to the new status quo in terms of their daily operations, such as having virtual meetings and court sessions, working digitally from home and reducing expenditure, among others.
Generally, COVID-19 has slowed down the economy in Tanzania, which in turn has resulted in most businesses downsizing their workforce and operations, with some businesses offering employees longer holidays, in the form of unpaid leave, as well as, directing employees to work digitally from home.
How positive or negative these impacts end up being on law firms in Tanzania, will largely depend on what actions these law firms will take, in order to survive these challenging times.
Below are some tips that law firms in Tanzania can adapt, to stay afloat during this difficult period: -
Reduce non-essential workforce. Much as this is a harsh recommendation, but COVID-19 has opened us to the reality of a lean but functioning workforce. To achieve this, law firms should make a needs assessment survey of their human resource requirements for their organization and downsize any non-essential workforce. A bulky workforce can be a huge expense to a business entity, and especially, amidst COVID-19 where business turnovers have taken a ‘hit’.
Cut un-necessary expenses. Law firms should conduct a thorough review of their respective management accounts to determine what specific expenses and/or services can be removed or can be replaced by a more affordable alternative, but without affecting the quality. For instance, if a law firm operates a motor vehicle for its day to day business operations, it can, opt to use ride sharing transport platforms, such as, Uber and Taxify, so as to cut costs on fuel, vehicle insurance, maintenance and driver’s remuneration.
Investing in financial instruments. Since income revenues have been affected by COVID-19, law firms should look outward by investing in financial instruments that will generate income for their firms and cushion them against the current volatile business climate. For instance, investing in bonds issued by the Government of Tanzania, through the primary or secondary markets, can be one of the options, because of several reasons, namely: - (1) they are relatively risk free, (2) they are transferrable and negotiable, (3) they can be pledged as collateral and (4) their rate of return is competitive. Government bonds are issued for a minimum period starting 2 years and maximum of 20 years and they offer interest per annum ranging from 7.82% to 15.49%.
Enhance presentation of your firm with a view of reaching out to more clients. COVID-19 has changed the manner in which businesses function, with much emphasis on working from home. This being the case, law firms have now ample time to write articles and display (without overstepping the bar association’s internal rules on marketing legal services), what they do through their personal online platforms. In light of the current global predicaments, potential clients now have plenty of time to go through these online platforms and evaluate the type of services law firms’ offer, thereby broadening their markets.
Evaluate business structure and systems. Law firms should review their structure and systems to take advantage of the changes in the way business will now be operated post COVID-19. With emphasis on digitally working at home, law firms should determine if this will be the trend and how best to position themselves going forward.
Take advantage of reliefs given by the Government. Law firms should be on the lookout for any mitigation measures from the Government of Tanzania aimed at cushioning Tanzanians against the economic effects of COVID-19, so that they can take advantage of them to stay afloat and survive any business downfall or difficulties.
Stay focused on your business blueprint. One thing is to stay focused and not panic.COVID-19 will come and go, and businesses as a going concern must continue. Focus and financial discipline are a virtue amidst these trying, but not permanent times.
Note: This is not a legal opinion and the contents hereof are not meant to be relied upon by any recipient unless our written consent is sought and explicitly obtained in writing.
