Morrison & Foerster’s third global survey of in-house GCs reveals companies are optimistic about returning to work
NEW YORK (December 9, 2020) – Morrison & Foerster, a leading global law firm, today announced the results of its COVID-19 Impact Survey: Road to Recovery, in which in-house general counsels from global corporations described plans for returning employees to the office, continued data privacy concerns, and business risks. This is the third iteration of the survey the firm has conducted; the earlier iterations discussed the initial impact of the pandemic and the easing of stay-at-home orders.
While many of the issues that were top of mind in the first study remain, the new findings indicate optimism among businesses navigating the impact of the pandemic and as they look towards the future with the possibility of viable vaccines on the horizon.
“The COVID-19 pandemic has devastated many industries and continues to have a profound impact on companies worldwide. Most companies are still not out of the woods, but the findings in this report indicate a majority of businesses are at least more optimistic about the road to recovery than before,” said Morrison & Foerster COVID-19 Task Force chair and Global Risk + Crisis Management partner David Newman.
When asked what percentage of their workforce would have to be vaccinated for their company to return to normal, a majority (56%) believed over 50% of employees would need to be vaccinated; 15% felt they could return to normal with less than 50% of employees vaccinated. Slightly more than one quarter of general counsels (28%) reported they didn’t know or had no idea. Many stated they had neither considered this question with leadership, nor considered a return to normal as dependent on the availability of a vaccine. Several indicated they would wait for scientists or local health regulators to advise on protocol, while some questioned companies’ ability to require employees to be vaccinated.
“With one or more vaccines on the verge of being approved, some employers will undoubtedly mandate employee vaccines, either for altruistic reasons – they don’t want people to get sick at their place of business – or because they are worried about liability for workplace exposure to COVID-19. Other employers will take a different tact, merely encouraging vaccines,” said Morrison & Foerster Employment + Labor partner Janie Schulman.
Perhaps the biggest challenge for employers operating in this largely uncharted territory is weighing the benefits and potential risks of mandating employee vaccinations against the benefits and potential legal risks that not doing so would pose to the business.
Data security has now risen to the second highest legal risk for companies, increasing from 50% in May to 69% today, surpassing contracts (64% in May to 66% today) as the second highest legal risk.
“The ongoing pandemic has emboldened cybercriminals, and the demands for ransomware in particular are increasing in volume and amount,” said Morrison & Foerster Global Privacy and Data Security co-chair and partner Miriam Wugmeister.
“Every business is a potential target because every company has some type of data – personal information, trade secrets, confidential customer information – and thus every business should take steps to bolster their cybersecurity programs including technical controls (such as multifactor authentication, regular patch management and malware detection tools), administrative/organization controls (such as training on phishing, limiting access to sensitive data and conducting tabletop exercises to prepare to respond to an incident),” added Ms. Wugmeister.
When asked about business transactions companies are considering, especially in the next nine months, 38% of respondents reported that reducing commercial real estate and renegotiating leases was in their immediate plan.
“This finding is likely being driven by the fact that many employees, especially in cities that rely heavily on mass transit and with high-rise buildings requiring elevator usage for large numbers of tenants, are nervous about health risks in getting to the office, and that has weighed on the minds of employers,” said Mark Edelstein, Morrison & Foerster Global Real Estate Group chair and partner. “As a result, some companies that have opened their offices have made it voluntary for their staff to go into the office and have found that many are opting to work from home. These changes have prompted a number of businesses to revisit and renegotiate their leases, and to sublease some of their space, to accommodate for this changing office-workplace dynamic, which is likely going to continue until employees feel that it is safe to return to the office.”
Far fewer respondents, however, were considering acquiring assets or making an acquisition offer (20%), selling assets or business divisions (19%), or raising capital (18%). Terminating or slowing down any transactions currently in process dropped significantly since May, with 9% of in-house counsel reporting slowing or dropping transactions compared to 23% six months ago.
“At the beginning of the pandemic, we saw companies either slow down or terminate existing transactions. We are now seeing companies revisit those deals and big investments being made in the areas of technology and healthcare. We are also seeing companies start to emerge from crisis mode and begin to strategically position themselves for a post-COVID-19 world,” said Morrison & Foerster Corporate Department co-chair Eric McCrath.
“While the public health picture remains dire, and there will undoubtedly be continued legal risks and challenges ahead in the coming months, particularly in the areas of employment and labor, data security, and contract disputes, among others, this sense of optimism underscores the important planning work that we saw our clients put in throughout this pandemic to mitigate risks and protect their businesses from the impact of this unprecedented global health crisis,” Mr. Newman explained.
For the full results and analysis, including in-house general counsels’ insights into other key areas of the business, additional challenges they face, and strategies they are employing, read the survey report.
Morrison & Foerster surveyed 80 in-house legal professionals around the globe with organizational revenues ranging from less than $250 million up to more than $20 billion. The survey was conducted between September 23 and November 10, 2020. The top three industries represented in the study include: finance and insurance (20%), followed by technology (14%), and life sciences (10%).
Morrison & Foerster launched its Coronavirus (COVID-19) Task Force and Resource Center on March 2, 2020, to help address immediate questions and concerns from clients about planning and responding to the risks associated with the pandemic as it continues to evolve. Since its launch, the Task Force has advised more than 100 clients – including leading U.S. companies in the retail, technology, finance, real estate, manufacturing, and pharmaceutical sectors – on their COVID-19 response efforts.
Our Task Force is led by Washington, D.C.-based partner David Newman, the co-founder of the firm’s Global Risk + Crisis Management practice. Prior to joining Morrison & Foerster, Mr. Newman served in the White House Counsel’s Office and in various positions on the National Security Council, where he helped coordinate the U.S. government’s response to the Ebola outbreak in 2014–2015. The Task Force is interdisciplinary in its approach and global in its scope, comprised of almost 50 attorneys (including almost 40 partners) from across the United States, Europe, and Asia, and spanning 17 practice groups.