Communications Lawyers Staying Busy Despite COVID-19

Many law firms instituted austerity measures, including cutting reimbursements to partners as they build cash reserves. The legal market is vulnerable to the economic slowdown, but telecom is less susceptible, said Joshua Turner, FCBA president and Wiley attorney. "Everyone is still focused on moving forward and working on the aggressive policy agenda the FCC has set forth to address COVID," he said. "We're focused on supporting our clients to meet those needs."

Akin’s telecom and technology practice “continues to be very busy ... advising clients on COVID-related funding opportunities, communications restructurings including Intelsat, projects that will utilize drone technology for humanitarian purposes, and the everyday needs of our client,” said Hal Shapiro, chair of the regulatory practice steering committee.

Hogan Lovell’s communications group “has been very busy the past two months on a range of issues, including FCC agenda items, COVID-19-related activities, ongoing regulatory filing deadlines and several new efforts,” said Michele Farquhar, head of the practice: “Given the high level of FCC and client engagement, we expect the summer to be busy as well.”

“The FCC has done an excellent job keeping the trains running for all communications industries it regulates,” said Sally Buckman, manager of Lerman Senter. “Although deal work has slowed, there is likely to be increased work involving refinancings and restructuring over the coming months,” Buckman said: “The work will ebb and flow a bit in the coming months, but, in general, communications law firms will continue to be pretty busy.”

If telecom carriers run into financial trouble, that would change the nature of the legal work that law firms specializing in the sector would do for their clients, Turner said. He hasn't seen that yet.

“Legal work from regulated industries is largely recession-proof because the government powers on, sometimes with more energy and activity than in times of prosperity,” said Cooley’s Robert McDowell.

Staying Busy

Fletcher Heald has stayed busy, said Francisco Montero, managing partner. “Some media transactions get derailed as a result of fears over the length of the shutdown, as well as the initial trauma of the market downturn and sky-rocketing unemployment,” he emailed: “In late April into May I'm seeing an uptick in transactions as investors see bargains, as well as transactions that never canceled proceeding to close.” The pandemic has also “shone a light” on infrastructure needs, including for better broadband, he said.

“We’ve stayed relatively busy working primarily on auction-related matters,” said Russell Lukas of Lukas LaFuria. “We’ve learned that we can work effectively from home,” he said: “We will continue to do so for the foreseeable future.” That's happening at other communications practices as well.

Communications attorneys said the type of work they do has changed due to COVID-19, but the amount either hasn’t changed or has increased.

“It’s a lot of counseling, as opposed to regulatory,” said Richard Hayes, a radio attorney with his own firm. Some small- and medium-market radio broadcasters Hayes represents are facing a 70-80% drop in revenue. “It’s more that I act as a sounding board for the plans they’re coming up with” to handle the crisis, Hayes said. “We are quite busy,” emailed Marc Martin, a Perkins Coie partner. The firm’s communications group recently hired one attorney and is seeking another, Martin said.

It's broadcast license renewal season at the FCC, so stations don’t have much choice about using lawyers now, said Dawn Sciarrino, radio attorney with Sciarrino and Associates. “But payment is slower than usual,” she said. Hayes and Sciarrino said they're accommodating clients about payment during the pandemic. “If I help them survive, I survive,” Hayes said. Many broadcasters learned harsh lessons during the 2008 recession and have been running leaner businesses for years as a result, Hayes said. “We can get through this.”

“What’s not happening is any transactional work, said Sciarrino. She generally keeps a whiteboard in her office listing clients’ pending transactions and opening and closing dates. These days, “it’s empty,” she said. She’s expecting that to change as the pandemic progresses -- radio stations are going to begin going into bankruptcy, seeking new terms for lenders, and possibly seeking to sell, she said. That’s not a positive for the industry but is likely to lead to a pickup in legal work, Sciarrino said.

Best Best lawyers are keeping busy but less so than in-house local government counsel, said the firm’s Gerard Lederer. “Local government counsel have had to develop remote open meeting rules and procedures that comply with state and local laws and conduct such meetings on typically a no-less than weekly basis,” he emailed: “They have also had to do that while keeping local government open in the virtual space, track expenses associated with COVID to be eligible for reimbursement from the CARES and HEROES Acts; and will be spending much of their Memorial Day weekend crafting rules for returning to municipal buildings that both protect government workers and the public, while honoring the privacy rights of all involved. I’ll take my job assignment any day.”

Student Impact?

The economic downturn could hit law students seeking summer internships and recent graduates starting their careers. "We're looking at certainly the toughest job market for an incoming attorney or recent graduate in the last decade," said Ethan Lucarelli, a lecturer at George Washington University Law School.

Many law firms delayed the starting dates for new lawyers, said Joe Altonji, founding principal of consultancy LawVision. "If it was September, it's now January instead." Some firms shortened summer internships or moved them online, he said.

Firms like to start new lawyers after they have taken the bar exam, but now it's unclear when they will be able to take them, said Stuart Benjamin, a Duke Law School professor. "There's an enormous amount of uncertainty" for graduating law students, he said. If they start a job virtually, he said, training becomes more difficult.

Lucarelli said he would rather work in telecom law and policymaking than another sector if he were working at a law firm during this downturn. "From a regulatory and legal perspective, the FCC has not shown any signs of slowing down," he said. "They're a model for organizations that can shift to remote work and not miss too many steps."

Some sectors require more in-person meetings and court appearances, but the FCC is working remotely now and the agency regularly works with people all over the country, said Blake Reid, clinical professor of law at the University of Colorado. Since the pandemic, Reid said, "the FCC's work is amplified in importance." This summer, attorneys will deal with spectrum policy and reallocation, orbital debris, broadband deployment, emergency stimulus funding, telehealth, network resiliency and hurricane season, he said.

One wild card in telecom policymaking is the U.S. role in international standards setting, said Benjamin. It could become even a wilder card if U.S.-China tensions heighten, he said: There could be more focus on creating a 5G network without any participation from Chinese companies. "The most obvious way this could affect telecom law firms is in their representation of individual U.S. companies," he said. "With respect to spectrum, T-Mobile could have a different take on things than AT&T or Verizon, for example." On the international side, he said, some companies could be more hurt than others by international sanctions or international standards setting.

"We don't know what will happen in November," FCBA's Turner said. In a typical election year, "you see a little slowdown from the government as it transitions, but there's always a ramp up in figuring out what the new policies will be. I don't see election year as a slowdown." If the election ushers in a new administration next year, "one obvious difference in the telecom landscape" will be that "net neutrality issues would be back in play," Benjamin said. He said because net neutrality regulations are based on a classification of internet access on common carriage, any change would "tee up a lot of new regulation."