With hurricane season underway, at-risk small businesses need to make sure they have a response plan in place to mitigate potential damages. Unfortunately, many small companies, especially law firms, don’t come close to being hurricane-ready. And this lack of preparedness can come at a significant cost.
The Gulf Coast is still reeling from Hurricane Harvey, as Hurricane Irma is set to barrel down on Florida. While well over one hundred thousand Texas homes are just beginning to evaluate the effects of the first storm, thousands of entrepreneurs are going through the same challenges with their small businesses – and these numbers will only grow if or when Irma hits Florida.
Historically, law firms and other businesses have a notably poor track record when it comes to coping with and recovering from natural disasters. According to the U.S. Department of Labor, over 40% of companies that experience disasters never reopen. Over 25% of the remaining companies close within two years of the disaster. Despite these grim statistics, three out of four small businesses lack a disaster recovery plan. For very small businesses, which would include almost all of the law firms I work with – those with 50 or fewer employees – that number jumps to four out of five.
In Texas, we are in a high-risk weather area, as the whole world has seen recently with the catastrophic flooding due to Hurricane Harvey. But what if your law firm is not in a risky geographic location? Should your law firm have a natural disaster preparedness plan? Absolutely. A disaster response plan will benefit your law firm by expediting recovery, ensuring employee safety, reducing economic loss, protecting your property, and in some cases reducing insurance premiums.
While an emergency plan can significantly help your law firm bolster its hurricane readiness, no business is hurricane-proof without being properly insured. Appropriate insurance for your law firm can include commercial property insurance and business interruption insurance, among others.
Crucial Law Firm Functions Affected By Natural Disasters:
1. People who work with you
When disaster strikes, sometimes it only affects your office – such as a localized fire. But a natural disaster like a hurricane will affect not only your law firm but also the personal lives and personal property of its employees. If you know a storm is coming, be careful when making physical preparations. Having employees carry firm equipment, client files, or other such items out of your office carries the risk of employees getting injured. This can lead to unnecessary claims for workers’ compensation.
Communication is hugely important when disaster strikes, so keep clients, employees, and any service providers up to date about your plans for inbound weather disasters and/or recovery efforts.
When people’s homes and families are at risk, you can expect the effect of a disaster on the business is the least of the concerns, and rightly so. After a disaster, dealing with personal losses while having work responsibilities is distracting. You may be short-staffed, before, during, and after the storm passes. People’s minds will be occupied with more pressing issues. Expect and be ready for it. Importantly, if one of your employees serves as a law firm administrator or office manager, ensure you have access to key information that may go offline (such as contact details for all employees and key suppliers).
2. A place to work
Most lawyers still use physical office space to run their practices, have client meetings, and interact with staff. Will your landlord close the building, and when? Will you be able to be present during the hours and days your customers and clients expect service? And, if you own your own law firm office building, will you suffer potentially extremely disruptive and costly commercial property damage? Be sure to find out the plans of your building management before disaster strikes, including whom to contact in the event of an emergency. If you are the property owner, be sure to keep accessible digital and paper copies of all applicable insurance policies handy in case your building suffers damage.
3. Cases to work on
We lawyers cannot work without access to our client files. How are your files stored? Is your office paperless? If not, do you have any portion of your client files scanned and uploaded to a file server? Be wary of chain of custody issues, protective orders, and other confidentiality and privilege issues that may arise should your employees take physical files out of the office. Ideally you’d have a complete digital version of everything in your office stored in a cloud based server unaffected by any natural disaster so your work will remain as uninterrupted as possible.
4. Information technology
These days attorneys are largely required to be technologically savvy as part of their ethical obligation to their clients. But how many of us really know much about how our software, hardware, and network are set up? Not many! It would be advisable to take the time to learn what equipment you have on site and off site, and what vendors help you with each item. This list should, at a minimum, include your office phones service provider, Internet service provider, email hosting company, law firm database or case management software, and servers.
Ensure that your law firm has a full backup of all critical data available, ideally offsite. By ensuring all your business’ proprietary data is securely backed up – either virtually or on a physical backup drive stored at a safe location – you can prevent a natural disaster from turning into a major data loss catastrophe.
No matter what type of Internet connectivity your business uses, before, during, and after a hurricane or other disaster, it may be down or degraded. Your provider may not be able to restore service quickly. You (and your employees) may not be able to remote into the office or servers. Many phone networks often also depend on connectivity and may be down for a long while. Furthermore, one or more cell towers may be down. Cell phones may not work. So how will you keep in touch with your clients and staff? Even more importantly, how will you file documents with deadlines with the state and federal court systems?
Most businesses, including law firms, require money to run. How will you cut checks if you use paper/hard copy checks and the books are underwater in your law office? And, if the checks somehow remain dry, what if looters come and steal your corporate checks and credit cards left at the office? You will also not want to lose your law firm’s bank records, tax returns, and other items necessary for ongoing accounting work and tax purposes.
Best Practices To Employ So Your Office Stays Open
In order to ensure your law firm remains up and running in the event of a natural disaster like Hurricane Harvey, you should use cloud based servers, laptops, mobile devices, Skype, and other such items that can remain just as functional in the event that your physical office ceases operation. By engaging in proactive decision making before a disaster occurs, your law firm can save time, money, and maintain the trust of its clients.