Memo from the S.J. Quinney College of Law Career Development Office, 2022-03-22: Covid Deaths, Omicron, Vaccinations, the Economy, and Law News

Memo produced by James Holbrook from the S.J. Quinney College of Law Career Development Office "for the Dean of the College of Law about Covid disease, coronavirus vaccines, the economy and employment."

Covid Deaths, Omicron, Vaccinations, the Economy, and Law News To: Dean Elizabeth Kronk Warner Date: March 22, 2022 From: S.J. Quinney College of Law Career Development Office Covid Cases and Deaths, Omicron, and Vaccinations More than six million known Covid deaths worldwide have been reported since the start of the pandemic, although experts say no one will ever know the true Covid death count. As of March 22nd, the U.S. had 79.7 million reported Covid cases resulting in more than 972,000 reported Covid deaths since February 29, 2020. These numbers are certain to be low: during the pandemic, the U.S. recorded more than one million excess deaths, i.e., deaths exceeding the number expected during that period. Experts estimate that every Covid death in the U.S. leaves nine close relatives bereaved. And the bereavement burden is unequal: Covid has killed Black, Latino, and Native Americans at far higher rates than White and Asian Americans. As of March 22nd, the number of new Covid cases, hospitalizations, and deaths in the U.S. were all decreasing, and the U.S. was averaging about 32,000 new Covid cases per day, with about 1,000 new Covid deaths per day. Pfizer has asked the FDA for authorization of a fourth dose of its vaccine for Americans over 65. Moderna has asked the FDA for authorization of a fourth dose of its vaccine for Americans 18 and older. Even without any boosters, both vaccines provide strong protection against the worst outcomes of Covid. A recent survey showed that 56% of U.S. adults owe health-related debt and about 20% with medical bills are not paying them off. A large chunk of medical debt came from Covid testing and treatment. 23% of Americans with medical debt owe more than $10,000. About a third of those with medical debt said it is unlikely they will be able to pay off their medical bills in their lifetime. On March 17th, President Biden named Ashish Jha, a practicing physician widely regarded as a gifted public health communicator, to be the next leader of the government’s coronavirus response, helping Americans navigate their return to work, school, and other activities as the nation seeks out a “new normal.” The National Institutes of Health announced a $1.15 billion four-year program called “PostAcute Sequelae of SARS-CoV-2” to fund research studying the cause and effects of long-Covid disease including: • • • • How many people have long-Covid? What is the biological cause of long-Covid? What makes some people vulnerable to long-Covid but not others? Does Covid trigger changes in the body that increase conditions such as chronic heart or brain disorders? Scientists are warning that the U.S. is not doing enough to prevent a new surge of Covid from endangering vulnerable Americans and upending daily life again. The nation has been relaxing coronavirus restrictions, many people are not vaccinated, only a third of the population is boosted, and a Covid-response package is stalled in Congress as health agencies run out of money for tests and therapeutics. For example, there is not enough money to purchase all the antiviral drugs the government has ordered. As the federal government is warning that pandemic funds are drying up, Senate Republicans have refused to approve $15 billion in new coronavirus aid without cutting other spending elsewhere, and House Democrats have balked at a proposal to repurpose pandemic-response funds intended for state governments. The federal program to reimburse providers for free testing, treating, and vaccinating people without health insurance could end early next month. And the U.S. has run out of funds to buy a potential fourth vaccine dose for all Americans. On the other hand, immunity in the U.S. from vaccinations and previous infections could continue to prevent serious illness and hospitalizations from Covid, and the more contagious subvariant of Omicron does not seem to cause more severe disease than Omicron. 66% of Americans are fully vaccinated, and blood tests that detect antibodies from Covid infection indicate that more than 140 million Americans – about 43% of the population – have had Covid. These numbers exceed 100% because some people who got Covid were vaccinated after they recovered, and some fully vaccinated people got mild Omicron-caused Covid. Although case numbers in the U.S. are dropping, the more contagious subvariant of Omicron accounts for a growing proportion of new infections. Last week, wastewater testing sites in Massachusetts, Connecticut, and Ohio showed increases in viral levels. And case numbers are again climbing in China and in Western Europe. The U.S. runs about three weeks behind increased infections in Europe. Hong Kong has the highest recorded Omicron-caused death toll among its unvaccinated elderly: emergency rooms are overflowing, hospitals are overwhelmed, and nursing homes are facing devastating outbreaks of cases. Since early 2021, Hong Kong residents have been offered a choice between a mRNA vaccine manufactured by BioNTech and an inactivated vaccine made by the Chinese company Sinovac, and both types of vaccine provide protection against severe Covid disease. However, almost immediately thereafter a vaccine misinformation campaign began on social media stating the vaccines were unsafe, especially for the elderly. Because very few people in Hong Kong initially got infected, very few people got vaccinated, which made the city a ticking time bomb for Covid that is now exploding. For an unvaccinated person 80 years or older, the case fatality rate in Hong Kong is 12%, four times higher than those who received two doses of either vaccine. The Economy U.S. inflation increased in February at an annualized rate of 7.9%, the largest annual increase in 40 years, with the war in Ukraine likely to push inflation even higher in the energy sector. Inflation was driven by higher costs of gasoline, food, and rent. The U.S. is talking with Venezuela, Saudi Arabia, and Iran about purchasing oil from those countries. On March 14th, just days after the U.S. cut off its imports of Russian oil, the average price of gasoline in the U.S. hit a record high national average of $4.43 per gallon and exceeded $7 2 dollars a gallon in parts of California. Shell, Europe’s largest oil company, announced it was withdrawing from its long involvement in production of all Russian hydrocarbons. And the European Commission outlined proposals to “make Europe independent from Russian fossil fuels well before 2030.” “We simply cannot rely on a supplier who explicitly threatens us,” the Commission’s president said. The U.S. Federal Reserve raised interest rates by .25% to start cooling off the economy and is expected to raise rates six more times in 2022. As the Fed rate rises, other interest rates in the U.S. economy will go up, too, including for home mortgages and auto loans. Increased interest rates will gradually restrain spending in the economy and push inflation down, hopefully not into a recession (defined as two consecutive quarters of negative GDP growth). By invading Ukraine, Russian President Putin has done severe economic damage to the Russian economy through banking sanctions, many nations suspending Russia’s World Trade Organization’s Most Favored Nation benefits, Putin’s threat to nationalize the Russian assets of foreign companies that have stopped doing business in Russia, the crash of the ruble and the Russian stock market, and the growing consensus that Putin is a war criminal. Current U.S., E.U., and U.K. sanctions forbid companies and law firms from doing business with many Russian entities, including most of the country’s major banks and many of its oligarchs. As of March 9th, there were 5,532 sanctions on Russian trade, finance, technology, and culture: 2,778 were imposed just since the invasion started, with more to come. The Russian ruble has lost 90% of its value against the U.S. dollar since the beginning of the year. And about 300 foreign companies have suspended operations or left Russia completely since the invasion began. On March 9th, President Biden announced his administration will undertake a sweeping review of the government’s approach to cryptocurrencies, seeking ultimately to impose regulatory structures on these digital assets now valued at roughly $1.85 trillion globally. Before the Russian invasion, most countries acted to promote their economic growth with increased international trade, technology investments, and domestic reforms. Since the invasion, however, many countries are rethinking their defense postures and forces. And military security is only one part of their national security concerns. For example, Europeans are ready to end the era of having free American security and will increase their defense spending to secure NATO’s eastern border. Countries also are seeking greater national security in their supply chains and economies, perhaps with a reversal of 30 years of globalization. These measures will have the effect of raising prices even more everywhere. The 2020 U.S. Census shows the country is much more multiracial and much more racially and ethnically diverse than in the past\. The 2020 Census showed: • • • • • • • The country’s population was miscounted by 18.8 million people. The country’s White and Asian population was overcounted. The number of White people in the U.S. fell for the first time since 1790. U.S. population growth was the second slowest in history (just 5% growth since 2010). Black, Hispanic, and Indigenous people were undercounted three times more than in the 2010 Census. The number of people who identified as multiracial increased from 9 million in 2010 to 33.8 million in 2020. The under-18 U.S. population is now majority people of color. 3 Law News For three years from 2018 through 2020, associate compensation was basically flat at Am Law 500 firms but was increased about 3% in 2021. In early 2022, Cravath announced its compensation grid which increased salaries for associate attorneys by 13% and many of the biggest law firms in the U.S. adopted the Cravath compensation grid. Elite firms increased associate compensation to protect their associates from being poached or from leaving to go inhouse in a corporate law department. Top performing law firms can afford to pay these increases, but at firms where compensation is growing faster than revenue, the new raises pose a financial risk which will get more acute at more law firms as the economy softens. And partners at non-elite firms oppose the large increases in associate salaries because they cut into partner compensation. About 20 Am Law 200 firms have offices in Russia. On March 9th, Am Law 100 firm Squire Patton Boggs announced it was pulling out of Russia: “it has become clear that it is no longer tenable for us to continue operations in Russia, and we have therefore decided to wind down our Moscow office.” Lathan & Watkins, Baker McKenzie, Sidley Austin, Morgan Lewis, Venable, Norton Rose, Linklaters, Freshfields, and Kennedys have announced plans to exit Russia. Eversheds and CMS said they were reviewing their Russian operations. Cleary Gottlieb will temporarily close its Moscow office. Debevoise said it was terminating several Russian client relationships and would not take on any new clients in Moscow. All these Big Law firms which.have done legal work in Russia face issues such as talent retention, public perception, partner profitability, ethical obligations to non-sanctioned clients, employee safety and livelihoods, and compliance with the rule of law. Brownstein Hyatt has formed a new practice group in its government affairs business practice to specifically help clients with infrastructure issues. The firm’s clients include both receivers of infrastructure funds (like Native American Tribes and local and state governments) and businesses looking to win government contracts. The Infrastructure and Jobs Act, passed late last year, provides $1.2 trillion in spending on a range of projects aimed at improving U.S. infrastructure in the broadest terms possible. The firm estimates its new practice group will be busy with infrastructure work for up to seven years. On March 11th, leaders in four Salt Lake offices of large national law firms – Peggy Hunt at GreenbergTraurig, Jess Krannich at Kirkland & Ellis, Matt Moscon at Mayer Brown, and Deno Himonas at Wilson Sonsini – discussed “The Changing Utah Legal Market” from the perspective of the local offices of their large national law firms. Highlights included: • • • The Utah offices of Kirkland & Ellis and Wilson Sonsini are charging national hourly rates and paying national compensation rates to associates in Utah. The Salt Lake offices of large national firms will not be full-service law firms but will have specialized practice groups which likely will differ from firm to firm in Salt Lake. The recent arrival of large national law firms in Salt Lake is similar to the arrival of regional law firms in Utah 30 years ago, which did not cause a disruption to local law firms. 4 • • • • The large national law firms in Salt Lake will increase billing and compensation rates in regional Salt Lake law firms and in large local firms. As a result, large local firms will become less affordable to some of their clients and probably will lose some priceconscious clients to smaller less-expensive local firms. The biggest, most-complex, and challenging legal work went outside Utah in the past, usually to out-of-state offices of large national firms. Now much of that work can be done in Utah or done here together with legal experts in other out-of-state offices of their firms. The large national law firms refer proffered legal work they don’t do, or can’t do profitably, to local Utah lawyers who do such work. Recruiting challenges for the large national law firms in Salt Lake include law student questions and misperceptions about high billable hour requirements, DEI commitment, work/life balance in large firms, and whether there are early opportunities for professional experience and development: o 1850 annual billable hours are standard among these four national law firms, which is about what many local law firms require. o The DEI commitment in the large national law firms is real. o Big Law has had to evolve nationally with respect to work/life balance to be able attract and retain legal talent. o Large national law firms have resources for advanced training and mentoring, much more than local firms. o They also mandate pro bono work by all associates, with up to 100 hours of credit against the firms’ billable time requirements, which gives associates early opportunities for professional experience. o These large national law firms also provide opportunities for new associates in Utah to work on significant sophisticated national cases, mentored by experienced partners and senior associates. o The access-to-justice problem in Utah is independent of these big firms’ business models and hourly billing rates and will not be increased by these firms. As the country emerges from the pandemic, law firms face the issue of where legal work will be performed: in person in the office; online from home; or a mixture of both. They also will face the issue of when will legal work be performed, e.g., will law firms allow flextime so that lawyers and staff can do some work during the day, take off for exercise or family responsibilities, and then do more work in the evening? As work-from-home showed during the pandemic, a rigid 9-to-5 schedule is not ideal for everyone and is not even necessary so long as all the work gets done. It is yet to be seen whether law firms will permit flextime for in-office legal work, and whether lawyers feel they can adopt flextime for in-person work performed in the office. 5