Everyone knows the first reason why business travel will not immediately boom as the pandemic ends: It turns out that we didn’t need all those in-person business meetings after all!
Lawyers can look into prospects’ eyes and glean the essence of their souls by Zoom as well as the lawyers can at in-person meetings. (That may actually mean “not at all” in both situations, but that’s beside the point.) So long as in-person and Zoom meetings are more or less equal, there’s no reason to waste time and money on an unnecessary flight.
People have also realized a related reason why Zoom meetings are efficient: You can invite more people, from more locations, to attend. For law firms, that means that the head of the Chicago office, and the head of the securities litigation practice, and the head of litigation might all attend a one-hour Zoom meeting, even though all those people would never have flown to St. Louis for the same event.
Zoom meetings are perfectly good and much cheaper. Why should we go back to the way things were before?
But there’s a second, less obvious, reason why business travel will remain restricted as the world emerges from the pandemic: Quarterly reporting of financial results.
Many companies compare this year’s second quarter to last year’s second quarter, and the analysts look for improvement in year-over-year results.
During the pandemic, companies spent essentially nothing on business travel and entertainment. The comparison between this year’s Q2 and last year’s Q2 is going to look abysmal if the costs for travel and business entertainment jump from $0 in 2020 to $100 million in 2021. If companies want to look good during quarterly financial reporting, companies will have to minimize business travel to maintain favorable year-over-year results.
This doesn’t mean that business travel won’t ramp up over time. On the contrary: It means that travel will only ramp up over time. Travel will increase incrementally over several quarters, so there’s no noticeable blip in earnings.
That’s actually pretty funny. We’ll limit travel only in part because travel is tiring, time-consuming, expensive, and generally achieves little. All of those things are actual experiences that we live in the real world.
We’ll also restrict travel in part to ensure that year-over-year comparisons of financial results continue to look strong. That has little to do with what we experience in the real world, but a lot to do with how the world acts.
Mark Herrmann spent 17 years as a partner at a leading international law firm and is now deputy general counsel at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Drug and Device Product Liability Litigation Strategy (affiliate links). You can reach him by email at [email protected].