The American Bankruptcy Institute hosted its annual spring meeting last month in Washington, D.C. and with over 20 panels, there were a variety of discussions around current trends not only in bankruptcy, but in the world economy as well. Topics discussed included the current state of the economy, the use of AI within bankruptcy and the commercial real estate market.
The Economy
Throughout the four-day meeting, a common topic of discussion across the panels was the current political and policy trends that are impacting the economy and how these changes are creating high levels of uncertainty for Americans. With the global tariffs causing major uncertainty for people around the world, there were major discussions about how this change will impact businesses, investments and consumption.
Panels also discussed how there will be expected pressure from the higher levels of government debt globally and how interest rates will likely remain high.
Generative AI and Billing
Artificial intelligence has been a hot topic in industries around the world. At the ABI meeting, there were discussions around the ethics of AI use in law firms and what prompts the correct time for firms to use it. In an article from Law360, Nancy Rapoport from the University of Nevada, Las Vegas William S. Boyd School of Law spoke about how law firms may not be able to avoid the impacts of AI as clients begin using it to write first drafts of documents, with lawyers polishing them up.
Many law firms may have to look at their processes as clients begin expecting more efficiency from the use of AI. In the Law360 report, an example given was how clients may question the number of associates used on a task that could be completed with AI. This may create difficulty in billing and how firms generate revenue.
Real Estate
One panel at the meeting discussed the foreseeable future of real estate lenders as office space and retail spaces see the highest closing rates since 2020. With tariffs causing disruptions in product supply and corporations refusing to pay the newly imposed tariffs, some stores are facing empty shelves and reduced inventory. Businesses may have to consider closing more stores with the increased cost of products and the impact of tariffs.
Commercial real estate is continuing to face impacts of the COVID pandemic and the shift to remote work. Across the classes of properties available for lease, only 30% of the newer, high-end Class A properties are fully leased, 50% of slightly lower Class B properties are fully leased and the rates are even higher for Class C properties. Many real estate lenders may have to begin looking at their properties and how to navigate the difficulties of leasing their properties.
If you are facing financial burdens and are uncertain about what your next step should be, the attorneys at Sader Law Firm are available to answer questions and determine if bankruptcy may be the best course of action for you. Contact us at (816) 561-1818 for a free phone consultation and learn more about what actions might be your best decision.