Zachary Swartz, Partner, Real Estate Capital Markets and Mergers & Acquisitions, Vinson & Elkins LLP
By Zachary Swartz
Recently, economic and market volatility seem to have become the norm, rather than the exception. While current events could cause even the most seasoned lawyer’s head to spin, in-house legal departments have an important role to play in helping their boards and management teams navigate their companies through these uncertain times.
The Only Certainty is Uncertainty
Following President Trump’s announcement of sweeping tariffs on April 2, 2025, global stock markets experienced a significant downturn and increased volatility. Markets declined at a rate that hadn’t been seen since the 2020 market decline, which occurred during the recession caused by the COVID-19 pandemic. A week later, President Trump announced a 90-day decrease to 10% on all tariffs except those imposed on China, which caused markets to surge.
Although the volatility in the market continued following the announcement of the 90-day pause, as of this writing, markets had generally recovered to levels close to where they were on “Liberation Day,” and the VIX, a popular measure of stock market volatility, had decreased to a more “normal” level. However, longer-term uncertainty still exists with respect to the economy, particularly around inflation and interest rates. The economy appears to have remained resilient with low unemployment and strong consumer spending, but there are fears that a tariff-heavy trade policy could cause inflation to spike, which would suggest that the Fed could keep rates higher for longer; but then again, if the economy tips into a recession, the Fed could be pressured to bring rates down.
This general economic uncertainty comes at a time where significant geopolitical uncertainty continues to exist as well. President Trump continues to attempt to broker a peace deal between Russia and Ukraine, but has also suggested that such a deal is “maybe…not possible.” Conflicts in the Middle East continue to rage on, and evidence of fractures within the Trump Administration over the Israeli-Hamas conflict and U.S. relations with Iran have created additional geopolitical uncertainty.
And while trade and geopolitical developments continue to take up the lion’s share of the front page news of many media outlets, a significant amount of uncertainty exists with respect to domestic regulatory policy as well. While the Trump Administration has already taken steps to begin the implementation of its deregulatory agenda, a number of the President’s key political appointees have either only recently been confirmed, are awaiting confirmation, or in some cases, haven’t even been nominated yet. This likely means that significant additional regulatory changes can be expected in the coming months.
What Should In-House Counsel Do?
The phrase “markets hate uncertainty” has been used so often that it’s difficult to attribute it to any one person. And the uncertainty outlined above has certainly had an effect on markets – deals have been pulled or delayed, plans have been changed, and the phrase “wait and see” has been uttered on more than one occasion.
But taking a “wait and see” approach is generally not a luxury afforded to in-house lawyers. There are a number of actions legal departments can take to help their companies navigate volatile times. Here are some suggestions:
- Stay Informed. In an environment where trade policy can seemingly change from one minute to the next, it’s important for in-house lawyers to map out where and when they will obtain information on current events. Someone should be tasked with monitoring developments in the areas most material to the company’s business.
- Establish a Cadence With Your Management Team and Board. Regularly scheduled periodic meetings may not occur often enough for information to be shared between the legal department and the business team. At the board level, ad hoc special meetings of the board may need to be scheduled in the event of material developments between regularly scheduled board meetings.
- Know Your Documents. In times of uncertainty, it is imperative for in-house counsel to have a thorough understanding of their company’s key documents, including contracts, entity organizational and governance documents, and compliance materials. This knowledge can facilitate informed decision-making on tight turnarounds.
- Evaluate Key Relationships. Companies should assess their key relationships and determine whether those third parties themselves are prepared to deal with economic, market, and geopolitical volatility. In-house legal departments or business teams very well may need to rely on external support in turbulent times, so there is benefit to stress-testing (and, potentially, diversifying) those relationships in case they need to be called upon.
- Formulate Action Plans. Legal departments should consider whether they can formulate a range of possible outcomes in connection with any material uncertainty affecting their company. If so, consider whether a range of action plans can be created ahead of time in the event of the occurrence of any of these potential future outcomes. Tabletop exercises – where participants discuss their roles and responses to hypothetical scenarios – could be done to test and refine action plans, identify potential gaps, and improve communication and coordination.
- Communicate With Investors and Other Stakeholders. If your company has outside investors, in-house counsel should consider how the company should communicate with those investors in the current environment. Public companies need to carefully consider applicable securities laws in connection with their communications with investors, including Regulation FD. Talking points could be formulated for purposes of external communications.
- In-house lawyers can take the lead on educating and training board members and affected employees on new developments and the company’s potential responses. In addition to better positioning the company for dealing with unexpected developments, these training sessions can also foster buy-in across the entire organization and ease employee concerns.
Conclusion
In today’s environment, uncertainty is inevitable — but unpreparedness is not. In-house legal teams sit at the crossroads of risk and strategy, uniquely positioned to help their organizations anticipate disruption, adapt quickly, and communicate clearly. By staying proactive, informed, and connected across functions, legal departments can provide the stability and foresight their companies need—not just to weather the storm, but to emerge stronger on the other side.
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