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The second act is finished.
Your hero is plummeting toward an uncertain confrontation with forces they don't quite understand, and under circumstances that are not completely under their control.
What now?
Third acts tend to be short, because if a story has been carefully constructed, and character motivations are clear, then there remain but few things left to accomplish. Yet you have very little space in which to accomplish the resolution of every conflict and idea contained within the story - hence the "Crunch".
Essentially, the entire reason for the story's existence is to lay the groundwork for all involved forces and persons to come together for the defining confrontational peak in Act Three. All indicators should point toward an inevitable, shattering climax. And your main character has no choice but to see it through to the end. Now you, the writer, are ready to yank away the final curtain and show us why we sat through the last hour-and-a-half.
Is your ending a big enough payoff to justify telling the story? Does the story logically progress to its natural climax?
One way to diagnose the health of your screenplay's last act, is to check for the Three Keys to Act Three.
In Act Three, the main character's entire methodology changes. They struggled and battled their way through Act Two, and all they got for their troubles was either pain, unhappiness, or the realization that what they did get, they now don't want. This not just a new understanding, but a radical re-evaluation of their entire approach, philosophy, or goal.
It's time for a change of tactics.
Let's look at how this works on a few films.
"Alien"
Realization: Hunting the alien down as a crew failed. Destroying the ship and fleeing failed.
New Tactic: Ripley must become the predator, and fight the alien one-on-one."Clockwork Orange"
Realization: Alex sees that his old way of life is gone.
New Tactic: Unable to commit violent acts because of the Ludovico Treatment, he must now adopt the role of the victim, rather than the aggressor."Jerry Maguire"
Realization: Jerry and Tidwell realize they need each other's friendship.
New Tactic: They will stay with each other no matter what.
Subplot Realization: Dorothy and Jerry both realize that they are unhappy without the other.
Subplot New Tactic: They must somehow make their relationship work again.
As you can see in the above examples, the change that occurs is a shift in point of view that enables the characters to engage their world on different terms. The character has come to believe that their old approach is ineffective, and they now see the necessity to try new methods.
It often happens that the new approach is worse that the old! This can often occur because the character is driven to extremes by the events of the story, and they react in an extreme way. A great example is how Carl, Billy Bob Thornton's character in "Sling Blade," deals with his circumstances. In the beginning of the film, when a reporter asks him if he could kill again, he replies, "I reckon I ain't got no reason to kill nobody." Yet by the third act, he does have a reason. By our standards, this choice may not be wise, noble, or the best solution to the film's dramatic problem. But to Carl, from a purely practical standpoint, murder becomes an inarguable necessity.
This perspective of acting from necessity is exactly what a main character should face at the end of the third act. Their experiences lead them to decide on a course of action that they must do, because no other choice seems available.
The "Demon" in question is not necessarily literal, but represents a problem that the character has wrestled with during the course of the story. In a layered story, this Demon typically has two components - outer and inner. The outer component, or external conflict is represented by the physical obstacles to the character's goal. The inner component, or internal conflict is the emotional or psychological obstacle that could not only prevent the character from reaching the goal, but also often hinders them from achieving any real satisfaction.
In the examples below, note that both the Inner and Outer Demons are simultaneously confronted when the story has a single plot, but that in a plot/subplot story such as "Jerry Maguire," they are typically separately confronted - in this case the plot addresses the outer conflict, the subplot the inner.
"Alien"
The Outer Demon: The alien.
The Inner Demon: Ripley fears loss of control.
The Confrontation: Ripley must give herself over to instinct - i.e. lose control - and simply react, fighting the alien head-on."Clockwork Orange"
The Outer Demon: All those who Alex previously wronged - notably the Writer.
The Inner Demon: Society's attempt to make Alex realize the moral consequences of his actions - literally embodied by the Ludovico Treatment.
The Confrontation: Alex has been conditioned not only against violence, but inadvertently against the music of Beethoven. The Writer subjects Alex to Beethoven's music, greatly amplified, and the effects of the Treatment force Alex to attempt suicide rather than hear it."Jerry Maguire"
The Outer (Plot) Demon: Jerry's struggle to get a big-money contract for Tidwell.
The Confrontation: Because of Jerry's words, Tidwell gives his all in a grueling Monday Night Football game, and he is knocked out.
The Inner (Subplot) Demon: Jerry's inability to give his all to Dorothy.
The Confrontation: Jerry rushes home to Dorothy, and gives a moving speech before Dorothy and her sister's women's group, in which he tells her he needs and loves her.
"Jerry Maguire" bends convention, which makes it such a wonderful film. Every element in the film is tied to every other. Jerry's outer conflict has subplot-like components. This is because Jerry's self-doubt, amplified by Tidwell's lack of heart makes his efforts to win Tidwell a better contract more difficult.
If you always think of the main character as having both outer and inner conflicts, you will never be short of material. This lesson is especially important to remember in the second act, where the inner conflict is given time to grow. First and third acts are usually so packed with information, it can be difficult to spend time on developing character.