ROBERT VERKAIK DISCOVERS MANCHESTER RECOVERING FROM THE IRA BOMB OF 1996 AND LIVERPOOL DIGGING ITSELF OUT OF RECESSIONJune 1996 will be remembered in Manchester as the month the IRA tried to rip the heart out of the city.

The explosion left 49,000 sq metres of shops and 57,000 sq metres of offices badly damaged.

Nevertheless, within five months of the bombing, 640 of the 670 affected businesses had resumed trading.

For many Mancunian businessmen and women, next year's scheduled reopening of Manchester Corn Exchange, the building which felt the full force of the bomb, will mark a hugely poignant moment.

Other major post-bombing redevelopments are also coming on stream.

By the end of this year, Marks & Spencer, whose city centre store was also badly hit by the blast, will be opening a new megastore just outside the city -- the largest M & S centre in the world.

Chris Clifford, the Confederation of the British Industry's north west regional director, sums up: 'As a result of the IRA bomb the whole of Manchester had to be rebuilt.'Today, Manchester commerce, like businesses all over the north west, is facing up to other challenges of a global economic nature.

According to Mr Clifford, the region is currently suffering from a two-speed economy -- the steady growth in financial and professional services and the 'heavily hit' manufacturing industries.

A government study of the region published last month and entitled 'North West England: the forward looking region' remarked that the north west had a 'determination to think positively about future development and not live on its past glories.'As one of the country's major export regions this gritty determination will be sorely tested as it attempts to counter the impact of high-flying sterling.Mr Clifford is confident the region's manufacturing industries will succeed.

'It's a region which has a lot of traditional industries and there has been heavy restructuring in those sectors, particularly car making, pharmaceuticals, aeronauticals,' he says.

As the pound continues to soar, these industries are again in the direct line of fire.

Already a number of high profile companies have gone under.

Ironically, this has included a number of shopfitting businesses, many at the forefront of the bomb damage repair initiative.

These collapses, says Mr Clifford, are indicative of the high level of competition in the retail development market.Manchester also faces a severe skills shortage.

This has led to a Manchester Training and Enterprise Council (TEC) initiative to establish a new skills taskforce.

Says Manchester TEC's research manager John Harrison: 'As skill shortages are a constantly changing problem, the TEC intends to survey its members and the wider business community every three months.' He says the taskforce will also look at associated issues such as low wage rates and the perceived unattractiveness of certain occupations.Manchester is the centre of the largest concentration of IT-related industries outside the south east.

As industry makes preparations for the impact of the millennium computer bug, when systems could fail to recognise the 1999/2000 date change, IT wages have spiralled and IT consultants cherry-pick the best jobs.

To counter the impact of the bug, the region's leading education centres in partnership with Manchester TEC have begun plans to build a £1.2 million centre of excellence for IT skills.

The new centre will be running next year.It is the twin dominance of Liverpool and Manchester which characterises the economics of the region.

No other English region has two major conurbations in such close proximity.

While Manchester is making great strides towards realising its dream of being regarded as a truly international city, Liverpool has been taking smaller steps.After the disappointment of not being selected as the host city for the 2000 Olympics, Manchester is gearing up for the Commonwealth Games in 2002.

Its airport is already the fastest growing one in Europe, handling 16 million passengers a year.

The controversial terminal three project is also well under way.

Trafford Park, the £400 million Manchester out-of-town shopping and business centre where many of the bomb-damaged companies have relocated, is scheduled to open in two months.

Inward investment is also prominent in the region.

Earlier this year, the Japanese-owned computer manufacturers, ICL, announced a multi-million pound joint venture with software giant Microsoft.In Merseyside too, there is also evidence of new developments and joint ventures.

This year, four finance companies and institutions have announced major new communication centres in the Merseyside area.

Abbey National, Norwich Union, HSL and Capital Bank, a subsidiary of the Bank of Scotland, have contributed to a total cash investment of £50 million and a commitment to create 3,000 new jobs.The £9 5 million Queen Square development in the heart of Liverpool is one of the largest urban re-development schemes in the country.

The flagship project is a 150-bedroom four star Swallow Hotel.The home of the Beatles is also planned to be the site of 100-bedroom Fab Four-themed hotel called 'A hard Day's Night'.

Liverpool's own airport has just secured deals with two of the country's biggest holiday operators, Thomson and First Choice, which could lead to a doubling in passenger numbers -- an annual passenger turnover of 500,000.

The Mersey Docks & Harbour Company is also pressing ahead with £50 million worth of development.

Perhaps most significant has been confirmation this year that Merseyside's Ford Halewood car plant will be the home of the new 'baby Jaguar', an investment worth around £400 million.

One of the key organisations to Liverpool's resurgence has been the Merseyside Partnership which has helped attract a great deal of outside investment by not only promoting the region but by providing hands-on help.

It is one of the largest public/private sector-funded organisations of its type.

Merseyside Partnership chief executive Christopher Gibaud: 'There is a new feeling of optimism here.

Major businesses are relocating to and growing within the region.

Business now has confidence in the people of Merseyside.

That is why companies such as Jaguar, Capital Bank, Abbey National and Norwich Union are now heavily investing here.'The partnership's membership boasts a number of law firms.

These include Berrymans Lace Mawer, Dibb Lupton Alsop, Hill Dickinson and Davies Wallis Foyster.

In fact, lawyers are playing a much greater role in the commercial development of the whole region.At the forefront of the CBI's initiative in the north west is Paul Lee, senior partner of Addleshaw Booth & Co, who takes over as chairman of the CBI regional council for two years in November.

Mr Clifford explains: 'One of the reasons we appointed Paul was to reflect the growing importance of that kind of membership in the CBI and the north west region.' After all, adds Mr Clifford, Manchester claims to be the second most important city in the UK for professional services.PRESTON REGIONAL OFFICEThe Preston-based north west regional office of the Law Society celebrates its tenth anniversary this month.

The first such office to be established, the Preston base covers a region with more than 8,500 solicitors working in 2,650 offices.Speaking at the anniversary celebrations Michael Matthews, Vice-President of the Law Society, said: 'The Preston office has set the standard for the development of regional offices.

Under David Sharples's leadership, the office has been involved in a number of high profile campaigns for local solicitors.

I am delighted that the north west office has built a strong link not only with the profession but with the community as a whole.'The office provides support and information to individual solicitors, acts as a channel of communication between north west solicitors and the Law Society, provides training for solicitors, promotes the interests of solicitors within the region, deals with enquiries from local journalists and maintains contact with the north west's MPs and MEPs.-- The north west regional office can be contacted on 01172 561 114.MANCHESTER FIRMS ARE THRIVING TO THE POINT WHERE THEY ARE RIVALLING LEEDS AND LONDON COUNTERPARTS FOR WORKS, REPORTS MIKE YUILLEAt first glance, Manchester and Dubai seem to have little in common unless one has a passion for real ale and sand dunes -- or works for Berrymans Lace Mawer.The merger between London-based Berrymans and the north west empire of Lace Mawer in May 1997 created a law firm with a big name in insurance and construction.

The Manchester office, roughly a third of the 600-staff firm, is a powerhouse for insurance litigation.

Apart from six other UK offices, the firm has a base in Dubai -- which serves as an important gateway to lucrative middle-east construction contracts.Berrymans Lace Mawer's dynamism reflects that of the legal market in Manchester as a whole.

After a flurry of big mergers, which coincided with a boom in corporate and finance work during the last two years, and some reorganisation in the existing commercial practices, Manchester now has a commercial law sector to rival that of anywhere outside London.

'The city is beginning to punch its weight, and is now a centre of excellence,' says Paul Nicholls, managing partner of Dibb Lupton Alsop's Manchester office.There are less than ten firms that stand out as pure commercial practices.

The biggest two were created by mergers: Addleshaw Booth & Co (from Manchester's Addleshaw Sons & Latham and Leeds's Booth & Co), and Dibb Lupton Alsop (from Manchester's Alsop Wilkinson and the ubiquitous Dibb Lupton Broomhead).Addleshaws continues to pride itself on having the purest and strongest corporate practice which, it maintains, attracts some of the biggest clients and corporate deals.

It is also the largest, with 16 partners and 45 other fee earners.

Senior partner Paul Lee says: 'We act for 35% of the north west's large private and public companies.

No-one gets near that.'But Eversheds says it may handle more corporate work than Addleshaws.

Danny Hall, corporate partner, says: 'We've done fantastically well.

Discloseable deals last year totalled 93, worth some £2.6 billion, and we have 20 listed clients.'Mr Lee is ready to acknowledge the rapid growth of his firm's rivals, and their penetration into areas of work Addleshaws once regarded as its own preserve.

'We are in no sense self-satisfied or resting on our laurels,' he says.

That is perhaps just as well.

Addleshaw Booth & Co faces growing competition in Manchester from the influx of 'national' firms -- Hammond Suddards and Eversheds, as well as Dibb Lupton, which have moved into to exploit Manchester's lively economy.

While these newer offices may not have the corporate depth of Addleshaw Booth & Co, they sell themselves on their diversity of expertise and national coverage.A good indicator of the threat of this invasion, as well as of overall financial performance of the leading firms, is the annual 'law review' published by the Manchester Evening News each May.

According to figures supplied by the city's 16 biggest firms, the review shows Hammond Suddards as the fastest-growing firm for the second year running.

Seven firms achieved turnover growth of 20% or more, on gross fee incomes of between £7 million to £17 million.The firm achieved 40.6% growth in turnover to £13.6 million, making it the third-biggest biller after Dibb Lupton Alsop, with £15.34 million and Addleshaw Booth & Co, with £16.64 million.The big two grew at around 10% and 6% respectively.

Hammond Suddards, which only set up in the city five years ago, grew by a record 30% on the previous year.

In terms of corporate deals, all the big firms report a significant increase in both volume and size.

Paul Nicholls, of Dibb Lupton Alsop says: 'Where deals of £15 million to £20 million were once average, now £100 million-plus deals are becoming the norm.'Some are much bigger.

Hammond Suddards' s Manchester team is handling this month's £400-million flotation of Torotrak, the automotive transmissions business spun out of engineering group BTR.

Eversheds handled US chemicals giant Du Pont's £1.8 billion acquisition of the ICI chemical business, probably the biggest ever deal for a firm in the city.Manchester's home-grown talent say the national firms have attracted public attention to the regions and so are helping divert work which might otherwise have continued to be fed into London.

'We feel we have not lost out at all,' says Mark Halliwell, a Halliwell Landau corporate partner and son of one of the founders.Halliwell Landau's turnover grew by almost 24% to £13.3 million.

And with 43 partners and more than 130 fee earners, it has doubled in size in three years by purely organic growth.

Apart from the usual mix of corporate and venture capital work (62 deals worth £640 million last year), it is making a name for itself with 'public to private' deals -- institutional buy-outs of public companies.

It is also starting to challenge Berrymans Lace Mawer over insurance litigation business, having increased turnover in this sector by 250% over two years.Cobbetts, meanwhile, is probably the strongest northern firm in commercial property, an area which provides around 55% of the firm's fee income.

Cobbetts is known in corporate work for majoring in owner-managed businesses.Mike Shaw, managing partner, says instead of trying to compete in every area of work with the biggest firms, Cobbett's approach is now to develop expertise in high-value niche areas while continuing to run other services 'at a maintenance level.' He says: 'The three core things for businesses are people, property and IT.'Beyond the largest firms, another corporate and finance practice that stands out is Chaffe Street.

Small, with less than 30 lawyers, it is nonetheless, 'well-respected for its high standards,' says a managing partner from a competing firm.Speculation continues about future mergers of Manchester firms, over Cobbetts in particular, and there is talk of Pinsent Curtis looking for such a firm.Cobbetts and Halliwell Landau called off their own wedding plans a little while ago.

Neither would rule out such a move in the future, but both say they are set on saying independent and growing organically.

Meanwhile, 60-lawyer Vaudreys, known for strengths in personal injury and property work, is set to merge with Wansbroughs Willey Hargrave some time this autumn.AFTER YEARS OF BEING IN AN ECONOMIC TROUGH, LIVERPOOL IS EXPERIENCING A PERIOD OF SOLID GROWTH, PAUL ROGERS FINDSWhen two cities are stuck just 35 miles apart, their rivalry is likely to resemble that of neighbouring dogs, with the smaller one doing most of the yapping.

But Liverpool has stopped barking at Manchester, largely because it is busy gnawing on the first solid economic resurgence it has seen since the 1970s.Appropriately, for a city that has always faced the sea, the most common term used to describe the current climate is 'buoyant'.

Not booming -- that would be too much to ask for -- but with solid growth across the board.

The days when local government was in the hands of militants and Merseyside workers has ended.

And a flood of European Union money under the Objective One Status -- a programme for the most needy European regions -- has swept Liverpool into a new era, according to the city's economic development unit.

The cash from Brussels is fuelling property developments along the old docks and at the airport, and it is drawing private sector funds after it.

The result has been an increase in business for solicitors specialising in corporate or property work.Michael Prince, regional managing partner at Dibb Lupton Alsop, the largest player in the city's corporate legal sector, points to the £21.5 million flotation of ship repair and conversion company Cammell Laird a year ago and its purchase of the Gibraltar shipyard.

'It's gone from strength to strength ever since,' he says.

And it is not the only big deal.

'We've done some worth more than £100 million, although most are in the £5 million to £10 million range.' The firm recently helped MTL, formerly the government-owned regional transportation company, sell off its London bus business for more than £40 million.Dibb Lupton Alsop, formed just 18 months ago, combines the leading Liverpool firm with a strong partner from Manchester, giving it considerable depth of expertise to draw upon.

But other firms are also reporting an increase in corporate business.

Mark O'Connor, managing partner at Liverpool's Davies Wallis Foyster, which grew out of a similar, but smaller merger in 1989, says his firm's corporate business grew by 20% last year.

'And we estimate we'll have 10% to 15% growth again this year,' he adds.Liverpool's economy is not only smaller, but structurally different from that of its larger rival.

While Manchester went in for manufacturing, Liverpool stuck largely to trading.

Manchester's businesses are more likely to be PLCs, while Liverpool's are mostly family run, sometimes with the third or fourth generation of managers at the helm.

As a result, Manchester has 35 to 40 legal partnerships that could be counted as key commercial players, while Liverpool has only half a dozen.

The recovery now underway will not change the shape of the Merseyside economy overnight, but it is having an impact.Often quoted as a significant influence is the Merseyside special investment fund, which is partially backed by the European Union under Objective One.

It has a total fund of £10 million and says it is looking at making anything up to 40 investments.

'It's noticeable at the smaller end of the corporate market,' says Terry Montague, the partner who runs the commercial division of Berrymans Lace Mawer.The bureaucratic confidence in Liverpool is prompting other outsiders to take a fresh look at the city's economic prospects, argues Mr Montague.

'We are seeing other investments coming in,' he adds.

'One of the expanding areas is service type business.

We act for several that are starting call centres.'This upturn could be expected to draw the attention of the big players in Manchester, but local solicitors claim they have lost little, if any business to their rivals.

One reason is that Scouse businessmen are reluctant to give any work to Mancunians that can be done closer to home.

A more telling point made by Tim Polding, corporate partner at Lees Lloyd Whitley, is that legal services in Manchester can cost 50% more.

'Over the last 12 months we've seen an influx of commercially-oriented work from clients who see they can get a similar level of service cheaper than from our colleagues in Manchester,' he says.

'For businesses based predominantly in the north west, Manchester and Leeds are pricing themselves out of the market.'On the property side, the two major developments are along the waterfront and near the city's airport.

Mersey Docks and Harbour Company has done deals with David McLean Group, a developer, for a new five star hotel and conference centre, office blocks, parking and shops at Prince's Dock.

Meanwhile, the city counc il and English Partnerships are working on the Speke Garston Development, which will include warehouses, manufacturing facilities and offices.

Other developments include the new Conservation Museum and Conservation Centre, the Queen's Square development and a proposed building for accountants KPMG at Pierhead.Like most major port cities, Liverpool has a well established insurance industry, and the legal services to back it up.

Recent changes in that market have created some losers, especially among smaller firms, but also some big winners.

As the insurance industry consolidates through mergers and acquisitions, the resulting, larger companies are looking to reduce the number of lawyers who handle their litigation.

Size is an important factor in remaining on the insurers' panels, but not the only one.

'You have to have strength in depth,' said one partner with a major local firm which did not wish to be named.

'If you've got a lot of cases through the door in any one week you have to have a slick system so that you don't have any bottlenecks.'Liverpool has also developed as one of the top three or four cities with an expertise in employment law.

And that too is likely to result in dramatic gains in the near future.

After consultation on the Fairness at Work white paper this month, the Labour government is widely expected to introduce legislation to remove the current cap of £12,000 on unfair dismissal claims.

'There will be a lot more at stake financially.

It's conceivable that an industrial tribunal could create a millionaire,' says Martin Edwards, partner and head of employment law at Mace & Jones.

Both companies and their former staff will be looking for the best advice possible, and Liverpool is well placed to provide it.A perennial problem for Liverpool firms is the fight to attract top talent.

Not only do they have to pay competitively, but they have to persuade young lawyers with five to ten years experience that the quality of work they would be doing would be as good as anywhere else.

Convincing a Londoner of that is still hard, but at least now locally bred solicitors are not automatically decamping to the square mile to pursue their fortunes.Old seadogs always keep one eye on the horizon.

Viewed from Liverpool it is not entirely cloud free.

Money from the European Union will eventually run out, although most Liverpudlians believe the current programmes will be replaced with new, perhaps smaller ones rather than abruptly scrapped.

More significantly, the UK economy as a whole could slip into recession.

The recent nationwide downturn in manufacturing, as a result in part of the high value of sterling and gently rising interest rates will hit other areas more directly, but no-one in Liverpool believes they are immune.Law firms elsewhere in the region are also benefiting from generally better economic conditions, although larger corporate deals do tend to gravitate to the regional centres of Manchester and Liverpool.

Aaron & Partners in Chester, Brabner Holden Banks Wilson of Preston, Taylors in Blackburn and Walker Smith & Way of Chester are the main local players doing corporate work.Chester in particular has been developing a reputation as a centre of expertise in agricultural law, with Walker Smith & Way leading the field in contentious cases and Birch Cullimore concentrating on property matters.

The city is also strong in family law, with five firms specialising in, among other related issues, high-value divorces.Hill Dickinson (inc Wayman-Hales), one of those five, resulted from a merger in May last year bet ween Hill Dickinson and its Chester-based rival Wayman-Hales.Blackpool, on the other hand, still shows little sign of emerging from the recession of the early 1990s.

Most of the local business is tourist based, with much of the commercial instructions revolving around landlord-tenant issues.