As the world teeters on the brink of recession, one could be forgiven for looking nervously at the seemingly booming state of the property market and recalling its catastrophic collapse following the last recession of the late 80s and early 90s -- a crash from which this sector took a full five years to recover.However, many commercial property lawyers suggest that history will not repeat itself and that although economic slowdown will hit commercial property prices and transactions, a crash of the same proportions is unlikely to occur.Martin Elliott, a partner in Linklaters & Alliance's real estate department, says: 'If there is a recession, there will be casualties with companies going into receivership and liquidations.

Receivers and liquidators will be looking to sell.

I suspect prices will come down in that situation.'Property is not insulated from the economy -- it will be affected, but at the moment with interest rates at the level they are and rental rates so high, we are not likely to see the disastrous effect we saw in the late 80s and early 90s.

There are differences and stepping back from it, property is looking much healthier.'Laurie Heller, a full-time consultant with Berwin Leighton Paisner, says: 'The stock market crashed in 1987, but it was around 1989 before property suffered.

When equity went down, money went into property and the market remained quite buoyant.

Then it all blew up and no one could get rid of it -- it took five years for it to recover.

This situation is not as bad as 1989.'Nick Brown, commercial property partner with CMS Cameron McKenna says: 'Historically, property tends to decline in the second wave, not the first, but everything happens more quickly nowadays -- it is more closely aligned.'Mr Heller says the commercial property market is 'very patchy' and not so buoyant -- particularly compared with last year.

With the economy showing signs of slowing down, fewer big property developments are planned, and many transactions are abortive.'Spectaculars' such as Sir Norman Foster's 41-storey tower -- dubbed the 'erotic gherkin' -- for insurance firm Swiss Re in the City of London, and his Music Centre by the Tyne in Gateshead, could be the last of their type to be planned for some time.

'I suspect people are quite fearful of the situation,' Mr Heller says.Some law firms, he adds, are already starting to cut their normal charging rates.

'I suppose some feel it is better to have some work at a lower rate than no work at all, so they undercut.

I've seen about three examples of this in other firms over the last month, and although this doesn't mean that it represents the whole, it indicates a trend.'Since the last property crash, says Mr Heller, commercial property lawyers have seen a big down-turn in the fees they can expect.

'Property used to be a more profitable section of the legal economy, with scale fees for work.

Now it's very cut-throat and clients always want you to drop the price.

It doesn't seem to have affected corporate work, and you look at the amazing figures generated by corporate work since the last crash and wonder how long it can last.

I suspect their day will come.'Mr Brown says his department is busy, but adds: 'One can't ignore that agents are talking about less activity in the recent past and people are pretty cautious.'All lawyers questioned agree that the US terror attacks of 11 September have had an effect on the market.

Mr Brown says: 'One transaction has gone off because of reasons directly related to that.

It became inappropriate to proceed.

I am aware of oth er transactions in which people have changed their minds.'David Wright, head of property at Nabarro Nathanson, says: 'Even before the dreadful events of 11 September there were signs of a slowdown.

Since then some purchasers have decided to put things on hold for a while to see what happens.

It acted as a catalyst -- some could be seen to have used it as an excuse to change their approach.

Some deals may undoubtedly take longer to close, but work is still flowing.'Mr Wright says that banks were left horribly exposed after their accelerated lending before the last property collapse in the early 1990s -- and hopefully they will not have forgotten the experience.

'A lot of property is now debt-financed -- whether that's going to carry on and they continue to lend -- we will have to wait and see.'He says that one positive thing that has emerged out of the substantial drop in the equity market is that there is now a 'strong argument' for pension funds to invest in property.Mr Elliott agrees.

He says: 'Property still looks to be a good investment.

You look at the gap between interest rates and levels of rental, and it still looks an attractive prospect.

It's difficult because the level of transactions has diminished as many investors are looking to contain what they have.

Clients have money set aside for buying property but they can't find the right product at the right price.'Commercial property is very much transaction-based but litigation does crop up -- some of it against lawyers when the economy is less buoyant.Mr Heller says: 'There is not much litigation in boom time, but when values go down people start looking for scapegoats -- there were a number of cases in the early 90s.

People make a bad investment and try and scrape some money back from lawyers.

Bad times lead to more work for litigators; it goes to show how the market moves in cycles.'If the slowdown continues, he says, it may be necessary for law firms to redeploy resources in their property departments.

'It's a question of practice management -- firms might have to cut costs.

If you don't want to make people redundant or lay people off, you have to redeploy your resources.'Disputes in the sector also arise over rent reviews.

Says Mr Elliot: 'There is always scope for litigation over rent reviews and we are already seeing increased activity in this area.

It's a way of keeping costs down.

In boom times, rent represents quite a low proportion of turnover -- but in times of slowdown, there are hard negotiations going on.'Mr Heller says proposals for legislation and regulation often crop in the commercial property sector -- frequently from the Law Commission -- but rarely make it through Parliament, as they are considered low priority.Some proposals make it through to the statute books though, and the lawyers agree that several in the pipeline at the moment will significantly change the way they do business.Mr Elliott says: 'At the moment there are proposals for documents to be capable of being signed electronically -- it has not yet got to the stage where it has been put into practice.

If that can be made to work in a satisfactory manner, it will speed up matters in property transactions.'Mr Wright says: 'There is a white paper out on e-conveyancing which -- if implemented -- will have a significant impact on the way things are transacted.

The aim is to speed it all up.'He adds that there is an ongoing debate over reform of the Landlord and Tenant Act 1954, with tenants arguing for contingency of security and the abolition of upward-only rent reviews, plans which landlords and investors, 'not unnaturally' are resisting.

The matter has yet to be decided.So how do UK property laws compare with other jurisdictions? Mr Elliott says there are important differences between UK property laws and those in place in Europe.'I have noticed in terms of the length of leases that on the continent there is a much greater acceptance of short-term leases, and often linked to the retail price index.

This hasn't really gained great acceptance yet here, but there has been a convergence over the last few years with our leases getting shorter, and it will be interesting to see whether this convergence continues.'Most lawyers seem cautiously optimistic about the future, at least for now.

Mr Brown says: 'In the next two years, in one way or another, we are going to see a good level of property work for firms involved in the full range of property transactions.

There will be less investment work, but there will be other types of work, which we are already seeing.

We can look forward to the next two years with cautious confidence.'