SOUTH OF ENGLAND: THE FACTSThe Law Society's Annual Statistical Report 1997 showed:-- There are 2,009 firms employing 6,630 solicitors in the south east (Kent, East and West Sussex, Surrey, Hampshire, Berkshire, Oxfordshire, Buckinghamshire, Hertfordshire, Bedfordshire and Essex)-- The average number of partners for firms in the south east is 2.7ROBERT VERKAIK LOOKS AT THE HEALTH OF THE BUSINESS COMMUNITY IN THE SOUTH AND FINDS BRITAIN'S SILICON VALLEY BOOMINGThe most serious threat to the booming economy in the south of England is a severe labour shortage.

This is a problem faced across the board from the professions right through to the manufacturing industry's shop floors.

It is an ironic turnabout from the early 90s recession when the region never quite came to terms with the ravages of unemployment on its own door step.'Recruitment is a horrible problem at the moment,' says Mark Sharman, policy unit manager for the Thames Valley Chamber of Commerce.

'Everybody is reporting problems.' He admits some of it is a skills shortage but he also maintains there is a straightforward labour shortage where employers 'simply can't fill the vacancies available'.Newbury, found in the middle of the affluent M4 corridor -- Britain's answer to the US's silicon valley -- now has the lowest rate of unemployment in the country, down to just 1%.

The rest of the Thames Valley is similarly short of workers and has an average unemployment rate of 1.5%.

Mr Sharman says: 'This is actually below statistical full employment which is 2.5% that is needed to create fluidity in the recruitment market place.'The situation has become so serious that recruitment agencies and head-hunters are now beginning to target the unemployed and those who have settled for retirement.Humana International, a head-hunting agency, has 75 offices in the UK covering 90 different sectors.

Humana founder and managing director Doug Bugie explains: 'A lot of people in their forties and fifties were axed mercilessly in the last recession.

A great deal of talented people were cut down in the prime of their careers.'Mr Bugie says that in the south these people can still be found 'at home, consulting in temporary jobs or just off the radar screens.'The Thames Valley -- Buckinghamshire, Berkshire and Oxfordshire -- has been the country's greatest beneficiary in the explosion of the high tech an d computer industries.

It is home to two million people, with 50,000 businesses and a GDP of £22 billion.

The list of companies located in the south east's silicon valley reads like a who's who of computer household names and includes, Microsoft, Hewlett Packard, Dell and IBM.

And latest figures released for the region show that these companies are very confident of their future economic prosperity.

In its most recent survey, the Thames Valley Chamber of Commerce found 90% of manufacturing companies reported that their turnovers and profits would either remain the same or improve in the coming year.

The service industry reported similar figures.A high proportion of the high tech products produced in the Thames Valley are for export.

But by and large, reports the Chamber of Commerce, it has avoided the fall in trade normally associated with a strong pound and which is being experienced by the rest of the country.Solicitors too are playing their part in moulding the economic fortunes of the region.

In addition to the valuable provision of a commercial/legal resource, five solicitors sit on the Thames Valley Chamber of Commerce council, the chamber's business forum and policy-setting committee.They are Richard Benz, of Kidd Rapinet, Chris Cope from Copes Solicitors, Rob Jonckheer of Manches & Co, Paul Lucas of Lucas & Co and John Harding of Harding Forsdike.

Says Mr Sharman: 'Because solicitors are in touch with a lot of businesses themselves they hear a lot about the issues that affect business and therefore they are very useful to us in feeding information on to the council.'Not all parts of the south have achieved the same levels of economic growth as the Thames Valley.

In areas of Kent and Sussex, such as the Isle of Thanet, Brighton and Hastings, unemployment is still a serious problem.

Thanet, in eastern Kent, is the only area in the south to be designated by the government as a locality seriously affected by industrial decline.

In Hampshire, cuts in defence spending have taken their toll around Farnborough, Portsmouth and Aldershot -- homes to the Royal Air Force, Navy and the army, respectively.

Hampshire now has the south east's lowest estimated GDP for the next three years at 1.8%, compared with the UK average of 2.4%.Nigel Bourne, south east regional director of the Confederation of British Industry (CBI), says the combination of seaside unemployment and the leafy lane affluence of counties like Surrey, creates a widely contrasting region.The recent uncertainty over the future of a high speed channel tunnel rail link has raised doubts over the future of a high tech channel tunnel corridor to challenge that of the Thames Valley.

'There is quite a lot of concern from businesses, particularly in Kent.

First, that it has taken this long to get this far and secondly that after getting this far there is now suddenly a major hiccup,' says Mr Bourne.The London & Continental Railways consortium is still in negotiation with the government regarding the funding of the link.

But the regional CBI is concerned that even if a new agreement is reached, perhaps with another consortium, the developers will build the cheap part of the link first -- from the tunnel to the outskirts of London, and put the final, more costly stage on hold.

'What invariably happens is that the expensive bit never does get done or just becomes increasingly more expensive until it becomes prohibitive,' says Mr Bourne.Nevertheless, even without the high speed link, the channel tunnel has already had a commercial impact in the region.

T ransport businesses and the tourist industry have been the main beneficiaries and continue to flourish.

But more surprisingly, the tunnel has also acted as a spur to French companies -- already attracted by the UK's low labour costs -- to relocate to Kent.Mr Bourne says a number of mainly French manufacturing companies have already crossed the channel to set up new headquarters around the market town of Ashford, site of the new international railway station.Inward investment from farther afield is also beginning to take hold in the region.

While Mr Bourne acknowledges the south east does not have the heavy manufacturing tradition of other parts of the country, it is proving attractive as a base for foreign companies servicing their industrial investment in other parts of the UK and into Europe.RACHEL HALLIBURTON FINDS LAW FIRMS DOING GOOD BUSINESS IN THE HOME COUNTIES AND A THRIVING LEGAL CENTRE IN SOUTHAMPTONThe white cliffs of Dover provide the backdrop to some strange activities as far as local criminal solicitors are concerned.

'If you're on a duty solicitor scheme, you could spend 24 hours a day down at the docks dealing with smugglers,' says John Eyley, president of the Dover, Deal and Sandwich Law Society.

Mr Eyley gave up being a duty solicitor because it took too much time away from his work at Deal law firm Emmerson Brown & Brown, dealing with family, probate, divorce, and conveyancing law.But he still remembers, as well as the usual smugglers' fare of drugs, cigarettes and pornography, the couple who brought through 'an old Volvo, filled with so much booze you could have run a pub for a week.

If you let the clutch out, you could hear the clank of glass.'Bradleys, one of the largest firms in the area, also deals with a lot of crime from the docks.

But like most other firms around Dover, it also provides a comprehensive service, covering criminal, matrimonial, probate, and commercial law.

Mary King, the partnership secretary explains that during the past year, the firm has developed a strong specialisation in immigration -- which is surprisingly rare among the firms close to the largest port in England.Stilwell & Harby, one of the other large firms, does not handle asylum applications, but is frequently called down to the docks in order to deal with illegal immigrants.Further along the coast in Brighton, Donne Mileham & Haddock, one of Sussex's leading law firms, specialises, unsurprisingly, in shipping.

This however, is swamped into insignificance by the size of its large commercial litigation section.The firm has another branch in Crawley, and both handle large amounts of corporate finance and commercial property work.

Martin Allen, a partner with the firm, paints a picture of its rapid expansion.

In the last year alone, it has increased its financial turnover by 15%.Another pre-eminent firm in commercial litigation is Tunbridge Wells firm Cripps Harries Hall which also has a large private client investment business department.

This area of litigation makes up 22% of its annual turnover, while it also handles professional indemnity cases.

Bond Pearce, based in Plymouth, extended itself into the Southampton area in 1995 when it took over the Boodle Hatfield office based there.

During the last couple of years, it has used its coastal base for legal work connected to international pipeline and sewer outlets into the channel.

It has many clients among the strong business community in Southampton, and has acted for a high percentage of disposals and management buy outs.

The firm's insolvency de partment has a reputation for being one of the strongest in the south east.It is Blake Lapthorn, however, which is the county's greatest heavyweight, with the largest corporate and commercial department.

From 1996-97, the firm as a whole boasted a 27% increase in profits.

In the area of commercial property, it has dealt with retail development, licensed property work, agricultural property, and work for residential developers.

In crime, it has a particularly strong reputation for dealing with tax fraud.While some of the firms located near the coast find the sea brings in business, others find it a hindrance.

John Ball, former president of the Hastings and District Law Society, says that operating on the coast, 'we only deal with an arc of 180 degrees, as opposed to 360 degrees.

This cuts us off from clients.'Nevertheless, his firm Fynmores has a lot of work, largely in the probate area, because Hastings is 'a high retirement area'.

The solicitors here find that business can overlap with the personal, as they go against the fat cats image, visiting clients who have no relatives to take care of them.

Fynmores, as a high street firm, also has a large litigation department, and caters for some field sports and equine law cases.Further away from the sea, Thomas Snell & Partners lays claim to being one of the oldest, if not the oldest solicitors' firm in England, having been founded in 1570.

It is perhaps understandable, therefore, that its chief executive John O'Connell says it has one of the strongest client bases in Kent, and a large matrimonial department.

Professional negligence is also one of its key areas, while it has four partners dedicated to commercial work.In Eastbourne, family work is also a priority.

Leta Kerin, a partner at Stephen Rimmer & Co, says the firm's specialisation is in childcare work.

She says: 'We also have a specialist personal injury section, which is unusual for this area.' Towards London, in the depths of the commuter belt, firms such as Bells in Kingston do a lot of work with property.Paul Marsh, a senior partner at the firm says: 'We specialist in leasehold and in franchisement -- there is a strong market for flats in south London.'As well as covering a wide range of areas, in litigation, commercial and conveyancing law, the firm deals with some unusual probate tax-related work.

Mr Marsh explains: 'If, for example, someone living abroad dies, and has property in the UK, there can be problems of tax.

This is the kind of thing we deal with.' FB Jevons, Riley & Pope, and Warners, in Tonbridge, also have strong probate sections, and focus on private work.

Julian Watson, a partner at Warners, says: 'We're constantly trying to beef up the private client and commercial property work.

We also do a lot of company commercial work.'The south east, therefore, is filled with tensions between bids towards establishing a strong foundation within the community, and stretching towards London with large scale commercial, and property work.

As transport links and computer links improve and become more flexible, these tensions are going to increase.

It is then that the competition will really start.FIONA BAWDON SEARCHES OUT THE QUIET COUNTRY LIFE WITH SOLICITORS IN OXFORDSHIRE, GLOUCESTER AND WILTSHIRE'Is it about Rotary business?' I was asked when I called to speak to a partner at one Gloucestershire firm.

Yes.

It seems legal life in the shires is different from that in some big conurbations.

But lawyers in areas like Gloucestershire, Wiltshire and Oxfordshire warn that London lawyers s hould not underestimate them just because of their cosier, more traditional image.

Provincial firms say they are increasingly winning top quality work away from London firms who, because of higher overheads and geographical distance, are finding it more and more difficult to compete.Oxfordshire Law Society Vice-President and Law Society Council member Michael King says: 'I can never understand why clients go to London firms when they can come to Oxford.

We can give as good a service, or better, and we don't charge £200-plus an hour.'Tony Henman, senior partner at 15-partner, Oxford-based Henmans, says: 'We are certainly pulling a lot of work out of London in all areas of practice.' His firm markets itself with the slogan: 'A City service at a provincial price.' In Henmans's case, the Oxford 'brand', its associations with quality in other spheres, is helpful, admits Mr Henman.

That, and the area's excellent communications, is one reason why clients from all over the country are prepared to use the firm.Henmans holds around a dozen client seminars a year.

The most recent one, on defending personal injury cases, was attended by insurers from Birmingham, London, Brighton, Southampton and Bristol, he says.

'People like to come here.

When they come to see us, some of them go on a bus for the first time in years.

The public transport here works.'Oxford and surrounding areas were also protected to a large extent from the worst ravages of the recession.

Jeremy Irwin-Singer, a partner at Linnells, says the university creates a considerable amount of work, directly and indirectly, which is surprisingly recession-proof, including work for academic publishers and that generated by a constantly changing property market.

There is also a number of hospitals close by which, inevitably, generate medical negligence work.Not that local solicitors are pretending the area escaped the recession altogether.

Mr Henman says: 'Our commercial property department almost came to a grinding halt.

We had to change some people around to become employment lawyers.'In Wiltshire, Michael Nield, partner at the biggest firm in Swindon, Townsends, admits that, unlike Oxford, the town where he works is 'never likely to win prizes for architectural beauty'.

Nor does it have a prestigious university in its midst.

But it is the location of head offices for some household names such as WH Smith and numerous life insurance companies, as well as many smaller, high tech businesses.Mr Nield admits that not all of these will turn to local lawyers for their legal advice, but a growing number does.

His own firm also has a national reputation for its personal injury work, in particular for catastropic head injury cases, and so generates referrals from around the country in this field, a process again made easier by the area's good communications.Wiltshire and neighbouring Gloucestershire both fall under the aegis of the Gloucestershire and Wiltshire Law Society.

It is, says Matthew McKaig, Law Society regional secretary for the south west, one of the biggest local law societies in the country.

Not surprisingly, within such a vast, sprawling area, there are huge variations and vast discrepancies.For example, says Mr McKaig, Gloucestershire may generally be thought of as a Royal borough -- because of its connections with the Royal family -- and although parts of it are correspondingly wealthy, there are also areas of relative deprivation.

These differences will inevitably be reflected in the size and type of firm that serves these communities.Despite this, Mr McKaig insists there is a surprising degree of coherence and common feeling among local practitioners.

A suggestion a few years ago that the local law society should be split up was rejected.Instead, other ways have been found to get around the logistical difficulties created by the sheer size of the area, there are half a dozen local legal associations and the society recently took the unprecedented step of employing a development officer with the brief to co-ordinate all the different interest groups in the constituency.Firms across the board in Gloucestershire, Wiltshire and Oxfordshire do seem to have an admirable level of awareness, as they are already prepared for the many changes in practice that they are about to face.

Concerns readily cited include the impact of the Solicitors Indemnity Fund charges, changes to taxation rules, and also the host of changes planned by the Lord Chancellor such as the expansion of conditional fees, contracts for criminal work, and the Woolf reforms.Christopher Horley, a sole practitioner in the Wiltshire county town in Trowbridge, says only the 'swift, strong and up-to-date' will survive the broadening of conditional fees.

Apparently, he is already making huge strides to ensure that he is among that elite breed.

Although ostensibly a sole practitioner, he employs a handful of other lawyers, all of whom are specialists in their particular fields.Between them they are members of Central Law Training, the Association of Personal Injury Lawyers, the Criminal Law Solicitors Association, and the Solicitors Family Law Association.

He has a Website on the Internet and is in the process of applying for a legal aid franchise.

His colleague recently won substantial damages in a big personal injury case, where a motor cyclist had been horribly injured, which received wide coverage in the local press.Mr Horley says: 'Dealing with the press is a dangerous occupation.

Ten years ago, we wouldn't have done it.

But as the world changes, you get bolder.'