Spend to survive

Firms need to invest more money than ever in marketing and recruitment in order to survive during a recession, leading US management consultant Ward Bower said last week.

Addressing the Law Society law management section's annual conference in London, Mr Bower, of Altman Weil in Pennsylvania, warned that although UK firms had not yet been affected by recession, the slowdown of the US economy meant that it was inevitable, and the 11 September attacks had hastened its oncoming.

He estimated that some US firms had lost at least three weeks' worth of billable hours in the two months following the attacks.'Law firms' first reaction in a recession tends to be to cut down on marketing, which is seen as a luxury, and to stop recruiting people because there simply isn't enough work for them,' he said.

'Lawyers must beware of a hiring moratorium, because those firms will be the ones suffering when the recession ends and they have a dearth of work and experienced associates.'UK management consultant Julian Boardman-Weston, of Sherwood PSF Consulting, warned of the 'dangerous lure' of mergers in an uncertain climate.

'Merging two weak firms with the aim of creating one stronger practice will not work,' he said.

'Mergers are not a magic solution for a lack of work - the only reason a merger will succeed is if it strengthens and expands a specific area of the firm's practice.'

Victoria MacCallum