Not even the lawyers are making money
As once great retail companies like Woolworths collapse into insolvency and the car giants line up with their begging bowls for handouts from the US Treasury the sheer scale of the recession starts to become more clear. Even the lawyers are not making the money they are used to.
As the focus moves away from the banks and building societies and financial institutions and on to other business behemoths the creeping business drought gets ever closer to animals further down the food chain.
The knock on effects of the collapse of these big companies will be gradual but will be devastating. Small and medium size businesses who relied upon the custom of these giants and were already pared to the bone in cashflow terms will need to downsize or die.
Few shed tears for lawyers but law firms are businesses like any other. In the the UK law firms directly employ hundreds of thousands of people and indirectly help to provide a living for hundreds of thousands of others.
Redundancies are increasing week by week in the legal sector. The website of The Lawyer magazine helpfully runs a legal job watch section with a cheerful chart recording the total number of redundancies in the top firms to date. The figures do not include the unreported layoffs in the smaller firms which make up the majority of the legal sector.
Sometimes it seems that the only really busy lawyers are the employment lawyers. Across the legal industry the corporate lawyers and the property lawyers are sitting by the phone, stunned by the sudden collapse in work. Even the older and wiser heads struggle to recall a time when the property market tanked in quite such a spectacular fashion and now the general corporate world seems to be going the same way.
Is there a chink of light for hard pressed law firms? Many have ramped up their insolvency practices and anybody who has ever dabbled in an administration or winding up has suddenly become a “re-structuring” expert. However, most of the insolvency lawyers, litigators and other carrion crows of the industry are yet to find any rich pickings. The big boys might be feasting on the carcasses of slain beasts such as Lehman Brothers and Woolworths but drought has not yet killed off the smaller creatures for the chasing pack to feed on.
That comes next.
Tags: Insolvency
Boardroom Dispute Resolution | Ed Weeks | 
December 16, 2008 7:39 pm
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