Editor's letter

HOWEVER REWARDING your job or rosy your outlook, I think few would dispute that returning to work on 2 January is invariably something of a headache. Even here at Managing Partner, putting the finishing touches to our first issue of the brand-spanking-new 2008, I fear we couldn’t exactly call ourselves the cheeriest chaps in London over that three-day week.

But this year the business community’s lingering New Year hangover will also hardly be helped by the feeling that the likely impact of a downturn triggered by the sub-prime mortgage ‘crisis’ remains tricky to call. Indeed, just two weeks in and investment bank Merril Lynch has controversially gone on the record to say the spectre of economic recession in the US is already a “reality”.

The official verdict on whether recession strikes in the US is made by the National Bureau of Economic Research, but it can take up to two years for them to confirm economic decline, based on the four key indicators – employment, personal income, industrial production and sales activity. With these appearing to peak and the US unemployment rate reaching five per cent in December, however, Merrill Lynch chief North American economist, David Rosenberg, said the firm’s analysis showed the recession “isn’t even a forecast anymore, but is a present day reality”.

He continued: “This isn’t about ‘labels’. What is important about recessions is that while each may have its own set of particular characteristics, there are also unmistakable patterns that emerge time and time again.”

Of course this view is by no means universal on Wall Street, and the bank Lehman Brothers has actually countered the claim by issuing ten reasons why the economy won’t tip into recession.

Nevertheless, the UK’s economic glass isn’t exactly half full either. The latest survey – this one from accountants and business advisors BDO Stoy Hayward – shows that short-term business confidence is at its lowest level since January 2006, driven by slowing house prices, the rising price of oil and disappointing High Street sales. In a fourth monthly drop, BDO’s Output Index showed confidence was down from 100.4 to 100.1, largely driven by the service sector. BDO partner Peter Hemington said further base rate cuts would likely be required in the first quarter of 2008.

But to what extent will all this take its toll on law firms? The news – just as we went to press – that Cadwalader, Wickersham & Taft is making 35 lawyers redundant in the US admittedly caused something of a stir. The firm openly cited “unexpected and persistent volatility” in the financial markets for its decision, and is one of a string of major US law firms to announce departures in recent months.

Still, in spite of a spate of such headlines on both sides of the pond, the general consensus seems to be that the ‘war for talent’ is still being waged. Here in the UK, Olswang bad farewell to ten staff in its real-estate group in November, including five lawyers, but said its decision was part of an internal restructuring only affecting the property practice – to which it remained committed. Then early January saw Taylor Wessing make four business development managers redundant. The firm says the four are to be replaced by people with even more experience, however, and the business-development team as a whole is set to increase by at least two.

Of course, law firm success depends on the ideal symbiosis of human and physical resources. As usual, this February issue of Managing Partner focuses on the investments and changes firms are making in terms of technology – a key differentiating factor as competition for key clients continues to increase. As last year, it will be distributed at Lex 2008 – the event where management from a wide range of firms meet to discuss strategies for maximising operational efficiency and productivity. I hope to have a chance to speak with many of you there!

Richard Brent

Editor

Features

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Taylor Wessing introduced a new e-mail management solution to ensure 24/7 access for lawyers as part of its business-continuity plans.

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The UK legal industry is changing and changing fast. Much is made of market pressures and legal reforms being the catalysts for this change, but the real reasons are deeper and more fundamental.

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Herbert Smith has implemented a system that provides ‘on demand’ management information – MIS. Already available to all partners, it is now being developed for associates. It will form the basis for developing a ‘balanced scorecard’ for the firm – to address client, people, financial, process and community information needs.

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Rowley Ashworth Solicitors took up IP telephony as part of its firm-wide IT strategy.

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Is the legal profession working with the right definition of ‘talent’? Alan Hodgart asked attendees at Ark Group’s Oracle dinner how law firm talent management might be modified in light of the Legal Services Act.

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When Mills & Reeve made the decision to embark on a necessary upgrade of its business-critical telephony systems, it soon saw an opportunity to achieve much more for the business by integrating communications and IT via an intelligent unified-communications infrastructure.

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Masterclass: People are the root of success in professional-service merger scenarios, but implementing the right technology is indispensable when it comes to risk management and achieving the synergies sought.

Voyage of discovery This article is for subscribers only
Litigation lawyers are dealing with a growing mountain of electronic data and need to make quick decisions about what will be relevant. In-house or external e-dicovery solutions can save valuable time, money…and clients.