Litigation culture pays PROs wages

City PR firms that have got fat on the fees from mergers and acquisitions find that there is now not enough to keep them all feeding comfortably. The notable exception is Andrew Grant’s Tulchan Communications, which did very well out of the Marks & Spencer defence.

But as one door closes another opens. What do companies do when they can’t take each other over? They litigate. And what do PR firms do? They latch on to them and quietly brief the press. No matter what horrors are alleged in court, those reporting know there is another side –and don’t have to wait.

This is vital because, as a rule of thumb, as soon as a big-name client gets to court they’ve lost – whatever the outcome. Things will be said in court that no one would say outside for fear of the libel laws. These will be gleefully reported under cover of privilege and some mud will stick.

The bigger the firm, the more gleeful the reporting of the allegations. In actions concerning employees, it is even better. The watershed case was when Merrill Lynch Investment Managers was sued by Unilever because of its poor investment performance, and one of the City’s most powerful figures, Carol Galley, found herself in the witness box. Merrill abandoned the case after two weeks.

But that was nothing to the damage done to Goldman Sachs when it prosecuted a secretary for stealing millions from partners’ bank accounts, and in so doing painted a picture of the firm that filled people with distaste at the extravagance.

Since then, the cases have come thick and fast. But I’d say the specialist financial PR firm ahead in this area is The Maitland Consultancy; perhaps because its clients get sued a lot, more likely because it has good links with City law firms.

While it may be in front now, competition can only intensify because, as with most litigation, money is no object.

anthony.hilton@haynet.com

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