Lawyers feel crunch effect

The threat of a recession is leading to an increase in PR business from professional services companies and providing a boost to City and corporate PR agencies, according to industry watchers.

FD managing director Jonathan Hawker said he has numerous mid-tier professional services firms contacting him in this period of uncertainty, including law and brokerage firms - providing a fillip in a PR sector where IPO and M&A downturns are affecting margins.

'It's rife,' said Hawker. 'They are all worrying that if they don't make noise now they will struggle to get business during the downturn. They fall into two categories - either they are stopping or they are spending more.'

In particular, insolvency companies and debt collection firms are vying for attention at the moment, as the number of debt-hit companies going into administration looks set to increase.

The markets are also showing a trend towards activity in this sector - UK business restructuring specialist Begbies Traynor was this second quarter's best performing financial stock.

In addition, reports last month showed the number of families forced to become insolvent had jumped by almost a half since the start of the year.

Lansons Communications director Ralph Jackson agreed with Hawker. 'It is consistent with what we have seen. It is a useful time for these companies to invest further into PR and marketing. They see the need to differentiate themselves in these times.'

Jackson said he had seen the most interest from medium to large law firms, as well as accountancy firms. Whereas PR would once have come second to marketing, it has now established itself as a central plank of the professional services' pre-recession strategy, he suggested.

Jackson said that such companies were seeking a fresher look and themselves and the market.

'It is a B2B proposition, but not all law or accountancy firms are the same,' said Jackson. 'For us it is an opportunity to provide fresh thinking in a different way that they would not normally have. Some people want to have more bang for their buck.'

In February, Paver Smith won an account to handle accountancy practice Grant Thornton after a four-way pitch (PRWeek, 23 February).

HOW I SEE IT

Gavin Ingham Brooke, MD, Spada - We have lots of professional services clients and are noticing that business is still very buoyant. Professional services firms need to engage in a candid dialogue with the market in order to be selected.

They are keeping in front of clients' minds and continuing to spend on issues.

If you look at a company such as PriceWaterhouse-Coopers, in the good times it is talking about corporate deals and growth advice, and in bad times it is insolvency advice.

It can thrive whether the economy is going up or down.

Companies have to continue to talk about the most relevant issues, holding roundtables and providing commentary to get the message across.

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