As the global recession deepens, corporate/financial practices and firms are increasingly diversifying to weather the hard times. While bankruptcies and other crisis communications work are on the rise, some firms are actively beefing up other areas to compensate for the dearth of M&A deals and IPOs.
Steven Lipin, a senior partner at Brunswick Group, says strengthening public affairs is a smart strategy in this climate. The firm recently added two public affairs-focused partners in its Washington office.
“Given the active government participation in wider slots of the economy,” he adds, “we think having an active public affairs practice is essential for our corporate work.”
Other growth areas, Lipin notes, are communicating dire economic news, such as layoffs and plant closings.
Even though the firm has seen a spike in bankruptcy work, it has not hired new staff members to meet this demand, he explains.
“Bankruptcy is cyclical,” Lipin points out. “We're not necessarily hiring for that, but we are shifting some resources that have been devoted to other areas of work.”
Ron Culp, MD and partner for Ketchum Midwest, says another tactic for navigating these stormy recession waters is to offer more holistic services for clients.
“We're approaching corporate financial clients with an eye on managing their overall corporate reputation,” says Ted McDougal, SVP, corporate practice director for Ketchum Midwest. “There is this unusual convergence of financial and investor relations, as well as a need for issue, employee, and internal communications expertise.”
There are also other unconventional assignments in a downturn. For instance, a displaced CEO approached Ketchum to help him with rebranding his personal image so he could become a viable candidate on the job market.
Additionally, more clients are opting to work on a project basis rather than a retainer. Bill Haynes, president of BackBay Communications, says project clients that the firm would not have considered in a more robust economy are now more attractive.
“We are now eager to take on the project work in hopes that it can become a longer relationship when the economy picks up,” he adds.
Haynes says the firm is also diversifying its offering beyond the services a traditional corporate or IR agency would provide.
“We make sure our clients know that we're going beyond media relations to be a more holistic firm,” he explains. “We're doing everything from message development to [creating] marketing collateral to writing a Web site.”
Haynes says clients are looking to consolidate their marketing and PR functions. Rather than maintaining an agency that works exclusively on media relations, they want a firm that can service all their corporate and IR needs.
“You have this environment in which companies have less bandwidth – they are hiring less and laying people off,” he says. “But they still need to get things done, especially in the realm of corporate communications.”
Public affairs is an area for corporate/IR firms to grow because of govt. intervention in the recession
Financial PR pros are more open to working with clients on a project basis
Offer unconventional services as many clients are dealing with smaller staffs