Accountants and Lawyers in the frame

Accountants and lawyers are regularly voted the most unpopular people in the City. The prosecution argument runs something like this: while everybody else loses their jobs they still profit from misfortune. They continue to pick up fat fees for liquidations and receiverships and home repossessions and every other type of misery known to man.

But this Big Crash is different. Lawyers and accountants – as well as investment bankers who have achieved pariah status in the wider community – are beginning to feel the pain of recession. Even accountancy big gun KPMG is talking to 1100 of its people about going without pay. The thing that’s gone AWOL for the accountants are the M&As. And what are they? Mergers and Acquisitions. That’s where the real dosh used to be made.

And as for the lawyers all sorts of firms have been swept up in the tsunami in which no sector will be left unscarred. As one would expect from one of the great ‘whispering’ professions everybody is of course trying to put on the bravest of fronts.

The one thing you wouldn’t expect a lawyer to do is admit to meltdown. But every now and again the door creaks open to reveal a dismay which borders on alarm. It used to be if a child went into the law proud parents would say he or she did well. A job for life and safe as houses. Well, we all know what’s happened to houses.

Most of the very big firms will, no doubt, be able to cling on to their assets ( assuming they’re not ‘toxic’) and batten down the hatches and all those other lunatic Churchillian euphemisms which are wheeled out when things get really bad. Having said that, Clifford Chance, the biggest of the biggies, has said it’s losing around eighty lawyers in the UK.

Smaller operations that could be in trouble. They’re the ones who could be stretched in so many different ways. From smart new offices acquired on expensive leases when it looked as if the bubble would go on forever. To those who employed yards of starter solicitors who specialised in such areas as conveyancing.

But it won’t just be apprentices and beginner lawyers. As transactions dry up the partnership money pools shrink. Partners won’t be able to dive into those and come up each year smelling quite as rich as before. So partners and seniors face redundancy too.

No matter how bad it gets lawyers and accountants – like bankers – won’t receive much sympathy. The reasons are at the start of this piece and because of a perception that in the past they have made such huge amounts they should have salted it away for a rainy day.

The one thing a recession guarantees, let alone a slump, is a great wave of schadenfreude: the malicious enjoyment of others’ misfortunes.