find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Real Estate & Projects Lawyer (6+ years PAE)
Category: Property Law | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Top tier firm with offices nationally · High profile clients
View details
When will the recession be over? When will it begin?

When will the recession be over? When will it begin?

Kate Gibbs, editor of The New Lawyer, says firms should be more realistic about how long this recession will last.

See her write-up in today's e-magazine 


The idea that chief executives are feeling optimistic about the imminent end of the global economic crisis, as the CEO Institute has suggested, is a shaky one. The mass redundancies, the frenzied pressure to have staff working more flexibly, the forced deferrals of trainee programs, all point to a wretched outlook. 


Law firms keep hypothesising about when the recession will be over. Allens Arthur Robinson Sydney-based partner Guy Alexander said he expects the M&A market in Australia to see an improved flow over the next quarter, while Mallesons Stephen Jaques Shanghai M&A partner Martyn Huckerby told The New Lawyer he’s expecting a “rapid pick up in transactions” in the next 6 to 12 months. Both reflect a general optimism sweeping through the business districts of Sydney and Melbourne that things can only get better.  


According to the CEO Institute research, released on Thursday last week, 58 per cent of the chief executives surveyed believe there will be a return to normal during 2010, with 35 per cent expecting the business outlook to worsen this year. 


Ken Gunn, CEO Institute chairman, said members were more positive about the outlook than had been expected, with 27 per cent expecting things to improve this year. 


We note the spin in the CEO Institute survey – 35 per cent is actually quite a large portion. Fifty-eight per cent think there will be a return to normal in 2010, which could be at least a year and a half away.  


There is a sort of forced optimism around when the global economy will recover. But idealists are ahead of themselves in questioning when the recession will be over. The OECD’s latest economic outlook report offers a bad tasting dose of reality. The question, instead, should perhaps be “when will the recession really begin?”. 


As firms tout the pending recovery, their actions are saying something very different. Emails offering flexible hours, forced trainee deferrals, and pay freezes all point to the reality that firms know well the economy is not about to brighten. 


Blake Dawson cut 89 staff members last month. This was not done with an inkling that things are about to get better but 'we'll do it anyway', it was done because things are not about to get better and the firm went into emergency mode. And other local firms will follow as they have internationally. 


The recruitment market is virtually crashing. Once buying double page advertising spreads in legal business magazines, some local legal recruiters are cancelling $300,000 contracts and are holding tight. 


Australia has been protected by defensive political and economic measures, from the bank deposit guarantee, the short selling ban on financials, cash bonuses and the first home buyers grant, not to mention the massive fiscal stimulus package. Many, meanwhile, cling to the technical definition of what a recession is supposed to be – two consecutive quarters of negative GDP. So technically, we’re not even in a recession yet, and we have until June to ignore all suggestions we are. 


The OECD forecast is a 4.3 per cent GDP contraction this year, with another 0.1 per cent contraction for 2010. Six to twelve months and we’ll all be back to the black, then, is starting to look a little naïve. 


The positive outlook may not really matter of course, except when it comes to affecting people’s jobs. If firms really believe things are going to pick up in the next year, why are they deferring graduates, why are they making redundancies? It’s a spurious claim driven little by facts and a lot by hope.  


It would be refreshing if law firms, if not their clients as well, start acting like we’re facing more bad times. Freehills’ recent pay freeze is a nod to reality. 

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017


When will the recession be over? When will it begin?
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Unite
07:04
Professionals unite in support of marriage equality
The presidents of representative bodies for solicitors, barristers and doctors in NSW have come toge...
Aug 21 2017
Is your firm on the right track for gig economy gains?
Promoted by Crowd & Co. The way we do business, where we work, how we engage with workers, ev...
Scales of Justice, Victorian County Court, retiring judges
Aug 21 2017
Replacements named for retired Vic judges
Two new judicial officers have been appointed in the Victorian County Court, following the retire...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...