Over the past few weeks I’ve been speaking to some senior bankers about the financial crisis that’s gripping us all. One thing that seems obvious is that the one sector that is likely to make a lot of money over the next few years will be the corporate lawyers.

My reasoning is that the banks are beginning to argue over themselves over who was to blame for selling AAA assets to financial institutions that weeks later were assessed as being worthless. Who was to blame, the banks, the buyers or the rating agencies?

Then there are the law enforcement agencies such as the FBI investigating some of the “deals” and “Sell-offs” to see is some acted fraudulently.

What is interesting is that whilst the US authorities are taking action the UK Government is not instigating any criminal investigations. Perhaps the UK Government is too afraid of what they might find or perhaps they intend to let the US authorities extradite hundreds of our top bankers to face the courts and imprisonment. (Someone asked me last week if they would have a prison big enough).

In any event most corporate lawyers must be thinking that all the Christmases until 2020 are about to come early.

I was asked a few days ago what I felt were the the “mission critical strategies” that a business should employ for survival during the downturn.

The first piece of advice that I gave was not to be panicked into knee jerk reactions. Panic inevitably results in poor decision making and poor decisions inevitably leads to long term regret.

The answer was then expanded into six key areas:

1) Plan for a long downturn. It’s likely that things will be slow for between one year and five. (in Japan their last recession lasted a decade)

2) Focus on productivity.(Both individual and team delivery)

3) Retain the best talent and continue to develop it. (Historically, talent tends to leave when it believes it is not learning)

4) Encourage innovation

5) Ensure robust succession planning so that if people do leave there is continuation of productivity.

6) Reduce expenditure as far as possible on non-productive items

With the ongoing banking crisis and stock markets around the world continuing to fall it is possible that the best paid experts and talent in the future will not be bankers but those able to predict trends in business.

With everyone from Governments, businesses and individuals wanting answers to the current economic questions perhaps the best paid experts over the next two years will be those able to predict the future.

Of course the information being from futurologists, and paid for by business, will need to be based upon historical precedent and expert analysis. The individual in the street, however, might still have to rely on the astronomer’s predictions in their daily papers. 

One has to wonder how likely it is that anger over the financial downturn will spill over into prosecutions of those bankers found to have been negligent, incompetent or having given themselves huge salaries and bonuses despite being aware that their companies were in trouble.

Reports that bankers have taken upwards of $300 million in salaries and bonuses have been greeted with some disbelief by both customers and politicians. Such revelations can’t generate sympathy for any banker hauled before the courts.

However, one has to question whether such a series of court cases might be more of a reflection of “revenge” as opposed to justice?

There is one thing for sure, that is that banks can be expected to be saddled with rafts of restrictive legislation in the future.

With the financial downturn, loss of bank confidence and recall of loans it’s inevitable that well known brands will disappear from the high street.

Marks & Spencer, Curry’s and other brands are recording falling income. More concerning is the amount of investment owned by the banks in Iceland.

However, there is one glimmer of hope, and that it if the shopper should decide that an “enjoyable Christmas” to put all these miseries behind us is necessary and, as in the past, spends in the high street to blow away the blues.

If not then it won’t be just banks such as HSBOS, lloyds TSB and HSBC won’t be the only businesses shedding staff this year. Unemployment in the UK will increase sharply and perhaps we will be talking “depression” instead of downturn.

HSBC have announced that they are cutting jobs in an effort to reduce costs.
Could this be an attempt at saving money whilst ignoring other cost saving ideas that could protect jobs?

Or is it that reducing staff is the easiest solution for the bank, one that sees instant savings and which requires little managerial thought?

During past financial downturns companies would rush to lay off staff as a means of saving money. As a result the time taken to recover was longer because of the need to re-recruit talent. Most businesses seem to be avoiding this mistake in the current financial climate.

However the question must be in people’s minds, “At what point will unemployment be the final option for survival?”.