Just as McKinsey’s consulting practice centers on corporate America, certainly its core clientele and expertise, as opposed to law firms, where they have no domain expertise that anyone would notice, the McKinsey Quarterly surveys do not encompass law firm leaders, but global corporate executives. Nevertheless, these are widely traveled and well-informed people with their fingers on the pulse of the global economy, so it’s worth reviewing what McKinsey learned in its most recent (March 10-March 16) series of interviews in its “Global Survey.”<\/p>\n
Here’s what they found.<\/p>\n
In summary, a “gloomy economic stasis has taken hold,”and while the proportion of executives saying economic conditions have deteriorated has, at least, not increased this quarter, fewer than one-third expect an economic upturn this year.<\/p>\n
As we’ve almost come to expect in these types of surveys, and amusingly, overall they remain confident about how their own companies are handling the crisis (still, over half expect profits to drop in the near term).<\/p>\n
Some other interesting results of the study:
\n \u2022There’s no doubt whatsoever that trust in business has fallen: 85% have that view. And the culprit? The #1 response(56%) was: Financial firms’ inability to comprehend risk and guard against its repercussions. For our purposes, what’s more interesting is that after #2 (33%, “job losses,”which is something of a non-response) was “executive compensation levels”(29%). Why do I mention this? Only because lawyers are seen as highly paid.
\n \u2022Recovery will take time. 90% of these global executives say their own national economies “are in very poor shape”and “have declined since September 2008″but a similar number also agree conditions have not gotten worse since then.
\n \u2022Some particularly revealing responses came in answer to questions about jobs and prices: ?Compared to just three months ago, even more executives expect their workforces to shrink: 50% now vs. 42% in January, and only 38% expect them to stay the same size now vs. 45% in January.
\n ?The news on prices (can you say: Rates?) is equally telling: Projecting changes for the first half of 2009, only 12% see an increase, 25% see a decrease, and 54% see no change (9%, presumably in commodity businesses, don’t know).<\/p>\n