Non-conformist approach helps to weather difficult market conditions

But Hogarth Davies Lloyd, a boutique financial services search firm, is one of the exceptions.

Being non-conformist does not appear to have done any harm. In the eight years since it opened its office on London's High Holborn, Hogarth Davies Lloyd has worked with most leading investment banks.

Today the company has a second office in Tokyo and is one of the most esteemed companies in the City's headhunting market.

The three founders, all former bankers, attribute their success to the combined principles of client responsiveness and a desire to be different.

"We like to be somewhat contrarian. Our growth has not been based on obvious choices," says James Hogarth. "We are also very client-oriented," adds Nick Lloyd. "Our strategy is based on the fulfilment of clients' needs."

The Tokyo office is a symptom of this client-driven contrariness. It was opened in 2001, at a time when the Japanese economy looked no nearer to pulling out of recession than it does now.

Executive search firms could be forgiven for exiting the market. Hogarth Davies Lloyd was not deterred.

Lloyd explains: "People asked us why we were going into such a difficult market.

But clients were telling us that they were having problems finding staff in Japan and the success of the office has vindicated this decision."

At clients' behest, the Japanese office focuses on the placement of Japanese nationals, as opposed to gaijin, or foreigners.

The distinction has proven valuable. As cost-cutting leads international banks to eschew expensive ex-pats, the company is benefiting from demand for home-grown labour.

Because it takes patience to gain a foothold in the relationship-driven Japanese market, Lloyd says the firm will be in a strong position when Asian hiring eventually picks up for real.

Hogarth Davies Lloyd also appears to be weathering the difficult London market. While competing headhunters have been busy dismissing staff, the company has been hiring as well as firing. The net result is that at the end of 2002, Hogarth Davies Lloyd has one more search consultant than in 2001.

Guy Davies says: "We enjoyed incredible revenue growth during the mid- to late-1990s, but this was not matched by hires.

"We have been very fussy about who we take on. As a result, we have had less need to make aggressive cuts."

Staff cuts have been deeper in the company's selection arm, HD+L.

Formed in 1999 to provide back- and middle-office staff on a contingency as opposed to headhunted or search basis, HD+L has been hit by cutbacks in operations hiring.

Nevertheless, total staff numbers in both the search and selection areas of Hogarth Davies Lloyd are down by less than 15%. Niche financial services competitors such as Armstrong International have cut staff by up to 60%.

Product expertise, strong client relationships and breadth of service are said to have helped.

In search positions, Hogarth Davies employs only former bankers.

It works with four banking topclients, for whom it aims to be a one-stop shop, providing staff for every division and every level, from global heads down.

Within this scheme, the company's founders stress that HD+L was never intended as a profit centre, but merely as a means of fulfilling the entire recruitment needs of important clients.

Hogarth explains: "HD+L Selection was viewed as a bolt-on service to our core search business. It enables us to fulfill not only the senior client needs via search, but also the junior to mid-level market via selection."

Equally beneficial has been steady hiring in areas such as regulatory and compliance, credit derivatives, structured finance and CDOs.

Hogarth Davis Lloyd has six consultants working in the strong fixed-income market. Revenues for 2002 are set to be roughly equal to those in 2001 as a result.

All indications are that Hogarth Davies Lloyd is unaffected by an alleged incident last year in which one of its staff posing as a member of a bank's own human resources team sought to obtain the names of employees working at SEB Group.

It is something clearly at odds with Hogarth Davies Lloyd's reputation in the market. The company is unwilling to discuss it in any detail, saying only that such activities contravene its code of ethics and that if such an incident were ever to occur, it would merit dismissal.

There is cautious optimism about the future. Hiring will be up as banks look to upgrade existing staff and boost their proprietary income, says Lloyd.

A new European office is being mooted in Geneva - a typically unusual location, but one that clients have indicated would be propitious.

Other potential options include an office in New York, a stock market listing, or similar to some other search firms, a tie up with a third-party.

Wooing such a contrarian catch could be hard, however.