Experts Help Firms Cope With Disasters Before They Happen : Recovery planning: Consultants say demand is booming. Many companies believe that their very existence might be at stake.

The spectacular fire at the First Interstate Bank skyscraper in Los Angeles in 1988 not only caused one death and millions of dollars in damage, it also sent a jolting message to other companies: This could happen to you.

For those who missed or ignored the message, it was delivered anew the following year when the San Francisco area was hammered by a powerful earthquake and Hurricane Hugo battered the East Coast.

Now a growing number of companies are heeding the warnings and developing plans to rebuild quickly after a major physical disaster. Consultants who specialize in disaster recovery say demand for their services is booming, and large accounting and management consulting firms now consider it de rigueur to have disaster experts on their staffs.

Case in point: The Warner Group, a consulting firm in Woodland Hills, recently bought SecuREcovery Inc. and hired its owner and sole employee, Gregory Staininger, who has been devising disaster-recovery plans for corporate and government clients since the 1970s.

“It’s a high-visibility time” for disaster planners, said Staininger, whose clients include Lost Arrow Corp., the parent of Patagonia outdoor clothing; L.A. Gear, the athletic-shoe maker, and the Metropolitan Water District. Companies want to show their customers, suppliers and employees that because they’re ready for a disaster, “the dependability of the organization is cast in stone,” he said.

For years, many large corporations have had contingency plans to at least get their computers and telephones running again after a disaster. But these days, “we see the interest and demand increasing at much smaller organizations,” said Robert Smith, who heads disaster-recovery planning at the Los Angeles office of Peat Marwick Main & Co., an accounting firm.

Statistics show that fire and water--whether from rain or broken pipes--are the major causes of commercial disasters. But the demand for disaster planning “tends to be more active in the West than in other parts of the country because it’s the West where the ‘Big One’ hangs over everyone’s head,” Smith said, referring to predictions that an enormous earthquake will one day hit California.

Indeed, the Los Angeles chapter of the Assn. of Contingency Planners, a national trade group, saw its membership jump 20% last year alone, to 153 members, said President John Bogner, whose main job is coordinating emergency preparedness at TRW’s Redondo Beach facility. The association didn’t even exist 10 years ago.

The obvious reason more companies are assembling disaster plans is so they can rebuild their businesses if and when an catastrophe strikes. Perhaps less obvious is that many companies believe that their very existence depends on their ability to recover almost immediately.

“It can be a ‘put you out of business’ event,” Smith said.

Staininger said that for some companies, “if they’re down, within 15 minutes, they measure their losses in the millions of dollars.” Food and consumer products companies are an example. If their goods vanished from store shelves for only a short time, they might never regain their original market share because their customers would have begun buying rival brands.

Lost Arrow, a Ventura-based concern with more than $20 million in annual sales and 500 employees, is having Staininger develop a plan for the company to rebuild after virtually any disaster.

“If this building were to burn down, there’s no plan--nor any inkling of an idea--of how we would bring this place back up,” said Tim Sweeney, Lost Arrow’s liaison with Staininger. “We want to be able to get this place running again as quickly as possible.”

Companies can pay several thousand dollars to consultants for help in disaster planning, which also can include emergency plans for executive succession--that is, how the company should respond if one or more of its top executives dies unexpectedly. For instance, three Atlantic City casino-hotel executives who worked for financier Donald Trump were killed in October, 1989, when their helicopter crashed in New Jersey.

Many of the consultants, including Staininger, have never had a client experience an actual disaster under their watch--and therefore have never had their planning methods fully tested.

“The reality is that these disasters very rarely occur,” said Peat Marwick’s Smith. But he and other consultants said that their clients, using simulated conditions, test their plans at least once a year and that those plans incorporate lessons learned from the few disasters that have struck others.

For instance, a power blackout in New York City last year highlighted many companies’ heavy dependence on fax machines, and now disaster planning helps companies make sure that they have alternative forms of communication, Staininger said.

“As these new technologies creep into our business environment, the recovery plan needs to be a mirror of that,” he said.

There are other examples. Boxes of blank checks used for payrolls, or toner and paper used for copiers and printers could sustain water damage or be destroyed in other ways. The recovery plan must have ways to get those items replenished immediately.

At Lost Arrow, Staininger will also be planning for “the people who empty the garbage and clean the buildings because we can’t function without them just as we can’t function without telephones,” Sweeney said.

Staininger said “there’s no substitute for going through the real thing” in finding new ways to plan for disasters. But he said he has mixed emotions about whether he wants to see his methods tested with a real-life catastrophe.

“You develop your credentials in this industry by living through disasters,” he said. “The people who were in charge of First Interstate’s recovery plan are now gurus in disaster recovery. But nobody wants to see people you’ve worked with go through the trauma and the emotional stress.”