How the world's favourite agency became the week's big story

The Saatchi brothers created a legend whose final chapter has yet to be written, says Ivan Fallon

A boardroom row and the exit of the founding chairman at, say, ICI, Unilever or even General Motors would be a big story, but it would not reverberate around the world, lead the front pages of half the nation's press and create the television and radio discussion that events in the past few weeks at Saatchi and Saatchi have. For such a modest-sized company - its market value is £215m - employing 11,000 people, Saatchi makes very big waves. The departure of Maurice Saatchi and a key group of senio r executives from what was once the world's biggest advertising business has made headlines from New York to Tokyo, and been analysed in a dozen languages. Maurice Saatchi and his elder brother Charles have caught the world's imagination in an almost unp recedented way.

Why? And how? What makes Saatchi & Saatchi so important, even in countries where neither brother has even set foot? It is, after all, only an advertising agency which has fallen on hard times and whose shareholders have persuaded the board it was time for change at the top. The share price has fallen by 96 per cent from its peak, debts are mountainous, there has been a bitter public dispute raging for some time between chairman and chief executive, and creative performance is no better and no worse thanin many other better run but less well-known advertising businesses.

The answer is a complex one, but comes down to the brothers themselves. It is they, from the moment they started their nine-man agency in 1970, who have set it aside from the herd. In those early days Charles, then only 27 but already one of the highest-paid young men in Britain (£25,000 a year), was the driving force. He was savagely contemptuous of the creative efforts of other agencies, particularly the big American ones which dominated the industry around the world in the post-war era. T heir ads were "crap" or "shit", or even worse. The bright young team he built around him began producing some of the best ads of the day - ads that have since become classics, such as the picture of a young man in a sweater and swollen tummy remarking: "

Would you be more careful if it was you that got pregnant?"

Time magazine picked up the pregnant man as a prime example of the brilliant new advertising team coming out of Swinging London, and within months of launching every-one was talking about this brash young agency. The clients rolled in.

Maurice, three years younger, had never worked in the advertising business before they launched, but what he lacked in experience he made up for in his ability to analyse complex problems and produce startling answers. Charles had flunked out at school but Maurice was a scholarship boy and a star at the London School of Economics, where his professor tried to persuade him to pursue an academic career. Where Charles was brusque, abusive and volcanic, the baby-faced Maurice was thoughtful and ameliorative.

It was Maurice who persuaded the City of London that advertising agencies were good long-term businesses with such excellent growth prospects that they should be given star ratings. It was he who raised more capital than any advertising business in history, who plotted the takeovers of rival agencies, who invented the concept of the "global" agency, and who would eventually take one giant step too far when in 1987 he decided he would buy the Midland Bank.

Even that, however, would not explain the mystique that attaches to the brothers and the interest that follows their every move. They have a reputation as the masters of self-promotion, and it is deserved. Charles, a semi-recluse, has made his non-appearances the stuff of legends - he has never attended a board meeting in his life, let alone a shareholders' meeting, and has not met a client, not even Margaret Thatcher, since the first year of the agency. Far from resenting this, the clients have loved him all the more for it, coming to think of him as a great brooding force in his dark tower, watching over their interests.

For almost zero expenditure, the pregnant man probably created more publicity than any ad in history, anywhere in the world, but in 1978 the Saatchis created an even bigger storm with an ad that would help to change the political scene for a generation. For the first time the Conservative Party decided to hire an advertising agency and, to the astonishment of everyone, selected Saatchi & Saatchi. It was an inspired choice. That summer James Callaghan was confidently expected to call an autumn election, which he looked likely to win. Saatchi & Saatchi produced a poster with a line of people snaking out of an unemployment office and the slogan: "Labour isn't working."

The row that followed it ran through the rest of the summer, putting Labour on to the back foot, and as the Tories made ground Callaghan postponed the election to the following spring. In May Saatchi, by now a household name, helped Mrs Thatcher to power, ushering in an era of right-wing market economics and privatisation that half the countries in the world would follow.

The Saatchi links with the Tory party and with Mrs Thatcher greatly added to the agency's glamour, directly affecting the flow of clients, including British Airways, for which they produced another famous ad - the whole of Manhattan making a landing approach to Heathrow. BA at the time was regarded as one of the worst airlines in the world, but Saatchi's discovered it still flew more passengers to more places in the world than anyone else, and created the slogan "The world's favourite airline." The effect on staff morale, passengers and profits was dramatic.

After the first few years, the Saatchi brothers hired others to run the business for them, leaving them free to do what they were best at: Charles to watch over the creative output for his favoured clients and build probably the best collection of modernart in private hands in the world; and Maurice to plan his forays into all sorts of new business areas, as well as his garden in Sussex.

For a while it worked. Tim Bell, who managed the agency from 1971 until the early Eighties, was brilliant at it; Martin Sorrell, now running WPP, was an outstanding finance director. When both men left, the Saatchis could never properly replace them, a fact they refused to acknowledge until far too late.

The aggressive, performance-oriented American fund managers, wholly uninterested in reputations or mystique, who now control the bulk of the shares, wanted them out. Maurice Saatchi is starting anew, and may win some of the best accounts in the business,such as the ever loyal BA and the Daily Mirror. It is the end of a chapter in the lives of the brothers, but far from the end of the story.

The writer is author of `The Brothers: the Rise and Rise of Saatchi & Saatchi', Hutchinson, £12.99.