When Malcolm McKenzie looks out of his office window 37 floors above Canary Wharf's banking district in East London, he doesn't see the green shoots that others spy, optimistically, amid the wreckage of recession. He sees a war zone, a battleground, something closer to the Somme than the City.

The head of UK performance improvement for Alvarez & Marsal, a firm that played a pivotal role in the restructuring of Lehman Brothers, the failed bank, in America, argues that we are in the depths of a long recession. He tells his clients, the managers and directors of distressed companies, that the present downturn is like the First World War.

“It just seems apt,” he said. “It is long and drawn out and that is what the First World War was. Everyone thought it would be over by Christmas, but it wasn't. It went on for another four years.”

The recession is made up of three stages, he argues. First came the “early attack”, which began in September 2008 with Lehman's collapse. The subsequent loss of confidence and credit in the market was followed by a middle wave of “protracted warfare” (the midst of which we are in now), with its collapse in demand and poor credit availability. This will be followed, in turn, by a “final breakthrough”, possibly beginning in the middle of next year, when confidence, demand and investment will begin to pick up.

Mr McKenzie laughs at talk of a recovery by the end of the year. “No, no, no,” he said. “I think things will go up and down for a while, but I think the reality is that there has been such a shock to confidence, whether it's consumer, whether it's in the investment side of business or whether it's in the banking side, this is an enormous shock and it's going to take a long time to recover.”

Not that he seems particularly glum about the prospect. Bad business for many means good business for him. Restructuring and performance management are booming, so much so that professional services companies are rushing to rebrand themselves as turnaround genies. “You know a lot of people are, to be blunt, respraying themselves as restructuring guys and don't really have restructuring experience,” he said. Nonetheless, amid the chaos of “war”, Alvarez & Marsal is fighting off the upstarts and is busy.

Not that he advises UK plc to hide in the trenches and wait for the smoke to clear. “Despite all the doom and gloom there are some great opportunities.” But you have to get the basics, such as cash, sorted out before you can consider acquisitions, he advises, and any M&A activity should probably be around strengthening core businesses, not diversification.

The message is stark: those companies that did not act decisively in the first phase of the recession are now playing catch-up and risk death in the third phase. The worst, therefore, may be yet to come.

Those that went under in the first phase were the easy targets - those with flawed business or financial models, such as Woolworths, Land of Leather, Baugur and HBOS. “The danger is everybody forgets the third wave. Nobody really knows when that's going to happen, but when things start to get better you will actually find that many businesses will go bust then.” He predicts that there will be false dawns, with companies restocking too quickly; over-extension could lead to liquidity issues; banks will continue to be choosy about lending; and capitalising will remain difficult.

His aim, he added, is that companies should “never let a good recession go to waste”.

Mr McKenzie, who is likened to a general by a colleague, certainly seems to be having a good war and seems determined not to let his recession go to waste.

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