The route to stability lies in specialism, explains Leonard Curtis senior partner Neil Bennett
UNLIKE MANY FIRMS who are only beginning to recognise the value of focusing their practice, Leonard Curtis has always been a specialist in insolvency.
Since it began life in 1947, when established by its eponymous founder, the firm has veered away from being a multi-disciplinary practice.
According to Keith Goodman, its now retired senior partner, having a specialism is the way to win business. “If you go to a doctor and you have a problem with one of your joints, they will send you to a specialist, we’re no different,” he previously told Accountancy Age.
In a similar fashion, businesses speak to their accountants if they are having financial difficulties, and those accountants refer them to Leonard Curtis.
“Traditionally 75% of our work comes from accountant referrals,” explains current senior partner Neil Bennett. “We try to make them aware don’t just deal with liquidation and administration but we also offer business turnaround advice.”
However, it was stipulated by former senior partner Goodwin that specialists are in danger because clients want a breadth of services from a single provider.
This is an issue that Bennett is trying to overcome. He spearheaded a “corporate strategy” division which tries to get help to distressed businesses, long before they need an insolvency practitioner.
“Normally we see people too late, but, if we can see them earlier than we can be of more help,” says Bennett. “We can help them put strategies in place to help the business and sometimes businesses just need a person to help with that because some of the fixes are quite fundamental,” he adds.
Indeed, that single-minded focus on insolvency services has been aided by the firm’s unique structure. Leonard Curtis is a limited company not an LLP which, explains Bennett, has aided the firm’s organic growth.
The structure and way we are working, we’ll continue to grow organically. From our perspective in a quiet market we’re a quiet success story,” Bennett says. Nevertheless, the structure of the business has evolved since its inception to a more complex business model.
London Leonard Curtis Ltd is a subsidiary of the parent company Leonard Curtis Recovery Ltd, with the larger shareholders based in the northwest.
Although smaller practice issues are dealt with locally by a local director, the larger issues are dealt with by a main board which meets once a month, Bennett explains. “We don’t have to go through committees or complicated structures to get things done”.
Although he agrees there are pitfalls to a limited structure for a professional service firm, he is sure the firm won’t embark on the LLP route. “It’s not that the LLP structure is broken, it’s just not an option for us at this time,” he says.
As a business that prides itself on rescuing companies as well as advising them on how to avoid administration, it is paramount it has business continuity as top of its priority list. “In our business model it is obviously easier to sell shares than recruit more partners, and it has its tax advantages as an exit of a company. But, there are disadvantages of a corporate structure from an LLP, and vice versa.”
That structure has worked very well for Leonard Curtis. Regardless of where its offices are located, all are working on the same service line.
It creates a unity and understanding across the brand, which not only wins it work nationally for larger cases, but locally too. This was evidenced in January when, according to insolvency specialist Geoff Swire using London Gazette information, the firm increased its case load to 129 from 111 – making it the top appointment-taking firm in the UK.
According to Swire’s league table of appointments in 2013, Leonard Curtis was ranked number one, overtaking previous top and second spot holders Begbies Traynor and KPMG respectively – although fellow insolvency firm Zolfo Cooper does not appear in the list.
Specialising in one service line does not necessarily mean the firm can’t be diverse; quite the opposite in fact.
Its methodology of being “interested in the people – not the office” saw LC take on four partners from collapsed firm Bridge Business Recovery, Andrew Duncan, Matt Evans, Alex Cadwallader and Rob Horton. They all took director roles in the London office of LC after Bridge entered administration, following allegations of fraud against then partner James Bradney.
Andrew Duncan, one of the former Bridge partners, explains that although he is a licenced insolvency practitioner he advises on boards, currently working on a £1.2bn property business, as well as taking administration appointments.
“As a firm we know the world we’re in and make sure our staff take exams where possible and better themselves and give a better offering to clients,” he says.
The firm has also looked to expand it services in other ways. In February last year LC announced a joint venture with Irish-based accountancy firm Hughes Blake, in response to growing demand for cross-border restructuring and insolvency work. The joint entity in Ireland is called Leonard Curtis Hughes Blake and has a combined workforce of some 250 staff.
The firm is also dipping its toe into asset finance brokering, to help SMEs use ‘debt asset’-based lending. This sees the firm find lending for the SMEs by selling its debt in exchange for assets. It is also involved in obtaining tax deferral schemes for companies – known as Time to Pay (TTP) schemes – to give companies breathing space from their tax liabilities.
The only way is up
Although the firm saw significant growth in the last five years, growing its fee income by about £1.5m per year, the tide shifted, with it stagnant between 2012/2013 with fee income held at £15m. This is largely due to a decline in insolvencies, explains Bennett, from a high of 4,161 in 2009 to 2,532 in 2012 – and just 1,723 for the three quarters of 2013.
The firm isn’t panicking and jumping into acquisitions. In April last year LC was appointed to Ireland’s National Asset Management Agency’s (NAMA) a UK-based panel to provide expertise in complex enforcement and insolvency cases. State-run NAMA was set up to purge Irish banks of their toxic assets with the panel to help manage the disposal of banks’ property-backed loan books.
Although Bennett makes no qualms that the firm has had to streamline its practices and ensure it provides good quality work for lesser cost, the “lean structures allow it to be flexible and nimble to get things done”.
UK fee income: £15m
Top 50 ranking: 44
UK staff: 18 Insolvency Practitioners, 150 staff
UK offices: Ten offices in the UK: Birmingham, Bristol, Bury, Leeds, Liverpool, London, Manchester, Newcastle Upon Tyne, Preston and Wolverhampton.
Specialist sectors: Healthcare, Hotels, Pubs & Leisure, Property, Print, Retail, Recruitment, Construction, Automotive and Manufacturing
Leonard Curtis Business Solutions Group (LCBSG) was set up in 1948 in London. The firm now has 10 offices and continues to experience strong growth. In February 2012 the firm announced a joint venture with the Irish accountancy firm Hughes Blake, in response to the growing demand for cross-border restructuring, recovery and insolvency expertise. The joint venture has been named Leonard Curtis Hughes Blake (LCHB)
Neil Bennett’s CV
• 2005 – present
Managing Director, head of London practice Leonard Curtis
• 2001 – 2005
Partner, Leonard Curtis
• 1992 – 2001
Manager, Leonard Curtis (passed JIEB 1998 – Licenced insolvency practitioner)
(Neil joined Leonard Curtis as a manager in 1992)