LEAVING A FIRM you’ve worked at for 23 years only to see your new workplace the subject of fraudulent activity, leaving you facing bankruptcy in your 50s, would be enough to make anyone want throw in the towel. But, for Harrisons director Tony Murphy, he relishes the opportunity to get back in the insolvency game.
In 2011 the high profile collapse of insolvency firm Bridge Business Recovery involved a shattering discovery for all the partners. Co-founder James Bradney was taking money out of the business with the aid of the firm’s accountant Michael Worrall, unbeknown to the other eight partners and 55 staff across three offices.
In a twist, it was Murphy and fellow partner Rob Horton joining the firm that set the wheels in motion that would lead to the discovery of the fraud.
Prior to Bridge, Murphy worked at Smith & Williamson and had done so since 1989. But he was keen to move to a specialist insolvency firm.
“I wanted to work with an independent firm and IPs more like-minded to me – to be more fleet-of-foot, if you like. I thought it would be an environment which suited me better, and at that time it was Bridge Business Recovery,” he explains.
When joining the firm, both Murphy and Horton set up a parallel practice that worked similar to a subsidiary. The idea was that the entity would merge into Bridge. However it was during this merger of the firms that led to the discovery of the fraud. KPMG administrators Colin Haig and Samantha Bewick were appointed hours later on 1 July 2011.
In February this year both Bradney and Worrall pleaded guilty to fraud and were sentenced to prison terms of 42 months and 32 months respectively.
This is where Horton and Murphy parted ways. Horton, alongside fellow Bridge partners Andrew Duncan, Matt Evans and Alex Cadwallader joined Leonard Curtis, while Horton now works for Auria Recovery. James Bradney’s work in progress was sold to Griffins and Murphy joined Harrisons.
When one door closes another opens
In times of distress, you find out who your friends are, and Murphy leant on Harrisons managing director Paul Boyle for words of wisdom. Boyle subsequently offered Murphy a role.
“Originally I was going to take some time off and consider what I was going to do,” says Murphy. However, the KPMG administrators needed to sell the assets of Bridge – the case work. Murphy was left to either bid for his own work in progress, or lose it.
Meanwhile, Boyle was looking to expand his rapidly growing firm into London, but needed a person he trusted, and who had the contacts to build up the practice. “Paul wanted a London practice but never had the time to build one there, so it was a natural fit. He needed and wanted London, and I already had an established London team around me,” says Murphy.
He explains that London is his normal “hunting ground” and that Boyle had resources at hand, which made for a natural fit. Boyle had been at Harrisons for 15 years and was trying to grow its national presence. It now has offices around the country, including Reading, Manchester, Birmingham and Hereford to name but a few.
Who needs banks?
Murphy and Boyle have particular expertise in asset-based lending insolvency cases.
“Asset-based lenders account for about 50% of our workload, most of which are independent from the banks,” says Murphy. “They are easier to work for and the scale of those collapses and insolvencies is more in tune with Harrisons, making it a natural fit.
“Myself and Paul were some of the first people to get into this market 20 years ago,” which is one of the ways that their paths crossed previously.
“Those securities and assignments come from a different basis of law, the methodology of recovery is also different and we work more closely with the client than with a bank, although banks have ABL units,” he explains. But as that market becomes more competitive, Harrisons is looking to change tack.
To combat the competition, the firm is looking to work on corporate collapses that don’t necessarily have the bank as the major creditor, which was previously the majority of its appointments.
“Banks were not paying out money to start-ups, so there was a huge funding gap, especially between 2008 to 2009,” he explains. “During this period foreign money was coming in and businesses were attracting investors,” he says.
Unfortunately, a lot of investors got it wrong and the firm is now working with several foreign investment vehicles, or individuals, which Murphy says is a “solid market” for the firm going forward.
Harrisons is also interested in highly-contentious insolvency cases involving litigation, something which larger, audit-based firms, are unwilling or conflicted out of working on. The firm picked up the fourth Special Administration Regime in the country, a new insolvency process to enable a speedier payout to creditors in financial services sector collapses.
Its appointment is a coup – with the other special administrations so far undertaken by much bigger firms: KPMG; UHY Hacker Young; and Mazars.
As the firm gears up for its 20th anniversary this year, Murphy is keen to point out that it is still, and will always be, on the lookout to expand and offer a good working environment to ambitious young practitioners. “We’re going to build and grow and devolve from a geographical focus,” he says.
Although Murphy doesn’t foresee an influx of insolvencies anytime soon, he is confident that the only way is up for the firm.
Harrisons in numbers:
UK fee income: £4.8m
Accountancy Age Top50 +50 ranking: 85
UK staff: 40 plus 6 directors
UK offices: 7
Bluffer’s guide to the firm:
Two Pauls run Harrisons. Paul Boyle is essentially in charge of the company, as de-facto managing director and having run the firm for the last 15 years. Paul Walker became chairman in 2012 and has worked with Harrisons for the last 11 years.
Tony Murphy’s CV:
2011 – present Director Harrisons
2009 – 2011 Partner Bridge Business Recovery
1989 – 2009 Partner Smith & Williamson
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