When US investment bank Lehman Brothers collapsed last September, hundreds of
staff from PricewaterhouseCoopers, the administrators for the bank’s European
operations, were drafted in to help sort out the mess.
But by no means all of them had had experience of dealing with such a
Of course, there were plenty of qualified insolvency practitioners on board,
but many came from other parts of the firm – corporate finance, tax, audit were
Now, as the dust has begun to settle on one of the largest and most
spectacular corporate collapses in recent business history, many of these
staffers will be returning to their day jobs.
But some will stay on, if not directly involved in the administration, then
certainly in other parts of the firm’s business restructuring services. Because,
once someone has had a taste of restructuring, anything else can seem, quite
frankly, a bit tame. And given today’s economic climate – BDO Stoy Hayward is
predicting that almost 100 companies are expected to go bust every day this year
– there are plenty of opportunities out there.
Where are the opportunities?
Broadly speaking, business restructuring is divided between the formal and
That is to say, those who taken on formal insolvency appointments –
administrations, liquidations and bankruptcies – and those that are involved in
informal work, usually referred to as business restructuring and turnarounds.
An obvious route into working with troubled companies will be through the
business restructuring departments of the major accountancy firms, though law
firms also offer similar opportunities. Here you will be able to gain hands-on
experience and, if you choose, you can study towards gaining an insolvency
qualification (typically this means passing the Joint Insolvency Examination
Board’s exams and gaining 600 hours of relevant experience) and ultimately a li
cence to take insolvency appointments. There are also a number of niche
accountancy firms that are making a name for themselves as restructuring
But these are not the only routes. According to Christine Elliott, chief
executive of the Institute for Turnaround, there are plenty of other paths.
‘Look more broadly for turnaround opportunities,’ she says. ‘There are work out
units in banks, there are some fantastic private equity specialists that
concentrate on turnarounds, and in industry, you can become a corporate
troubleshooter.’ Elliott also suggests that another area to look for
opportunities is in the public sector.
‘Sometimes it is called “performance improvement”, but there are going to be
some significant opportunities, whether in health, education, local authorities,
and that is turnaround by any other name,’ she adds. ‘It is all about
rehabilitating and restoring financial health to an organisation.’
Elliott also says that the ‘third sector’ of voluntary and charitable
organisations is worth investigating for opportunities.
Who should apply?
‘You need to have a fairly robust character,’ says John Francis, technical
director at R3, the association of business recovery professionals. ‘By
definition, you are dealing with people who have already lost money. You are
always dealing with fairly messy situations.’
He adds that suitable candidates would also need to be commercially savvy and
able to take quick decisions.
Elliott agrees: ‘You must have great negotiating and political skills, and
the ability to understand the agendas of all the stakeholders. And you have to
have personal courage, making big decisions very quickly.’
All are agreed, though, that you need experience. ‘Generally, experience is
the main qualification,’ says John Bloor, head of business transformation at
Alium Partners, the interim manager provider. Talking specifically about interim
management, or trouble shooting, opportunities, Bloor says: ‘It’s not really a
personal development opportunity, so strictly “experienced hands only”.’
Of course, that experience may not have been gained directly in a turnaround
PwC’s Claire Knollys switched from tax work into restructuring in May this
year. The transferrable skills in her previous deal-related work, particularly
in a private equity context, and project management skills, have stood her in
Now she finds herself working for the lenders on a large debt restructuring
for a private equity owned global retail/consumer brand. ‘Moving into a
restructuring environment provides an opportunity to develop broader commercial
awareness and situational experience that should enable you to demonstrate a
better understanding of wider client and stakeholder objectives when advising on
tax issues,’ she says.
Is it sustainable?
Growth in business restructuring services has tended in the past to be
But cutting your teeth during a recession will leave you in good shape for
‘For business people in general, to acquire turnaround skills so that they
have at least an understanding of what happens in a turnaround, and can see
warning signs in their own businesses, is really important,’ says Elliott, who
adds that a number of MBA students are now taking turnaround courses as part of
their overall studies.
No matter where we are in the economic cycle, there will be companies that
get into financial difficulty, and this can give you a great deal of variety,
and a great deal of opportunity.
There are a number of associations for professionals working in insolvency
and restructuring, and it is worth getting in touch:
- R3, the association of business recovery professionals, publishes a careers
guide, which details the qualifications required to become a licensed
- The Institute for Turnaround, formerly the Society of Turnaround
Professionals, provides accreditation for turnaround professionals
- The Insolvency Practitioners Association authorises insolvency practitioners
- All the major accountancy bodies (ICAEW, ICAS, ACCA, ICAI) as well as the
Law Societies of England & Wales, Scotland and Northern Ireland support the
insolvency and turnaround communities. In addition, the Department of Business,
Innovation & Skills can sponsor you.?
Case study: Abhijay Jain, PricewaterhouseCoopers
Formerly working in the mergers and acquisitions tax department at
PricewaterhouseCoopers, Abhijay Jain was seconded to the Lehmans administration
in May. Since then, Jain has been on a rapid learning experience. ‘I have learnt
how it feels like to be the person actually making the business decisions rather
than just advising on the issues,’ he says. ‘This is a very different mindset to
the one I was used to and I am still adjusting to it.’
During his time at Lehmans he has been able to put his previous two
and-a-half years of tax experience to good use, but also build on that
‘I have also learnt that a major part of running an administration is about
communicating effectively for which you need to have a lot of empathy for the
parties affected by the failure of the business. And it is not very easy to do!’
And he believes that what he has learnt will prove useful for his future
career: ‘As a tax professional, it gives you a complete picture of businesses,
which will enable you to become more rounded adviser when you return to tax.’
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children