Insolvency professionals must face up to a totally different way of working, to keep up with market and regulatory developments
INSOLVENCY SPECIALISTS must adapt or die, with a new regulatory framework set to create a revolution in working practices, one of the profession’s most senior practitioners has warned.
In a speech to guests at Opus Restructuring’s first anniversary, held at the House of Commons last night, Nick Hood (pictured) said that the government’s plans to introduce fixed fees for formal insolvency services would see firms have to change the way they operate.
They will need to look at offering more “creative” services that fall outside of the legislation, and provide them earlier on in the business cycle – before an informal insolvency is required. Those that carry on providing formal services will have to operate much more efficiently.
“They will need to look for positive and more creative solutions, not rely on formal insolvency procedures and their draconian powers under the insolvency legislation,” said Hood. “This will need a very different set of softer skills than those still prevailing in most IP firms.
“If they are forced to go down the formal route, they will have to be ruthlessly efficient and carry a good deal less overhead than many firms do now.”
Corporate insolvencies are expected to increase, as an upturn in economic fortunes often sees businesses over-extend themselves. The latest Insolvency Service figures saw administration up 10% to 642 in Q4 2013, compared to a year earlier.