Insolvency law

Insolvency law deals with bankruptcies of individuals and insolvencies of companies, restructuring of businesses, realizing assets and working with people and businesses with financial difficulties.

Insolvency work is hugely varied and includes placing companies and individuals into insolvency; buying and selling assets of insolvents; and advising on the security and reorganisation of businesses in financial difficulties. Insolvency lawyers generally advise insolvency practitioners (generally accountants licensed to carry out insolvency work – although some solicitors are also licensed as insolvency practitioners) and are also involved in litigation to recover assets and pursue directors and debtors of insolvents.

Graduate careers in insolvency law

You will generally have a large number of cases if you work on the litigation side of insolvency. These can last from six months to several years. On the transactional side, businesses can be sold in less than 24 hours and transactions will rarely last longer than two or three weeks so as to minimise disruption to jobs and businesses. However, insolvencies can take a long time and court proceedings can last for a number of years. As you would expect, insolvency relies on the state of the economy and in a recession this area is very busy.

Working hours vary immensely. When a company becomes insolvent it is essential to realise maximum value for the creditors and if possible to save the business and jobs. Sometimes you have some prewarning of this but often there is an unexpected turn of events such as the loss of a contract, which may result in an urgent insolvency.

Typically insolvency lawyers work for insolvency practitioners and for banks or other investors, but they also act for directors and creditors. Lawyers have a lot of client contact by correspondence and meetings in and out of the office. As there are a limited number of accountants working in the insolvency field you will often be working with the same clients. You will be expected to take on quite a lot of marketing and you will get to know the clients well.

Is insolvency law recession-proof?

As expected, insolvency work has increased in the current recession. This has not been limited to any particular sector, although there have been a lot of household name insolvencies. It is anticipated that this will continue even after the economy starts to recover as there will be a knock-on effect for some time to come.

What skills do you need as an insolvency law solicitor?

• Flexibility.
• Problem solving skills.
• Commercial awareness.
• An established grounding in all areas of law.
• Communication skills.

What is it like doing a trainee solicitor job in insolvency law?

At trainee level, you will be involved in researching, assisting with litigation, placing companies and individuals into insolvency and assisting with transactions for selling businesses and assets. There may be opportunities for advocacy through bankruptcy hearings and you may also manage your own smaller files. Typical working hours for a trainee will vary – there will probably be some all-nighters.

Types of law practised

• Banking.
• Commerical.
• Corporate.
• Employment.
• EU.
• Litigation.
• Property.
• Tort.

About the author

KATHRYN HACKING is an associate in the corporate recovery department of GATELEY UK LLP. She graduated from the University of Leicester with a degree in law.