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Insolvency law: area of practice

Insolvency solicitors help companies in debt find a path back to recovery, explains Patrick from Sidley Austin.
The work has been particularly busy since the start of the financial crisis in 2008.

Restructuring and insolvency solicitors are contacted when companies or individuals are in financial distress and will typically advise the individual or company or act for their creditors or other stakeholders.

You might get involved in assisting a financially distressed company to restructure its debts or if the company cannot be rescued (for example, because it has insufficient cash or assets to compromise creditor claims) you may assist with the formal insolvency proceedings.

At any one time a junior solicitor could be working on two or three cases or may find that they are spending most of their time working on specific aspects of a large, complex cross-border restructuring. Cases typically last for 6 to 12 months but more complex matters may continue for several years.

What sort of clients and colleagues will I work with as an insolvency lawyer?

The work is varied and clients tend to expect their solicitors to take a practical and commercial approach to resolving their issues. You should expect to have a lot of client contact and to work with insolvency practitioners, accountants and financial advisers. On larger matters, you should also expect to work with local lawyers and advisers in other jurisdictions where the company operates or holds assets.

Cross-border work may often require early starts and late finishes to accommodate calls with advisers located across different time zones but may also provide opportunities for travel, for example, to attend important meetings and court hearings.

Hours will fluctuate depending on your workload but a typical day will run from 9.30 am to 7.30 pm. Occasionally, you might be picking up with Hong-Kong-based colleagues and clients in the morning and dealing with US colleagues and clients later the same day. You may also have long periods of working late at night when, for example, preparing a case for filing or closing a sale of assets. You can also expect some weekend work.

Are insolvency departments recession-proof?

The work has been particularly busy since the start of the financial crisis in 2008 and there have been a lot of legislative changes introduced in response to the complex issues that have arisen including legislation to deal with the collapse of financial institutions. While there may be less concern about insolvent banks and sovereigns in boom times, there are always companies and other institutions failing, and restructuring and insolvency lawyers can also be very busy when the economy is performing well.

What sort of work will I carry out as a trainee solicitor?

Trainees tend to get a lot of early responsibility. They have regular contact with clients, financial advisers and insolvency practitioners. You can expect to draft restructuring proposals and to present your work to other team members and clients. In their first six months, a trainee’s week will typically include research, drafting, attending client meetings and court hearings, and joining conference calls.

Types of law practised

  • Insolvency.
  • Company.
  • Finance.
  • Tax.
  • Regulatory.
  • Commercial litigation.

Good insolvency solicitors have…

  • Strong communication and presentation skills..
  • Teamwork skills.
  • Commercial awareness.
  • Creative thinking.
  • The capacity for hard work.

Patrick Corr is a partner in the insolvency and restructuring department of Sidley Austin. He graduated with a law degree from Leeds Metropolitan University (now Leeds Beckett University) in 1987.