Recruitment firms are reporting a demand for insolvency experts, says Mike Yuille.
Demand for insolvency lawyers is picking up, seemingly in preparation for what many expect will be an increase in company collapses next year due to growing global economic difficulties.
This renewed demand is taking two forms: demand for experienced big hitters, who can bring much-needed visibility to the handful of large firms which lack a high profile in the business, and the general recruitment of younger solicitors to boost teams.
In recent times, Linklaters took a team of three insolvency partners and two assistants from Dibb Lupton Alsop; Christopher Mallon, a rising star from Lovell White Durrant, was snapped up by Biddle and is currently building up a very successful practice. Nicholson Graham & Jones also recruited a team of four lawyers from Hill Taylor Dickinson.
Freshfields and Herbert Smith, both of which were perceived by others to have "missed out" on big-ticket insolvency work in the last recession, are looking to bolster their practices with recognised names who have a following.
While Freshfields is understood to be still hunting for star-quality names, Herbert Smith has already found one, in the shape of Hammond Suddards' Steve Gale. Head of the technical committee of the Society of Practitioners of Insolvency (SPI), Gale is well-regarded. He is effectively still the head of insolvency at Hammond Suddards, but is on gardening leave until joining Herbert Smith on 1 January.
There, he will be working with Richard Obank, a 33-year old partner whizz kid who is a former colleague of Gale's at Hammond Suddards. Obank says: "At Herbert Smith, we have handled a fantastic range of corporate recovery work but we have suffered from not having someone with a profile. Someone with flair like a Steve Gale or a Gordon Stewart [insolvency head at Allen & Overy] is needed."
High-profile practitioners are important in insolvency work. There are only a few big names among the insolvency specialists at law firms and accountants; these individuals are at least as important in marketing terms as the names of the firms themselves – if not more so, says Obank.
"We are planning to re-focus our efforts, to create a small team of specialists," explains Obank. "Currently, we handle this type of work across the range of departments."
He adds: "I do feel there will be a downturn at some stage soon, although in my view it won't be like in the early 1990s. It will be more gradual."
Gale handled all the Israel work in the Maxwell insolvencies. Both Hammond Suddards and Dibbs have strong reputations in the field. "I have enormous respect for Hammond Suddards," says Gale.
But he now wants the challenge of a "magnificent" City firm like Herbert Smith. "It may not have had a public face in insolvency, but any firm that has been at the heart of the Eurotunnel reconstruction definitely knows what it's talking about," he says.
As the head of corporate recovery department at Herbert Smith, Gale hopes to instill a new dynamism: "We want to build a high-quality team, and I am interested in seeing anybody with a good track record in the area."
Hammond Suddards may miss him, but it retains its strength with managing partner Chris Jones reverting back to heading its insolvency practice.
Even Lovell White Durrant, which along with allen & Overy has one of the biggest City teams, is planning to expand. Peter Horrocks, departmental head, says: "We are looking to bring in people, particularly our own trainees who are now qualifying."
Wansbroughs Willey Hargrave, which is vying to be one of the fastest-growing national firms with seven offices around the UK, also has plans. It already has a London office in Covent Garden and is in talks to merge with a smaller firm in the capital which will significantly boost its insolvency team.
Peter Rees, head of Wansbroughs' insolvency department, says the planned London expansion will mean its insolvency work will be "very much partner-led".
Meanwhile, recruitment consultants are suddenly doing a roaring trade in insolvency lawyers, with demand in the main coming from City firms.
Victoria Hall, of recruitment consultancy Badenoch & Clark, says: "Over the past two months, we have had lots of instructions. Candidates are being seen even though they may not have worked in a big firm before. In some cases, firms are offering to train new lawyers up to be insolvency practitioners, too."
This information will certainly come as good news also for many of the lawyers who have found themselves having to take on more routine banking or litigation work because of the post-recession fall-off in insolvency instructions.