In a world of increasing consolidation, where the accounting "big five" hold sway, the insolvency field provides some welcome relief.
The usual giants – PricewaterhouseCoopers, KPMG, Ernst & Young and Deloitte & Touche – have strong insolvency and restructuring teams. But they are being increasingly challenged by firms outside the big five – most notably Grant Thornton and, on a niche level, Buchler Phillips.
The merger of Price Waterhouse and Coopers & Lybrand brought together arguably the strongest insolvency and turnaround practices in the business. Their combined strengths comfortably cover all the bases, from multi-bank workouts to volume liquidations, as well as a global capability second to none. Its CV includes the public company side of Maxwell, where it instructed Norton Rose, and Polly Peck, where it instructed Cameron McKenna. More recently, it landed Peregrine, for which it brought in Clifford Chance – a job which has dominated its Asian practice over the last year. What's more, both PW and Coopers had exceptionally strong track records in the burgeoning field of insurance insolvency, and the merger has only served to confirm PwC's pre-eminence in this specialised, but increasingly important, area.
KPMG is PwC's nearest rival in insurance insolvency, but also has all-round strengths in general insolvency and turnaround. The firm managed to take the other big Asian collapse – Japan Leasing – from under PwC's nose last year, instructing Linklaters. Of course, had KPMG merged with Ernst &Young, as was mooted last year, then the combined insolvency practice would have been formidable. As it is, both KPMG and Ernst & Young trail PwC in terms of depth of resource, but still maintain sterling reputations. Ernst & Young, in particular, has set out its stall as being able to advise on the most complex of situations. It handled the successful Canary Wharf administration, along with Allen & Overy, and Barings, where it brought in Slaughter and May. Its insurance insolvency practice, while smaller than PwC's, is perfectly-formed.
Deloitte & Touche, which ran the BCCI liquidation along with Lovell White Durrant in the early 1990s, has been perceived to have been quieter of late, probably due to a series of internal restructurings. But new head Nick Dargan – not long down from Manchester – has made a splash in London.
One of the biggest mysteries is the virtual disappearance of Arthur Andersen in this sector. Despite its handling of Ferranti with Allen & Overy and Leyland-DAF with Wilde Sapte, and its unquestionable global capacity (it is beavering away in Brunei), there is little doubt that it has faded domestically.
Taking Arthur Andersen's place among the insolvency big five is Grant Thornton, which recently got the Griffin Trading job, where it instructed Stephenson Harwood.
Meanwhile, at the edges of the elite is niche insolvency firm Buchler Phillips, packed with Arthur Andersen exiles. Its capacity for attracting high-profile work (Maxwell private companies; Knickerbox; and a whole slew of football clubs) is not underestimated by its rivals.
Outside this main grouping are a number of firms which unapologetically target the small to medium enterprise sector: BDO Stoy Hayward, Baker Tilly, Horwath Clarke Whitehill; Robson Rhodes; and Pannell Kerr Forster. The potential merger between Robson Rhodes and Pannell Kerr Forster would have been interesting, since both have made small inroads into the financial services sector. With that merger now off, it remains simply a "what if?". But such is the pace of change in the accountancy market that the prospect of other mergers – with interesting effects on the insolvency sector – is tantalising.