Insolvency practices prepare for the worst

CC Raids Lovells workout team; Dechert launches insolvency practice; Herbert Smith group splinters

UK law firms are rushing to shore up their insolvency and restructuring practices as economists predict a slowdown.

Clifford Chance is taking on Nicholas Frome, head of business restructuring at Lovells, who is expected to join the firm’s restructuring and insolvency group following a vote on 5 January.

Frome’s appointment is a major coup for Clifford Chance since, coupled with former Wilde Sapte banking partner James Johnson who also specialises in restructuring, the firm will be able to boast one of the City’s strongest practices.

At present, Clifford Chance has just five partners specialising in contentious and non-contentious insolvency work.

One source says that Frome’s banking background is important, as workouts have become much more complex since the last recession. “With most of the fallout in 1990, it was just a matter of banks lending money to people in, say, France,” he says. “These deals weren’t complicated, you just had to get the money back. But now there are a lot of difficult financing instruments, and in these deals there are lots of different interest groups.”

One lawyer says: “There will be an upturn in work. Restructurings are starting to happen.”

At the same time, Dechert is setting up its own insolvency practice with former Herbert Smith senior assistant Ben Larkin.

However, at the end of last year Herbert Smith’s insolvency arm, which now houses just one partner and three assistants, was subsumed into the financial services practice.

Stephen Gale, head of insolvency at Herbert Smith, claims the move is a chance to “work right in the heart of finance, as part of the wider finance team, rather than as a bespoke insolvency practice”.

The group has experienced a raft of exits in recent months. A total of 11 lawyers have departed, including well-regarded partner Richard Obank, who went to DLA’s Leeds office (The Lawyer, 21 February 2000) and Sarah Nield, who left to go in-house at Societe Generale.

Meanwhile, Halliwell Landau has taken on Ralph Hume Garry partner David Grant to set up an insolvency and corporate recovery group at the firm’s City office.

Halliwells recently bolstered its Manchester insolvency practice by taking on Gavin Jones, Matthew Arnold & Baldwin‘s former head of corporate recovery and insolvency. This was aimed at boosting the group after Andrew Livesey, a former head of insolvency, left Halliwells to set up an insolvency group at North West firm Taylors.

Jones will be replaced by two partners, Alistair Bacon from Sinclair Roche & Temperley and Adrian Hyde of Denton Wilde Sapte, due to start at the firm in February.

Both Lovells and Clifford Chance were unavailable for comment.

Lovells is also losing corporate partner Jonny Myers to Clifford Chance.