Restructuring and insolvency

During a restructure, you will learn how to diagnose the cause of an organisation’s under performance, identify solutions and drive necessary change. The scope for possible impact is immense and can be a rewarding experience.

What is restructuring and insolvency?

Restructuring and insolvency services help organisations that are in financial difficulty. These organisations are typically on the brink of bankruptcy and potentially unable to pay debts.

Organisations in this situation have two options – urgently restructure or become insolvent. When an organisation decides to restructure, it may need to renegotiate its existing debt or improve cash flow to meet its financial requirements. If an organisation is unable to do so, then it will enter the insolvency process, which usually involves selling business assets and repaying debts.

What is the graduate experience like in restructuring and insolvency?

There are a handful of large specialist firms that offer graduate programs such as McGrathNicol, PPB and Ferrier Hodgson. The ‘Big Four’ accounting firms also have restructuring and insolvency practices.

Organisations will usually appoint external consultants because they believe the organisation will become insolvent without urgent intervention. As a graduate, this means working in a high-pressure environment where you’ll need to act quickly before the organisation finds itself in an insolvency situation. Expect a hands-on experience from the beginning!

During a restructure, you will learn how to diagnose the cause of an organisation’s under performance, identify solutions and drive necessary change. The scope for possible impact is immense and can be a rewarding experience.

If it isn’t possible to save the organisation or its business, then your task will be to help wind up its affairs in a fair and orderly fashion. In some instances, your client may actually be creditors who seek to collect and sell enough of the organisation’s assets to reclaim its debts.

As a graduate, restructuring and insolvency offers both ‘behind the scenes’ tasks such as financial analysis and modelling, as well as client interactions.

Working with people whose business is failing can be a highly charged experience. Australia’s laws force directors to choose between trying to turn around an organisation on their own or putting it into voluntary administration to prevent being personally liable if their efforts fail. This can put a lot of pressure on management and the project. You may also deal with terminated employees and angry suppliers and customers – all of which will help to improve your people skills.

What are your career prospects in restructuring and insolvency?

There are typically few barriers to promotion up to manager level. Beyond this, you will be required to bring in new business to become a partner. Working with clients early on however, means you will have a chance to learn the necessary relationship skills. Larger accounting firms will encourage you to become a Chartered Accountant (CA) by funding further study and allowing study leave.

Working in restructuring and insolvency also requires you to extend beyond traditional accounting and audit. It teaches you critical thinking and business problem-solving skills, which are valuable transferable skills. Indeed, you will find most firms, even those that are reasonably specialist, offer other services including corporate advisory and consulting.

If you discover you don’t like restructuring and insolvency in the early stages of your career, you can always look to transfer to another specialisation. Other career paths may include working in-house for a bank or at a credit department.

Furthermore, restructuring and insolvency work is often countercyclical. You will find yourself busier during an economic downturn when organisations are more likely to need help or are at greater risk of insolvency.

Choose this if you have:

■ Strong problem solving and analytical skills ■ High emotional intelligence ■ A willingness to work under pressure in uncertain environments ■ A desire to make a difference by helping organisations turn around their business.

Interested in this specialisation?

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