What Insolvency/ Restructuring Lawyers Do
When organizations and individuals cannot pay their debts, they turn to an insolvency/ restructuring lawyer. Attorneys in this field examine their client’s debts and help determine if restructuring, reorganization, or bankruptcy will help. They draw upon a wide range of skills, from business acumen, to knowledge of other areas of law, such as corporate (both M&A and CM), tax, real estate, labor, employment, and intellectual property, and utilize a mixture of litigation and transactional law depending on the needs of the client. In some cases, insolvency lawyers can renegotiate debts or help a client restructure debts out of court. With simple personal matters, this could be as straightforward as drafting letters on behalf of the client or renegotiating terms, though corporate insolvency issues may become quite complex, integrating debt securities or distressed mergers. Other times, the only options are bankruptcy, administration, or liquidation, which may involve litigation.
Insolvency lawyers may also represent creditors, in which case their goal is to try to get the debtor to pay as much of their debt as possible. Firms typically represent either creditors or debtors, though some will accept clients from either side.
Who would enjoy a career in Insolvency Law?
Some say work in insolvency law requires a law degree, but results in the equivalent of an MBA. This is true for those who work on the corporate side, as they must have in-depth knowledge of all areas of business in order to give proper guidance. Others say the work is more like that of a generalist, simply because knowledge of so many areas of law is necessary, which is also true. Because of these factors, people who get into insolvency and restructuring law must be incredibly well-rounded, plus be prepared for both transactional and litigation practice. Negotiation skills may also play a more integral role in this field, as the ability to persuade creditors to accept deals or wait for payment can make the process smoother, help the client avoid a lengthy legal process, and avoid court altogether sometimes. Equally, those who want courtroom experience, particularly at an early stage in their career, will likely find it in insolvency law, as the courts will want to approve most decisions the client makes once it’s involved, which can result in dozens of appearances. This also means that the same lawyers frequently come together to negotiate terms, often in front of the same judges repeatedly, not just for one case, but time and time again. Lawyers in this field tend to report a sense of comradery, even with opposing counsel, because they work together so much to come up with amicable solutions. For this reason, insolvency law can be a great field for those who like to build relationships and appreciate the welcoming environment.
Who mightn't like the career?
Although there is comradery amongst attorneys, the outside world doesn’t always appreciate or understand what insolvency attorneys do, so they may constantly feel the need to defend their work. It might not be an ideal path for those who are sensitive or are worried about public perception. In addition to this, work in insolvency law isn’t steady. Practices typically see spikes when the economy faces a downturn and have less work when the economy is booming. For this reason, insolvency lawyers should be masterful planners when it comes to their own finances, and won’t do well if they’re unprepared for slow periods. Moreover, insolvency lawyers are often called in to cope with unhappy and urgent circumstances, so those who aren’t prepared to do some degree of attitude coaching/ emotional counseling with their clients, as well as work shifting hours, will likely struggle.
Admittance into an accredited university upon completion of entry exams is the first step in entering law. Quality institutions have rigorous requirements and competition for positions is fierce. A law degree is required in order to practice at any level above the rank of intern or summer associate in the US and Canada. In the UK and Australia, offerings such as the Graduate Diploma of Law (GDL) or the Graduate Diploma in Legal Practice (GDLP), respectively, are available, which allow people with virtually any undergraduate degree to move into law. Each jurisdiction has further requirements, including a bar exam and licensure process.
- Juris Doctor
- Master of Laws
- Doctor of Juridical Science
- Bachelor of Laws (also called a BL or LLB for the Latin Legum Baccalaureus)
- Graduate Diploma of Law (GDL)
- Graduate Diploma in Legal Practice (GDLP)
Those who are aware they’d like to enter into a law career should plan early and apply for a summer associate or internship position while still in school, as the experience will help secure a long-term position after graduation.
- Harvard Law School’s “Questions You Should Be Prepared to Answer”
- 10 tips for a strong legal internship interview
- The Ins and Outs of Bankruptcy Law
Moving into Insolvency Law from another career
It can be difficult to transition into law, simply because one must pass legal exams and participate in additional coursework. At the same time, some big firms appreciate diversity and take pride in amassing a staff with unique non-legal backgrounds, as these individuals are better prepared to understand the needs of each sector that is being represented by the firm.
Graduate / Associate
Role: Incoming lawyers are referred to as associates. Students who are interning may have the distinction of being called a “summer clerk” or “summer associate,” and those fresh from university will be called “first-year associates,” and so on. Lawyers typically hold the title of associate for somewhere between seven and ten years, depending on the firm. During this time, their job is to support the firm’s partners, generally by handling research and reviewing contracts. It’s worth noting that some firms have an “up or out” policy, meaning that if a lawyer is not on the tenure track and does not become a partner within the allotted time, they are asked to leave the firm.
Role: Generally speaking, the title of senior associate is offered to a lawyer around five years into practice, though each firm will have its own guidelines. During this phase, the senior associate is expected to behave as if he or she is a junior partner. Ownership of projects is expected and the individual should be an expert in the area he or she covers. Tasks of greater importance may be assigned to senior associates by the firm’s partners and senior associates will generally have junior associates they can delegate some of their work to. It’s while working as a senior associate that a lawyer demonstrates to the firm that he or she is an indispensable part of the firm and is already behaving as if a partner.
Role: Associates who have proven themselves and are managing some of their own clients as well as bringing in new clients are typically offered partnerships. The exception to this is firms that have “of counsel” positions, which is a promotion from associate for those not on the partner career track. When a lawyer is offered a partnership role, it’s generally an equity partnership in which the lawyer “buys in” to the practice and then earns a percentage of the profits. As part owner, he also gets a say in the firm’s business decisions. Some firms may offer non-equity partnerships and let their seasoned lawyers take a salary instead of being part owner.
Although there are jurisdictional laws related to insolvency, most legislation is drafted at a federal level. This makes it relatively easy for an attorney to work anywhere in the country. Although most work in one major metropolitan area, those who represent corporate clients may be required to travel to places the company does business.
Entry Level: According to data from PayScale, those beginning their careers have salaries of approximately USD $104,000 in the United States, £58,000 in the United Kingdom, CAD$97,000 in Canada, and AU$78,000 in Australia.
Mid-Career: USD$121,077, £70,800, CAD$110,580, AU$113,943.
Experienced: USD$159,040, £74,340, CAD$121,250, AU$145,816.
Naturally, bonuses and profit sharing are a major part of a partner’s income. With additional payments, an experienced attorney can earn more than USD$307,000, £120,000, CAD$156,000, or AU$206,000.
Why Insolvency/ Restructuring Lawyers move on
“The largest pet peeve among bankruptcy lawyers is the failure of some lawyers to know and follow correct procedures. Most bankruptcy lawyers know the law, but are unfamiliar with procedures,” says bankruptcy attorney Ira Levee in “10 Things To Know About Bankruptcy Practice,” when asked what people hate about the profession. He adds, “Attorneys also dislike when adversaries seek emergent relief when it is not necessary or set unreasonable response or hearing dates.” Harrison Barnes of Law Crossing also lists unpredictable hours, stress, stigma, and paperwork as field-specific challenges. “For those of you who are sensitive souls, any reorganization or liquidation process can be just plain sad,” Barnes also notes. Comparatively, though, insolvency lawyers may enjoy their jobs more than most, and simply move to a niche-specific area rather than leave altogether. However, those who do leave are well-poised to work in virtually any other aspect of law or business.