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What does the changing face of insolvency work look like?

Author: ICAEW Insights

Published: 25 Aug 2022

Emerging roles are shifting the insolvency profession’s emphasis towards digital skills, back-office team building and empathic listening, says Mazars Partner Rebecca Dacre.

Home to an already bustling blend of analysts, managers, cashiers and administrators – among a host of other, specialist roles – insolvency is undergoing a sea change that is broadening the scope of who can enter the profession.

Mazars Partner Rebecca Dacre is seeing “a huge amount of growth” in digital ways of working throughout insolvency, and cites one example of how software technology has already transformed her firm’s methods for sourcing work – particularly in respect of personal insolvency.

“In the past,” she says, “new business would have come from accountants, lawyers, bankers and other intermediaries who, when working with their clients, would spot a potential insolvency and encourage the affected party to call us.”

However, for some time now, in respect of bankruptcies, that process has been partly automated, thanks to the vision and innovation of one of Mazars’ team members. Dacre explains: “By developing a data-driven technology tool, we became able to offer something more to creditors, which was what they needed to help them to deal with their customer debts quickly and efficiently.

“That illustrates that we need people in insolvency who aren’t traditional practitioners: people with a vision and a grasp of new technology, who can carry out a gap analysis of our processes and say, ‘Why are you doing it like that?’ and then help us to leap forward.”

Back-office boom

Recently, Mazars has recruited a data analyst with a high-level postgraduate qualification in digital technology to modernise its insolvency practice.

“Traditionally,” Dacre says, “the type of person who worked in insolvency was a pragmatic, numerate accountant with an insightful legal mind, who was capable of writing lengthy, technical reports that pull together all the varied strands of a case into one document, in line with statutory or client requirements.”

Now, though, she says: “We’re working with technology that will enable us to use information that we have stored in different software platforms as part of our day-to-day work – then an artificial intelligence (AI) tool will actually compile the reports for us. That falls squarely within our data analyst’s skillset, and she’s helping us to find ways of making it happen.”

Such roles are sparking a reassessment of how insolvency practitioners with accounting and legal backgrounds allocate their time. “If a lot of our documentation work will be carried out electronically with the help of AI, that will free us up to focus more closely on value-added tasks, such as strengthening our client relationships, meeting new contacts and deepening our involvement in business strategy and problem solving.”

A similar trend, Dacre explains, is driving growth in demand for back-office staff. “Once, someone like me in a mid-sized firm would have had a varied portfolio, combining manual and consultancy tasks, and would carry that from first instruction with a client right through to closing the case and filing the end paperwork with Companies House – which may take several years.”

By contrast, Dacre notes, “I am seeing more and more restructuring and insolvency firms move towards back-office teams that deal purely with a specific aspect of a case or case type – such as case closures, or solvent liquidations.”

Empathy skills

At the opposite end of the spectrum, the profession has room for people who can provide help, support and, indeed, a shoulder to those affected by the outcomes of corporate insolvency.

“This thread runs through a lot of our interactions with company directors, out-of-pocket creditors, family business owners or employees,” Dacre says. “For example, in cases where we’re dealing with redundancies and employee claims, we want to ensure we are assisting those individuals in a very sympathetic, caring way. It is a very stressful time. They may be worried about their homes – and they will certainly be worried about what the future holds for them and their families.”

To deal with those who are experiencing such strains, Dacre says the firm is seeking people who aren’t necessarily exceptional at numbers or report writing, but who have great empathy skills and can connect with distressed individuals and explain complex situations very straightforwardly.

“In some insolvencies we work on, the former employees may not have their own computers. Plus, some may have difficulties with literacy. Attentively helping them through their claims will ensure they don’t miss out,” Dacre says.

So, what do all those trends mean for insolvency firms’ recruitment strategies? “We need to be smarter across the whole profession,” Dacre notes, “and ensure we apply new job role advertising in the right places. That will require firms to think outside the box. Instead of using the same HR consultants typically used for ‘insolvency roles’, firms will have to go into more specialist markets to find the talents we need.”

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