A company is technically insolvent if its debts are greater than its assets. When a company runs into financial difficulties a number of professional advisers are called in to remedy the situation. If a company fails to pay its bills then its creditors may call in the administrators to help rescue the company from financial collapse. When a company goes into administration some of the company’s assets may be sold off to decrease its debt, or the company may be sold off in parts to repay its debt. If these solutions prove unsuccessful then the company may be liquidated.
Insolvency lawyers will go through periods of intense work followed by quieter periods. Insolvency work tends to pick up when the economy slows down as more companies find themselves in financial difficulty. Insolvency lawyers will advise on companies working in a range of sectors. Insolvency practices are also normally split into contentious and non-contentious work, so it helps if lawyers have a working knowledge of both areas, as some insolvencies often involve litigation.
Insolvency lawyers need a good knowledge of all the regulatory issues surrounding administrations and should have the ability to pick up knowledge about different industries very quickly. Lawyers also need the temperament to be able to work in an area that involves the end of something, rather than the beginning of something new.
