The growth of insolvency law practices has been widely considered a fait accompli since the Federal Reserve Bank announced its intention to raise interest rates and curb inflation in 2007.

Breckenridge has specialised in insolvency law for almost ten years, and was most recently with the firms Cosoff Cudmore Knox and Henry Davis York. The appointment lifts the Sparkes’ insolvency group to ten lawyers and is part of a wider strategy to grow the practice says partner Richard Anicich, head of the Insolvency & Restructuring service line.

“Kieran’s appointment to the team in Sydney is part of that strategy to grow that aspect of our business which is currently concentrated in New South Wales, but the aim is to grow that area particularly with focus on our east coast offices,” Anicich said.

Breckenridge said the key drawcard with the Sparkes team was the energy and resources being directed towards growing the firm’s bourgeoning insolvency practice.

“It’s got fabulous clients to which I can add my own client contacts. The resources are top line and on hand, and make the job really easy to get on with. The firm provides a real opportunity for me to develop this insolvency practice further and really get some presence in the market.”

Anicich confirmed that the firm expects further growth across the industry and is looking to capitalise on its market position in that regard.

“I think there are a number of reasons why it’s likely to be an increase in insolvency practitioners, both accountants and lawyers,” he said.

“While there are some sectors of the economy that remain fairly buoyant, particularly in the resources sector, the reality is that the increase in cost of credit in the global markets is having an impact — particularly on highly leveraged businesses — and that’s going to need businesses to look at restructuring their operations and that may lead to an increase in some business failures,” he said.

The prospect of further Opes Prime-type collapses is another dark cloud on the horizon, according to Breckenridge.

“There’s a lot of volatility in the sharemarket and it seems to react very quickly to any type of negative news. What we could quite easily see is more of these type of situations occurring, tied up with the whole margins lending and securities lending businesses.”

“From the point of view of the finance industry, financiers will need to have greater scrutiny on their lending operations to minimise risks of problem loans,” added Anicich.

Business failures and bankruptcy are not the best of circumstances for clients, he said, requiring a unique blend of skills perhaps not normally associated with commercial law. “I think you need to have empathy for people’s situation, and that really helps in this type of practice,” Breckenridge agreed, “But also because it is so emotional, the skills that a lawyer brings are the ability to remain objective and work through the problems.

“These types of situations really need that type of objectivity applied to it. To bring everything back in order, that’s what our clients, the insolvency practitioners, try to bring and we try to bring as their lawyers.”