Insolvency is perhaps not a natural first choice for someone looking for a route into the world of the professional adviser. Many trainees find their early encounters with individuals facing the prospect of bankruptcy, or owner managers watching as their businesses unravel, not only unpalatable but exhausting. Plenty turn on their heels and head back to the relative safety of tax advice or audit work.

Nick O’Reilly, current vice president of R3, the Association of Business Recovery Professionals and next year’s president of the association, is an enthusiast, however. He enjoys the technical side of insolvency work ­ the case law and negotiations. He also believes it is an area where personal experience counts for something.

O’Reilly cut his teeth in insolvency work when he joined the government’s Insolvency Service at 18, working in the Official Receivers office and studying accountancy on day release. He says he had little in the way of experience to back him up.

Within six months he was interviewing bankrupts and asking them probing questions about their finances, with little understanding of the specifics.

‘One of the questions I had to ask a bankrupt was, “Have you ever had a mortgage?” I was 18 and my mum and dad lived in a rented house; I didn’t honestly know what I was asking. I had to do an awful lot of research and learn about life very quickly.’

O’Reilly left the civil service to go into private practice in 1985, when he joined Booth White, an established insolvency practice now part of Moore Stephens. He qualified as a certified accountant two years later and between 1988 and 1991 changed tack and became a lecturer in financial management and taxation. By 1991, it became clear the recession was starting to bite, so he joined the London office Rothman Pantall & Co, where he was made a partner in 1992.

His next move was motivated by an ambition to play a role and ultimately become president of his trade body. Since returning to insolvency work in 1991, O’Reilly had made a number of approaches to the SPI ­ the forerunner to R3 ­ suggesting that, as a qualified insolvency practitioner and a former lecturer, he might be a good candidate for presenting and lecturing on insolvency. ‘Nothing happened,’ he smiles. This lack of response left him with something of a predicament. ‘The thing about being a president of R3 is that you can’t do it unless you know the members. But just how do you get to know the members?’

The right profile

O’Reilly wrote to R3 each year, but didn’t get a reply until 1996, when he was finally invited to lecture. He began joining committees and in 2000 was elected to the council. But he suspected he still didn’t have the right profile and if he were to go any further he would need to join a different firm.

‘I had a great time at Rothmans. It’s a really great firm, with great people, but because I’d had this experience up until 1996 of not being responded to, I took the decision in 2001 that if I ever wanted to [become president] I’d have to move to a larger firm. People had me in a particular box and I wanted to prove I could do more. So, in 2001, I joined Levy Gee. ’O’Reilly became Levy Gee’s last partner, as the firm was on the brink of becoming Numerica, which subsequently became AIM-listed Vantis. Throughout his time at the firm, he has continued to work on both personal and corporate insolvency cases, as well as developing his role at R3 ­ efforts that have now been rewarded. His long-standing ambition will be fulfilled when he takes up the R3 presidency next year.

He is already an active spokesman with clear ideas about the association’s future direction. ‘It’s fantastic and I’m really looking forward to it. A lot of people take on a presidency of a trade association; I think they see it as a development in their own career, whereas I’ve always seen being president as akin to being a trade unionist. I’m there because an awful lot of members know that I’m not afraid to say what needs to be said. So I’m quite looking forward to it being a bit different from the norm.

‘I want there to be a lively debate. If that means I’ve got to put my head above the parapet and say things that other professional bodies don’t like, well I’m quite prepared to do that,’ he says.

The kind of issues O’Reilly believes R3 should be leading on include whether there really should be eight professional bodies capable of licensing individuals to act as insolvency practitioners. O’Reilly thinks this situation makes little sense and he is not afraid to upset people by saying so.

He is equally vocal about current moves from banks and credit card companies to cap the fees they paid to insolvency practitioners to set up IVAs. He says this will force insolvency practitioners to withdraw from the IVA market ­ a situation that would lead to fewer choices for debtors, greater numbers of bankruptcies and, ironically, lower recoveries for creditors. Capital One’s declaration that it will cap arrangement fees at £4,500 is a case in point.

Realistic perspective

These two issues are just the start, however. O’Reilly believes personal insolvency is currently a minefield. IVA providers are marketing their services aggressively, he says, and failing to give a full picture of what an IVA involves.

They are presenting IVAs as a catch-free first move for people in debt, rather than an action with long-term ramifications for individuals and their credit ratings. ‘This idea that you can get out of debt by calling a free phone number and going into a voluntary arrangement drives me nuts,’ he says.

Credit providers don’t escape criticism either. He recalls that at 18 he was turned down for a credit card with a limit of £250 as he was considered too great a risk, even though his salary was £5,000 and he was living with his parents. Today, it is possible for a person earning £15,000 to acquire a credit limit of up to half their salary. ‘Banks will tell you they don’t lend irresponsibly. But I do think the parameters for lending have changed dramatically,’ he says.

What’s more, the Citizens Advice Bureau and other providers of free advice are overwhelmed and ‘cannot cope with the volume of people coming through their doors, so access to free and impartial advice is greatly compromised’. What does please him is the fact that bankrupts are handled very differently today from when he started out in 1980. Every person declared bankrupt had to go before a judge and admit they had failed. Bankrupts were also restricted from taking up positions of trust, which prevented them from becoming MPs, members of the clergy, school governors or ­ bizarrely ­ estate agents.

The 2002 Enterprise Act removed many of those restrictions. ‘Now we are getting towards what I would really like to see in society, which is rehabilitation. People make mistakes in their life, but they shouldn’t be punished for them forever,’ he says.

Setting a standard

One of the things he is most pleased about is the fact that a standard letter he drafted while at Rothman Pantall is now widely used by the industry. His letter sets out an approach he has always used in personal bankruptcy cases ­ acknowledging that the recipient will be facing a traumatic time and suggesting places they can turn to for advice.

‘When someone is declared bankrupt they find it terrifying coming in to a trustee’s office. A lot of them haven’t gone into a professional office before and all they can think is “this person is going to take my house away”. They don’t listen to what you have to say because they have preconceived ideas that you’re going to give them bad news. So, one of the things I’ve always done that is different from a lot of trustees is I go and see them at their house. They’re instantly more at ease. I’m the outsider,’ he says.

Ultimately, he’s aware of the fact that, as an insolvency practitioner, he’s not the important one. In his career, he has been involved in proceedings with two of his heroes ­ Isaac Hayes and Desmond Dekker. If O’Reilly is sure of one thing, it is that their achievements and names will be remembered longer than his.

Secrets of success

• So much insolvency work involves dealing with people who may be facing the hardest times of their lives. O’Reilly knows everyone has adversity in their life ­ be it sickness, death, money problems. For some, those events are enough to tip the scales against them. How you handle people as a trustee in bankruptcy is crucial.

• Communication is key. You must be able to explain things in simple terms.

• Keep the faith in your abilities. What we do impacts somebody. It’s easy to be derailed by people shouting at you.
‘Remember you’re not that important: no one will remember the trustee in bankruptcy,’ he says.

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