HENRY DAVIS YORK is unique.
Among the leading firms at the pointy end of restructuring and insolvency work, HDY is one of the few that can be considered a bone fide national firm.
It is something of which they are proud. 

“We have the largest insolvency and restructuring practice in the country. It is a core focus of the firm and I don’t think there would be any other firm that is in our sort of league,” says Roger Dobson, head of HDY’s insolvency and restructuring practice. “I am not trying to sound conceited, but we’ve such a strong focus in this area.”
And indeed, they do.

HDY has 15 partners and 51 lawyers in the group, making it one of the largest full-service law firms to operate in this area.

On the upper rungs of restructuring and insolvency, HDY competes with global firms such as Ashurst, King & Wood Mallesons, Allens (more about them in a minute) and Herbert Smith Freehills, while Clayton Utz and Minter Ellison are two national firms that also have strong expertise in the area.

Mr Dobson does not think that having only two offices – Sydney primarily, and a two-partner office in Brisbane – puts the firm at a disadvantage to its larger rivals.

In fact, he reckons that former national rivals undergoing a name change and acquiring a foreign HQ have not necessarily been a bad thing for HDY.

“To me, it comes down to capability – and what we do have is key relationships with law firms in all the major jurisdictions, and we do a lot of work for them,” he says. “If you have a London law firm that wants to engage a Sydney law firm, they are not going to give work to an Australian firm that is part of an international network they are competing with.”

One of the large rivals HDY competes with is Allens.

In a similar vein to Mr Dobson, Clint Hinchen, the co-leader of Allens’ corporate insolvency and restructuring practice group, claims his firm is the best in the land.

“I regard our firm as having the largest national depth of any of the law firms in this space,” he says, adding that the firm’s alliance with Linklaters has been a boon for the group.

“The alliance has provided us with inbound activity,” he says. “There have been some very large organisations that have failed, and we have been able to support them not only in Australia, but also where we have offices in these matters.”

Busy, busy?

A key reason for the heightened level of competition in insolvency and restructuring has been the GFC.

HDY, for example, experienced 14 per cent revenue growth in 2009/2010 at a time when many other law firms were seeing the coffers dwindle and were cutting staff.

Mr Dobson has been involved in some of the most significant corporate restructurings of recent times, acting for lenders with $3.2 billion worth of loans owed by Babcock & Brown, and representing 10 of the senior lenders in connection with the scheme of arrangement for the restructure of Nine Entertainment.

Some of his other recent work includes acting for the bank syndicate on the restructure and collapse of ABC Learning Group Limited.

However, he reckons that the boom years for insolvency work and practitioners might be starting to come to an end.

“It is quieter than it has been for a while,” he says. “It reminds me a little bit of what it was like in mid-2007, just before the GFC.”
There has certainly been an uptick in transaction work for M&A and capital markets lawyers over the past 12 months.

Mergermarket’s analysis pointed to a 47 per cent increase in global deal value in 2014 when compared with 2013, while Bloomberg pointed to a rosy future.
“2014 was the tipping point for M&A, the year in which the lingering effects of the financial crisis were finally shaken off,” Bloomberg said.

Mr Dobson says it is too simplistic to say that as the M&A market picks up, insolvency and restructuring work declines. “Where you get [companies in distress] you can get a lot more M&A activity, and I sense you will get that in energy, resources and petroleum, because the prices get knocked down to levels that make them attractive,” he says.

Mr Hinchen also highlights the resources sector, as well as the automobile industry, as providing opportunities for insolvency practice groups in 2015.
“The reduction in coal, iron and oil prices places miners with high operating costs under distress – which also places further pressure on mining services contractors,” he says.

And with the announcements that Ford, Toyota and Holden will cease manufacturing operations in Australia, “parts makers are looking at a shutdown scenario unless they are able to diversify or access export markets to keep themselves viable”, Mr Hinchen adds.