Q&A: Restructuring Consulting

fingerbanger's picture
Rank: Baboon | 154

I've done various corp fin jobs over ~14 years. I've been in the restructuring space for a few years now as a senior consultant (not MD) for a top firm. WSO is great, but I find that it has shit for info on RX consulting. A lot of folks speculating on what it is or infer what you'll be doing because the firm does a lot of other weird advisory shit (the firm I work for also does a lot of random ass advisory work). Hoping I can add some content here to folks that are actually considering this path as there is a lot of hiring going on right now. So ask away...

Comments (29)

Jun 29, 2020

How do you see the demand for RX consulting for the next 3-5 years, Do you think it is a good industry to enter out of undergrad in lieu of investment banking?

Jun 30, 2020

I think the demand will be strong over the next 3-5 years. I do not think there will be less demand. Most of the big RX shops have other corporate finance groups that they work closely with such as CFO advisory, enterprise improvement, etc. It's not uncommon for jr folks to jump around and get exposure there when staffing becomes an issue. There is a ton of work outside of just bankruptcy that you hear about on the news.

I think it is a solid place to enter out of undergrad. And it depends on how you want to steer your career. There is much more of an operational spin to RX consulting. RX banking is more like banking but for distressed clients. You'll probably make more money in 3-5 years in banking but you'll be working the hours to earn that pay!

I'd say exit ops are strong either way but again, depends on which direction you want to steer your career.

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  • Intern in Other
Jun 30, 2020

Thanks for doing this.

What are common exit opportunities, and do they differ for credit side vs debtor side?

What are your thoughts on Unsecured Creditors' Committee advisory? Worth pursuing long term?

Does travel decrease as you become more senior in the debtor side of the business?

Advice on breaking in with no previous experience out of college?

Most important soft and technical skills?

Eager to hear your responses!

Jul 1, 2020

Thanks for the questions. They are all good. I'll come back and update more thoroughly but for now:

Generally, travel does not decrease with seniority. You may have more flexibility on when you arrive and leave and if you are running a case you may opt to have your team not travel from time to time....but from my experience it is firm culture and most firms want you on the road. UCC / credit advisory seems to travel much less frequent and some folks like that.

Re UCC work, I am not as familiar so I'll keep my comment brief. You'll have the chance to review a lot of analysis and interact with a lot of constituents which may be insightful, but to me, it seems a bit niche and I personally wouldn't want to get pigeon holed in any group as I become more senior. The experience is valuable but if your career plan is broader, I'd say try it out and then make a move after a year or two and try to do some debtor side work.

Technical skills: 13 week cash flows and a business plan (3 statement model). thats the foundation. learn about credit agreements and capital structures.

Soft skills: be personable it is very much a relationship business. ask a ton of questions when you're new. always strive to do more and help the team. dont make plans Monday - Thursday... haha

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  • Intern in Other
Jul 1, 2020

Thanks a ton. Seems like a very exciting career path. I guess my main concern is travel. Although I'd love to travel for the next 5-10 years, I think it takes a toll on you once you're married with kids. At that point, you would've built a book of debtor clients and it'll be tough to rebuild at the creditor side of the business. On the other hand, creditor advisory seems less rewarding and worthwhile?

Nonetheless, excited to be a part of the industry soon. Thank you for your input

Jun 30, 2020

Thank you for this.
1.) What literature you recommend for both credit and debtor side?
2.) I am looking to move into the industry from a corporate finance and strategy & operations background at big bank (4 years). I think that the space will be very indemand for the next 1.5 years. My understanding that Chicago has a strong presence. Where do you recommend I look for roles? I am familiar with the big players e.g Alix Partners, BRG etc

Jun 30, 2020

Will get back to you on #1.

On #2: my opinion is that the biggest groups are in: Boston, Chicago, Dallas, LA, NYC. NYC by far has the largest number of professionals (consulting, banking, law firms) in the industry.

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Jun 30, 2020

What is the difference between RX Banking (HL, Evercore, etc.) and RX consulting? I tend to see a lot of CPAs in RX consulting, so it does not seem as strategic as typical management consulting. Interested in what your thoughts are.

Jun 30, 2020

Copied from my response in a different thread:

There is certainly some overlap and they work very closely together on most projects I've been involved with. Very generally speaking.

Consulting - You're traveling every week onsite at the client building out their operational plan. Cash flow, business plan, turnaround / performance improvement plan. You're helping management evaluate bids and financial terms and giving them the day to day guidance of going through a distressed time. You're helping to craft a turnaround business plan that can go to market. If it goes to BK, you're providing the day to day coordination to get the company and all he advisors aligned so that nothing slips. A CPA is a nice to have but not have to have especially if you are trying to pitch some interim management work with everything you are doing. This seems like a misconception on WSO that this is an accounting job vs a management consulting job.

Banking - You're FINRA licensed. You're trying to help them find a capital structure solution. Finding new financing, investors, running a process. Consultants can help facilitate but this is really marketing of securities and is banker type work. Probably means you're up until 4am building slides haha!

Hope that is helpful.

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  • Prospect in IB - Gen
Jun 30, 2020

Though the space seems for many to be a career 'destination' relative to other similar finance/consulting roles that have more traditional 'exits', what kind of person opts to remain in this space beyond their junior years? Likewise, what kinds of paths are typical for those who 'exit'?

Most Helpful
Jun 30, 2020

I spent some time in both IB and RX consulting. You are completely correct that it is more of a career destination than other finance careers. If you look through the backgrounds of some of the people that land in the space from the top firms (Alix, A&M, etc.) to smaller boutiques you will see CPA backgrounds but also a number of ex-IB and PE associates.

I think the appeal of the job is more of a personality type. I went in thinking that it would be a pit stop into a distressed investing role and completely fell in love with the work. Given that you generally come in as interim management during some form of crisis, the debtor side is a very different skill set than you're traditional finance roles. Someone who stays in it long enough will see a number of different roles that they are expected to step into and fix / figure out in a short amount of time. Since the main purpose of the job is crisis management, cash is generally king and you are tasked with stoping the bleeding as soon as possible. After speaking with many people that stay in the turnaround space, it becomes extremely difficult to work somewhere else because the pace is so much slower.

There are ample exit opportunities and I have seen old colleagues go many different routes. I would definitely say that RX IB is the most popular route from people that start straight out of undergrad. I have seen numerous people exit to PE, mostly on the distressed side. With that said, it is definitely easier for them to get an operating role, but deal team is not out the question. Have also seen people get hired by their client in a management role, go into strategy consulting, or go the startup route. To your earlier point, there is also a fairly decent amount that stay in the their current role or switch firms.

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  • Prospect in IB - Gen
Jun 30, 2020

it seems as if the accounting and capitalization/liquidity emphasis make rx consulting somewhat of a hybrid of rx banking & rx consulting - is there something to that? or its simply such that rx banking is just another animal with regards to the day to day work/deliverables & thus there's no real overlap? I'm sure it depends on the scenario of course

Jun 30, 2020

Agree with everything Bullied_Bear posted

  • Intern in Other
Jun 30, 2020

Thanks for this informative post. I found it very helpful. How does the work and exit ops differ on the creditor side of rx consulting?

  • Prospect in IB - Gen
Jun 30, 2020

Who are the major players in the space and which areas do they tend to specialize in?

Jun 30, 2020

Check out the league tables year over year to get a sense of who consistently shows up. I'm going to list out some good firms that I know alphabetically. I am not trying to rank one firm over another. These comments are for USA based work only although some do have a bigger international group.

The big 3 in the industry
1. Alverez & Marsal
2. AlixPartners
3. FTI

Top Boutiques
1. Ankura
2. Berkeley Research Group
3. Conway MacKenzie
4. CR3 Partners
5. E&Y

Again, not a ranking. Just my own opinion on top boutiques I've encountered in the market. Based on type of work they get, volume, and size. I'm going to stop at 5 for the boutiques because there are a ton of firms so I'm sure others will have their own opinion. In fact, if you are reading this and are in the industry, please add your 2 cents. It'll only make this QA better for the folks trying to understand it from the outside.

Hope this helps.

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Jun 30, 2020

What's the exit op? Salary progression and hours at Alix, A&M, and FTI? Thanks.

Jul 1, 2020

How does your firm source its deals? Primarily from banks, alternative lenders, directly form companies?

Jul 1, 2020

All of the above. Throw in law firms, BOD relationships, and investment funds into that mix as well.

Jul 1, 2020

Sorry to ask again. But can you answer on salary progression and hours?

Jul 2, 2020

Hey, thanks for putting this up. In your group, are there any kids that come straight from undergrad? If so, any kids coming from liberal arts degree (no finance/accounting knowledge outside of summer internships)?

There can only be one Dirty Dan, the rest of you are Pin-head Larrys...

Jul 6, 2020

Plenty of folks coming out of undergrad. Usually with 1 good internship under their belts. Most come out of finance programs. Its rare for a liberal arts degree unless you can nab experience beforehand. If you do not get in as an undergrad the best bet is to get some relevant experience and apply as an experienced hire (you might get taken down a level). From my experience, there is not a ton of MBA recruiting so you'll have to leverage internships / experience if you're coming out of a grad program.

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Jul 3, 2020
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Jul 6, 2020