Q&A: Restructuring Consulting

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 (98)

Jun 30, 2020 - 4:55pm

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.

  • Intern in Other
Jun 30, 2020 - 12:05am

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 - 11:11am

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

  • Intern in Other
Jul 1, 2020 - 12:05pm

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

  • Analyst 3+ in IB - Restr
Jan 16, 2022 - 2:11am

Exit opps I've recently seen from RX (esp among distress merchant banks, granted most were in IB/hybrid I believe): guy from Seabury went to AE Industrial, one guy from Carl Marks went to Castlelake, another Carl Marks guy went to Black Diamond, and another Carl Marks guy to an internal HF, and a Birch Lake guy went to MM PE in Midwest.

Jun 30, 2020 - 12:18am

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 - 5:04pm

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.

  • Prospect in IB - Gen
Jun 30, 2020 - 11:43am

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 - 3:27pm

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.

  • Prospect in IB - Gen
Jun 30, 2020 - 4:02pm

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 - 5:17pm

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.

EDIT: Take a look at the league tables. month to month / quarter to quarter folks bounce around all over the list but you'll find names relatively consistent. I don't know how the deal ranks them tbh. I suspect as long as you are involved in a deal you credit for it even if you are not the primary creditor / debtor advisor - so it may be a little skewed but should be a good resource. See "Rx advisors" under BK and Out-of-Court. Financial advisers listed are usually IBs. https://leaguetables.thedeal.com/power-ranking/pr-2020/q2-3/?mcat=bankr…

Hope this helps.

Dec 4, 2020 - 2:51pm

You're absolutely right about top 3 fingerbanger.

In Europe, PwC used to be pretty strong but has lost quite a few people. There are also some boutiques like THM Partners.

Jul 2, 2020 - 9:31am

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 - 8:46pm

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.

Jul 6, 2020 - 12:13pm

I think it is tough to say because some small boutiques do a lot of assessments (I.e., creditor wants a report on what is going on within the business). These are still considered "debtor" side work because the creditor provides a few contacts and the scope of the engagement letter, but ultimately the debtor signs the contract. My experience is that most businesses box these players out and only feed them what they need to get a report done.

On the other hand, there are some small boutiques that solely do interim management work and might do an assessment beforehand, but that is not their bread and butter. These are interesting because they can be extremely flexible with how they structure the engagement and associated fees. These firms usually also do some form of performance improvement and might get engaged prior to an issue arising.

Overall, I think anything with a capital structure under $100mm is tough bring through a RX. This is mainly because the cost of a RX whether in court or out of court is so high and it is tough without a lot of additional capital. The other factor at play is that the banks that are lending money to these size businesses do not want to own the business and do not have the resources to operate it on their own. That is why a large portion of cases in this range go to chapter 7 and the advisors work on a lot of shut down / wind down.

  • Prospect in IB - Gen
Jul 14, 2020 - 7:06pm

Not the OP but in a very similar situation. If given the choice to pick, what types of engagements do you think would be the most valuable both from a learning opportunity and from a transferable aspect (with respect to lateraling to a larger firm or RX IB)?

Jul 15, 2020 - 9:25am

That is why a large portion of cases in this range go to chapter 7 and the advisors work on a lot of shut down / wind down.

I mostly agree but there are consulting groups in the MM space that simply specialize in liquidating savable companies because they can extend their stay and pump up billings. (and they are lazy and lack courage). I witnessed one group close 3 companies in a row while we bought the assets and restarted one of them after they had left. The big banks who hire them care about nothing but return of capital, the owners get railroaded into liquidation, jobs get wiped out, community suffers and the consultants just move on to the next one.

I'd say at least half of these could be saved with talent and commitment but liquidation is the easy path. 90% of all failed businesses could have been saved with earlier intervention - which is a BoD failure. I'm watching one right now, $200M revenues, 3rd generation, universal brand name, obvious fixes everywhere and being driven right off a cliff by delusional owners. In Europe owners are not allowed to destroy their own business (for obvious societal reasons) but in the US no one can stop them.

Whoops, got on my soapbox a bit there.

  • Prospect in IB - Gen
Jul 25, 2020 - 7:05pm

Does anyone know how common it is to transition to the distressed buyside from an RX consulting role without doing a stint in banking?

Aug 3, 2020 - 9:16pm

Usually the same scope as an IB for senior lender advisory as the lenders only retain one financial advisor. FTI seems to win a lot of senior lender advisory work while Alix and A&M is much smaller percent and rest goes to IBs. UCC cases often have a FA and IB, which have different scopes.

Aug 11, 2020 - 3:31pm

Thank you for creating this thread.

1) What does a typical restructuring engagement team look like?
2) What roles can I apply for at top 3 firms? My background: ~14 years corp accounting and finance roles (CFO currently) at a small O&G co. Have M&A, modelling and credit agreements experience.

Aug 21, 2020 - 2:59am

This thread has been really helpful. I heard RX consulting firms, especially A&M, give a financial modeling test and a case.

Do you know what type of financial modeling tests and cases they give? And are there any courses or sites that we can use to prepare for them?


Aug 26, 2020 - 2:21am

I recently received an offer to be part of the first Sophomore Summer Cohort of a Big 3 Restructuring Consulting firm(A&M,Alix, FTI) in a NYC Office.

1) In terms of performance, what do you think I can do to be prepared for RX Consulting

2) What are the common exit opportunities for people especially in the Restructuring sector

3) How much travel is involved with these firms compared to more strategy focused such as MBB?

Nov 26, 2020 - 4:26am

Is it at all common for restructuring consultants to further specialize in a certain industry or sector? Or do you get staffed on restructuring projects from all sorts of industries?

And what other certificates, qualifications etc. should someone have in restructuring? 

Dec 4, 2020 - 3:02pm

I have never seen people with less than 10 years specializing in an industry/sector.
At more senior levels, it would depend whether you do debtor or creditor side. You tend to specialize more when you work on the debtor side, while on the creditor side you usually still do all sorts of industries.

Certificates or qualifications are not common either. Some may have CPAs or CFAs, but not a requisite.

Dec 8, 2020 - 1:53am

Thanks for your answer! I want to get into restructuring and turnaround management. So, that would be debtor side. When you say certificates are not common, would it still give me a leg up when applying if I had a CFA, CMA, or CPA? Which one would make the most sense?

And what are your thoughts on the certificates offered to experienced professionals from the Turnaround Management Association? (CTA and CTP)

Jan 19, 2021 - 2:55pm

I'm currently in IB coverage now but very interested in getting into restructuring consulting. Do you typically see this transition/ what is typical entry placement if I were to make a move this way? Separately, what should I be studying and practicing ahead of interviews?

  • Senior Consultant in Consulting
Jan 19, 2021 - 6:40pm

Wouldn't say it is typical since i've only seen couple of guys on my team who came from IB but it is definitely doable. Your industry knowledge and financial background would be welcomed. Just brush up on your knowledge on restructure and 13 week cash flow and you should be fine.  

  • Intern in Consulting
Jan 20, 2021 - 5:47pm

I will be an Intern at one of the top 3 RX firms in the TAS group (with a focus on debt transactions). Would you say transferring into the RX branch within firms is a viable path, or would applying externally be more feasible?

  • VP in IB - Restr
Apr 7, 2021 - 12:53pm

Reading through this thread that's a bit dated. But I'm an available resource if you have any questions regarding the Rx industry. To answer a few questions referenced above:

  • Relevant Certifications: CTP/CTA (Certified Turnaround Analyst designation that converts to Certified Turnaround Professional after at least 4 years of direct industry experience), CPA, CFA, CIRA, CDBV
  • Career Progression: The sky is honestly the limit - you become extremely valuable with the skillset you build and doors open across many verticals as an exit opp
  • Salary: 6 YOE with all-in comp easily over $200k; hours can range from 40 to 100+ (literally varies significantly)
  • Interview Modeling Tests: High probability of getting a 13-week cash flow modeling test or integrated 3 statement financial modeling test with corresponding borrowing base to determine availability on an ABL Revolver Facility. Other types of tests such as at AlixPartners involves various timed excel exercises that focuses on how creative/efficient you are with modeling out rather complex formulas very quickly.
  • My background: I work at a boutique shop that allows everyone to be involved in financial & operational restructuring (I few this as a form of management consulting - this is what A&M, FTI, AlixPartners, etc. focuses on), special situations M&A and distressed debt private equity. Feel free to PM me or respond to this thread with any questions.   
  • Intern in Consulting
Apr 7, 2021 - 9:40pm

This is great, glad more people with experience are commenting on this thread. I'll PM you with a few questions!

EDIT: I don't think we can pm if your username is private

Apr 8, 2021 - 10:22pm

I appreciate your above comments. I have been trying to break into RX for 1.5 YRs now e.g. networking with industry professional and applying cold via the job board but have not had much traction in terms of interviews. Can we connect via DMs? I would love if you could give feedback on my profile (Summary: 4 years of FT work experience- completed a corporate finance rotational program at a BB in NYC, 1 YR of strategy & operations work at a different BB and a couple private equity internships)

Apr 15, 2021 - 9:09pm

What are your thoughts on entering RX consulting but at a boutique shop that primarily does UCC work? How niche is this? Would this pigeon hole me? What does career progression look like? Exit Opps (assuming buyside is out of the question unless its a hedge fund specializing in trade claims)? 

  • VP in IB - Restr
Apr 15, 2021 - 9:43pm

I wouldn't say it necessarily limits you by any means. This is a matter of opinion, but I personally would try to avoid working in a firm that focuses on serving as a financial advisor to the UCC (this is more so forensics-focused as it relates to investigating solvency-related matters). So the focus is more so on matters such as Section 547/548 Preferences/Fraudulent Transfers (i.e. Avoidance Action Review, which I find to be one of the less interesting sides among the areas of work in the industry). Your essentially more so handling "forensic accounting" rather than management consulting, and you are effectively not involved in actually restructuring the company and putting out fires. The real money and depth of work experience is more so with serving as financial advisor to the Debtor. As it relates to your last question, assuming you're referencing something like Contrarian Capital? This is where UCC advisory may be truly relevant experience for that type of potential exit opp. However, without knowing more about your overall background, I can't speak to how attractive or feasible this route is. 

  • Intern in IB - Gen
Jun 25, 2021 - 4:09am

Are salaries that lower compared to IB RX?

I mean a analyst 2 at a place like PJT/EVR/HL/LAZ is making over 200k and I'm reading 6 YOE in consulting rx is similar level 

Jan 15, 2022 - 11:01pm

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  • Intern in IB - Gen
May 15, 2021 - 12:34pm

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