Steady growth in insolvency

MEMBERS of Perth's legal fraternity have confirmed that while insolvency enquiries have grown, the level of activity in the sector due to the downturn is lower than initially predicted.

Western Australian lawyers have indicated the enhanced levels of insolvency work in the eastern states is not filtering through to the west.

Jackson McDonald commercial litigation and insolvency partner, Vicki Butler, believes that while her area is busy at present, and appears to be getting busier, the expected level of insolvency work is yet to land on her desk.

"We haven't seen an avalanche of work at this stage," Ms Butler told WA Business News.

"It seems everyone is still figuring out what's going on so we haven't seen a lot of the insolvency side coming through."

Ms Butler said clients were instead seeking out information.

"I think, in particular, people are starting to get worried about ramifications of insolvency trading and starting to seek advice in relation to that," she said.

"And key people in organisations are wondering how to deal with other customers and suppliers who might well be facing financial difficulty, so they're seeking practical solutions for that."

Jackson McDonald chief executive John McLean said insolvency and restructuring had become more of a focus after lying dormant for the past five years.

"We're certainly reconnecting with networks we've developed over the years that specialise in insolvency and reconstruction," he said.

Blake Dawson practice leader Perth, Leigh Warnick, agreed that insolvency levels were set to grow, although its practice in Perth was restrained.

"What we're seeing nationally is that there have been significant increases in insolvency activity in Sydney and Melbourne and less so here," Mr Warnick said.

"Although the level of enquiry is high, the level of actual work has not yet come.

"The avalanche, if there is an avalanche, is in inability to meet debt commitments, at the default point."

Lavan Legal managing partner Greg Gaunt believes insolvency activity has picked up more at his firm than at others.

"Insolvency is one of our better performing areas," he said.