Leading Through Change: An Interview with Tom Russell, President of R3

Tom Russell, a licensed Insolvency Practitioner and Director at James Cowper Kreston, has recently been appointed President of R3, the UK's insolvency, turnaround and restructuring trade body. With a clear five-point agenda for his term, Tom is focused on expanding R3’s reach, amplifying member engagement, and reinforcing the profession’s value at a time of crucial regulatory change. In this Q&A, Tom shares his priorities for the year ahead, his perspective on the evolving landscape of insolvency, and why now is a pivotal moment for the profession.

1. Tom, congratulations on your appointment. You've set out five key objectives for your term. Which of these do you see as most urgent in the current economic and regulatory climate, and why?

Given the economic and regulatory climate, my primary objective is to lead discussions with Government, the Insolvency Service, regulators and other key stakeholders, ensuring that members' voices are heard on all key issues. R3 has historically been very strong in terms of its representation activity, and the present Government has been very keen to engage with the profession, so we know there is the potential for a lot of constructive dialogue on a range of issues going forward.

We have been quietly encouraged by the Government’s public statements on their intention to cut back regulation where it is appropriate to do so, as that potentially provides an opportunity for the profession when it comes to the proposed review of our regulatory framework. R3 has been very active around this issue for a number of years, and while progress on the next steps of the review itself was stalled by the General Election and the change of Government last year, a new administration with, potentially, a different attitude could mean that some of the more concerning proposals – such as the compensation scheme – may be open to being reviewed, which would be a positive outcome for everyone. We are expecting proposals for firm regulation to be included in the Draft Audit Reform and Corporate Governance Bill – if they are we will ensure that any concerns raised by the profession are heard at every stage of the legislative process.

The economic climate and the potential changes in regulation and in the framework for personal insolvency are what makes this another important year for the profession. Although we do not know when we are going to see progress on either of these issues because they are very much at the mercy of the parliamentary calendar, they will both impact on the profession, and they come at a time when demand for our services and skills is still high. We expected demand for insolvency and restructuring advice and support to increase after the pandemic, but we did not expect the war in the Ukraine or the cost-of-living issues, which have affected consumers and businesses. More recently, we have had the changes to National Insurance and National Minimum Wage, and these have had serious consequences for a range of businesses right across the economy and have led to an increase in enquiries for advice and support – both since they were announced and since they were introduced.

When you take all these issues into account, I think demand for the profession’s support, skills and services will continue to be high and it will be another busy and important year for the profession because of that, and because of the wider economic issues that are affecting the people we help. Two major areas of policy potentially progressing this year, R3’s history of representation work and the need to continue this given the two issues I’ve just mentioned are what makes this objective so crucial in the context of the economic and regulatory climate, although all five of my aims are important for different reasons for R3, our members and the profession.

2. Enhancing the member experience through technology and improved communications is one of your priorities. What practical changes can R3 members expect to see over the coming year in how R3 supports and engages with them?

The biggest practical change members will see is the upgrade to the R3 website. Work has already begun on this project, and once it is completed we hope it will be easier for members to make the most of the content R3 produces and to sign up to our events and training courses.

The website upgrade is part of a wider review of how R3 engages with members. As part of this, we are exploring how we can use the broadest range of communication channels possible to engage with members and provide them with content in a way that is most convenient and relevant to them. An early example of a change we have made already is the hosting of R3’s podcast on Spotify and a number of other platforms. That has been really well received – it has opened the podcast to a broader audience, as previously it was only available to members, and made it easier for subscribers to access new and previous episodes. We are keen to build on this and explore how we can better use digital content like podcasts and videos to engage with members and keep them abreast of what R3 is doing on their behalf.

3. You’ve described this as a crucial year for the insolvency and restructuring profession. Can you expand on what makes this moment so pivotal and what’s at stake with the upcoming Government review of insolvency regulation and personal insolvency reform?

We are aware that there is potentially going to be progress on the planned review of the Personal Insolvency Framework during my time in office. The timings of the review itself have yet to be confirmed, but when it happens it will be the first time the framework has been reviewed since the Insolvency Act was introduced in 1986. This will present the Government with a significant opportunity to amend the framework to meet the changing needs of individuals in financial distress, whilst ensuring that the needs of creditors are also considered. The end result of the review is going to have a significant impact on us and on insolvent individuals, and that means it is another area where the profession’s voice needs to be heard and our insights into the practical issues with the framework in its current form need to be raised at every possible opportunity.

4. One of your goals is to highlight the impact and value of the insolvency profession through R3’s value of the profession reports. What message do you hope to convey to the public, media, and policymakers through this initiative?

We last published our Value of the Profession report in 2021. The data this report provides plays a key role in our representation work. Hard facts around the contribution made by the profession help Government and policy makers understand the value the profession delivers to the economy and society, and helps them understand the basis and the socio-economic benefits and drivers of any calls for change or reform R3, as the profession’s voice, make. By way of an example, the last report showed that the profession returned around £1.8bn to creditors, and if we are able to explain how that could be compromised by any Government proposals or enhanced by any policy suggestions we put forward, it strengthens our argument, the case for listening to the profession and the ideas or suggestions we are making.

From a public perception perspective, this report also helps people understand the broader context to our work and our contribution to society and the economy – and helps to counter the misperception that becoming insolvent automatically means the end of a business because we can show that a sizeable number of businesses, and an even greater number of jobs, have been saved by the profession and its work. I would hope having hard facts about the number of businesses and jobs saved will also encourage more people to seek advice at an earlier stage because it should help them understand that rescue is a possible outcome from working with the profession.

We also know that the report has been well received by a number of key organisations in the UK. The Insolvency Service have said they have used it in discussions with Government about the profession and the contribution it makes to the economy and also when looking at how the UK compares against other jurisdictions around the world.

Given this feedback, the importance of having clear figures to demonstrate the value of the profession in socio-economic terms, and how the report can help with our efforts to represent and promote the profession and support the wider economy, we have made producing an updated version a priority for my year in office.

5. Advocating for the profession as a rewarding career choice is a powerful goal. What more can the profession do to attract diverse, talented individuals, and how do you see R3 playing a role in shaping the future workforce?

Historically, firms in the profession have done excellent work when it comes to recruiting talent out of schools, colleges and universities, but there is always room to build on this, and the role R3 can play in supporting that is three-fold.

Firstly, it can help to build relationships with schools, colleges and universities and use our networks of members to help get more people from the profession in front of undergraduates and people taking their GCSEs and A-levels. Every IP, every lawyer, every turnaround or restructuring specialist has really interesting stories to tell about what they do and what they have done in their career and I think if people hear those and understand the breadth of work the profession does, it will not be long before we are competing for the top talent coming out of schools, colleges and universities in the way other disciplines within financial and professional services do. I do not think it is unrealistic to hope that in future, students will know they want to be an IP or an insolvency lawyer by the time they sit their GCSEs or A-levels and know exactly what they need to do to make that ambition a reality.

The second thing R3 can do is evolve the support we provide to those who are at the start of their careers. We have a really strong New Professional membership offering, and we are looking to evolve that through our Bursary scheme, which helps members access subsidised places at our events and courses. We are also expanding our soft skills training because we know New Professionals want more of that from a development point of view, and we will soon be launching a mentoring programme. The combination of all of those initiatives and projects will enhance the training and development New Professionals get in their firms and the opportunities we currently offer, and hopefully will help them be better prepared for the next stages of their careers.

The last thing I think R3 can do is to continue to provide upcoming and established talent with a platform to share their stories so those outside the profession can see the variety of people who work in insolvency, restructuring and turnaround and the variety of routes into the profession. Our Annual Conference has just taken place and one aspect of the programme that was particularly well-received was a series of talks from a group we called the “Class of 2025”. This was a continuation of an initiative my predecessor Tim Cooper ran at last year’s Conference and involved people who are early on in their careers sharing how they got into the profession and their journeys to where they are today. There were some really powerful stories and I think if we can amplify those – and more as they come through – we will be able to show just how many different routes there are into the profession and the breadth of people there are working in it. If we are able to do that, the future talent pipeline will be a healthy one.