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Insolvency practitioners: how plain English can help

Why plain English can win the high ground

Tony Scott argues that insolvency practitioners are missing a major marketing trick


Of all the professions – from medicine to management and economics to engineering – only insolvency and recovery practitioners can legitimately get much of their marketing done for nothing.

Consider a typical assignment. A small company needs to be wound up or tidied up. It has, let’s say, 100 customers who owe it money, and 50 suppliers and creditors to whom it owes money. The insolvency practitioner (IP) has to collect from the first group, and check the claims of and report to the second.

Both tasks require the IP to make contact in writing, usually more than once. Both audiences will contain a high proportion of business people. And both tasks will be paid for by the creditors as a legitimate expense.

Since any ordinary business person encounters insolvency only rarely, you can expect both sets of people to talk to their peers about the experience. Let’s say each one mentions it to five friends. That makes a total of 900 (150 original contacts, plus five friends apiece) who hear about the IP. Multiply that by the number of assignments the practice handles in a year, and it’s easy to arrive at telephone numbers. Add in dealings with employees and the numbers get bigger still.

All these contacts, remember, are not a randomly selected mailing list. Without exception, they have a direct interest in reading the IP’s messages. Almost without exception, they will remember the experience. And, employees apart, all of them are potential clients.

Although this marketing-for-free aspect is peculiar to insolvency, there are two ways in which the profession is no different from any other. First, IPs, like all other professionals, want to be seen as both expert and approachable; it’s key to their commercial success. Second, familiarity tends to blur their ability to see their own messages from a reader’s point of view; as a result, old habits of jargon and formality can survive unnoticed.

Why does this matter? Because the blind spots not only undermine fee growth. They weaken credibility.

Consider, for instance, your own reactions to other specialists. If you were asked to name well-known experts from any field of knowledge outside your own, who might come to mind? David Attenborough, perhaps, on wildlife; Lord Winston on genetics; Professor Stephen Hawking on cosmology; George Carman on law; Jeremy Paxman and John Humphrys on current affairs.


Of these and all other widely respected experts in any field, ask yourself this question: how complicated do they make their messages? The answer of course is that they don’t. They make what they say simple and easy to grasp.

That straightforwardness is, I believe, precisely why we regard them as expert (and approachable, too). The reverse is also true. How do we tend to view people and organisations who make their messages technical and difficult – famously mechanics (ask any woman motorist), fund managers, pension companies, and lawyers? Answer: we don’t trust them.

Into which camp do traditional insolvency documents fall? Judge for yourself:


• From a report to a bank (likely to be a sophisticated user of IP services):

‘I refer to my appointment as Joint Administrative Receiver on 13 July 20XX. As you know, the company ceased trading shortly prior to the appointment. The receivership involves the collection of debts under the fixed charge and the realising of stock, furniture and fittings under the floating charge.

‘I estimate your total return will not be in excess of £100,000 in respect of the fixed charge and your floating charge return is heavily dependent on the defeat of a major retention of title claim….’

The report goes on for another page in this fashion. Nowhere does it say that the IP expects the bank’s total shortfall to be £1.35 million after costs.


•  From a general letter to creditors (likely to be unfamiliar with IP terms):

‘We refer to the above matter and now report to you on the progress made to date in the liquidation. In this respect, please find attached a copy of our receipts and payments account for the period 25 March to 24 June which shows a balance in hand of £87,379 which has recently been withdrawn from interest bearing accounts, pending tax clearance.

‘We present below detail of the major points of interest.

‘Realisations: All realisable assets have now been recovered exceeding the statement of affairs valuations with the exception of stock, WIP, plant, equipment and motor vehicles which realised £2,960 against statement of affairs estimates of £6,610….’

The letter, which runs to three pages, makes it clear only on page two that preferential creditors will be paid in full. Nowhere (until the Receipts and Payments account at the back) does it say what unsecured creditors will get.


No doubt, the output from many firms is more user-friendly than these examples. But, even in the best firms, are the estimates of surpluses available for creditors given before the deduction of professional costs and fees – or after? And is the surplus described as a payment or as a ‘dividend’, which to most non-IPs means shares?

It’s not just a matter of plain English, though of course that helps. It’s about looking at every document through the reader’s eyes.

The core message to the bank above, for instance, might be better expressed as:

‘At this early stage, we cannot be sure about the final-outcome figures. But I am sorry to have to report that, at the moment, our best estimate puts your total shortfall – on fixed and floating charges combined – at about £1.35 million after costs. For a breakdown of this figure, see the attached Estimated outcome statement.’

Similarly, the letter to creditors could start:

‘We are now almost in a position to complete the liquidation of this company. We are pleased to be able to report that all preferential creditors will be paid in full. In addition, we will be able to pay unsecured creditors a total of 43p in the pound. Where appropriate, we have already sent out Bad Debt Relief forms to allow creditors to reclaim, on top of this sum, any VAT they have paid.’

The amended versions might seem jarring to an IP’s ear. Survey evidence, however, suggests clients prefer them by a very large margin, which is why they can add significant value – at zero cost – to a campaign for more market share. Legal advice confirms that they can be entirely compliant as well.

Apply the same approach to every letter and report in your firm’s standard pack, and two other benefits follow. The documents will get shorter, sometimes radically so – which cuts production and distribution costs. And they will become faster to write and easier to review – which limits risk and frees up more chargeable time.


Tony Scott, a director of Oliver Scott Consulting (, specialises in resolving business communication issues. He’s worked with numerous insolvency and turn-around practices, including two of the Big Four – helping to lift revenues (in one case by 175 per cent in a year) and advising on everything from standard letters to international recoveries. He’s also worked with insolvency regulators.


Tony Scott is a management consultant, trainer and coach, and the director of a London-based international consultancy ( He specialises in helping businesses and people to communicate better – face to face or on paper.


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