In June 2008, when Fred Crawford was named CEO of AlixPartners, a 650-consultant business advisory firm based in Southfield, Mich., no one could’ve predicted what challenges were ahead. “I had worked at AlixPartners for five years and we were just starting to deal with the credit crisis,” he says. “But soon after I took over as CEO, we’ve sort of had the perfect storm.” Luckily for Crawford, AlixPartners made its name working with companies in severe distress, but that aspect of the business hadn’t been the firm’s bread and butter lately. It is now.
Consulting: So, do bad times for everyone else mean good times for AlixPartners?
Crawford: Well, the heritage of the firm is working with companies in bankruptcy and firms facing a pretty severe challenge, and certainly, we’ve got plenty of companies in that situation right now. That’s still the area where our brand is best known. Five years ago, I would’ve been more willing to say definitively, “yes, bad times for the economy equals good times for AlixPartners,” but because we’ve been so focused on growing our healthy company business we’ve actually run a pretty balanced model. Over the last few years, our restructuring business has only accounted for about 20 percent of our overall revenue.
Consulting: What’s your forecast for that business?
Crawford: I could easily see it becoming a third of our business … maybe more. Market conditions really play to those strengths of the firm. Overall, we’ve been growing at about 35 percent the last few years, and we think this will be a pretty good year, as well. This year and next should be robust.
Consulting: What type of work are clients asking for?
Crawford: The majority of the work right now is around cash preservation, liquidity and cost reduction work. The hot industries for us are automotive, financial services, retail consumer products and media, but it’s less industry focused because the internal problems of a distressed company are much more important than what industry it’s in.
Consulting: How big is the distressed space right now?
Crawford: I’d rather not talk actual figures, but we could have 50 percent more people than we have right now and still wouldn’t have enough capacity to handle today’s demand. Our senior model doesn’t allow us to add staff quickly.
Consulting: You have no junior-level people?
Crawford: That’s right. When a company is in a near-death experience, it needs leadership from senior people who represent a calm in the storm. Our entry-level profile is five years in industry, a master’s degree and five years in consulting.
Consulting: Are you still seeing some of the healthy company work you were before?
Crawford: We are. Some healthy companies are saying “we better get very efficient now because if this slowdown is as long as some say, we’re going to have to hunker down to get through it.” I wouldn’t have predicted that, but I’m glad to see it.