Financial Innovator in Divorce: What Is an In-House Forensic Accountant?
Robin Cooke is widely regarded as the innovator, that first brought about the concept of an in-house forensic accountant, working as part of a Family Law firm.
Robin is an E&Y alumnus and has worked on forensic and valuation work for over 30 years. He answers below some questions regarding his role and how it can, at times, make a significant difference to the conduct of a case.
FAQ on In-House Forensic Accounting Answered
Below, Robin Cooke answers questions about his role and how valuations assist law firms undergoing divorce cases.
Do you work exclusively for one law firm?
No, much of the time I have had assignments with more than one law firm. There are times when a firm is engaged in a particularly large or complex case, where they need a more temporary in-house type of arrangement.
What distinguishes the type of forensic support you provide?
Firstly, I have spent significant time in commerce as Director and/or Company Secretary so have direct knowledge of many industries. Business valuations are an important part of what I do. The difficulty with business valuation is there can often be very few valid comparators, thus leaving you to naturally fall back on the broad experience of Merger & Acquisition assignments. This presents a problem for experts that have largely learned valuation from textbooks, rather than direct experience of negotiating deals.
In what way can an in-house arrangement be more beneficial?
The working arrangement is often at the law firm’s premises or an electronic equivalent (online), as this seems to assist solicitors and barristers in gaining a wider understanding of valuations and businesses, which helps them later on in other similar cases. Many of the solicitors and barristers I have worked with in-house have progressed to the very highest levels, based on rankings in Legal 500, Chambers and City Wealth list; this tends to suggest wider benefits beyond individual cases. There have been times when I have had less than 15 minutes on a case but made a radical difference to the approach. That is very difficult to do other than as an in-house forensic.
What work falls within the in-house forensic accountant brief?
The brief can sometimes be quite wide, especially where industry-specific knowledge applies but can include some or most of the following:
* Initial thoughts on business values
* Indicating businesses more lifestyle than valuable
* Highlighting total income sources
* Industry-specific guidance on downturns
* Questionnaires, especially industry-specific
* Tracing hidden assets
* Confirming valuations as appropriate
* Indicating liabilities that are overstated
* Suggestions for appropriate SJE valuers
* Explaining industry-specific valuation issues
* Form E drafting and review
* Certain pension issues
What are your thoughts on how COVID-19 and the recession will impact on divorce settlements?
Not surprisingly, one is getting some exaggerated claims, suggesting businesses are suffering much more than they really are. Furloughing and other schemes have helped considerably in some industries, so things are not always as bleak as initially thought.
I tend to draw on my experience doing viability assessments for all major clearing banks and many other financial institutions. In that role, one was always alert to directors painting a rosier picture than justified, perhaps feeling that would secure bank support more easily. So, one almost reverses the techniques used in earlier recessions, to look for those exaggerating the actual decline. I do, however, have some concerns for those really struggling and firefighting, thus failing to put across how bad things really are. One can draw up rather obvious lists of those industries that are suffering badly, such as airlines, much of retail, hospitality and tourism. Yet, even in those industries, one may find niche players that are at least managing.
What are the stranger industries and valuations you have worked on?
I suppose valuing Ballet Choreography rights was one of the stranger ones that I did, which even involved a visit to the Royal Opera house. The accountant valuing for the other side, like me, had never encountered this segment before and I doubt has ever done so since. I also seem to have come across a number of well-known heavy metal rock bands in different situations. Before my youngest son went to University, we were Season Ticket holders at a premiership club. Over the years we had collected photos and autographs from many leading players and managers, who later featured on divorce cases I worked on.
Family Law Forensic.co.uk
Director or Senior Manager experience in industries
Agricultural supplies Architectural products Automotive components
Builder Merchant Construction Conservatories
Cruise industry Care Homes Defence suppliers
Food manufacture Financial Services Healthcare (Overseas)
Healthcare (NHS) Hotels Home Improvements
Lifeboats Leisure Legal services
Management consulting Offshore engineering Plastics
Paper Property Recruitment
Software Sewer operation Storage Tank
Structural steel Tourism Venture capital
Windows Waste Disposal
Industry coverage is particularly wide from favouring work in conglomerates and over the course of some 25+ years includes the industries shown, roughly 40% of industries listed below still apply today or in the last decade or so, including those through subsidiaries etc:
Jurisdictions Robin has worked in:
England and Wales, Scotland, Channel Isles, Isle of Man. From his experience as a director, he has been involved in litigation in China and Switzerland.
Robin has been the Acquisitions Director for two acquisitive groups, one a PLC and the other being one of the UK’s larger private enterprises. Then at two other organisations, he was a Merger Broker, bringing sellers and buyers together. He has also worked on a number of flotations. This experience is invaluable when working on cases as an in-house forensic accountant.