Sky News reports that Global Counsel, the advisory and lobbying firm founded in 2010, is set to enter administration following a rapid loss of clients and revenues. The firm, which employs around 130 staff, was destabilised after severing ties with its founder Peter Mandelson, amid reputational concerns arising from his past associations. Despite the appointment of a new leadership team, the scale and speed of client departures left the business without a viable trading future.
According to Sky News, employees were informed that administrators would be appointed imminently, office leases surrendered and redundancies expected. The board has since confirmed that it intends to apply to the court for the appointment of Interpath as administrator, noting that any ongoing client servicing would be extremely limited and that a significant number of redundancies are unavoidable.
From an insolvency perspective, administration is designed primarily as a rescue process and must demonstrate a better outcome for creditors than an immediate liquidation. In this case, that may be difficult to achieve. The firm’s brand has suffered significant reputational damage, which materially reduces the prospects of a going-concern sale or meaningful trading continuation.
The sudden nature of the collapse also highlights a key commercial vulnerability within the PR and public affairs sector. Client contracts commonly include provisions allowing immediate termination where the adviser itself becomes a reputational risk. Once confidence is lost, income can fall away almost overnight, leaving little opportunity to stabilise cashflow or restructure the business.
If the administration does not result in a sale or rescue, the administrators’ role will focus on an orderly wind-down, including redundancies, exiting property commitments and seeking to recover unpaid client invoices where possible for the benefit of creditors.
This sequence of events is similar in the collapse of Bell Pottinger, which entered insolvency in 2017 following severe reputational damage and an immediate exodus of clients. As with Global Counsel, Bell Pottinger’s downfall was not caused by a gradual deterioration in trading performance but by a sudden loss of trust that rendered its business model unworkable almost overnight.
In both cases, the absence of long-term contracted income and the reliance on reputation as a core asset meant that once clients exercised termination rights, the firms were left with little protection against rapid cashflow failure. That structural fragility significantly limits the scope for recovery once confidence in the brand has been lost.
Written ByRobert Moore
Marketing Manager
Rob has over two decades of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.
Rob is now working with the Board at RMT to develop strategic marketing programmes to support the business plan and drive more company rescues.
