SALLY-ANN UNDERHILL
Partner, Reed Smith
When looking forward for the next 10 years, perhaps the obvious place to start is to see how our sector has changed over the last decade.
What do we have? Increased geopolitical uncertainty, more advanced technology, a changing workforce and an increasingly demanding client base. These trends look set to continue for the future, but at a greater pace of change.
The opportunities for shipping and transportation law firms to undertake interesting and high-profile work looks set to continue. Such work is often of a highly technical nature when it comes to matching the environmental demands on the industry with the practicalities. So, for example, the uncertainty predicted for 2020 look set to continue as we head towards the 2030 carbon emissions target of a 40% reduction in carbon intensity compared to 2008 levels.
There is a seemingly unabating interest in investment in the shipping industry and whilst increasingly imaginative deals are being struck, there is clearly work for the finance teams; almost inevitably, litigation work will arise out of that in the future.
In terms of the traditional disputes in which lawyers new to shipping often learn their trade, such as laytime and demurrage, and hire disputes, the challenge is to continue to offer such service with a degree of profitability. These disputes often involve interesting legal complexities.
Although we face a market flooded with a large number of small firms offering economically unsustainable rates (as well as the sets of Chambers that are increasingly competing directly with law firms), which appear superficially attractive to those protection and indemnity clubs that are trying to make their defence cover a profitable arm of the business, we still need to maintain our offering in this area. Where will our great shipping lawyers of the future come from if they see shipping as a ‘poor relation’ to corporate or more general litigation practices?
And, in terms of those young lawyers themselves, we have to consider their expectations in terms of financial or job stability, opportunities to work in other offices or jurisdictions, work-life balance, agile working patterns, and maternity and paternity leave.
Fortunately (and perhaps not coincidentally), this arises at a time when most lawyers are able to work from home for at least some part of the week, and when there is no need to run all parts of your business from a central office.
The law firms that embrace the changes, whilst investing in their own teams and being open to the ideas generated by them, will be best placed to align themselves with the businesses they serve. The difficulty will be with those who think they can operate in the 2020s in the same way they did in the 1990s, or even 2000s.
CHRISTOPHER NOLAN
Partner, Holland & Knight
Opportunities abound! The Roaring Twenties for maritime law will require a nimble skill set for the next generation of maritime lawyers. Their tool boxes will require a comfort level in understanding technology to address cyber threats against shipping interests at land and sea.
They will also need an appreciation of insolvency law in the US and abroad to advise clients on the best protections in light of major company filings from this last decade, as well as the advancement of autonomous technology, requiring the revisiting of long-standing maritime convention norms and reimagining staid clauses in long-tested form agreements.
The sharing of information collected will surely implicate privacy issues and antitrust/competition concerns when assessing blockchain initiatives and the merging of logistics chain interests. In order to have a sustained practice to meet these needs, the next generation of maritime practitioner requires a general understanding of these key areas and the ability to call on colleagues within the firm skilled in these areas.
Addressing the cargo loss in a home port will always be necessary, but the sustained practice will require leading efforts between different offices and ports in a seamless fashion. If you are adaptable, it will be an exciting time to be a maritime lawyer.
LINDSEY KEEBLE
Global maritime sector head, Watson Farley & Williams
The combination of increased capital requirements for lending across the banking sector and targeted environmental legislation for the shipping industry will lead to a further tightening of capital available (or more expensive borrowing) for the second-tier and third-tier borrowers — also, for leasing houses which turn to mainstream banks for back-funding.
We anticipate the Poseidon Principles becoming a market standard in such financings as well.
Over the next decade, a carbon levy will most certainly be on the cards. It is incumbent on the industry to engage early to self-regulate and shape any legislation that develops so it is fit for purpose.
In addition, while the shipping industry has started to focus on the “E” of the ESG [environmental, social and governance] requirements, over the next 10 years we can expect legislation and financing terms to shift the focus to include looking at the “S” and “G”. One step towards this relates to the The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships and looking carefully at all aspects of the life cycle of a vessel.
This is part of a multi-sector series on shipping industry outlook for the decade ahead. Read the full report in this week's print edition.
