In 2011 lawyers are going to have to adapt to win work, whether by rebranding themselves, becoming mediation advisers or by moving in with the client…
What will construction lawyers be doing in 2011? Shuffling paper clips? Contemplating the changing climate (both economic and meteorological)? Or perhaps events in construction will still keep its specialist legal professionals on their toes.
The challenges faced by the construction lawyer, of course, reflect those faced by the industry they serve - reduced construction activity inevitably means less to do (even for those in disputes) but these changing times are bringing much much more than that.
So with less mainstream work around, where will construction lawyers be focusing their attention this year?
- The increased focus on infrastructure and energy projects (as the area of most significant construction activity) has brought with it a new type of construction client and contractors/suppliers. Many construction lawyers are “re-branding” as energy and renewables or infrastructure lawyers to illustrate their involvement and knowledge within these sectors
Those coming from these sectors are not steeped in the traditions of construction or indeed construction law at all and have different needs and perspectives. This is particularly the case for the energy market, in which procurers of construction projects are drawing on their very different procurement experiences, often non-UK, in their core businesses
- This new type of construction client has lawyers taking a fresh look at the common standard contract forms. Do they work for them? This may well mean increased use of “bespoke” contracts and forms used internationally such as FIDIC.
The number of lawyers on secondment is staggering. Those returning to private practice - and many may not - will do so with a greater understanding of what the client truly needs from its lawyer
There is an increased scepticism - not just from the lawyers - towards the “boom time” contract models - and yes, this does include NEC and partnering. People now clearly understand and are concerned about the costs involved in using some of these forms of procurement. The project management and reporting resources needed to deal with procedures under these contracts can have significant cost implications. These factors are all coming into play in choice of contracts
- Formal resolution of disputes - even by adjudication - continues to be considered too expensive by many. Early cheap and fast settlements and the increasing use of mediation are expected to continue. Construction lawyers do have a role to play here but it may not be as “advocate”, more as adviser
- Greater and more detailed understanding of the clients’ business is essential. One way this is being achieved is through the secondment of lawyers from private practice to in-house in this sector. The numbers on secondment are staggering. This will undoubtedly continue this year as law firms’ workloads remain light. Those returning to private practice from secondment - and many may not - will do so with a greater understanding of what the client truly needs from its lawyer
- This year will see the increasing involvement and interest of the corporate lawyer in the sector. The search is on for new forms and sources of funding for the public sector. The prospect of complex new funding models and corporate vehicles is too appealing for them to resist. The construction lawyer will have to show that his or her knowledge of the sector remains an essential part of the jigsaw.
So what about outside influences? New legislation is still coming through. There is a growing awareness of the opportunities afforded contractors by the recent changes in the public procurement regulations.
Not only are there the challenges that face the industry, Europe has published proposals for a European Contract Law. There is a view that to harmonise contract law across Europe would remove trade barriers and reduce transaction costs. To say that the industry is generally underwhelmed by this is the understatement of the year.
There is a similar feeling towards the much heralded and long time coming changes to the Construction Act - April or October 2011? There will inevitably be legal challenges while the legislation beds in and the new payment regime is put into practice.
So construction lawyers have a lot to play for. If they adapt to the new regime work will follow. They resist the changes at their peril.
Lindy Patterson is a partner in Dundas & Wilson