Because we’re worth it

This article will doubtless prove to be contentious among the readership of this magazine and be quoted back to me at length, but someone has to defend us lawyers (and, in a lawyerly way, I must emphasise that the views in this article are entirely personal to me).

As we all know, legal fees involved in major projects, such as big private finance initiative schemes and other limited-recourse financings (the Channel Tunnel Rail Link and the London Underground public-private partnership, for example), are likely to be very significant indeed. What does the construction industry get in return? From what I have heard, lawyers deliver many things, including delays, extraordinary cost overruns, a lack of commerciality, the reinvention of the wheel at “our” expense and a disinclination to stake all or nothing on success fees.

Before I am buried in a welter of abuse, you may also consider the areas in which your legal team is delivering value for money. If nothing else, this may assist you in identifying what you should be expecting of your lawyers, and why, even if you consider their services to be expensive, you do need them.

Take the following points, for example:

• Legal advice and skills The “classical” use of lawyers in the construction industry has been two-fold: first, in the contentious field, for arbitration and court-based litigation; second, in the non-contentious, contractual field. With the explosion of activity in the major projects sector, these two areas have expanded dramatically. As the construction industry finds itself involved as owners or stakeholders in on-going businesses, its legal needs now cover finance, procurement, employment/TUPE, real property and the environment.

  Believe it or not, the law in these areas can be difficult and requires extensive training, experience and intelligence. These are costly skills. And people who have them are in demand. Don’t they deserve to be paid accordingly?

• Experience If a client is paying for a service, he needs a lawyer with appropriate experience. A particular hobby-horse of mine is the lawyer that lays claim to a particular expertise, but the client’s expectations are not met. Surely a sophisticated client should be alive to this and select the lawyer as he would any other professional – through word of mouth, or demonstration of an appropriate level of knowledge, or common sense? All those ways one would identify a decent surgeon or dentist.

  Get the right lawyer, however, and he or she is worth their weight in gold. They have encountered the situation before and know their opposition. They facilitate the deal, inspire confidence from other principals involved, are a source of wise counsel and possesses all manner of other marvellous attributes. More seriously, major transactions often see developments of techniques used in other contexts, but applied to a novel situation. The experienced lawyer will recognise such techniques and their applications.

• Scapegoat Leave it to the lawyer to atagonise your future partners in developing the deal, and when the 10-, 20- or 30-year relationship is bedding down and developing, he or she may always be blamed for those antagonistic moments, late nights and short-tempered outbursts that had to be endured.

  I have heard that lawyers deliver many things, including delays, extraordinary cost overruns, a lack of commerciality and the reinvention of the wheel at “our” expense …

• Documentation architecture and thought

  The lawyer springs major limited-recourse financings from piles of paper for parties that would otherwise have been unable to raise such sums. This is 21st-century alchemy. For credit providers (banks, institutional bondholders, monoline insurers, sureties, multilaterals, equity investors) to be persuaded to lend or invest requires a balanced architecture across a vast array of documentation.

  Think of it as a building. The documentation must work as a whole. It is pointless having the most perfect construction contract if it is not within a similarly perfect panoply of associated documentation: concession, credit and security documents, operation and maintenance contracts, “direct” agreements, equity and insurance arrangements, and so on.

  This demands clear conceptual thought and detailed legal, technical and commercial analysis. Surely such skills call for significant remuneration?

• Highly skilled manpower and team approach To deliver these services on ever more aggressive timetables, to higher standards, with ever more complex financing and commercial structures, teams of skilled people are required. What use was Napoleon without his Grande Armée? These people are among the brightest and the best in their class. Clients expect us to employ the best, and such people are not cheap, especially when they are subjected to demands requiring extraordinary effort and energy. It can be tough. Nights are worked regularly, as are weekends, and holidays are sacrificed.

  I readily accept that lawyers are their own worst enemies. They egg each other on, and there are ridiculous macho imperatives and promises made. But clients rightly consider that if they are paying millions, then they are entitled to require such a service. Surely this carries a premium?

• Integrity and professional pride These should go without saying. The second may be treated with some suspicion by you sceptics, but I believe it to be the case. There must be a desire to complete a job to the best of one’s abilities. The good name of the lawyer and his firm are, in truth, the only marketable assets they possess. More tangibly, there is always the threat of a personal negligence claim if an appointment is not discharged to the required standard.