Asia’s shipping legal services market may just be recession proof. While lawyers in other sectors are preparing for a slow-down, shippng practices are boomng. But this not to say that changes are not looming large on the horizon.
According to shipping lawyers in Asia, the outlook has never been better. Traditional areas such as maritime disputes, admiralty and wet work are up by almost 15% on 2006/07, and finance is not slowing down despite the worldwide liquidity crisis. And the boom in aligned areas such as commodities, energy, and oil and gas continues.
Shipping law practitioners in the region may well think that their own ship has come in. However, a closer look at the reasons behind the upturn in work in this area reveals that significant changes continue. And while these changes may not be as far reaching or as deep as the global financial crisis, the early signs indicate that they are just as profound.
Wet and admiralty work resurgence
If 2006 and 2007 were the years in which traditional areas of shipping law sunk to record lows, then 2008 is, by comparison, the year it experienced a renaissance. All firms that ALB spoke to noted a e in maritime dispute work, and the forecast is for more of the same in the months ahead.
What are the reasons behind the resurgence?
According to Dato' Jude Benny, name partner at Singapore-based Joseph Tan Jude Benny, there are many but the most important is the increase in maritime activity occurring throughout Asia.
"The increased tonnage moving through the Asian region at the moment is driving the resurgence in the purist areas of shipping law.
With 40% of the world's tonnage owned and operated out of Asia, it follows that the propensity for incidents such as collisions, groundings, fires will also increase," he says. And admiralty and wet work are tipped to further grow on the back of increased maritime trade into and between countries in the Asian region.
Goh Mei Lin, a Singapore-based partner at Watson, Farley & Williams, agrees, but says the increase in work in these areas is as much due to the strength of ship building as it is about increased tonnage moving through Asian ports.
"When fleets expand and more building is being done, this tends to result in a proportional increase in the number of casualties occurring," she says, noting that such activity is substantially up on previous years, and not necessarily being done by ship building powerhouses such as Japan and Korea but "happening more and more in India, China and Southeast Asia".
Goh's Singapore-based colleague Jon Ray adopts a slightly more pragmatic approach. For Ray, the amount of work on offer for admiralty and wet work lawyers in Asia ebbs and flows simply because of historical cycles.
"It is either feast or famine; you can find yourself very busy or going for a long period without much work," says Ray, highlighting that the latter was the case during much of the Asian financial crisis of the 1990s. But if the current economic situation gives way to a similar situation to that of the 1990s, how might the region's shipping lawyers fare? According to Ray and others, the lessons learnt by shipping practitioners in the 1990s stand them in good stead should sucha slowdown occur. And according to those ALB spoke to, the key, as always, is diversification.
Next: Broadening Horizons
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