State of the market

The Australian and New Zealand building and construction industries witnessed yet another year of strong growth in 2007. In Australia, the sector as a whole grew by 4% - a figure which represents an increase of 3% on 2006 figures. However, while growth occurred across all industry sectors, the infrastructure and major projects sectors were the most impressive, not least because growth has occurred in the midst of an international liquidity crisis.

Growth was spurred by the mining/natural resources boom in Western Australia and Queensland's South-East Corridor, evidenced by KPMG's Global Construction Survey which estimates that these sectors grew by 7% on 2006 figures, peaking at 14% in the last quarter of 2007, with at least a 4% year-on-year growth expected over the next 10 years. 

The same story is unfolding, albeit more slowly, in New Zealand, with transactional activity in vital infrastructure such as roads, transportation and energy anticipated to witness steady long-term growth. Needless to say, the industry's growth prospects have law firms excited.

However, while there is wealth of work to keep B&C lawyers occupied in the years ahead, a number of issues are emerging which have the potential to profoundly alter the role of legal advisors in the area. Regulatory intervention, 'green issues' such as sustainable development and climate change, and - perhaps most importantly - shifts in the economic environment have all emerged as pivotal issues in ALB's survey of clients and in-house counsel.

While these changes bring challenges for lawyers and firms of all shapes and sizes, they also bring opportunities. Capitalising on these opportunities, and understanding the practical commercial and social impacts underlying them are the catalysts for growth in the legal services market in the years ahead.

SYDNEY

Colin Biggers & Paisley won praise for its high-calibre advice and "close attention to client care". ALB leading lawyer Antony Riordan (see box starting page 38), who heads the firm's commercial dispute resolution division, was singled out for his dispute resolution expertise, with clients noting that he was "second to none in Sydney" in B&C. Riordan's Sydney-based colleagues Nick Crennan and Alex Ostermayer were also mentioned for their "unrivalled experience" in front-end and contractual matters.

Although Maddocks is a Melbourne-based firm, clients felt that its core B&C strengths resided in its Sydney operations - largely due a number of high-profile lateral transfers over the last few years. Practice head Mal Fielding was considered by colleagues to be an "utter professional" while Andrew Chapman's "sound industry knowledge" had peers saying the team was "one to watch". Melbourne-based ALB leading lawyer Greg Campell won plaudits from clients for his "pragmatic yet commercially sound" advice in the industry with a number of in-house counsel noting that he was "always on the ball regarding regulatory changes".

East-coast firm Herbert Geer continues to build strong credentials in the B&C legal services market, according to many in the industry. Recent Sydney-based lateral hires Doron Rivlin, Paul Deschamps and Chris Kelly were all singled out by clients for the "always timely and always spot-on" nature of their advice.

Piper Alderman's small yet "flexible" Building and Construction team possesses experts in both front and back end work, with clients praising their ADR skills. Tim Coleman won praise from public sector clients for his "cost-conscious" advice, while his Brisbane-based colleague Andrew Robertson was noted for his strong litigation and dispute resolution skills.

MELBOURNE

While Corrs Chamber Westgarth is a national firm, public and private sector clients alike felt that the firm's core B&C strengths were to be found in its Melbourne office. The firm was noted as possessing resounding strengths in both front and back end work with ALB leading lawyers Melbourne-based Andrew Pitney and Brisbane-based Rod Dann each being singled out for special mention.

Clients believed Pitney to be "among the best in the nation" in terms of his project delivery advice, while Dann was noted for his "superb litigation skills." Clients, including those from many of Australia's leading building, construction and infrastructure companies, also noted that Sydney-based Robert Regan and the Brisbane-based Peter Schenk are "very professional operators".

Similarly, Deacons' Melbourne office was considered to be leading the way in a saturated Melbourne market. Clients widely mentioned Grant Ahearn and his involvement on some major projects, the firm's strength in its "leading light" and "industry stalwart" in Brisbane, John Sharkey, is unquestionable. The firm's strong industry relationships, ties to the Asian markets and broad experience have helped it move beyond peer appraisal as a "smaller" firm, with its recent work in the Royal Children's Hospital PPP (Public Private Partnership) contributing to the advance in its standing.

The team at international firm Baker & McKenzie won plaudits from clients for the quality of advice given by its Melbourne office. Tim Garrood was said to run a "very tight" infrastructure advisory practice, with clients appreciating the international reach that the firm provided. Garrood's colleague Anthony Whelan was singled out for his "international litigation experience".  Gadens' Melbourne team was considered to be "top tier" by a whole host of blue-chip clients. Mixing commercial construction with major energy, oil and infrastructure projects, its clientele includes AMP, Mutliplex and Cbus. Partner Tony Greenaway's commercial construction skills are "well known", while his Melbourne-based colleagues, national property group leader Mark Woolley and Mark Poustie, were both mentioned as being "very professional".

Madgwicks was also thought to be leading the way in the Melbourne market. Mentioning particularly strong capabilities in the property side of the market, clients felt Lorna Gelbert's expertise to be "invaluable", praising her "practical" and "economical" approach to practice. Sydney-based Peter Crawford was also mentioned for his "industry-wide expertise".
Dibbs Abbott Stillman's B&C experts were said to be highly "skilled" in dispute resolution and project management. Front- and back-end expert Kevin Oldridge was noted for his "outstanding" advice and praised for his intimate knowledge of all areas aligned to the industry, one client saying that he "was like a one-stop shop in himself".

Lander & Rogers continues to keep its clients happy, with many particularly singling out Michael Champion for special mention.

Arnold Bloch Leibler was spoken of as being "expert" in back-end construction law, with solid experience in some notable dispute resolution cases. Senior litigation counsel, Robert Heathcote was said to be "very competent at his job" while one notable contractor underscored that the firm "always kept to its word".

BRISBANE

While DLA Phillips Fox has a B&C presence in all centres throughout Australia, clients felt that its Brisbane office was leading the way in the market. Mentioning expertise in all areas of the industry from front-end project planning work to litigation and dispute resolution work, many clients said they value the commercial advice of ALB leading lawyer Jim Feehely who was roundly praised for "knowing his stuff". Clients and peers alike noted that Feehely's counsel was always "practical, sensible and reasonable", and many felt that this was aided by the strong team around him. Sydney-based

Alex Hartmann and Perth-based Robert Edel were also singled out for special mention.

Carter Newell was another firm that received glowing praise from clients for its all-round abilities in the area and "close attention to client care". Patrick Mead was particularly mentioned by clients and peers alike for his "esoteric knowledge of the industry", with one prominent client noting he was the lawyer of choice on contractual issues. Mead's colleague David Rodgihiero was noted for his strong skills, with clients saying he was a "leader in litigation matters".

Specialising in both front- and back-end construction work, HopgoodGanim has been noted for the good working relationships that it maintains with clients of all sizes. Adam Carlton-Smith was mentioned as possessing "very good" experience in the property and infrastructure sectors. One client spoke highly of the teamwork between Carlton-Smith and resource sector specialist Martin Klapper, noting that it was something not encountered in the "mega firms".

MacDonnells Law was also mentioned regularly by clients. Citing key strengths in contractual and dispute resolution issues, clients believed that Cairns-based partners Terry Karydas and Melinda Foley were "attuned to industry trends" and had proved instrumental in some of the notable infrastructure projects completed by the firm.
Similarly, Holding Redlich's ever-expanding Brisbane office outstrips its Brisbane rivals for the "industry knowledge possessed by key partners". Two such partners were Brisbane-based duo Stephen Pyman and Scott Lambert, who colleagues believed to constitute the crux of an up-and-coming team.

TressCox Lawyers were also thought to be leading the way in a booming Brisbane building market. ALB leading lawyer Rob Leacock was mentioned by clients for his "no fuss" approach to the practice in the area, with colleagues stating that the former Bakers' partner was "among the best in a tight Brisbane market".

OTHER AUSTRALIAN CITIES

In a quieter Adelaide market, clients felt that Finlaysons possessed a "dedicated and well-rounded team". George McKenzie and Anthony Floreani were singled out for the "relevancy of their advice", with the latter being mentioned as possessing good "business knowledge" by virtue of the time he spent as in-house counsel at construction firm Urban Construct.

Newly merged firm Thomson Playford also received kudos from clients for its advice. Partners Geoff Brennan and David Beer were both thought to be "extremely efficient" in this.

In Perth, Cochrane Lishman and Jackson McDonald Lawyers were thought to be among only a handful of "quality firms" in a resources-dominated market. At Cochrane Lishman, Justin Harris and Paul Vinci elicited praise from their clients for their "sound counsel" and "knowledge of commercial realities facing businesses" respectively. Meanwhile, clients were equally as exuberant about the firm's work with contractors and sub-contractors. Anthony Bereyne and Paul Fyfe were named as "excellent practitioners". 

NATIONAL FIRMS

Clayton Utz was far and away the firm that was mentioned most widely. Having an impressive stable of blue-chip clients, the firm has been intimately involved in many of the most prominent deals in the industry. Possessing particular strengths in PPP work and vital infrastructure projects, the firm numbers the Brisbane Airport Link, Eastlink and the Rollingstock PPP among its deals. Clients roundly commended the firm's practitioners as being the "unrivalled experts in the field" and many clients (and a fair share of their peers) expect them to remain so in the time ahead.

The internationally credentialled ALB leading lawyer Doug Jones was noted for his breadth of knowledge and expertise in the field, while his colleague and fellow ALB leading lawyer Arch Fletcher received praise for his "unrivalled" contract negotiation and review skills. Fletcher's colleague Sergio Capelli was often mentioned by clients in the same breath for similar reasons. At the back end, Michael Pryles was thought to be leading the way with many peers noting that he has particularly strong credentials in ADR.

If Clayton Utz is leading the way among national firms, then Blake Dawson was thought to be right at its heels. Maintaining a dedicated presence in each city, the firm possesses great strengths in both front- and back-end work. Boasting particularly strong credentials in project financing and, like Clayton
Utz, consistently appearing on the nation's "largest ever" PPP projects lists, it is the "firm of choice" for many blue-chip clients, from telcos to contractors.

Joanne Evans is described as "unbeatable" on PPP projects, with clients praising her "open and honest" communication skills. Chris Davidson and Bill Smith were both mentioned by clients as possessing an "impressive depth and breadth of knowledge in the field", while Kevin Arkwright was said to be "peerless when it comes to contract and project planning matters".

The most glowing client praise, however, was reserved for ALB leading lawyer Grant Rowlands. Clients believed that the calibre of his advice on infrastructure and commercial property matters to be matchless. One public sector client noted that as much as Rowlands was an "utter professional," he was "extremely personable and easy to deal with".

With an abundance of front- and back-end lawyers in all its offices, Allens Arthur Robinson was said by clients - including the likes of Rio Tinto, Babcock and Brown and Macquarie Bank - to be a "go-to firm for project financing and development". And, certainly, the firm's "dedicated" and "impeccably skilled" corpus of lawyers has
had a hand in the majority of the nation's public infrastructure and construction works.

ALB leading lawyers Leighton O'Brien and John Dorter were noted by clients as being "very talented"; O'Brien's colleagues earmarked him as a "financing guru" while Dorter was considered to handle "construction disputes efficiently and speedily". Their colleague John Cooper was mentioned by clients for his "superior knowledge of the industry".

Mallesons Stephen Jaques was mentioned by its clients as "always delivering excellent advice" in the industry. Clients involved in deals such as the Rollingstock PPP, Perth Airport and the Eastlink Toll road commended the firm for being "commercial savvy", and its attention to detail, productivity and "superior time management skills".

The team, including the "vastly experienced" Peter Doyle and "all rounders" Jeff Clark and Tony Holland, were all mentioned by clients as having "key strengths in important areas of the industry". ALB leading lawyer Peter Pether was also mentioned by one client as "top of the list" when it comes to ADR and litigation in the industry. Another client noted that the "erudite" Pether "never failed to meet expectations and had an excellent eye for the value-add".

While the team at Freehills work on a variety of areas in the industry from property development, financing and dispute resolution, clients and peers felt that their core strengths resided in projects. Their "depth of knowledge" in this area equates to a level of "reliability" and "practicality" that a number of clients feel is missing when dealing with other firms. Project finance guru Patrick St John has been mentioned for his "trustworthiness" and "pragmatism," while Melbourne office head, John Curtis, was lauded for his management of a diverse client portfolio - one that boasts both contractors and equity investors.

Minter Ellison polled highly for its 'straightforward' approach to practice in the industry. Clients noted that the firm had a real "intuition" about the major regulatory currents in the industry. ALB leading lawyer David Fabian was said to be "very competent" when in it comes to project development and delivery, a claim that is substantiated by the high number of prominent transactions that Fabian has worked on, deals ranging from the King St Wharf redevelopment to the Stadium Australia development. 

NEW ZEALAND

Meanwhile in New Zealand, it is the largest firms which have the lion's share of the legal services market in a relatively small B&C market. According to many of those surveyed, it is a trend that is expected to continue, and certainly one that has the big players excited.

Kensington Swan was undoubtedly the winner. The firm was interchangeably referred to as "simply brilliant" and "very competent in all areas of practice". ALB leading lawyers Andrew Skelton and Paul Buetow were noted as being "leaders in the NZ market" by clients, with their peers giving similar accolades. Chris Booth was noted as being "always willing to talk things through with clients", while Ian Haynes was considered to be the "authority on contract drafting".
Simpson Grierson is fast establishing itself as the major contender in construction law. Preferred by the NZX-listed Kiwi Income Property Trust for advice on its retail developments, its self-proclaimed 'dispute resolution specialists' have advised on a number of multi-million dollar projects.

Partner and ALB leading lawyer Michael Weatherall was lauded for his "unrivalled industry knowledge" with clients in the industry believing his engineering background to be invaluable in a legal counsel. Weatherall's colleague and fellow ALB leading lawyer back-end specialist Graeme Christie was spoken of extremely highly by clients who liked his "ability to nip potential problems in the bud". Clients' widely held views were articulated enthusiastically by one who said that, if matters were to proceed to litigation, they would select Graeme Christie "without so much as a second thought".

Bell Gully's strength in project financing is such that even competitors give their versions of the opinion that it is "miles ahead of others in the space". Clients feel that Tom Bennett's financial services background to be "crucial in pushing the big projects through", with one in-house counsel stating that "the guy just oozes business acumen". Gary Downs and Chris Gordon were noted as good operators, with Downs' work on the Auckland Waterfront Redevelopment praised as "professional carriage of a vital project".

Chapman tripp's expertise in the B&C market has marked it as a firm of choice for ING, Telecom and Landco. ALB leading lawyer Robert Parker was mentioned for his "strong litigation credentials" possessing expertise in all areas of the industry from contract negotiation and project advice to back-end litigation and arbitration.

Parker's colleagues Bill Sandston, Tony Keenan and Matt Carroll were said to be part of the nucleus of a "very accomplished team".

Minter Ellison Rudd Watts' clients includes Coles Myer, Ports of Auckland, AMP, ANZ and Stamford Hotel. Clients believed that the firm's acquisition of former Bell Gully partner Stephen Price is proving fruitful. Practice head David Gilbert was said to possess "very good" capabilities in project financing and a "well-rounded knowledge" of project delivery methods.

Russell McVeagh's "knowledgeable and efficient" team won the plaudits of those in the industry for their "excellent knowledge of marketplace".

Greg Thompson, who has advised major developers Multiplex and Westfield for the firm, was noted as being "outstanding" while Gerard Curry was mentioned for his "technical knowledge" and "dispute resolution skills".

Among the many issues raised by clients, in-house counsel and company secretaries during the survey, the international credit crisis was the most common. And while many in the industry believe that it will have a minimal effect on 'vital' infrastructure projects, its impacts confined to non-discretionary projects and commercial developments, ALB's research suggests that it is already affecting client behaviour, with many displaying a greater disposition to shelve major projects in anticipation of a calmer economic climate.

Nonetheless, and as ALB's highly selective snapshot of the major B&C deals in 2007/08 suggests, lawyers and firms in the industry have responded to client concerns with adaptability and ingenuity. Alternative project delivery methods such as PPPs, Early Contractor Intervention (ECI) and Alliance Contracting (AI) have proved crucial to closing deals in Australia, and while similar methods have remained relatively under-utilised in New Zealand they are expected to assume a similarly high importance there over the next few years.