What Asian Legal Business Said About Us In October 2002

Sunshine On A Rainy Day

Given the unfortunate tag of ‘sunset industry’, the shipping and maritime area is undergoing change. But as ALB discovers, there are many who remain optimistic over its future.

Shipping and maritime law has dominated the headlines in 2002, and nowhere more so than Hong Kong.

Teams of lawyers have, if you’ll excuse the pun, jumped ship to other firms; a traditional heavyweight has dropped out of the market altogether, while a number of other firms have sought refuge in the arms of each other.

The severe downturn in the global shipping industry in the past few years has led to suggestions that it may be in permanent decline. The region’s flagship maritime event, Asia Pacific Maritime, has been postponed for a year – from March 2003 to March 2004, and the Maritime Strategies International (MSI), an independent consultancy based in the UK, says there is no clear indication of when a recovery might occur.

Maersk Sealand Hong Kong Ltd was established in 1975 to act as general agents for Maersk Line’s services, connecting Hong Kong and Macau with all major trade origins and destinations. The Hong Kong organization engages in a variety of transport-related services including trucking, warehousing, consolidation, container repairs and refurbishment, ship and engine repairs, offshore activities, ship brokerage, and the sale and purchase of ships.

Head of legal, Patrick Yu, confirms that Maersk Sealand is under cost cutting pressures, but adds that the firms themselves are unwilling to embrace low value work.

“What external counsel suggest,” he says, “is that if the case is on a 50/50 win/lose basis, then we should use the service of lawyers. But if the percentage of winning the case is quite low, they prefer us to settle the matter rather than fight against opponents.”

Yu says that although maritime firms have not increased their rates this year, they are still “incredibly high”.

“The partner rate is about HK$3,500 per hour,” he says, “and even for a lawyer below partner level they charge about HK$2,400 per hour. It is up to an unacceptable level.”

Wishing to keep its choice of firm confidential, Yu says Maersk Sealand outsources mainly cargo claims rather than corporate or finance matters. “We have instructions from head office and they suggest that we do not use the service so much,” he says.

One lawyer who is able to keep his fees down is Jonathan Rostron. Formerly of (the now defunct) Sinclair Roche & Temperley, Rostron set up Jonathan Rostron Solicitors about a year ago to combat the problem in Hong Kong of high overheads that inevitably are passed on to clients.