Christchurch City Report: Legal expertise under pressure

by Kathryn Crossley08 Oct 2014
When asked about the past year, Christchurch’s lawyers all seem to use the same two words to describe the city’s legal market: busy and buoyant. 

For many firms 2013 was a record-breaking year that saw strong performances across all practice areas, and so far 2014 has been even bigger.

With the rebuild now well and truly underway, demand for legal services is high, but one of the resources most under pressure is legal expertise.

“In New Zealand there aren’t actually many construction lawyers; there’s a lot of people out there that are property lawyers that have probably dabbled in the odd construction contract, but it’s not the same,” says Chapman Tripp partner Brian Clayton. “In most jurisdictions you have specialist teams of construction lawyers, so I think the big challenge for Christchurch is resourcing.”

Lane Neave partner Bill Dwyer agrees. “I think it’s becoming an area where there is growing recognition that you really do need specialists … I think with construction law it’s becoming really apparent that it is highly technical and very specific,” he says.

With large and complex projects such as the Christchurch Hospital and Burwood Hospital rebuild, and the Lyttelton Port rebuild reaching the construction stage, demand for specialist expertise has grown and is only expected to increase.

However, a limited number of construction lawyers isn’t the only challenge facing the Christchurch rebuild.

“Christchurch is a really hot contracting market,” says Clayton. Because contractors are able to pick and choose which projects they work on, “a lot of thought is going into procurement strategy and how to partner up with the best person on the best terms,” he says.

Traditionally, in New Zealand a major project would be put out to tender, but as the market is so competitive Clayton has observed an increase in alternative approaches. “There’s a lot more thought going into strategy and other techniques such as early contractor involvement,” he says.

International investment has also added a layer of complexity, with foreign investors often entering joint-venture arrangements with local companies as a way of winning work in the tight-knit Christchurch market.

According to Andrew Woods, partner at Chapman Tripp, the size and complexity of the large redevelopment projects, and the involvement of offshore companies with impressive construction and facility management experience, has meant that local firms need to resource work with matching experience. He says his firm draws on colleagues in its Auckland and Wellington offices for these projects.

The increase in construction work has also generated work for other practice areas, such as banking, commercial and property, and health and safety.

And although it’s still relatively early days for the construction phase, dispute work is also likely to flow from the rebuild.

CEO of Duncan Cotterill, Terry McLaughlin, says this is because in booms – particularly in construction – it ultimately leads to some problems in terms of quality, delivery or business performance.

There are already some indicators that sectors are becoming increasingly stretched, he says.

And although earthquake-related work is capturing a lot of attention, the rebuild isn’t the sole driver of activity for Christchurch lawyers, with New Zealand’s strengthening economy also generating work for firms.

The firms that NZ Lawyer spoke to have been enjoying a variety of work, including natural resources, energy, private client work, tech matters, family law, general corporate work for SMEs, immigration, subdivisional work, M&A, health and safety, and employment matters.

Agribusiness, particularly irrigation scheme work, has also been a dominant area for a number of firms.

Post-quake life in Christchurch has been anything but business as usual. For the legal profession, one of the key differences has been the rapidly changing regulatory environment, with the many changes aimed at facilitating the significant recovery effort.

Anderson Lloyd partner Jen Crawford says lawyers have been busy keeping up with the rapidly evolving legal environment, and communicating with clients regularly about the latest changes.

“It’s very different,” she says. “It can be quite tiring, but if we all work together we can deliver something quite special…it is a different way of advising because the regulatory and legal environment is ever-shifting.”

With law firms no longer clustered in the CBD, Christchurch’s lawyers have also been making a greater effort to communicate with one another. Although the scattering of firms may have caused some lawyers to feel isolated; others are making greater efforts to participate in events where they can catch up with their colleagues.

In Crawford’s view, the earthquakes and rebuild have offered a unique challenge to the city’s lawyers.

She feels an adversarial approach is not necessarily appropriate in a recovery environment, and says there has been a trend towards greater dialogue, more negotiated solutions, and more collegiality and collaboration in the local profession. Pro bono work has also been on the rise.
This shift may also be recasting lawyers’ roles.
“If we keep that dialogue going, then legal advisers will be used for construction of positive opportunities, rather than debate,” Crawford predicts. “I don’t think the community needs unnecessary litigation; I think the community is looking for solutions and opportunities that will enable us all to move forward. From a legal point of view, I think that’s where lawyers can add value, where they sit down and provide solutions to clients.”

This article appeared in New Zealand Lawyer’s latest magazine edition 6.3. Subscribe for more articles and detailed legal features.

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