The Wimbledon effect should see London still dominate maritime legal market
The Big Bang was the kiss of death for old-school City stockbrokers. By contrast, traditional English shipping law firms have gone from strength to strength
As long as shipping disputes are by default resolved under English law in English courts, domestic firms have an obvious head start
THE All England Lawn Tennis and Croquet Club organised its first gentlemen’s singles tennis tournament, restricted to amateur participants, in 1877. Plucky British chaps won every year thereafter for almost three decades.
It was all downhill from there. By the late Edwardian era, players from the white dominions of the antipodes even had the impertinence to emerge as the dominant force.
Since competition resumed following suspension for the duration of the First World War, Britons have won on just five occasions, with an embarrassing 79-year hiatus between Fred Perry and Andy Murray.
The parallels with the relative decline of the UK economy, from the late Victorian workshop of the world to the lowest projected rate of growth in the G7 this year, are uncanny.
Yet Wimbledon remains perhaps the world’s most prestigious tennis tournament, a phenomenon that led economics commentators in the 1980s to coin the term “Wimbledon effect” by way of analogy with the British financial services sector.
The decade that followed Big Bang deregulation of 1986 saw the demise of many firms that were household names, at least in households that subscribed to the Financial Times.
Few now remember the clout once wielded by the likes of Capel-Cure Myers, Panmure Gordon, de Zoete & Bevan, Scrimgeour Kemp Gee, Hill Samuel, Seligman Harris and a vast array of others, swallowed up by European and US investment banks.
The Wimbledon metaphor gently points out that while British players don’t often win any more, the City and its Canary Wharf adjunct still host the matches for those that do, running Wall Street a close second as a financial centre.
Seen in the broader historical context, London’s dominance in international shipping law has held up far better.
This is partly a matter of historical legacy from the days when British shipowners controlled around a third of the world fleet. Settlement in the English courts under English law thus became the specified default in most shipping contracts.
The specialist law firms that grew up within that ecosystem remain the blue chips in the niche.
They have lost much of the day-to-day disputes work they once monopolised, which now stays with P&I clubs, who have built up substantial in-house legal firepower in their own right.
But HFW, Clyde & Co, Watson Farley & Williams, Norton Rose Fulbright and Hill Dickinson, not to mention numerous boutiques and more recent start-ups, reinvented themselves with a range of new offerings, not least advising on deals.
Sadly, that list no longer includes the daddy of them all: Ince & Co, not too long ago indubitably the Rolls-Royce of shipping law firms. Founded in 1870 — the same decade as Wimbledon — it this week went into administration for the second time in recent years.
The reasons for its demise are, to use one of the Latin hashtags beloved of lawyers, sui generis.
They boil down to poor management and a run of bad breaks. The decision to merge into a listed broader commercial law firm is also regarded as curious.
But the upshot is that those who can avoid such pitfalls can potentially continue to run highly profitable shipping legal practices indefinitely.
The talent pool has vastly expanded beyond the old school tie network and has substantially internationalised. Attractive careers are open to those with the right skill set and level of determination, including women and those of other nationalities and ethnicities.
For younger members of the workforce that looks only natural. Those now approaching retirement will appreciate just how revolutionary it really is.
But these remarks should not occasion complacency. Accumulated expertise is not a golden ticket, and market leadership never a given.
A big corporate law firm doesn’t need to be traditionally rooted in shipping to decide it wants to muscle in on an attractive niche market. US giant Reed Smith has led the way since its acquisition of Richards Butler in 2007, and others could follow suit.
In the wake of the global financial crisis, Asian lenders emerged from nowhere to become a power in ship finance almost overnight. Repeating the trick for shipping law would likely prove harder.
That’s mostly down to politics. Asian undergraduates can assimilate English law as easily and brilliantly as they assimilate the English language, or anything else to which they turn their minds. That much is proved by the number of them already working for English firms.
But this is where the Wimbledon effect kicks in. Confidence is lacking in the independence of judicial systems in many Asian countries. Until that can be guaranteed, the consistency and perceived honesty of the English courts will allow them to maintain their edge.
Physical ship owning has long been reduced to a relatively minor business in the UK, and even the once unassailable Lloyd’s hull insurance market now lags the Nordic, Singapore and Chinese markets.
But shipping law firms constitute the brightest assets of the entire UK maritime cluster, and even losing a firm as storied as Ince does not change that. For the foreseeable future, expect them to keep winning in straight sets.