Law Times

LAW TIMES / JULY 14/21, 2008 FOCUS PAGE 13 (P3s) — work that's interesting as well as lucrative. Lawyers say the work is men- Lots of interesting, lucrative legal work in P3s N BY JULIUS MELNITZER For Law Times eedless to say, legal work abounds in pub- lic-private partnerships tally challenging and demands a complete understanding of the long-term relationships involved among numerous players, includ- ing bidding consortiums, the gov- ernment, the concessionaires (who are usually special purpose entities), and the financing groups. It follows that the P3 game works only for a select few firms. "P3 work requires a cross- section of every discipline within a major corporate-commercial firm," says Ian Bendell of Davis LLP's Toronto office. "It engages corporate and project finance, real estate, construction, tax, corporate structuring, commercial law, and intellectual property expertise, as well as an understanding of envi- ronmental and planning law and other regulatory issues." And, depending on the sector affected by a particular project, P3s may also require experience in specialties such as transportation, public health law and energy law. Once a project is operational, the operator's lawyers may be called upon to advise on everyday issues in areas like labour, employment, and human rights law. No surprise, then, that multidisciplinary experi- ence thrives in the P3 arena. "My background in architec- ture has been very useful on the construction side of P3s," says Owen Pawson of Miller Thomson LLP's Toronto office. Notably, Miller Thomson is the firm that has also parlayed Joshua Liswood's expertise in health-care matters into a prominent role in Ontario's P3 sector. P3 projects, then, are multi- party, time-intensive, document- heavy and involve big dollars. They also feature the types of pressures that justify top-end hourly rates. What we're not talking about, are the premium fees that exist on the M&A spectrum. Still, there's no doubting P3's profitability. "Are P3s attractive in terms of margins and rates? Do P3s provide for attractive returns to law firms compared to general corporate finance work and general securi- ties issues?" ask Jacques Demers of Ogilvy Renault LLP. "The answer to both is a resounding 'yes.'" Getting paid is no problem. The clients are blue-chip and many of them are multinationals. And none of this even takes into account the legal work gener- ated following completion, where a full range of operational business mandates will be up for grabs. The roster of legal work be- comes more impressive when the pre-bid stage of a P3 project is factored into the equation. Each bid usually involves three to five bidding consortiums, with some of the individual partners in each usually represented separately. "Front-end legal involvement in RFPs is one of the areas unique to P3 practice," says Gordon Will- cocks of McCarthy Tétrault LLP's Toronto office. "In other types of project, clients often manage the RFP process without a lot of egalAid_LT_July14_08.indd 1 Get Our Environmental help, but P3 requires a higher level of sophistication in such areas as procurement law and the trans- parency demands on the parties." The gravy is in representing the winning bidder. Which is not to say there's no money in represent- ing the losers, merely less money. "The market is already very competitive," Bendell says. "And the consortia expect law firms to take some of the risk." Still, the firms who have suc- ceeded in this area stick with it. "In order to make this type of practice work, it's important to pursue lasting relationships with consortia leaders, construction companies and financiers so that when you participate in a losing project, they're around the next time," says Mihkel Voore of Stike- man Elliott LLP's Toronto office. "There are people out there, particularly the large international firms, who just keep bidding and bidding," says Toronto's Tim Mur- phy of McMillan Binch Mendel- sohn LLP whose firm closed nine P3s worth $1.9 billion in 2007. "And you've got to go after them." Davis LLP and its national team, which includes Bendell, Doug Buchanan and a group of U.K.-trained lawyers, has done just that, closing a half-dozen proj- ects for SNC Lavalin in the last 18 months. The picture's also rosy for firms like Fasken Martineau Du- Moulin LLP, who do a great deal of work on the government side. "If you work with the govern- ment, you end up working with them again and again," says David Doubilet, head of Faskens' P3 de- partment. "To be sure, government rates are discounted, but the advan- tage is that you've got a steady client and the ability to spend whatever time a long project requires." There's also a place for the re- gionals in their areas of strength. WeirFoulds LLP has leveraged its traditional depth in municipal law to acting for Ontario municipalities on infrastructure and P3 projects. "Municipalities have unique issues of their own including the pressures on municipal staff, com- munity scrutiny and the need to report to council properly," says the firm's Brad McLellan. According to McLellan's part- ner, Dan Ferguson, municipalities are embracing the P3 concept. "The overall trend in municipal regulation is to allow municipali- ties greater flexibility and a wider range of legal vehicles to which they can resort," Ferguson says, adding a good example is "the municipal service corporations that municipalities can create un- der the Municipal Act, and these fit well within the P3 vehicle." Everyone wants in. "The P3 market is the sec- tor of the future," says Doubilet, who has been working on various forms of P3s since the '80's. "The huge gap between the need to sus- tain infrastructure and the funds available to government ensures that it will be around for a long time. And for the time being, it has become an urgency." Of course, the future these days extends beyond domestic borders, offering limitless opportunities for law firms that can make them- selves globally relevant. For the most part, it has been the Ameri- can and British legal behemoths who have done so; Canadian law- yers, by contrast, have a discrete presence only in a few niche areas, such as mining and energy. But it is here that P3 presents intriguing possibilities. Bendell has international experience and the reputation and connections to go with it. Davies Ward Phillips & Vineberg LLP is consortium coun- sel on the Port of Miami tunnel project, is consulting on a toll road in, and bidding to be legal counsel on a bridge project in Alaska. "I would put the Canadian legal market as second only to the U.K. market in the P3 arena," Bendell says. "We're not punching above our weight yet, but we do have the potential to export our expertise in project finance and in the structure and development of the procure- ment process for P3s." LT INTELLECTUAL PROPERTY • Patents • Trade-marks • Trade Secrets • Industrial Design • Packaging & Labelling • Litigation • Licensing • Copyright • Product Liability • Technology Transfer SIM, LOWMAN, ASHTON & MCKAY LLP Barristers & Solicitors SIM & MCBURNEY Patent & Trade-mark Agents 330 University Avenue 6th Floor Toronto, Ontario Canada M5G 1R7 • www.sim-lowman.com • mailsim@sim-lowman.com Get Our Environmental w Specialistson Your Team! 7/8/08 11:19:12 AM Law Specialists*on Your Team! Our team of environmental lawyers includes 5 Environmental Law Specialists* We help you help your clients. Call us. P. (416) 595-1155 F. 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