Without pier

Stephen Walsh left BA to become a one-man legal engine room at Associated British Ports. Brendan Malkin reports

Luckily for Stephen Walsh, his first major piece of work after joining Associated British Ports (ABP) a year ago was handling the sale of several airfields that formed part of ABP’s modest US operation Amports. Eleven years as legal counsel at British Airways (BA) had made Walsh at home with such corporate work.

But ABP, which owns and manages 21 ports in the UK, is altogether a different kettle of fish to BA. At the airline Walsh enjoyed the luxury of an 18-strong in-house legal team, whereas at ABP he is the company’s sole in-house lawyer and must coordinate and manage its entire multifarious legal function, not to mention getting to grips with a whole new body of law. New to him at least, the principal law that governs ABP’s mostly Victorian-built ports is the Harbours, Docks and Piers Clauses Act, which dates back to 1847.

At present Walsh is coordinating and advising an internal inquiry, which is taking place alongside a health and safety investigation into the death of a lorry driver in an ABP-managed port. Then there is the company’s involvement in a number of public inquiries, including that into Dibden Bay in Southampton, which concerns ABP’s proposals for a £600m six-terminal port. Walsh has also been reviewing papers relating to the prosecution of the master of Greenpeace’s ship Rainbow Warrior for blockading Southampton Military Harbour (its waters are owned by ABP) in the run-up to the second Gulf War.

In addition, Walsh must coordinate a whole range of day-to-day matters, such as complaints from residents living adjacent to port properties over environment disturbances, and manage the firm’s corporate activity, where transactions range from outsourcing the maintenance of pilot boats to the importation of timber from managed forests in Eastern Europe to its Cardiff port. Even contract reviews have a novel flavour, with most incorporating unusual long-term revenue guarantees. Half of ABP’s income this year is guaranteed through these contracts, which require significant negotiation to be implemented. Characteristically, though, Walsh is modest on the subject of contracts. “A lot of them are quite simple when all we’re doing is bringing a ship in and out of a port,” he claims.

To complicate Walsh’s job further, ABP operates as a highly decentralised company and first employed an in-house lawyer only four years ago. Historically, individual ports did not coordinate their legal functions, instructing law firms independently as and when they were needed. Since his arrival Walsh has worked hard at rationalising referral work, mainly by using a firm for specific work rather than handing it out on an ad hoc basis. Previously ABP faced the expensive problem of one port official asking a law firm a question that had already been put to another law firm by a different official in the same week. Work was also referred to a large number of firms, few of which really understood the nature of ABP’s business, Walsh says.

Following Walsh’s grass roots review, ABP now refers the bulk of its work to three regional firms – Andrew M Jackson, Bond Pearce and Morgan Cole – in addition to local property firms for planning applications and environment surveys. In London, CMS Cameron McKenna is instructed on health and safety work, Simmons & Simmons for employment, Norton Rose for planning and environment, Slaughter and May for corporate and M&A and Taylor Wessing for insolvency. It also uses Winckworth Sherwood for parliamentary work, in particular for planning applications that require a harbour empowerment order.

But Walsh is still not entirely satisfied with his law firm rationalisation programme to date, saying that “in a perfect world” his needs would be best suited by having one firm doing all the work. “We’ve not got it organised in the best way, but also moving in one big step to consolidate the work is not the best way either. However, I think things will evolve and I’m sure we’ll be using fewer firms in a few years time,” he said.

Firms on the company’s existing panel will now be battling it out for those lead roles as and when they become available. ABP can certainly prove both a lucrative and an interesting client. The Dibden Bay Inquiry, for example, has earned ABP’s counsel Martin Kingston QC of Birmingham set 5 Fountain Court a cool £1.5m, and doubtless Bond Pearce a tidy sum also.

There are already two further ABP projects likely to go to inquiry – an outer harbour in Immingham and another terminal in the port of Hull, known as Key 2005. Winckworths is involved in both, with Norton Rose doing some of the environmental work.

Walsh will be helping to devise contracts and monitor developments on the projects. Although he modestly refutes that he is involved in the strategy side in these inquiries, this does feature in his work. For instance, the Humber terminal is likely to be used by coal importers, so the profitability of the terminal is linked to the state of the coal industry, which in turn is linked to the value of oil and governments’ policies in relation to these energy sources. Furthermore, the coal imported through Humber will be used to generate electricity, thus putting the terminal in competition with the nearby Drax Power Station. All of these issues will be looked at in depth by Walsh.

Walsh says he left BA to get a change – he certainly got that, and with it a major challenge. Since his arrival he has tackled a broad range of legal issues, from public inquiries to a criminal prosecution; he has got to grips with a whole new body of law – including the little-known Harbours, Docks and Piers Clauses Act – and has undertaken a complete review of the company’s legal function and outsourcing arrangements. Not bad for 12 months work.
Stephen Walsh
Head of legal
Associated British Ports

Organisation Associated British Ports
Sector Owning/managing ports
UK turnover £473m
Employees 3,600 worldwide
Legal capability One
Head of legal and compliance Stephen Walsh
Reporting to Chief executive Bo Lerenius
Main law firms Andrew M Jackson, Bond Pearce, CMS Cameron McKenna, Morgan Cole, Norton Rose, Simmons & Simmons, Slaughter and May, Taylor Wessing and Winckworth Sherwood