From an academic and intellectual perspective, nothing beats shipping,” claims Nick Fell, general counsel of petroleum logistics company AET, which has a fleet of 90 tankers that ship billions of dollars worth of oil around the globe annually.
With a team of just four in-house lawyers, Fell is responsible for coordinating the company’s global legal strategy, covering the needs of its three main bases in London, Houston and Singapore.
In 2006 AET shipped 100 million tonnes of oil around the globe on its fleet of around 90 vessels, which are insured for $3.5bn (£1.71bn). Fell himself clocked up 200,000 air miles following its trail, as managing the legal logistics of moving liquid gold is no mean feat.
“When I took the job I underestimated the challenges,” he admits. “The learning curve has been very steep but it is also very rewarding.”
When he joined the company two years ago, Fell was the company’s sole in-house counsel. He has since recruited and trained four further lawyers who, like him, work across a broad range of legal issues.
“You have to be passionate to work in this job; you have to be interested in the business,” he says. “Historically speaking, insurance and shipping defined UK commercial law.”
AET’s goal is to become the largest petroleum logistics company in the world within four years, with a fleet of 120 vessels. As it grows Fell expects to further expand his legal team with it.
“There will be lawyers in Houston and Singapore eventually,” says Fell. For now, Fell and his team are reliant on their close relationships with external advisers. “We don’t have a panel of firms; we don’t think it is necessary,” he says. “It is about getting the right people and the right expertise working on cases.”
The internal legal team’s daily routine is broken down into four key areas: company secretarial support, company advice, litigation and managing outside counsel. Yet with such a small in-house team, Fell says AET lacks the resources to launch litigation proceedings and is reliant on outside counsel.
“Shipping can be fertile for litigation, and it is a chunk of the business in the US because of the litigious nature of the country,” he explains.
Most litigation centres on admiralty incidents – a collision between two vessels. The prospect of a major collision is the only thing that keeps mild-mannered Fell awake at night. After all, it could cost millions in legal fees just to decide who is liable for an incident.
Meanwhile, as Fell’s team is based in the UK, AET looks to Holland & Knight to manage the bulk of its US legal affairs. It also has a strong relationship with Washington DC niche firm Thompson Coburn.
In the UK, the choice of advisers has dwindled as the magic circle firms have left the shipping arena. Consequently marine rates are beginning to escalate as the choice narrows.
AET has relationships with Ince & Co and Norton Rose and is in the process of formalising a relationship with Clyde & Co. But Fell questions the profession’s commitment to shipping as a profitable revenue stream.
“It’s not healthy that so many firms are pulling out,” he argues. “Any firm that we instruct has to be fully committed to shipping. We have some worries about the competitiveness of the UK shipping firms.”
It is a point on which the normally laid back Fell becomes animated.
With litigation fees rising, it will not be long before it becomes a central factor when deciding where to bring a case to court. AET would prefer to litigate in the country of origin, and Fell says escalating costs could influence the company’s decision about whether to bring a case at all. By contrast, he adds, the cost of hiring a US firm is “comparatively modest”.
That said, Fell enjoys strong relationships with his handpicked selection of UK lawyers. And the firms he uses have expanded to Aisa, so AET can align its Singaporean relationships with UK firms.
He says Singapore has a more relaxed regulatory environment than the UK and US, but that means he has to keep a closer eye on what is happening there. The company uses UK firms in Singapore to run its legal affairs, but Fell exercises his hands-on approach by regularly visiting the office.
With the arrival of two new tankers expected in June, AET is entering a period of growth. The next four years will present even more complex issues as AET pushes to become the market leader. It is fortunate that Fell enjoys a challenge; as he says, there is nothing more challenging than shipping law.
Name: Nick Fell
Organisation: AET
Title: General counsel
Sector: Marine
Turnover: $1bn (£490m)
Global legal spend: $1m-plus (£490,000)
Global legal capability: Four lawyers and one trainee
Number of employees: 2,500, including sea staff
Reporting to: Chief executive Amir Azizan
Main law firms:
US – Holland & Knight, Thompson Coburn;
UK – Clyde & Co, Holman Fenwick & Willan, Ince & Co, Norton Rose, Reed Smith Richards Butler
Nick Fell’s CV
Education:
1981-84: University of Liverpool, LLB Law
1995: University of Chicago, MBA Finance
2005: University of Liverpool, LLM
Work history:
1986-1987: Richards Butler, trainee
1988-1993: Richards Butler Hong Kong, lawyer
1995-1998: AT Kearney, management consultant
1998-1999: Orrick Herrington & Sutcliffe San Francisco, lawyer
1999-2005: GATX Corporation, in-house lawyer
2005-present: AET, general counsel
