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Trade & Customs 2016: Trends

The legal market supporting the practice of trade and customs law is somewhat unusual. In one respect, the trade area is no different than any other highly competitive area of law: in order to deliver value, lawyers must have a high level of expertise and be able to translate this expertise into practical and commercially beneficial results. However, the nature and intensity of this expertise has developed over the last 20 years of WTO practice, and for some time now more generalist practices have fallen by the wayside. While the ultimate aim of the WTO and many individual governments is to move progressively towards a liberal and fair system of trade, the consequence is an evolving body of rules and procedures that put pressure on companies and their legal counsel.

The importance of managing the risks and maximising the returns associated with increasing regulatory burdens has meant that clients have had to become more sophisticated in their choice of legal representation. For law firms this has been a challenge, since legal fees in this area do not command as much as corporate and finance practices. Therefore, successful outfits have to be cost-sensitive while allocating enough resources for an effective practice in this area. For large full-service firms this is a particularly difficult task. Outfits that pressed ahead with committing more resources to trade law began creating independent practice groups, allowing lawyers to devote more time to the area. Meanwhile, law firms that were reluctant to do so saw their practices diminish as their best trade and customs experts left for firms that did, or to set up boutiques or solo practices.

This is not to say that, as a rule, global law firms have struggled in this practice area. A number of Anglo-American international law firms that established large and specialised independent trade and customs practice groups have had great success and continue to do so. In fact, there are certain mechanics of how international trade and customs law is practised and how it is developing that are conducive to a wide collaborative and global approach.

This is in part because trade and customs law is an increasingly global affair, with law firms continuing to adapt the flow of work across different regions. Respondents have noted the relative slowdown in trade cases initiated by the EU over the last few years, which has led trade specialists to expand their scope of work, typically by advising clients in trade remedy proceedings initiated by Latin America, Middle Eastern and Asian governments. The current economic slowdown has contributed to trade protectionism. For example, in the past few years, national steel producers have been directing their products into global markets, leading to the initiation of anti-dumping, subsidies and safeguard investigations. Cases targeting Asian countries have been a significant source of work recently, and there has also been an uptick in cases involving the Middle East, where strong industrial diversification in the UAE is generating more trade remedy disputes.

Meanwhile, a critical development in regional trade agreements has been the introduction of specific rules to address regulatory issues, non-tariff barriers and concerns related to trade and labour rights, the environment and other societal and health-related themes, including pharmaceutical patents and pricing. In this regard, it is a benefit that global full-service firms can leverage cross-disciplinary expertise.

Despite these developments, the draw of operating small specialised practices at lower-overhead platforms is a highly appealing model in this legal market. The scope and nature of international trade, WTO and customs issues allows experienced practitioners to receive at least a robust flow of work, while delivering a top-tier service with a small team. In the US and Europe, this phenomenon has been particularly noticed and has continued over the last few years. This is not limited to lawyers leaving larger law firms, but also government attorneys moving into private practice. Ultimately, as clients become increasingly cost-conscious, there will be well-regarded practitioners who believe it is better to draw on a smaller pool of highly specialised knowledge at lower costs.

In other jurisdictions, the opposite trend has been observed. Boutique and solo practices are very much the model in Latin America and Asia, where traditionally full-service firms could not contend with the specialisation required. In jurisdictions where there were a fewer number of trade remedy investigations and WTO disputes, it was difficult for lawyers to gain experience and disturb the status quo. In more recent times, as the number of trade remedy disputes has expanded in these jurisdictions, a greater number of firms have been able to develop an international trade practice, normally by expanding or diversifying their competition law practices.  

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There have been significant changes to the market recently as specialisation has diversified and practices have expanded globally. However, there has been no great growth in the trade and customs bar outside of emerging market economies. The most significant developments have been structural changes. Many experienced practitioners who have set up specialised practices with lower overheads have had success, and several individuals at such outfits feature in this edition. On the other hand, established law firms have had to hold on to substantive areas of practice and expand their practice geographically, or else focus on expanding their portfolio of trade and customs law expertise, as the level of work ebbs and flows both geographically and by sector.

Ultimately, the combination of a highly specialised and competitive marketplace ensures that trade and customs law is one of our smallest publications by number of listings. Only lawyers who have the established specialisation required to produce practical and commercially beneficial results for their clients feature in the following pages. 

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