Questions & Answers
Dan McMillan is co-leader of Jones Day’s global construction practice, recognized by Chambers USA as the Construction Practice of the Year 2017. Dan is the rare attorney who combines skills of an accomplished trial lawyer with those of a sophisticated transactional lawyer, capable of fashioning practical solutions. Contractors and owners trust Dan’s advice on cutting-edge issues when insight and judgment matter most. The National Law Journal recognised him as a Trailblazer in Real Estate/Construction (2020).
What do you enjoy most about working in construction?
Construction projects are crucial to the health and economic success of our communities. Whether it is the design and construction of a new hospital, subway or light rail line, or clean power plant, people are put to work and lives are improved. Providing legal support to such projects, wherever they might be located in the world, has been very rewarding even though I have not been the one swinging the hammer. I take satisfaction gazing out the window of my office and seeing projects with which I have been associated – projects that make our world a better place to live.
How does your experiences as a transactional lawyer and disputes specialist benefit and complement each practice respectively?
My unique combination of experience drafting and negotiating construction contracts and handling construction disputes makes me more effective regardless of the nature of the representation. While the age of legal specialisation makes it increasingly difficult for attorneys to learn both the transactional and dispute side of construction law, I have focused on both sides of the practice. I encourage both new and more experienced attorneys to obtain a blend of experience, which will make them more effective attorneys and enable them to better serve the construction industry. Depending on the year, my practice may be 70 per cent disputes and 30 per cent contract drafting or vice-versa.
Can you tell us about the notable Millennium Tower of San Francisco litigation you have been working on?
Over the past three years, the Millennium Tower litigation has been one of the most highly publicised lawsuits in the USA, including being featured on 60 Minutes. The Millennium Tower, aka the “leaning tower of San Francisco,” is a 58-story luxury condominium tower in the heart of San Francisco. The tower has sunk more than 18 inches and is tilting. A host of lawsuits has been filed by unit holders and the homeowners’ association against the developer and its contractors, subcontractors, and design professionals, as well as against neighbouring property owners. One key issue has been the adequacy of the foundation. The tower is particularly heavy, having been constructed with a concrete frame rather than a more typical and lighter steel frame, with foundation piles that terminate in sand layers rather than bedrock. This litigation will be a case study for lawyers and engineering students for years to come, as the Millennium Tower presented a truly unique challenge. A potential global settlement was approved by the court in August 2020.
Which recent developments have impacted the construction industry across the globe?
While the covid-19 pandemic is on everyone’s mind, globalisation and consolidation within the construction industry, two interrelated trends that have accelerated over the past 10 years, continue to have an enduring impact on the construction industry. Historically, construction was largely a local endeavour – local architects and engineers designed a project, which was then constructed by local contractors. Now, virtually all larger projects involve non-domestic participants. Regardless of where a project is located, whether California, Kazakhstan, or elsewhere, materials and equipment such as steel, turbines, or drywall might be supplied by a company or manufactured at a facility in another country like China, South Korea, Italy, or India. To meet the challenges of globalisation, construction firms and design firms have experienced enormous consolidation, which has fundamentally changed the face of the industry.
How important has it been for project developers and contractors to diversify their supply chains and to ensure they have multiple or back-up material suppliers? Will this become increasingly important in a post-covid-19 world?
The covid-19 pandemic is having a significant impact on many construction projects across the globe. We have written a three-part white paper available on our firm website that addresses these impacts and challenges. Certainly, increased focus is being placed on supply chain diversification and risks. Both owners and contractors are evaluating, often collaboratively, the risk that critical material, equipment, and labour supply chains could be disrupted by successive waves of the virus or resulting government actions. We are seeing owners and contractors identify alternatives for specified materials or equipment in the event of covid-19 disruption.
How does Jones Day distinguish itself from its competitors?
The global footprint of Jones Day matches the platform of today’s global industry participants who seek advice across jurisdictional boundaries. This, coupled with Jones Day’s “One Firm World Wide” approach to the practice of the law, has been of great value to our construction industry clients. For clients doing their first project in Asia or those doing their first public-private-partnership in the US, they know our construction industry lawyers can provide comfort in less familiar jurisdictions and support successful completion of their projects.
How do you see your practice developing over the next five years?
Given ongoing globalisation of and consolidation within the construction industry, I will continue to be involved with more international arbitrations, advice on anti-corruption laws like the Foreign Corrupt Practices Act, and assisting participants in critical industry sectors.