There’s much more to Stephenson Harwood than just shipping. ALB sat down with two of the firm’s newest hires, Steven Dewhurst and Paul Ng to discuss the market, trends and what lies ahead for their rapidly growing firm.

Stephenson Harwood’s growth oveinsr the past 12 months is impressive by even the most conservative of measures. In January, the firm secured the services of insurance and reinsurance specialist Steven Dewhurst from the Hong Kong office of DLA Piper and more recently brought asset finance “heavy hitter” Paul Ng on board as its global head of aviation from, magic circle firm, Freshfields Bruckhaus Deringer, where he was a partner. In addition, towards the end of 2008, the Singapore office also added to its number renowned maritime expert Timothy Elsworth. The moves bring its partner count in Singapore
to nine (and means that nearly 60% of its partners are now located in Asia) but, as Martin Green, managing partner of the firm’s Singapore office says, expansion isn’t necessarily all about size. “The last six months have been very busy for us,” he says. “What has been driving our expansion is the larger time frame of 3-5 years and beyond. When we talk about expansion and we go about implementing our plans it’s  not reactionary— we are shaping the future of our business.”
A difficult task at the best of times and one that is no easier in the midst of a global economic crisis. But Green says that growth can be made a little easier ditching the ‘expansion timetable’ and maintaining a focussed market approach—both of which have been pivotal in Stephenson Harwood’s impressive growth story over the last 12 months. “When you talk about expansion for some firms there is sometimes a tendency to overdo it,” says Green. “In reality, growth should not be driven by timetables but by opportunities and synergies when they arise. If we look at the people we have brought on board over the last six to seven months we didn’t take them on just because we had vacancies to fill but because
they suit our plans and they offer us industry specialisation.” And, industry specialisation is just what
Green got when he recruited both Dewhurst and Ng earlier this year. Both are recognised as leaders in their respective fields admired as much for the high calibre of their legal advice as their knowledge of the ins and outs of their industries. “We are a medium sized firm but have  a well-developed international profile andthe goal is to make sure that in our areas of specialty we are top-tier,” says Green. “Our
lawyers, whether we are talking about Steven [Dewhurst], Paul [Ng], Asheesh [Das] or Durai [Shunmugam] or any other are focussed on the industry. They are the first choice for clients because they leverage their industry knowledge and bring this to bear in deals.”

Insurance & re-insurance

When Steven Dewhurst joined Stephenson Harwood as a partner from the Hong Kong office of DLA Piper in January this year it was seen both as a perfect example of the ambitions of the firm to bolster its burgeoning South East Asian corporate practice and its pragmatic yet effective expansion model—
one premised on branching out into new areas which complement its existing offering. Dewhurst, widely considered to be among only a handful of non-contentious insurance experts in Asia, will be responsible for moulding an insurance and re-insurance practice with an emphasis on advisory work and his arrival couldn’t have been timed better with the balance of power in the insurance industry shifting away from Hong Kong and towards Singapore. “About 5 years ago Hong Kong was by far and away a larger market but now the latest industry estimate is of Singapore being about 30 percent larger by premium,” according to Dewhurst, who says the growth has been affected by both the big players setting up in the Lion City as well as by a booming reinsurance industry. “Re-insurance in particular is big business here. The large insurers have focussed their strategy on re-insuring domestic insurers across South East Asia with an outward emphasis; there is real, tangible skills transfer taking place and it’s in no small part thanks to the proactive attitude of the Singapore government.”

Shadowing your clients

Dewhurst goes on to note that just as Singapore has quickly established itself as a regional economic and legal hub, so too are insurers operating here using Singapore as a hub for their operations throughout the region. Adopting a regional approach, as opposed to a country-based one, says Dewhurst, is the key to the firm’s strategy in the industry.

“Few insurers operate on a country specific basis,” he says. “Insurers and re-insurers operate out of hubs and to succeed you have to map your insurance clients’ organisation structure—that is a large part of the reason I came to Singapore. My goal here is to develop Stephenson Harwood’s capability to track this regional emphasis.”

The Stephenson Harwood advantage

Dewhurst’s practice is split 50/50 between insurance advisory and professional liability, the latter of which includes work on D&O claims, bank claims and fraud investigations. And, while he notes that the insurance advisory end of the practice—particularly advice on product distribution arrangements—is ‘busier than normal’, it is the work in the latter where he is noticing the biggest upswing from depressed levels of activity.

“The global financial crisis has really brought a number of firsts to the surface in Asia. The issue of mini-bonds for example, this is the first time that we are seeing the issue of mis-selling arise across the region’s different regulatory environments and it will produce a steady stream of business for the firm’s corporate and insurance practices. The other area Dewhurst tips to take off is D&O claims, with far more policies now in existence compared to the Asian financial crisis (AFC) and companies in the region struggling to refinance debt acquired during a credit bubble.

“Broadly speaking, D&O insurance is a relatively new concept in Asia. It only emerged as a product in Asia in the last 10 years and this will be the first time that its true value is put to the test here. The end result of the depressed economic climate will be some mega claims against directors and there is probably five years worth of solid work there,” he says. “On the D&O front all you have to do is look
at the numbers to get an indication of the amount of work on offer,” he says. “There is an estimated US1trn worth of debt that needs to be refinanced in emerging markets alone in 2009 and in global terms that may not be a lot, but in Asia, where debt is typically shortterm and bank financed, some borrowers who are not investment grade are going to find refinancing extremely difficult.” Dewhurst says that this paves the way for a raft of insolvencies and restructurings, drawing a comparison with the AFC a decade earlier but suggesting that this time around there will be more of a focus on the role of directors and
officers and, particularly, the CFO, in the whole process. The task for Dewhurst is clear: maintain an
industry-focussed approach and stay as close as possible to clients and their business. “I have been in the industry for over 16 years now and the trick is to identify problems and trends before they become apparent to the competition” says Dewhurst. “Insurance is a needs business and while you have to stay
close to your clients’ needs, you must also recognise that these needs evolve and change. Stephenson Harwood can offer this to clients and we are already seeing very positive demand for our broader range of specialist services.”

Aviation: taking off at Stephenson Harwood

“Stephenson Harwood ticked all the boxes,”  says Paul Ng speaking of his move to the firm in March this year. “Leaving Freshfields, where I had been for 10 years and was also their Asian head of Asset Finance was not an easy decision. It had to be a firm that had demonstrated its commitment to Asia, had offices and operations across the region and was looking to grow in my core area of  business—transportation.”“Five years ago it may have been difficult for Stephenson Harwood to lure away partners from Magic Circle or Wall Street firms, but this is certainly not the case now. The market view is that the firm is up and coming and is one to watch coming out of the global financial crisis with a younger, focussed, nimble and marketorientated leadership team.” In an unprecedented move for the firm, Ng, joins as global head of aviation, reinforcing its commitment to the Asian practice by stationing a practice global head outside London, something which no other international firm has done thus far.

The Stephenson Harwood difference

Aviation, just like Dewhurst’s non-marine insurance practice, is a fiercely contested practice area in Asia but one that is dominated by only a few specialist players. What separates Stephenson Harwood from the rest, according to Ng, is its “non-factory line production” approach to legal service and its unique personal focus provided by true industry specialists. Many of the large aviation firms have suffered from both a marginalisation by their management of their aviation businesses in favour of the then lucrative leverage/corporate practices. Ng says “A few have also suffered key personnel losses and retirements of late. As a result, these have affected their reputation in a detrimental way and is an opportunity for smaller focussed players to expand their market share because when it comes to aviation across the whole region you’re only talking about around a dozen lawyers who can do it well, he added. ‘Doing it well,’ says Ng, requires not only skilled specialist lawyers but staying close to clients in good times and in bad times. For Stephenson Harwood, this means a devotion to the core market players, including the large leasing companies, the big transportation banks and the airlines. In particular, the low cost carrier (LCC) segment of the industry, a topic which Ng is passionate about. “I believe they can make and have made a real difference to people’s lives,” says Ng. “The leaders of these LCCs have catholic  belief in what they are doing—making international travel accessible to the masses.” “They also have a business model which is helping them weather the current economic downturn much better than their legacy carrier cousins—as, amongst other things, they are masters at extracting the best value from every situation”. Ng declares “I feel committed to help them succeed ... and I believe that they understand this.” Ng counts as clients some of the largest LCCs in the region (for example, AirAsia, Asia’s largest LCC; Lion Air, the largest carrier in Indonesia, Air Deccan, India’s largest LCC, and Spring Airlines, the first LCC in China), so much so he has been acknowledged by many of his peers as “King of low cost carriers.” Qualified to practice English law, New York law and Singapore (his home jurisdiction) law, Paul has acted on major aviation debt restructurings for banks and governments including the US billion dollar restructuring  of Air Canada’s export credit support loans during the last  aviation downturn and also, more recently, the US billion dollar acquisition of Singapore Aircraft Leasing Enterprise by the Bank of China creating the largest aircraft leasing company based in Asia, BOC Aviation.  Ng foresees more corporate consolidation along the way and possibly a few restructurings as the aviation industry continues to struggle in 2009.

The market

Despite the inclement economic conditions Ng is optimistic about Asia “The aviation industry in Asia is undoubtedly contracting, however  it is doing so at a rate slower than other areas,” he says, suggesting also that any recovery is likely to happen here in Asia first. “Over the next five years, Asia is going to see the most number of new aircraft deliveries with China having the single most number of aircraft deliveries amongst the countries in Asia. These aircraft will need to be paid for by either debt and/or equity financing. It is going to be an interesting time and we are staffed and here to help the industry players through it,” Ng says. “Furthermore, some of the most innovative financings have happened in Asia. It’s such a competitive market that bankers, and lawyers, for that matter, have to be creative in how they approach deals especially when margins are squeezed and liquidity is scarce,” says Ng, citing AirAsia’s multi-award winning Islamic-compliant French tax lease, where he was lead counsel, as an example of this.

The team

Ng says that the Stephenson Harwood aviation team is currently fully engaged in transactions but that the next 3-5 years will see the team increase its regional and international practice even more as they continue to look to bring on board the right resources to work with his existing team.

“We have tremendous regional and international reach already, with an unrivalled network in China, and the goal is to expand that through hiring senior-level lawyers,” says Ng. “Ash Das (a banking and asset finance partner in the firm’s Singapore office) has built a great practice from scratch working closely
with partners in London and our associate offices in Europe and the Middle East and we will be looking to leverage our track records as we build our team and our business. Stephenson Harwood has, in some ways, been one of the best kept secrets in the legal business ... but it’s secret no more.”

Contact: Stephenson Harwood 1 Raffles Place #49-00 OUB Centre Singapore 048616. Telephone + 65 6226 1600. Fax + 65 6226 1661.
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