Practice profile: Serving the clients on defence law

When talking about defence law, images of lawyers donning fatigues over their suits come to mind. But as Justin Whealing writes, lawyers will more likely be found working on regular matters of…

Promoted by Lawyers Weekly 24 June 2010 Corporate Counsel
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When talking about defence law, images of lawyers donning fatigues over their suits come to mind. But as Justin Whealing writes, lawyers will more likely be found working on regular matters of contract drafting, procurement processes and systems integration.

Lawyers working in defence law face a tough uphill battle. The clients are particularly savvy, the technology is constantly changing and evolving, there are numerous privacy, commercial-in-confidence and, of course, plenty of security issues.

Then for those dealing direct with the Australian Defence Force (ADF), there are three different wings of the armed forces and the notoriously complex and rigid Defence Material Organisation (DMO) procurement process to contend with.

The DMO is the agency within the Department of Defence that primarily deals with the purchase and maintenance of equipment and services for the ADF.

"There are many sensitive issues in the procurement process when dealing with the DMO," says Jeremy Prentice, a special counsel with Freehills. "From confidential information and IP rights, to the access and use of government furnished facilities, data and equipment ... [but] I generally find that the DMO are pretty sensible in deciding what should and shouldn't be classified."

Prentice is a key man for Freehills in this defence space, acting for clients in the aviation and engineering sector - such as the TAE Group, an aerospace engineering service provider and the leading Australian turbine engine maintenance, repair and overhaul business.

All of Prentice's defence sector clients in this area are on the private side, with Prentice saying Freehills "took a strategic decision to exclusively advise on the private side of the table".

The DMO's legal panel includes Blake Dawson, Clayton Utz, DLA Phillips Fox, Minter Ellison, Norton Rose and Sparke Helmore.

Blakes, in particular, advises the DMO with regard to the Air Warfare Destroyer (AWD) Ships Program. Much of the work the firm does relates to the competitive procurement process as part of this program, including assisting in the development of contracting strategies and tender documentation, assisting in tender evaluation activities, drafting and negotiating contract documentation for the engagement of various contractors to the Commonwealth, and providing legal advice on various issues arising from the procurement process.

The unique culture and contractual model used by the Department of Defence can also present significant challenges for lawyers acting for clients in the private sector.

"The Department of Defence favours a standard form AUSDEFCON contract," Prentice says. "It has not changed massively over time, and in conducting transactions around that framework, you need to understand both the market arrangements for that type of contract, and how it differs from a standard commercial contract. Understanding the particular culture that flows throughout the armed services is also very important."

Prentice is in a good position to comment on the culture of the defence force. He was a Lieutenant legal officer with the Royal Australian Navy between 1994 and 1998, before swapping the white uniform for a Windsor knot and designer suit that is the look of the corporate lawyer. He has practised in the defence sector since that time, advising on projects for the Navy, Army and Air Force.

Mark Weber, a partner with Mallesons Stephen Jaques, is an IT, defence and aerospace contracting specialist. He concurs with Prentice's comments about the structure of DMO contracts and nominates "responsibility and risk", and the way in which it is allocated, as the major challenges facing clients and law firms in the defence sector.

"Defence favours a brand of alliancing which is closer to the conventional contract model than the limited liability / no dispute model which clients understand from the resources projects sector," he says.

The bulk of Mallesons' clients from the defence sector are found within the ranks of the large Australian and international defence contractors.

Not loving the tender process

In discussing the major challenges for lawyers operating in this area, Weber nominates the tender process as being of a "perennial concern to clients".

"The DMO procurement process can be attenuated and challenging (despite efforts over the years to simplify it)," Weber adds. "We do a lot of work with clients trying to navigate those waters."

With the level of sophistication and bureaucracy required to cut through in this sector, it is no wonder that only a small number of firms have the capabilities and the patience to operate in this space.

With both the DMO and the defence contractors utilising high-end, and often vastly different technologies, systems integration is another perennial issue.

For both the defence force and contractors, the technology surrounding electronic systems, particularly with regard to sensors, weapons systems and communications is vastly complex and changing all the time. Human integration issues concerning training, OHS and the culture of the workplace also need to be factored into any commercial arrangements.

"The difficulties with many of the major projects have revolved around the integration of Defence's nominated suite of systems into their chosen platform," Weber says. "This is a major contract risk altercation that needs to be addressed by clients head on."

In terms of the integration problems faced by Prentice and his clients, he says that "grappling with technological frontiers can be problematic, and the quality of information available to come up with a solution can sometime be incomplete."

"The Department of Defence is a very large and structured organisation," Prentice says. "It can be difficult to get access to certain areas of the organisation or to gain access to certain pieces of information."

Despite what can obviously be a difficult area to work in, Prentice is largely optimistic about the potential for future work in this niche area.

"Clients that we have previously acted for in the defence sector have expanded their service offering and are now also using us in commercial areas, such as commercial aviation," he says.

"There is also lots of work emanating from sources such as the AWD program, and there is a broad range of new technologies being introduced across many platforms."

Prentice is also complimentary when it comes to talking about the quality of lawyers that work in the defence sector.

"Quite a few lawyers come from backgrounds similar to myself, in that they have spent time with the Australian Defence Force," he says. "To be successful [as a lawyer] in this area, you really need to understand the culture [within the ADF] and not be afraid to ask questions about technical and operational issues."

"I have found that due to the technical nature of the work and the unique culture in which you must provide your advice, the often sensitive nature of the issues being discussed, leads to this area of practice attracting shrewd and focussed lawyers with a depth of industry experience."

If only the international community got on as well with each other, there might not be as much demand for the big toys and weapons systems that help to keep the lawyers working within the defence sector busy.

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