Auto Law Firms Tap Defense BusinessJuly 16, 2009
Companies that operate in automotive-related industries in the Detroit area are increasingly looking for business opportunities in the defense sector. But as these companies begin to manufacture parts for weapons systems, they face myriad export regulations that have them turning to law firms, according to a report in Crain's Detroit Business.
This trend is bringing new business opportunities for law firms that help companies comply with export regulations. Area law firms are seeing their defense and export control legal groups draw nearly 40% of their new business.
The work involves helping clients comply with federal International Traffic in Arms Regulations or Export Administration Regulations, according to the article. These regulations govern the export of defense products or components, the engineering of defense products, and also "dual-use" services and technologies that have military applications. These technologies include such products as mobile antennas, steering systems and specialized windshields.
"Not everyone who diversifies into defense realizes how important these regulations are," William Gilbride, a managing partner at Abbott Nicholson Quilter Esshaki & Youngblood of Detroit, Mich., told the publication. "There are restrictions even on sharing information with your own employees who are not U.S. citizens. And violations can run over $1 million apiece, with some possible criminal prosecution."
The article notes that compliance is even more complex when a company enters the defense sector while still making automotive products and technology for automotive original equipment manufacturers (including those with foreign owners) or if they maintain a supply chain in a foreign counrty.