VOL. 127 | NO. 194 | Thursday, October 4, 2012
Memphis Law Talk
Logistics Background Helps Stewart Thrive as Attorney
By Bill Dries
Paul W. Stewart not only represents third-party logistics companies in his law practice, but he has even served as chief legal officer to three national logistics companies and CEO of a fourth logistics company.
Stewart, of counsel for Jackson, Shields, Yeiser & Holt Attorneys at Law, is immersed in an area of law that is highly technical and affects an industry where there is seemingly no end to consolidation and continues to evolve.
“The development of the law around logistics is rapidly evolving,” Stewart said. “The logistics sector is one of the few – with the possible exception of information technology and social networking – where the law is far behind the development of the industry. The law is still defining key terms and the duties and responsibility of the parties that participate.”
Stewart, who writes about logistics law for trade journals and academic publications, also has been an adjunct professor at the University of Memphis Cecil C. Humphreys School of Law. And he will speak next week to the Traffic Club of Memphis, a group that includes the city’s top logistics and transportation professionals.
“It is very difficult to manage the law surrounding this sector without emphasis on that sector. In many instances if I wanted an excellent litigator, trial attorney – I had to educate them as to what this business is all about,” Stewart said of his time on the business side. “Most people don’t spend that much time with it.”
For Stewart, his introduction to the business and the law involved in that business came suddenly. He wanted to be a trial attorney.
“The first couple of years with a firm here in Memphis, I was asked by the senior partner to represent the two guys that formerly owned GST Corp.,” Stewart said of the Memphis-based third-party logistics company. “When he introduced me to them, I didn’t know intermodal from piggyback. I thought piggyback was something kids did on a playground.”
That was 30 years ago. It would be another 15 years or so before the concept of a third-party company to handle logistics and supply chain management for companies began to become an accepted practice.
Stewart was retained as counsel by GST and represented the firm for approximately 10 years. GST was bought by NYK Logistics America in 1988. Executives with NYK, a subsidiary of the Japanese shipping line Nippon Yusen Kabushiki Line, hired Stewart as general counsel.
“The development of the law around logistics is rapidly evolving. The logistics sector is one of the few – with the possible exception of information technology and social networking – where the law is far behind the development of the industry. The law is still defining key terms and the duties and responsibility of the parties that participate.”
–Paul W. Stewart
of counsel, Jackson, Shields, Yeiser & Holt Attorneys at Law
Stewart’s journey to the legal side and the business side and back is unusual.
“That gave me the very unique and blessed opportunity to participate in both selecting targets for acquisition, doing the initial negotiation, doing the transaction itself,” Stewart said. “That’s a unique position to have and it’s unusual for a corporate entity in that those are usually siloed.”
Usually someone on the business side picks a company for acquisition and someone else works out the terms of the deals through negotiation and yet another person works on integrating the two companies.
Stewart was also CEO of 4E Logistics until the company was sold in 2010. He came to Jackson Shields Yeiser and Holt in September 2011.
Stewart does contract review, some litigation, insurance coverage, loss and damage claims in a practice that is predominantly representing local and national third-party logistics companies.
The mergers and acquisitions are a part of the third-party logistics business that Stewart doesn’t see any end to at least for the immediate future.
He cites estimates that U.S. third-party logistics companies bring in $120 billion to $130 billion a year and 80 to 85 percent is made by smaller companies.
“When the economy returns there will be a feeding frenzy by the larger logistics companies to acquire and assimilate more and more of the smaller companies,” he said. “The industry is so young. It’s not an unusual phenomenon.”