Pharmaceuticals stands out as one of the UK's few industrial success stories. The sector carries out more than a quarter of all industrial research and development in the UK and is estimated to spend more than £6m a day employing more than 60,000 people. In 1997 the industry's exports were valued at £5bn.
The industry covers all areas of pharmaceutical development and research, but it is biotechnology or 'new wave drugs' which has been at the forefront in recent years.
The nature of the industry demands particular skills from those advising in-house and in private practice. Lawyers must have an ability to grasp complex scientific data and documentation before they can even begin to advise on legal aspects.
The global nature of the industry means legal advisers must also be well-versed in international law and the legal requirements of different jurisdictions. And as the sector grows, so does its in-house legal departments. Recruitment agencies have reported a rising demand for in-house pharmaceutical lawyers.
On the corporate front, the industry has seen a spate of international mergers and acquisitions. The on-going merger of British company Zeneca with Sweden's Astra is a case in point. Valued at a massive $67bn, (£42m) the alliance will be the largest-ever pharmaceutical merger, with Astra Zeneca becoming the fifth-largest company in the UK.
Lawyers in both departments are working around the clock on the deal. And consolidation is set to continue, as the UK and European companies struggle to compete with the US giants.
Americans buy one third of the world's drugs and a slice of the US market is essential if a company aims to be a major global player.
Aside from working on corporate mergers and acquisitions, the work of most in-house pharmaceutical lawyers is dominated by IP work. Lawyers advise at every stage in the process of developing and marketing a new drug – from the patenting of products to their licensing and, in some cases, their distribution.
International regulatory compliance is a major problem. European regulations will often differ from those of the US and other jurisdictions.
A prime example is the on-going medical ethical debate on human cloning. In 1998, the European Commission issued a directive prohibiting the cloning of advanced life forms. In the US however, cloning is permitted.
John Ilett, one of the two in-house lawyers at British Biotech, highlights the difficulties of working in so many jurisdictions. He says finding suitable lawyers in all the jurisdictions in which his company markets drugs is a major headache.
Brian Cahill, director of group legal services at Glaxo Wellcome, the largest pharmaceutical company in the UK, says it is pointless to try to handle all the company's international work in-house.
"Although there is increasing globalisation in the industry, law is not global. We tend to delegate to lawyers who know the law of the jurisdiction, rather than run it centrally," he says.
Back in the UK, however, he says his team of 11 lawyers prides itself on retaining as much work in-house as possible, including small mergers, acquisitions and disposals as well as contractual transactions, up to a value of £50m-£90m.
Another in-house solicitor at a large pharmaceutical company, who did not wish to be named, agreed with the philosophy of keeping as much work in-house as possible. He says his firm covers everything in-house except for large corporate transactions.
He feels in-house lawyers are best equipped to deal with issues thrown up by the sector. "The raison d'etre of the in-house lawyer is that you understand the industry more than an outside practice."
Not surprisingly, the main concern expressed about outsourcing work among corporate counsel in the sector is that old chestnut – the level of fees charged by law firms.
Ilett says: "We try to get as much cost effectiveness [as possible] in using outside lawyers. We ensure that we have some idea of the levels of cost before we instruct the lawyers. If they exceed the initial estimation we ask why."
He adds: "Companies are trying to tighten their belts in the legal area. If you can keep costs down you are doing a good job."
In recognition of the demand for specialist pharmaceutical lawyers, several law firms have set up specialist pharmaceutical groups.
S J Berwin & Co set up a pharmaceutical team in 1997 and it now has 12 lawyers – including five partners. Jeremy Schrire, head of the group, says: "From a client perspective I believe it is better to have a single unit comprising all the necessary skills and expertise in one seamless unit."
Lovell White Durrant also boasts its own pharmaceutical group. It is made up of 19 lawyers, drawing on expertise from different parts of the firm. It includes two post-doctoral scientists who provide support on complex scientific and medical issues.
So what of the future? In the US, pharmaceuticals company lawyers tend to play a pivotal role in the management of the company and will often be brought in as part of the decision-making process at every stage.
Glaxo Wellcome's Cahill says: "Our role is different from the US in-house lawyer. They have more input in the decision-making process. The US has a perception – whether or not it is true – that the risk of litigation is high. Here we advise other people who make the decision. We don't police them."
Is the UK in-house lawyer set to follow the same path? S J Berwin's Schrire thinks not. "The role of lawyers in the US is greater. They are used as business advisers. I don't think that it will ever be like the US here."