Transatlantic Elite 2011
Baker Botts kicked off what it expected to be a busy 2011 with a brace of multibillion dollar M&A deals, including offshore drilling specialist Ensco’s $7.3bn acquisition of Pride International and UK-based Wood Group’s disposal of its well support division to US industrial giant General Electric.
Corporate group chair David Kirkland featured on both deals, giving the lawyer his busiest February for some time.
The deals confirmed Baker Botts’ position as a firm deeply rooted in the oil and gas sectors. Along with Vinson & Elkins, the firm is hard to beat on domestic oil and gas transactions, evidenced by its US upstream oil and gas team’s involvement in more than 50 US shale-based transactions since late 2007. Its roles advising a Brazilian client on an innovative floating liquefaction project and Cheniere Energy on the early stages of its Sabine Pass terminal expansion confirms this.
Indeed, the energy group’s future lies primarily in the oil and gas sectors in all its forms. Baker Botts is targeting what it sees as a significant area of need over the next few years, including upstream pre-salt plays in Brazil, offshore deepwater activities in Africa, midstream infrastructure deals, the first gas storage master limited partnerships in the US (on which Baker Botts advised), as well as power clients across the industry ranging from traditional gas and coal-fired plants to biomass and hydroelectric generation.
The US will remain the firm’s primary market, although over the past couple of years the majority of Baker Botts’ work in Russia has switched from advising foreign companies on Russian-based matters to 90 per cent of its new business coming from Russian companies. Baker Botts is currently representing the Russian Federation on what is estimated to be the largest arbitration claim (in aggregate), brought about in several jurisdictions by Yukos Oil Company. Other longstanding relationships include Rosneft, Gazprom and Gazprombank.
Elsewhere, Brazil, where clients include Petrobras, and China head the firm’s target list of overseas jurisdictions.
That said, in comparison with several of its more internationally minded rivals, Baker Botts’ international network - a total of seven offices outside its six in the US - is limited, although its offices in Dubai, London and Hong Kong are particularly noted for their strength in energy matters.
The firm’s top talent has also been in the sights of rivals such as Latham & Watkins, which snared former global chair of oil and gas Mike Darden along with several other high-profile partners to launch its office in Houston last year. Earlier this year Latham returned to Baker Botts to hire corporate partner Ryan Maierson.
In response to this undoubted pressure, Baker Botts points to a tripling of the number of lawyers in the Middle East recently, a regional push that has included the opening of an office in Abu Dhabi and the appointment of the former US ambassador to Saudi Arabia Robert Jordan as head of the firm’s Gulf operations.
The Middle East expansion paid off, with Nigel Thompson in Dubai advising Saudi Electricity Company on its independent power project programme.
Baker Botts has also boosted its transactional capabilities in Moscow, Beijing and Hong Kong.
Closer to home, in March 2011 the firm strengthened its regulatory practice by hiring 40 antitrust lawyers and the former deputy general counsel at the US Commodity Futures Trading Commission, Brad Berry.
Of Baker Botts’ 725 lawyers more than 350 spend 50 per cent or more of their billable time on energy-related matters, with the bulk advising on oil and gas matters.
However, that focus was not enough to avoid Baker Botts posting a 3.5 per cent drop in turnover in 2010 from $574.8m to $554.9m, although a concerted effort on cost-cutting saw the Houston-headquartered firm achieve record average profits of $1.37m.
David Kirkland, Stuart Schaffer, Steven Miles, Thomas Eastment, Nigel Thompson
Top three sectors
Upstream oil and gas
Mid and downstream oil and gas
Top three countries
Pride International’s $8.7bn merger with Ensco
Lead partners: David Kirkland, Tull Florey
Saudi Electricity Company (SEC)’s independent power project programme
Lead partner: Nigel Thompson
Yamal LNG liquefaction project, Northern Russia
Client: Novatek OJSC
Lead partners:Steven Wardlaw, Maxim Levinson, Jason Bennett