Transatlantic Elite 2011
The history of Herbert Smith’s domestic energy practice is rooted in the North Sea, when the firm advised on financings for a string of US companies entering the UK market.
More recently, despite its undoubted track record, rivals have criticised the firm for being primarily power based, claiming specifically that it suffered when key client EDF sold its UK assets last year for £5.8bn. Its response to this claim, as one might expect from a firm with such a fearsome reputation for handling disputes, is blunt.
“Absolute rubbish,” says global energy practice head Mark Newbery. “These days people realise that sectorisation works but we’ve been doing it for 15 to 20 years in the energy practice, and oil and gas has been a major component of our broader energy practice since the 1970s.”
The firm’s position as Chevron’s sole non-US panel firm as well as a client roster that includes the likes of BP, Hess and Marathon adds weight to Newbery’s pithy contention.
Indeed, Herbert Smith has handled a string of downstream disposals for Chevron recently, including the $730m sale of Chevron Limited to Valero Energy, on which partners Simon Tysoe and Stephen Wilkinson led, and the sale of its fuels marketing and aviation businesses to Vitogaz (a deal led by partner Henry Davey - who also advised on the EDF sale - and which also featured Tysoe).
Last year the transactional side of the practice did take a hit when it lost corporate energy partners Paul Griffin and John Geraghty to Allen & Overy (A&O) but, as Newbery argues, “that’s two out of 70”.
On the flip side Herbert Smith strengthened its London team in response to the increased deals activity in the sector with the hire as partners of two Linklaters counsel, Martin Kavanagh and Matthew Job.
Kavanagh takes the credit for bringing in one of Herbert Smith’s biggest current deals, the $40bn Browse LNG project in western Australia, on which it is advising the Australian operator Woodside (the company’s joint venture partners are BP, Shell, Chevron and BHP-Billiton). A team led by Asia head of energy Anna Howell is also advising CNOOC on its investment into BG Group’s Queensland Curtis LNG project.
Howell’s team is an integral part of where Herbert Smith sees the future of its overseas energy practice. Last year it launched a Beijing energy team to bolster the China practice, relocating Hong Kong associates Monica Sun and Hao Su to Beijing and firming up links with the corporate teams in the city headed by Tom Chau and Karen Ip.
The Paris office is also noted for its links to the Francophone Africa market in particular, while energy and projects work accounts for around of a third of its Madrid office. London finance partner David Wyles relocated to Madrid in 2009, while last year the firm hired banking partner Gonzalo Martin de Nicolas from A&O.
But there is a clue in the location of the firm’s biggest current project - Woodside’s Browse LNG deal - as to the location of its energy group’s top target for future growth.
The combination of Australia’s stable, developed economy and similarities between its legal system and the UK’s, coupled with its abundant natural resources and close proximity to China and South-East Asia places it at the heart of the energy group’s strategic thinking.
Sources at the firm say an office in Australia is “under review”, although others play down any merger talk, reported this May in The Lawyer, with partners claiming the country is “over-lawyered”.
What is certain is that the firm has another ace up its sleeve with its contentious capabilities. For US-based oil and gas companies in particular the combination of its international network, English law capabilities and sector specialisms, along with its disputes capabilities is a compelling sell.
Energy now accounts for around a quarter of total revenue, a big jump over the past five years.
John Balsdon, Henry Davey, Jason Fox, Anna Howell, Mark Kavanagh, Simon Tysoe
Top three sectors
Oil and gas
Mining and minerals
Top three geographical regions
Russia and the CIS
$40bn Browse LNG project, western Australia
Lead partners: John Balsdon, Martin Kavanagh
Downstream disposals for Chevron
Lead partners: Simon Tysoe, Stephen Wilkinson, Henry Davey
EDF’s £5.8bn sale of its UK distribution assets
Lead partners: Henry Davey, Adrian Clough, Jennifer Bell