If the capital markets of London and New York first powered the rise of global law firms, then the energy and natural resources market will drive the next stage of their development.
As The Lawyer has documented over the past year, this has made Calgary and Perth unlikely new stops on managing partners’ itineraries, and energy work is at the nub of firms’ international growth plans.
In a move that has caught the eye of Wall Street, Ashurst has been rejigging its US practice from its questionable focus on structured finance to energy, while Norton Rose is endlessly being linked with Fulbright & Jaworski for its next join-the-dots merger.
Let’s be clear about the sort of work this is - it isn’t a projects play, it’s about global M&A. According to Thomson Reuters’ deals figures for 2010, the energy and power sector was the most active, with over 20 per cent of all announced deals. And that trend has continued into 2011. In the first two months of this year, according to Thomson Reuters, there was nearly $94bn (£58bn) worth of deals, up 40 per cent on the previous year.
So it’s Houston where the big boys are really focusing. Linklaters, despite early off-the-record affirmation from senior sources that Houston was in its sights, is now trying to downplay its interest by saying that there’s no office launch on the cards, no sirree. But in truth, if Linklaters was not interested in formalising relationships, establishing associations or launching a representative presence in Houston it would, frankly, be an act of negligence. (And that goes for Freshfields too.)
Look at Latham. There’s a telling quote from Bill Voge (see Matt Byrne’s feature on global energy practices on page 16 this week) where the Latham boss says Houston is one of the firm’s most successful offices since its New York launch in 1985. Given that Latham’s credibility was established by cracking New York and using the high-yield as a product to do so, you can be sure that its harnessing of the energy market to make it big in Houston is the next business school case study.
Other Wall Street giants are looking closely at Houston too - Linklaters isn’t the only global practice checking out Texas. You heard it here first.