Hunton & Williams is a force to be reckoned with in the US energy sector, and the firm that found its beginnings in Virginia representing utility clients is now trying to make waves in the UK market.
Hunton already has a well established energy project finance practice in London. But the firm hired partner Matthew Williams and promising associate Lis Blunsdon from Cadwalader Wickersham & Taft in the summer to launch a “pure energy” practice.
Hunton says it will target domestic work, rather than focus on being a London base to service deals sourced by its head office. But the firm’s presence in the City is relatively small. So can Hunton survive, or does the practice risk falling into a niche, unable to garner the big ticket mandates?
The majority of US firms’ work in the energy sector has been to offer a London base to clients operating out of the US in the upstream sector. For instance, rivals such as Akin Gump Strauss Hauer & Feld, Baker Botts and Fulbright & Jaworski, which also have reputable US energy practices, have shied away from acting for domestic clients in the UK.
The likes of Denton Wilde Sapte (DWS), CMS Cameron McKenna and Herbert Smith continue to be the market leaders in the UK energy field. But Hunton has plans to rock the boat.
Hunton has made it no secret that its eyes are firmly fixed on securing the high-profile, big-ticket work. There is a vigour in Williams’ voice, a sense that the underdog is shaping up for a title fight against the champs.
At first glance, it seems as though it takes a lot for a partner to leave a firm like Cadwalader to join Hunton. At Cadwalader, Williams had a sizeable team and a solid client base. But Williams’ passion is with his work, and Cadwalader was unable to offer that which he desired most – the opportunity to focus on what he calls “pure energy law”.
Williams has huge ambitions for his practice. He wants the London office to rank in the top echelon of energy firms in the domestic market within three years.
“We’re building this office, and rather than being all things to all people, we’re focusing on our key strengths internally for now,” says Williams. “It has already been proven that good US firms can take on the UK firms in project finance, but US firms have not tried to do it in terms of pure energy law. I don’t think any US firm has specifically challenged DWS and Herbert Smith,” he adds.
“UK firms have had it their own way for a long time, and it may be that some of their long-term relationships may be a little bit stale,” he argues.
This view seems to be taking hold among the US firms in London. One US firm partner, who prefers to remain anonymous, confides: “There are some old hands in the big firms that just might be a little bit more interested in their retirement package than maintaining client relationships.”
That is all well and good, but how can Hunton, or any US firm, rival the services offered by large established UK firms?
“We’re not going to turn up on the company’s door and say we want their entire corporate relationship,” says Williams. “It’s just not going to happen and they would probably just laugh. Our key is to offer them particular expertise in one area, then grow that relationship – let them know we’d love to do more work.”
French oil and gas giant Total is one example touted by Hunton. Finance partner Jonathan Marsh, another cog in the Hunton expansion wheel who joined this year from Hammonds, handled the financial regulatory work for the company’s energy trading business. Total retains DWS as one of its primary advisers, but Hunton hopes to expand on its relationship in the company’s current panel review.
International Power is a key client. Williams spent two years in-house at National Power before the international arm broke away, and retains a close relationship with the company. The company followed Williams from Cadwalader to Hunton, and is one of Hunton’s biggest clients.
“We do a lot of domestic trading work for them. We’re not on the radar for their big-ticket project finance work yet, but we hope to be. Our expertise is recognised by the company – that’s why they moved with me from Cadwalader,” he says.
Williams hopes to “ride the wave” of International Power, but needs to be wary of placing all the practice’s eggs into one basket.
His advantage is he retains many contacts at International Power, and Hunton currently has a trainee on secondment with the company.
Trading is also the basis for most of Hunton’s work from Gazprom – another Williams client that came over with him from Cadwalader – but UK general counsel Carole Colley says being a US firm was not an advantage.
“For me, it was a gathering of a few key people at Hunton, not whether the firm was US or not,” Colley explains. “I don’t go shopping for brand names, and it’s not necessarily the big five that can serve what I want best.”
The key for these firms is to prove to clients that they are capable of doing the work despite their relatively small size in the UK.
“It’s a matter of making the client understand that despite having a small practice in London, we have a massive support base across the Atlantic that is available to us,” argues one US firm’s London partner.
Williams speaks of “hunger for work” and “enthusiasm for the industry” among the US firms. One client says they can rely on a US firm to “pick up the phone when I call”.
But Williams is also prepared to pitch low, cutting his rates to win the clients. “That’s not to say we’ll be coming in at the rate of a provincial firm, but we’ll be flexible about how we do the deals to get the business. The firm is well aware we’re trying to build a business here.”
Cut-price rates could see the firm delay hiring until the client base is more solidly secured, but hiring is inevitable.
The firm is also hoping to build relationships through managing partner Martin Thomas’s AIM practice, in conjunction with energy partner John Deacon’s focus on renewable energy. Novera Energy is an example of Hunton’s strategy in this area – one of the many renewable companies floating on AIM. And with the Government set to make a final decision on nuclear power next year, Hunton is well poised to capitalise, with substantial strength in the area available to the firm from its US parent.
The rhetoric from Williams is right, but for Hunton the forthcoming months will be crucial in determining whether the firm can pull off its ambitious plans. So, for now, the firms established at the top of the energy sector are safe, but they would do well to watch their backs.