The energy transition

You don’t need to look very far to know that there’s an energy revolution going on in Australia. Every morning, LinkedIn and the AFR are set alight with headlines – the lack of progress towards the 2030 Federal Government carbon offset targets, the increase to the CIS, the NEM report into Wholesale Market Settings or the barriers to foreign investment in the sector.

So, it was no surprise to read on Law.com that “Law firms in Australia look to energy transition for revenue growth”. Energy and specifically, the transition to clean energy, is one of Australia’s fastest growing sectors and the work law firms undertake in the sector has been growing exponentially over the last few years.

All leading firms in the sector (and several disruptors that have recently emerged) are seeking to build one thing – a unified energy team that can offer a true “cradle-to-the-grave” service for clients. Each of the leading Partners in energy I have spoken to are seeking to build a one-stop-shop for clients, much like their UK counterparts – think of the Energy & Infrastructure teams at the likes of Linklaters, Clifford Chance – where they can offer advice on regulatory requirements, planning approvals, easements, land acquisition, project financing, project development, construction documents all the way through to M&A deals and dispute resolution.

The issue facing those firms is that “it’s difficult at times to unseat the very good players because they are in such short supply.”

The lack of talent

Australia has always been a hub for projects and construction. The focus has previously been on big infra such as Sydney Metro, Westlink. Most of the leading lawyers in this space know road and rail inside out, but might not be across the specifics when it comes to solar plants, wind turbines, BESS, hydrogen and similar.

Most firms are finding ways to upskill their lawyers, by merging their infrastructure and energy teams. Ashurst, in particular, boasts its Energy Industry Academy as a means of getting lawyers up to speed. But there is a general feel that the lawyers’ technical abilities have not kept up with the fast pace of expansion in the sector.

What does that mean for you?

When law firm leaders outwardly state that they receive “a lot of CVs from partners wanting to make the lateral move to the firm, but most of them don’t have the right experience and client relationships,” alarm bells start ringing.

Any Partner with a practice in the new energy space is gold dust, a diamond in the rough, the needle in the haystack.

At SSQ, we are at the forefront of the energy sector, having made leading global placements including:

• Ex-Global Head of Project Finance into a US firm in London
• Head of Projects into an international law firm in Dubai
• Head of Projects into an international law firm in Johannesburg
• Infrastructure M&A Partner into a leading US law firm in New York
• Head of Project Finance for the GCC into an international law firm
• Team move in Infrastructure Finance to a US law firm in Paris

In Australia, I have personally spent the last six months networking with Partners who specialise (or have at least touched upon) the energy transition and my key takeaways are:

1. Young Partners, particularly those that have done a stint abroad in London, are recognising that they are in fact the specialists in this space.
2. Often, those Partners aren’t aware as to what is portable, so are conscious of not leaving their current firm. I have actual examples that the days of client loyalty being tied purely to a law firm’s brand are fading; clients are becoming much savvier and will follow the lawyers with the strongest technical expertise.
3. There’s a significant lack of understanding as to what competitors genuinely offer. Most Partners see firms on the other side of deals and assume they’re all the same. I have insights as to exactly what equity structures exist – full equity, hybrid, merit-based/EWYK – and how these structures could impact your remuneration as the sector continues to explode.
4. As most firms are trying to do the same thing, it’s difficult for Partners to differentiate between their options. I can elaborate on what a firm’s strategy is around energy: how they are investing in the space; who are their core clients and target clients; what sector of the market are they targeting and importantly, what is the culture like behind closed doors? This means I am able to independently advise a Partner with which firm their practice and preferences best align.

If you are a Partner operating in any phase of the energy transition, let’s have an independent, confidential discussion about the market.