Traditional oil and gas work may be in a slump, but lawyers aren't backing down in Texas. Recent weeks have shown them launching new energy-focused firms, hiring laterals with energy practices, or doubling down by relocating partners to the hot Austin market.

While the nature of these moves have varied, they have a common thread: despite ups and downs in the price of oil, the energy sector is still a big part of growth strategies for firms in Texas.

"Traditional oil and gas in the energy space is getting hammered. All you have to do is look at the stock prices to see that," said Jack Hopper, a managing director in Houston and Austin for Kinney Recruiting.

But, significantly, Hopper said, that presents opportunities, particularly in litigation and bankruptcy.

Hopper said demand for corporate partners doing M&A in the energy sector continues at a strong level in Texas, while trial lawyers are also in demand.

"Litigation is recession-proof. When we go through tough economic times, litigation always is the practice area that shines," he said.

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Energy Laterals

On Monday, Winston & Strawn announced the hiring of energy litigator Michael T. Murphy, who was managing partner for K&L Gates in Houston prior to his move. As part of its expansion plan for Houston, Winston & Strawn is targeting transactional and litigation partners who work in the energy sector.

Douglas Atnipp, managing partner in Houston for Winston & Strawn, said the hiring follows the firm's strategy, and it is not a reaction to doldrums in traditional oil and gas work. But, he said, it's true that any time the economy or the energy sector "turns south a little bit," there's an uptick in litigation.

Murphy isn't the only recent Texas hire in the energy sector. Balch & Bingham, which earlier this year moved into Texas with a Houston office, added energy M&A lawyer Derek Anchondo as a partner in Houston. Anchondo, who worked at Holman Fenwick Willan in Houston before his move in February, joined two other energy M&A lawyers in the new office.

Anchondo said he was impressed by Balch & Bingham's expertise on the energy side as well as deep bench strength in corporate transactions across industries. His practice focuses on oil and gas, but he also works in power generation, aviation, shipping, technology and health care.

Houston is a "changing marketplace" for lawyers, and out-of-state firms like Balch coming into the market are creating opportunities, Anchondo said. He added that he was attracted to the Birmingham, Alabama, firm because it's "bullish on Houston."

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The Trial Boutique

Colleagues Christopher Hogan and Samantha Thompson recently left Houston trial firm  Reynolds Frizzell to launch commercial trial boutique Hogan Thompson. Their new firm will concentrate on oil and gas cases and other energy litigation.

"Honestly, it's something that's become the focus of my practice and her practice," Hogan said of their interest in litigation in the energy sector.

While litigation is typically counter-cyclical, Hogan said he's not noticed any difference in the volume of energy litigation from the days of $100 a barrel oil to the present price of less than $50 a barrel—as the price has lately been buffeted by coronavirus uncertainty.

"There's litigation on both sides. When everyone is making a lot of money, people tend to fight over it. When people are making less money, people are still fighting over it," he said.

He said nothing at Reynolds Frizzell prompted the move, and the firms continue to work together on some litigation. When asked to comment on the departures, Jeremy Doyle, a founding partner at Reynolds Frizzell, said, "We are proud of Chris and Samantha, and we know they will do well."

Thompson said owning a small firm gives them opportunity to offer clients more flexible rates, and to have more control to craft their practice how they like it. In addition to energy litigation, their practice includes commercial real estate, construction law and contract disputes.

The firm's clients include Chevron, EOG, Marathon Oil, BP, Callon Petroleum and Escondido Resources. Its current docket includes oil and gas disputes, such as a lease pooling dispute before the Texas Supreme Court, several lease-termination suits in the Permian Basin, and more than a half dozen royalty disputes in the Eagle Ford Shale, the firm said in a press release.

At Reynolds Frizzell, Hogan was a partner and Thompson a trial attorney.

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The Transplants

Instead of hiring laterals, Reed Smith recently transferred two energy and natural resources partners to the firm's Austin office, to support a strategy of bolstering energy, health care, life sciences and technology practices in that location.

Oil and gas dealmaker Gary Johnson moved to Austin from Reed Smith's Houston office, while Edward Rogan, renewable energy leader, transferred from San Francisco.

Jeff Layne, managing partner in Austin, said the office recently relocated into new space that will accommodate up to 30 lawyers, so the firm can work on growth goals. Transplanting these lawyers is one of the first steps in that process, he said. The Austin office, which opened in 2018 with a life sciences/health care team, currently has 11 lawyers.

"We are hitting a different part of the spectrum," Layne said in reference to adding the energy lawyers to Austin.

Johnson said Reed Smith needs energy lawyer "boots on the ground" in all three of its Texas offices—Austin, Houston and Dallas—because the industry is important to Texas and strategic for the firm. His work is concentrated in renewable energy and midstream, which is the transport and marketing aspect of the business.

Rogan, who also focuses on renewable energy, said he's worked on "a ton" of Texas projects, and being located in Austin will help him expand his client roster. He said his clients include Calpine Corp., Vestas Wind Systems and OwnEnergy.

Layne said it's not uncommon for firms to transfer lawyers between offices to build practices. The life sciences partner said he was working for Fulbright & Jaworski, now Norton Rose Fulbright, in Washington, D.C., when he moved to Austin in 2005. He joined Reed Smith in 2018.

"A lot of firms in Austin have partners who have transferred in from other places .. .to help the firm grow in a city with an expanding economy," he said.

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