Region's law firms target energy cases

| Thursday, Oct. 7, 2010

Competition is growing among the biggest law firms in the Pittsburgh region for business from the booming natural gas exploration and production industry, experts say.

Firms across the city are either adding attorneys or focusing more of their time on the booming field, seeing an opportunity for fees after several years of flat revenues here and nationwide due to the recession.

In the Pittsburgh region, "Coal is still a very important part of energy law, but the big thing is Marcellus shale. Some law firms such as ours are aiming to cover every need and facet related to oil and gas, such as property law -- who owns the title," said Shawn Gallagher of Buchanan Ingersoll & Rooney.

Buchanan Ingersoll created an oil and gas group with 10 to 15 attorneys about two months ago, said Gallagher, who also chairs the environmental and energy law section of the Allegheny County Bar Association.

"The legal profession tends to go where the money is, and the money goes where the drilling is," said Stephen Brewer of market analysis firm Brewer Business Development of Kansas City, Mo. "I would anticipate (increased gas production) would lead to a ramp-up of the availability of related services in the Pittsburgh market."

Energy law "is a growing field, and there are a lot of reasons for that," said Steven McKinney, chairman of the American Bar Association's section on environment, energy and resources. "They all fall under the general banner of energy is more important, and more expensive, than ever before. Any time you have a subject like that, you are going to see the law being more and more involved."

The competition is to represent gas companies and other entities involved in negotiations and disputes over locating gas wells, handling the water used to fracture shale to free the gas thousands of feet below the surface and sinking pipelines to transport gas to market.

National and local attorneys' groups don't track the time or revenue involved in energy law, said McKinney, with Balch & Bingham in Birmingham, Ala.

At Reed Smith, "Pretty much all the different areas of the firm touch on oil and gas," said attorney Kevin Abbott, who focuses on energy litigation and oil and gas law. The Downtown firm created a Marcellus shale group with about 15 to 20 attorneys to focus on issues related to mineral rights leases, gas storage and other areas.

Reed Smith wants to expand its energy practice, and is in preliminary merger talks with Thompson & Knight of Dallas, a firm that concentrates on energy finance, taxation and other areas.

Jones Day's office in Pittsburgh has collaborated often on energy matters with the firm's attorneys in its Dallas and Houston offices. Jeff Schlegel, a partner in Houston, was involved in putting together Atlas Energy Inc.'s $1.7 billion joint venture in April with India's largest private sector firm, Reliance Industries.

Reliance acquired a 40 percent interest in 300,000 Marcellus acres in Western Pennsyvlania.

Roy Powell, a partner in Jones Day's Pittsburgh office and co-chair of the firm's global construction practice, used to spend one to two weeks a month in Texas.

Now, while many of the Texas legal specialists are involved in cases here, Powell is concentrating on pipeline infrastructure and other projects plus litigation in Pennsylvania and West Virginia. Also, "There will be disputes. There is a lot of money involved, and a lot of people involved in this," said Powell, an experienced litigator. "Right now I am involved with four different companies, in four different lawsuits in the Marcellus area" over property rights and other matters.

K&L Gates is heavily involved in the regulatory and real estate aspects of the natural gas business these days, said partner Walter Bunt.

While one or two attorneys was involved in each of those areas in years past, he said, "you now find that in regulatory, there may be as many as 10 people in Harrisburg and Pittsburgh, and 15 to 20 in litigation and about five in the real estate area," he said.

Duquesne University's law school added a course in energy law this fall, spokeswoman Karen Ferrick-Roman said.

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