Mining, oil and gas at forefront of growth

AMONG the 3,400 delegates at the recent Australian Petroleum Production and Exploration Association annual conference in Perth was lawyer Paul Griffin.

The UK-based partner of Allen & Overy has been a regular in Perth, but this time it was different. Not only is he new to the major London-based law firm, he now has a bunch of colleagues in Western Australia, including energy specialist Angus Jones and resources lawyer Geoff Simpson.

The group believes the Perth office fits with the firm’s strategy of being a major player in the oil and gas field. Its geographic spread of offices appears to reflect that focus.

“It feels as if Perth has become part of a bigger pie,” Mr Griffin said, pointing to the Gorgon project, which has been the game changer in terms of convincing the market that WA could become a significant global player.

The APPEA conference highlighted the rise of oil and gas in Perth, notably LNG production, which is tracking to make the north-west one of the most important energy provinces of the future.

Resources work loomed large with most of the law firms in Perth that were prepared to discuss where they saw their growth coming from.

“The areas picking up and doing well again are areas you expect,” Freehills head of Perth office Jason Ricketts said.

“The resources industry and areas that hang off the resources industry continue to expand.”

Many others in the top tier, second tier and boutique sectors of the industry backed that view.

Allion Legal managing principal Philip Lucas said the firm was expanding its corporate and resources area and would also invest in expertise in preparation for the introduction of the Personal Property Securities Act (PPSA) in October.

The PPSA will require mining companies, contractors and their suppliers to register contracts or arrangements that involve ‘personal property’; failure to register an interest may mean that the interest is lost through a subsequent transaction.

“We’ve bulked up our corporate and resources area and we’ve invested pretty heavily in the PPSA area. We see that as a key growth area because the law comes into effect in October and in the first six months after that there will be a lot work in that area,” Mr Lucas said.

Allion Legal has doubled its partner numbers from six to 12 during the past 12 months, with two of these appointed to the mining and resources area.

“Clients want to deal with partners because they not only get good legal advice, they get experienced advice. It resonates with them because they want to be told the commercial position and not just what the law is,” Mr Lucas said.

Allion has also introduced a new partner into each of the corporate, commercial and workplace relations practice areas.

Talbot Oliver managing principal Brendan Taylor said the firm’s mining and resources practice was becoming increasingly busy, with mining related work accounting for about 30 per cent of the firm’s revenue.

This expansion has led to the appointment of two lawyers to the corporate/resources area with mining-related expertise.

Norton Rose Australia partner and head of Perth office Jenni Hill said the expansion of the oil and gas and mining practice areas was purely a reflection of the mining boom in WA.

“The expansion of the oil and gas, resources and corporate practice areas simply reflects where the WA economy is going. We are noticing that the activity level in Perth firms is generally high because that’s where we are seeing the movement as the world continues to emerge from the global financial crisis,” she said.

Norton Rose recently announced that oil and gas specialist Alex Cull has moved from the Singapore office to the Perth office to bring his expertise in the area.

Commercial litigation has continued to be a profitable area for many law firms, in particular with the increase of construction disputes.

Kott Gunning commercial litigation partner Tom Darbyshire said increasing costs and the difficulty in obtaining finance were factors that would lead to an increase in litigation into the next financial year.

“We have dealt with some substantial property disputes in recent months, but the increase in the volume of work we have been doing in securities enforcement, insolvency and reconstruction has been noticeable and looks set to continue,” he said.

“The outlook for individuals, businesses and sectors not directly linked to the mining boom is quite complex, and the combination of steadily increasing costs plus a noticeable decrease in the availability of credit are causing significant stress.”

Property

The volume of work in the commercial property area has drawn a mixed response from Perth law firms.

Clayton Utz managing partner Paul Fitzpatrick said that while his office’s commercial property area was busy, other law firms might experience a different pattern.

“Oil and gas, mining, corporate and litigation are the obvious growth areas. How property grows will depend on who you’ve got in your property department and who your clients are,” Mr Fitzpatrick said.

Mr Taylor said Talbot Oliver’s commercial property area continued to be soft compared to what it was historically.

“Our commercial property section is still quiet with the commercial property market being weak. We are seeing a two-tiered economy where mining-related businesses are going well and businesses involved in sectors unrelated to the mining sector seem to be a bit slower,” he said.

Kott Gunning property partner Emma Leys said while work in the commercial property area had been consistent, the lack of increase in work flow could be attributed to a lack of confidence in the market.

“We would normally expect an increase in activity in the commercial area as we emerge from a period of realignment and consolidation, but there seems to be a residual lack of confidence which makes it difficult to predict which way the market will go into 2012,” Ms Leys said.

“However, the resource resurgence should hopefully play its part in kick-starting the property sector, assuming overall economic conditions continue to improve.”

Plenty more

Other practice areas that continue to grow include environment, workplace relations and private client services such as family law and succession planning.

Clayton Utz hopes to recruit lawyers not only in corporate and commercial litigation, but also environment and workplace relations areas.

“With a lot of projects going forward there is the need for expertise for environmental approvals and planning in advance for some of these projects,” Mr Fitzpatrick said.

Allion Legal’s Phil Lucas said workplace relations was one of Allion’s biggest growth areas, leading the business to create a separate practice area six months ago.

“Workplace relations is a very busy area at the moment because of the federal government’s laws combined with the labour market shortage, so employers are chasing a scarce commodity in people at the moment and that’s manifesting in people moving around a fair bit,” he said.

Allion has since recruited four lawyers to the area, which is led by ex-Freehills employment relations specialist Kathy Reid.

HHG Legal Group managing director Simon Creek said private client services, such as high-level estate and succession planning, personal tax planning, superannuation and general private wealth services were currently in demand.

“This is because people are putting the uncertainty in the economy aside and getting on with life regardless,” he said.

“They have waited for a recovery, they still don’t know if it has arrived, but personal issues have become more important than waiting further.”