Demand for energy and resource partners is booming on Australia’s west coast

Partners are jumping from firm to firm in Perth, Western Australia’s capital and largest city, as a booming mining sector and closed borders during the COVID-19 pandemic create demand growing resource and infrastructure lawyers.

This year lawyers in the Australian west coast town, 3,300km from Sydney, left or joined firms such as Ashurst, Norton Rose Fulbright, King & Wood Mallesons, HFW and Quinn Emanuel Urquhart & Sullivan.

“I’ve been recruiting lawyers in Perth for over 20 years and I’ve never seen it so hot,” said Doron Paluch, director of specialist legal recruiter Burgess Paluch, who added that demand is also strong in the capitals of other states.

Other resource projects are underway thanks to a strong global economy and high commodity prices, including iron ore, lithium and natural gas.

“Agreements are made. Projects are underway,” Paluch said.

Additionally, Western Australia’s border has been closed to other states and the rest of the world for much of the COVID-19 pandemic over the past two years, drying up the usual supply of experienced lawyers in the worldwide and from Australia.

Litigation partner Paul Evans and his three-person team joined HFW from Quinn Emanuel Urquhart & Sullivan in April.

“There is a lot of activity on the business front. And a lot of money lying around in the economy,” said Evans, who has extensive experience in energy and resources and construction litigation.

Usually, the demand for front-end project lawyers is followed by a demand for litigation lawyers as the resource cycle comes to an end and a cooling resource sector leads to more disagreements.

However, Evans said frontline lawyers — those working to set up projects — and litigation lawyers are in demand at the moment. “We had a somewhat unusual period where there was an overlap in the litigation cycle since the last boom, coinciding with a mini-boom but in a constrained environment,” he said.

Hiring lawyers has become more expensive, which in turn puts pressure on business costs.

“There are tensions in the ever-changing market related to this tension of rising cost bases, with customers perhaps not revising their rate expectations as they might at some point in the future,” Evans said.

He declined to guess when the boiling commodity market and resulting demand for avocados will cool.

So far, it continues unabated.

In March Clifford Chance hired Projects and Construction Dispute Partner Spencer Flay from Corrs Chambers Westgarth, and in January energy partner Tracey Greenaway left Allens to join Corrs Chambers Westgarth in Perth.

Ashurst has been particularly active. In May, he hired two project partners from Corrs Chambers Westgarth in Australia, and in March he hired three partners from Norton Rose Fulbright for his Perth energy and resources practice.

But the movement of partners has not gone one way in Ashurst. In March, King & Wood Mallesons poached two Perth-based energy and infrastructure partners from the London-based company.

Dan Brown, projects partner and co-head of Ashurst’s international projects group, said commitments by governments and companies around the world to decarbonize the economy are underpinning opportunities for lawyers specializing in infrastructure and energy.

“We must have sufficient resources and personnel to help our customers take advantage of the opportunities that arise from the energy transformation,” he said.

Additionally, high commodity prices are making more projects viable, which previously might have been shelved because they were unprofitable, he said.

The value of engineering work carried out in Western Australia has increased since the start of the pandemic, as the state’s strict border restrictions and effective sanitary measures have allowed activity to continue largely uninterrupted, notes forecaster Deloitte Access Economics in its quarterly investment tracker.

Western Australia’s economy grew by 4.7% in 2021, outpacing the Australian economy.

The mining industry accounts for three-fifths of total project investment in Western Australia. Several projects are under development, including the A$4.6 billion ($3.2 billion) Iron Bridge iron ore project, the A$3.8 billion Koodaideri iron ore rail and mining project Australian dollars ($2.7 billion) and the AUD 1.8 billion ($1.3 billion) Eliwana Iron Mine project. and railway development.

And there is more to come.

Western Australia has a total of A$156.8 billion ($110 billion) in future plans, an increase of 7.8% on last year, according to Access Economics. About A$50.9 billion ($35.7 billion) of those projects are currently listed as final, with the rest planned. Future investment is led by the A$30 billion ($21 billion) Browse to North West Shelf natural gas development.

While ongoing and upcoming work supports the demand for experienced lawyers in Perth, many are reluctant to change firms, recruiter Paluch said. Most lawyers are cautious about moving and firms know how difficult it is to replace a good lawyer in today’s market.

“Many law firms have gone to great lengths to nurture the best employees to ensure they stay,” Paluch said.

Strong demand drives up wages, sometimes dramatically.

“I don’t think the salary trajectory is sustainable in the medium term. Companies have offered huge salaries and signing bonuses to try to attract talent, but we need to ensure these positions are sustainable if we have a downturn over the next 12 months,” he warned. .

He expects the resource boom to continue into next year because there is so much work going on. But worries about China and Russia and the effects of inflation and rising interest rates will likely slow economic activity in 2023.

Even so, it won’t be bad news for all lawyers. “It will likely create more demand for partners in areas like litigation, insolvency and labor law,” Paluch said.

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