Welcome back to the Big Law Business column. I’m Roy Strom, and today we look at how Big Law firms are helping power the transition to solar energy. Sign up to receive this column in your Inbox on Thursday mornings. Programming Note: Big Law Business will be off next week.
Big Law is a follow-the-money business. And there is a flood of cash flowing into solar power.
Global investment in solar photovoltaic energy production will pass $500 billion this year, predicts the International Energy Agency, an intergovernmental research agency. That’s nearly $100 billion more than the investments in generating electricity from coal, oil, natural gas, wind, and nuclear energy combined, the agency says.
Demand for solar and other renewable projects has spiked so dramatically since the 2022 passage of the Inflation Reduction Act, which piled subsidies into the market, that many law firms feel they can’t keep up with all the work.
“We just don’t have enough lawyers to do it all,” said Eli Katz, global vice chair of the energy and infrastructure industry group at Latham & Watkins. More than 650 lawyers at the firm globally, including around 400 in the US, work on the energy transition and routinely bill above 100% of productivity targets. The group’s headcount has grown at least fivefold in roughly the past decade, Katz said.
Firms that haven’t developed strong energy transition practices are poaching lawyers from other firms “pretty ruthlessly,” said Anna Kimbrell, who leads Husch Blackwell’s Energy & Natural Resources team.
“It is very niche, very boutique, and it commands very high rates,” Kimbrell said. “So every law firm wants a renewable energy group even if they don’t have one.”
At least 90 of the country’s 200 largest law firms have hired a lawyer with a “renewable energy” specialty over the past three years, according to Leopard Solutions, which tracks law firm moves and combs law firm bios.
The busiest firms on the hiring front, according to Leopard, have been Norton Rose Fulbright, Orrick Herrington & Sutcliffe, Husch Blackwell, and Holland & Knight. They are the four firms that have hired more than 10 lawyers in the past three years, per Leopard.
Today, at least 140 of the 200 largest firms boast at least one lawyer with a “renewable energy” specialty, Leopard says.
Norton Rose Fulbright, with its Texas roots and a longstanding energy practice, and Orrick Herrington & Sutcliffe, where energy and infrastructure is one of three major practice groups, have the most renewable energy specialists, according to Leopard. They are the only two firms with more than 40 such lawyers.
The data likely fails to capture the full picture at every firm, but it suggests few firms are ignoring the solar revolution.
Power Indeed
I was oblivious to just how much progress has been made in solar, and how much is yet to come, until I read an essay in The Economist on the rapid and largely unexpected growth in this area.
The upshot of the essay is that solar power will likely become the largest portion of global energy production during my lifetime, transforming other industries in the process.
Most of the investments are in China, but the US has become one of the busiest markets. Domestically, utility-level solar production capacity—the type of large-scale solar projects Big Law firms paper up—is estimated to hit a mid-point of around 657 gigawatts by 2035, more than four times the production this year, according to BloombergNEF, which tracks new energy financing.
Already, nearly all the country’s new energy production comes from solar, wind, and battery storage. In the next two years, 92% of energy capacity additions are predicted to come from those three sources, says the US Energy Information Administration.
The surge is driven by the low cost of the commoditized technology. Modules that absorb sunlight and turn it into electricity have become very cheap. The last year solar panels cost more than $5 for each watt of electricity they generated was 2003. The cost today is less than a quarter.
The Expertise
Solar technology may be relatively simple and cheap, but lawyers specialize in important parts of the business, structuring deals to be tax-friendly and helping to raise capital.
Husch Blackwell’s Kimbrell said she wishes she had an engineering degree as she helps independent energy companies develop solar projects. That’s because tax implications can dictate how projects are designed—determining where batteries sit next to solar projects, how power connects to the grid, or how leases are structured.
“Trying to figure out all of the legal rights, from a regulatory, real estate, corporate structuring, and finance perspective, is a lot of work,” said Kimbrell, who is part of a roughly 90-lawyer team that spends 95% of its time on renewable projects. “You can’t come into the industry as a lawyer and fake it.”
The legal work is evolving as solar power gets put to larger and newer applications, said Kristin Seeger and Patrick Ferguson, Orrick partners.
One main driver of bespoke legal work is the ability to transfer tax credits generated from solar power, a new concept introduced by the Inflation Reduction Act. That has led to an “explosion” of interest from large corporate clients, either interested in building their own solar capabilities or engaging in the tax credit market, Seeger said.
The tax subsidies have also made plans that were once considered “moonshots” more realistic, she said. Clients today are pursuing projects such as green hydrogen, the process of generating hydrogen nearby solar panels. She’s even discussed “on-orbit” solar, placing panels in space.
“You hear conversations now in the energy space that once sounded futuristic,” Seeger said. “But they are real conversations people are having from a technology standpoint. And that’s a ride we will go on along with them.”
As Latham’s Katz puts it, “There’s so many new capital sources and so many new projects that people are developing. And if you look at some of the hockey stick charts, we might only be in the early innings.”
Worth Your Time
On David Boies: David Boies will likely be tasked with arguing that former bankruptcy judge David R. Jones enjoys judicial immunity over a lawsuit seeking damages from the fallout of Jones’ personal relationship with a lawyer who worked on cases in his court.
On Pro Bono: A court-mandated requirement for Illinois trial lawyers to represent indigent litigants for free is helping newer attorneys at some Big Law firms gain valuable courtroom skills, Stephen Joyce reports.
On Thompson Hine: The Ohio-founded law firm sees its Midwestern base of lawyers, and their “flexible rates,” as an advantage as it opens its first office on the West Coast in Los Angeles.
That’s it for this week—and next! Thanks for reading and please send me your thoughts, critiques, and tips.
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