Energy M&A Boom Intensifies Big Law Talent Drive, Says V&E Lawyer

Big Law firms face a challenge in luring the talent they need to crack the notoriously insular Texas energy M&A market even as deal volume surges, according to a lawyer who helps close such deals.

The desire to work with known and trusted teams encourages some senior lawyers to stay put rather than join a rival firm, said Lande Spottswood, a deals lawyer at Vinson & Elkins. That’s because there’s a risk in moving to new and unknown groups that handle large transactions requiring layers of coordination, she said.

“When you see mistakes happen on transactions, it’s not because of an individual not being good—it’s because of how lawyers are working together,” Spottswood said in an interview. “It’s something falling in between.”

The battle for talent, ever critical in Big Law, is particularly crucial for mergers and acquisitions tied to energy and infrastructure. Complex deals such as those involving artificial intelligence data centers require increasingly large teams of lawyers touching several practice groups.

Lande Spottswood

Vinson & Elkins

These groups require senior lawyers with deep expertise who work well with their counterparts in other practice areas, Spottswood said. The large teams are especially important when deals combine several areas, such as an equity consortium, financing and commercial agreements, she said.

Many lawyers prioritize the quality and depth of teams, despite huge demand for lateral talent, Spottswood said. “People that have sophisticated practices like that would be very concerned about moving anywhere that wasn’t on a very short list—just from a specialized expertise standpoint,” she said.

Texas Standoff

Texas has been at the center of the M&A energy deals market, and the “Big Three” Houston-founded firms—Vinson & Elkins, Baker Botts, and Norton Rose Fulbright (previously Fulbright & Jaworski)—have stood their ground in the state. They have brought in steady business, despite the growth of heavyweight interlopers such as Latham & Watkins, which opened a Houston office in 2010, and Kirkland & Ellis, which arrived the year after.

V&E emerged ahead of competitors guiding $30.3 billion worth of energy deals in Texas during the first three quarters of the year. Spottswood, who began her career as an M&A lawyer at V&E 17 years ago, was elected as the youngest member of the firm’s management committee nearly four years ago.

She has guided several notable deals in the energy, infrastructure, industrial and energy transition spaces, including several plans announced this year: Sunoco’s $9.1 billion purchase of Parkland in May; and Vital’s $3.1 billion sale to Crescent Energy, and Western Midstream Partners’ $2 billion purchase of Aris Water Solution, both in August.

“One of the things that’s kept me busy is the continued gobbling up of small and mid-cap energy companies by bigger peers,” Spottswood said. “There’s really broad consensus in the investor community and management teams that scale is better.”

Global deal volume reached $3.13 trillion in the first three quarters of the year, up 29% from last year. More than a quarter of deal value in the period came from 38 megadeals over $10 billion in value.

Easing Regs

Texas players have all benefited from a political loosening around oil and gas and the artificial intelligence-fueled data center market.

“Most of my clients on the infrastructure side—both traditional energy and other infrastructure—feel that for anyone who wants to build things, now is the best regulatory environment they can expect to get, so they kind of feel a clock ticking down,” Spottswood said.

That’s in contrast to antitrust regulation under the Biden administration, where any transaction with a “large enough price tag” got a second request, even in a very fragmented, competitive and commodity-driven business and market, she said.

Another potential boost could come from foreign parties interested in US infrastructure and energy deals, despite some concerns about erratic US policy and markets.

“One thing that’s interesting, and I will be curious to see how it plays out is the push and pull between the Trump administration advocating very hard with counterparties in foreign governments to encourage more investment in the US,” and “some concerns about uncertainty and volatility, and desires to do less cross-border,” she said.