World’s Top M&A Law Firm Plots Path Through Slump in Oil Deals

Kirkland & Ellis spent a decade building a billion dollar-plus energy and infrastructure business and becoming the top legal adviser for US oil and gas deals. It was perfectly placed to benefit from Donald Trump’s “drill, baby, drill” agenda.

Then, the US president’s global trade war tanked the price of crude and stifled transactions in the country’s oil patch, which are down by more than 40% this year, Bloomberg-compiled data show. Kirkland has also found itself among firms caught up in the US government’s attacks on big law.

With Brent crude hovering around $65 a barrel, Kirkland is looking at other corners of the energy industry, as well as adjacent areas, to help plug the gap. It’s notched some big wins this year, including working on one of the largest deals of 2025: Constellation Energy Corp.’s near-$30 billion takeover of power station operator Calpine Corp.

Diversifying away from fossil fuel clients has become more pressing for Kirkland after multiple consolidation waves in the sector reduced the number of listed drillers and pipeline operators the firm can tap.

“It’s kind of a dwindling business from a public company perspective,” partner Sean Wheeler said. “It’s kind of incumbent upon us to try to expand our remit a bit.”

Sean Wheeler

Source: Kirkland & Ellis

Kirkland’s energy and infrastructure business generated about $1.5 billion last year, or roughly 15% of group revenue, people familiar with the matter said—with the US being the main engine. That figure is up from just $30 million in 2014, when Kirkland first arrived in Houston.

The firm is seeking more of a foothold in mergers and acquisitions internationally and, for many at the firm, the story of its foray into the heartland of American oil provides a blueprint for how it might try to conquer new markets.

A Complete Unknown

Back in the spring of 2014, there were plenty of reasons to be skeptical about Kirkland’s efforts to break into energy M&A. Founded in Chicago in 1909, the firm had long been an established player in Washington, DC and on Wall Street, but was a completely unknown entity in Texas, where law firms like Vinson & Elkins and Baker Botts dominated.

The handful of Kirkland lawyers who landed in Houston to launch the firm’s energy practice already had return tickets to Chicago in their pockets in case things didn’t work out.

“People around town would ask ‘who is Kirkland? What are you guys doing?’,” recalls Kyle Watson, a partner at the firm who was among the first on the ground in the Lone Star state and is still based there.

To help fix that, Kirkland poached Andrew Calder from Simpson Thacher & Bartlett in Houston and tasked him with leading the build out. A Scotsman with a thick accent, Calder brought strong connections to the likes of Blackstone Inc. and KKR & Co. and had a track record of advising leading energy companies.

On his watch, Kirkland prioritized hiring local talent to show it wasn’t just, as Calder puts it, “a bunch of guys with funny accents that were hard chargers and only wanted to do private equity.” Those early recruits included Will Bos from Vinson & Elkins and David Castro from Baker Botts.

Shortly after opening a 1,000 square foot office in Houston, Kirkland booked the late county singer Jerry Jeff Walker — best known for his 1968 song ‘Mr. Bojangles’ — to perform at an event at the annual North American Prospect Expo. The concert was designed to announce the firm’s arrival on the scene.

“I was so nervous,” says Calder, 46. “We were, like, is anybody going to show up?”

They did, and Kirkland was soon advising on deals for new buyout clients, as well as strategic players such as C&J Energy Services Inc. The small group of Houston attorneys would ask colleagues in New York to chip in as they jumped from one transaction to the next.

“There was no time to take a breath,” said Watson. “You were just trying to get deal done, get deal done, get deal done.”

What Kirkland didn’t envisage was that M&A in the sector would halve in 2015, as excess oil supply sent crude prices crashing. Bankruptcies ensued and, overnight, the firm found itself in demand because of its reputation as a restructuring specialist. Weil Gotshal & Manges, another prominent adviser in distressed situations, had left an opening by scaling down its presence in Texas.

Bonanza Creek Energy Inc., Energy Future Holdings Corp. and Midstates Petroleum Co. were among those that came knocking. Some remained clients of Kirkland and kept the firm on speed dial when M&A work returned.

“Good timing played a big part in that initial success,” said Justin Stolte, a partner at Latham & Watkins — one of Kirkland’s main rivals in US energy dealmaking. “But from that point forward they made their own luck.”

US energy deals slowly began climbing, and hit a new record in 2018. By then, Kirkland was a top three adviser in the sector when measured by number of transactions and was branching out, working on more infrastructure deals as private equity firms sought out ways to benefit from a transition to cleaner forms of energy.

Andrew Calder

Source: Kirkland & Ellis

It was also still hiring lawyers, with the promise of a fast-track to partner: Associates typically enter Kirkland’s non-equity partnership after six years, assuming leadership roles that competitors would make available later.

Wheeler, a public company attorney, agreed to join Kirkland in the summer of 2018 from Latham. He’s since brought in multibillion-dollar deals from the likes of Marathon Oil Corp., ONEOK Inc. and others.

“Kirkland is pretty entrepreneurial,” said David Foley, a Blackstone senior managing director and a long-time client. “They evaluate stuff and if they decide that it’s a good business and a growing one, and they’re not in it, they can make decisions to really commit the firm’s capital to hire top-notch talent.”

‘Dog Fight’

Kirkland hit the top of the legal advisory rankings for US energy deals by value for the first time in 2022, Bloomberg-compiled data show. It slipped back to eighth the following year after missing out on the mammoth Exxon Mobil-Pioneer and Chevron-Hess deals, before reclaiming the number one spot in 2024 thanks to its role advising local giant Marathon on its roughly $23 billion takeover by ConocoPhillips.

At the most recent NAPE summit in February, Kirkland partners no longer needed to worry whether anyone would show up. This year, the firm handed out neckties emblazoned with oil-related motifs — instantly recognizable to longtime attendees of the expo. For years, rival Vinson & Elkins had given away the same promotional swag, with oil execs sometimes wearing them in television interviews as an insider nod to the event.

Vinson retired the neckties during the pandemic as fewer people donned formal officewear, but Kirkland decided to bring them back. The line to grab one was longer than the queue for a neighboring stall, which was giving away free cigars.

“It’s a dog fight down here, it really is,” said Calder. “So far, we’ve been on the right side of it.”

Both Kirkland’s energy and transactional groups fall under the purview of Calder, who sits on Kirkland’s 20-person executive committee and helps Chairman Jon Ballis run the firm together with other equity partners. Ballis and his lieutenants often reach key decisions through informal conversations, rather than via committee meetings — an approach that insiders say allows Kirkland to move quickly in competitive situations.

In May, Kirkland poached a group of lawyers from Skadden Arps Slate Meagher & Flom after putting together an offer in just 24 hours. “Time is the enemy of all deals and this is our kind of deal,” Ballis said of the hires.

Kirkland’s energy and infrastructure division now houses roughly 550 staff spread across the US and beyond. Public companies account for around 30% of its energy dealflow, according to people familiar with the matter, who asked not to be identified discussing confidential information.

In some ways, Kirkland has become a victim of its own success in Houston. In a close-knit industry town, the firm can sometimes find itself facing a tough choice of whether to work for a strategic or private equity client in an M&A situation. And picking up more mandates in areas like infrastructure and industrials can be more of a challenge from Texas, according to Wheeler.

“There is a bit of a marketing issue for us when trying to expand into different sectors,” he said. “People see you in Houston, they think all you know how to do is drill well.”

Kirkland’s Houston crew has picked up some other big mandates away from pure-play oil and gas this year, advising Brookfield Infrastructure Partners LP on its $9 billion acquisition of fuel pipeline company Colonial Enterprises Inc. and helping Blackstone Infrastructure on its $11.5 billion purchase of New Mexico utility owner TXNM Energy Inc.

Growth outside of the US has been harder to come by, despite efforts to capture more international business with new hires and offices abroad. Although the top law firm for deals globally, Kirkland ranked eighth for legal advice on transactions outside the US last year, Bloomberg-compiled data show; in the energy and industrials sectors, it wasn’t in the top 10. Calder cites the Middle East and China as regions where the firm might look to do more.

What happens next at Kirkland is likely to be overseen by someone other than Ballis, who, at 56, is nearing the age of 60 at which the firm expects partners to start winding down and relinquish seats on its executive committee. Calder is considered a strong contender to succeed him, people familiar with the matter said, with litigation partner Andrew Kassof another name that regularly comes up.

Ballis has some words of advice for running the firm.

“You just keep waiting to see where’s the ball bouncing and we keep running with it,” Ballis said. “As long as it keeps bouncing the right way.”

--With assistance from Alex Tribou.

To contact the reporter on this story:
David Carnevali in New York at dcarnevali@bloomberg.net

To contact the editors responsible for this story:
Fareed Sahloul at fsahloul@bloomberg.net

Elizabeth Fournier

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