Recruitment: growth in liquefied natural gas projects boosts private practice salaries and size of in-house departments

The UK’s dwindling gas supplies and the growth of liquefied natural gas (LNG) projects have had a dramatic impact on the recruitment market for lawyers with energy-specific experience, leading consultants claimed this week.


Chris Payne, a specialist recruiter in the energy sector at GRS Legal, said: ‘There is a real shortage of lawyers with specific LNG-related experience and with demand far exceeding supply, the market has gone mental and salaries for energy lawyers have rocketed.


‘LNG is now a commodity traded worldwide and capital expenditure on a single project is measured in billions of dollars. Consequently there are significant funding demands and projects are heavily dependent on legal professionals.’


Mr Payne pointed to a string of high-profile moves recently by senior partners and teams of lawyers. ‘Private practice firms are putting together highly attractive packages to tempt those who may not be actively looking to move, to do so. We’re seeing some salaries of £1 million-plus,’ he said.


It is not just private practice that is affected. According to Mr Payne, the average energy company increased the size of its in-house legal department by between 10% and 20% last year. ‘The in-house option can be more appealing, offering benefits such as share options, a better work/life balance and a greater commercial role,’ he said.


Mr Payne added that the greatest demand among in-house legal departments was for practitioners with five to eight years’ post-qualification experience, while in private practice partners and senior associates with good client contacts were the most sought-after.


Charlotte Pember, a specialist private practice consultant at Michael Page Legal, agreed there was a shortage of lawyers in this highly specialised area, but said: ‘While firms have more work in this area than they can do, they have learnt a lesson from the dot-com boom and are taking a more measured and consolidated approach. If they can’t get the right people, they won’t hire them.’


She said large US firms are competing with magic circle and top-tier firms – offering very attractive packages to secure the best people – meaning the smaller London and regional firms, which serve their clients well, are losing out. ‘The candidate is king in this area at the moment,’ Ms Pember added.


Cecile Wake, a senior energy associate at City firm Herbert Smith, explained that while LNG is not new, it has grown significantly in the past few years because of declining natural gas reserves in major markets such as the UK and the US, coupled with the move away from coal-fired power generation to gas-fired generation and the increased demand for gas from countries in Asia.


‘LNG projects require lawyers with an in-depth knowledge not just of the legal issues associated with LNG projects but with the industry as a whole and the commercial drivers for the particular project,’ Ms Wake said.