In the wake of Allen & Overy’s stated ambition to merge with Shearman & Sterling, announced in May, Magic Circle peers have found themselves in the unenviable position of having to demonstrate to the market that they also have a coherent US expansion strategy.
Clifford Chance (CC) did not disappoint, on 15 June naming Ness Cohen as the first ever managing partner of its New York office. Cohen, a real estate lawyer by trade, has worked at CC since 1998 and was promoted to the partnership in 2007. He has also held the positions of regional practice area leader of the Americas real estate practice and chair of the Americas personnel committee.
Specialising in real estate private equity and joint ventures, Cohen advises a range of real estate investors, investment banks, REITs, lenders and private equity funds. His standout mandates include representing Madison International Realty on the recapitalisation of its 49% joint venture stake in a property portfolio of real estate assets valued at nearly $1.3bn, as well as advising J Safra Real Estate on its acquisition of several US properties valued at more than $800m.
CC’s regional managing partner for the Americas, Sharis Pozen, said of the move: ‘[Ness] is an exceptional partner and a strong role model in the New York office, with invaluable experience leading our real estate practice, which is part of our extraordinary global real estate team.
‘With a deep knowledge of the firm, Ness takes on this position at an exciting time of growth for us and will certainly add real value as he works closely with our leadership team on the strategy and management of the region.’
Cohen added: ‘It’s an honour to be appointed NY office managing partner. We have a remarkable group of people here in New York. After seven years leading our real estate practice, I have a broad knowledge of our capabilities and deep experience collaborating across practices and offices to deliver on our clients’ goals. I look forward to bringing my experience to this new leadership position to support our business, clients and colleagues in New York and across the region.’
This latest statement of intent followed hot on the heels of the Magic Circle stalwart announcing it was opening a new office in Houston as a means of bolstering its global energy and infrastructure practice in the US, with a view to establishing itself as a leading player in the energy transition.
The firm has hired seven Houston-based partners to join the office, first announcing the recruitment of Jonathan Castelan and Trevor Lavelle, who both joined from Latham & Watkins. Castelan advises on energy and infrastructure transactions, including carbon capture and storage, hydrogen projects, utilisation and sequestration projects and renewable energy projects. Standout matters for Castelan include advising ExxonMobil on its carbon capture and storage agreement with Linde, transporting and storing up to 2.2m metric tons a year of CO₂ from Linde’s US$1.8bn clean hydrogen plant.
Lavelle’s clients include companies and financial institutions across public and private financing transactions. Standout matters include advising initial purchasers in the $1bn offering of sustainability-linked notes by Kinetik Holdings.
A few days later, CC revealed more of its hires in Houston, announcing the appointment of Alexandra Wilde from Jones Day, Enoch Varner from Kirkland & Ellis and Jonathan Bobinger from Baker Botts.
These lateral hires will be joined by CC partners Devika Kornbacher, Alexander Leff, and Anthony Giustini.
Kornbacher is co-head of the firm’s technology group and works with clients across the software, hardware, sports, aviation, and retail sectors. Leff is a renewable energy and infrastructure partner and also practices across project finance and tax. Giustini is the senior partner for the firm’s worldwide projects group, co-leader of the energy transition initiative, and leader of its clean hydrogen task force.
Speaking to Legal Business about the Houston launch, Pozen said: ‘This play in Houston is all about extending our energy and infrastructure practice. We have a market-leading practice globally and the one piece of it that was missing was Houston and having a hub in the US for energy and infrastructure. So that’s what drove us to Houston.’
She added: ‘We have about 700 folks in total in the US. We have almost 500 fee-earners and 95 partners. So, we’ve been fortunate to be able to build a fantastic team in the US that’s very connected to the rest of our firm.
‘Our clients led us to Houston. Many of them are global clients headquartered in Houston and they are primarily energy and infrastructure clients. Houston right now is an incredibly dynamic marketplace. It is the fourth-largest city in the US, one of the most diverse, and it’s really the hub of the energy transition,’ Pozen explained. She added that she was hopeful that the Houston base would prove to be an attractive offering for new clients as well.
Houston, a longstanding hotspot for major players in the energy sector, looks set to play a key role in the energy transition. As the climate crisis escalates, traditional energy companies headquartered in the city are grappling with the challenge of transitioning to cleaner energies. Meanwhile newer, disruptor energy companies are choosing Houston as a base because of its existing energy network.
The CC team is aiming to assist clients across both traditional and renewable energy matters. This will see the team advise on carbon capture and trading, digital infrastructure and infratech, clean hydrogen, batteries, energy infrastructure, new nuclear and renewables across M&A/corporate, regulatory, leveraged financing, capital markets, litigation, restructuring and private equity/ funds activity.
The launch has been several years in the making. Pozen said: ‘We’re discerning, and we play our own game. That’s who we are. So, we’ve watched other firms with some global reach go into Houston and watched the successes and those that haven’t been as successful, and we’ve learnt. In our world, there isn’t always that first-mover advantage. Often history shows that the person who sits back and watches goes in even stronger and better.’
Pozen also credited the reach and foresight of global managing partner Charles Adams as a driving force behind the office opening. The firm plans to expand the Houston office with more growth expected over the coming year, with the strategy for the next three to four years to remain on the lookout for new talent and continue to grow the team when it makes sense.
‘We will look to build out the team further for sure. That is the plan. It’s part of our plan to expand in the US generally, and we have been expanding in the US. We plan on continuing to strategically grow. We are not just a growth-for-growth’s-sake firm. We are a strategic grower and meticulous about our execution,’ Pozen added.
CC’s Americas business currently accounts for 13% of its global turnover. The firm has seen 67% growth in its Americas revenue since the fiscal year 2015 and has also seen an 80% increase in partnership profit in this timeframe. However, like the rest of its Magic Circle peers, it has struggled to make a lasting impression state side. One managing partner of an international firm told LB that his managing partner peers in America remained dismissive of the Magic Circle’s brand power in the US, suggesting that these firms lacked visibility and credibility.
However, with the move into the Texas market, CC is placing its bets on the energy transition sector as its chosen route to cracking America. If the merger with Shearman goes ahead, A&O will also be breaking ground in Texas, giving it access to offices in Austin, Dallas, and Houston if the partner vote is passed.
With net zero ambitions for 2050 as set out in the Paris Agreement, the pressure on the energy sector to successfully transition is ever increasing. The sector certainly has its work cut out to achieve this ambition, and consequently there will likely be plenty of business development opportunities for lawyers in Houston. There are certainly worse ways to crack the US than Texas.