Oil and Gas Boom Can Mean Big Business for the Little Guy

By Charles R. Peissel
Texas Lawyer Magazine

June 09, 2008

The boom is back. The price of oil and gas keeps going higher, and the demand for oil and
gas attorneys has never been stronger. Unfortunately for the energy industry, a generation
of young oil and gas attorneys was quite literally lost in the collapse of the 1980s. Universities
dropped oil and gas from curricula, and most students relied on their bar review course to
cover the subject. The resulting lack of qualified oil and gas attorneys presents a significant
opportunity for solo practitioners who are ready to move into a new field.

At this moment in time, solos who wish to break into the industry have several advantages
over lawyers at larger firms:

• Billing rates: Multilawyer firms have higher overhead that they must pass on in their billing
rates. This proves problematic in an industry that needs legal help at levels above the
qualifications of a landman but below the $200 per hour large firms charge for new, untrained
associates. Energy companies have a serious financial incentive to seek out more seasoned
lawyers who also are more affordable.

• Scarcity of title lawyer talent: Larger firms are giving up the business of title opinions and are
training fewer associates in this area. New associates are funneling into energy trading,
securitizations and other more exotic areas that seem to promise a faster track to partnership,
without realizing (or caring) that title research is one of the basic building blocks of the oil and
gas legal industry in Texas.

Simply put: No one can buy or sell an asset with any accuracy if he does not know who owns it
and what burdens it carries. In my experience, the typical large-firm associate who attempts to
handle an oil and gas transaction has only a rudimentary grasp of what it is he is trying to buy
or sell and usually ends up on the short end of the stick without ever knowing it.

• One riot/one lawyer: There is a tradition of independence in the energy industry that appreciates
and encourages the solo player/wildcatter. Most small and medium-sized oil companies prefer
to deal with one lawyer in which they have confidence and with whom they have a relationship,
rather than seek out a larger, established firm.

• Flexibility: The solo has the luxury of assembling whatever talent she may need to carry out an
individual transaction. I, along with several solo colleagues, have represented both buyers and
sellers in transactions ranging up to several hundred million dollars. I selected each member
of my team carefully, based on respective talents and not because he or she was a junior associate
in need of billable hours.

Starting Up

If possible, go audit an oil and gas course at a Texas law school. Oil and gas professors are industry-supportive and will accommodate lawyers seeking to learn. If auditing a course is not feasible,
start with "Oil and Gas Law in a Nutshell" by John S. Lowe for orientation. Other handy references
are Richard W. Hemingway's treatise on "Oil and Gas Law and Taxation "; Howard R. Williams and
Charles J. Meyers' "Oil and Gas Terms "; and "Texas Law of Oil and Gas" by Ernest E. Smith and
Jacqueline Lang Weaver. These books will get lawyers started down the right path and will be a
continual source of support for years to come.

Fortunately there now are many excellent seminars on the subject of oil and gas offered at various
law schools and other venues around the state on a year-round basis. In particular, the oil and gas
law short course offered annually by the Rocky Mountain Mineral Law Foundation is a five-day
crash course staffed by an outstanding faculty. For a solo hoping to maximize the return on his
seminar dollar, this course offers not only a great value but an outstanding opportunity to network
with others similarly situated.

Major bar associations around the state offer monthly continuing legal education that usually is
combined with a networking lunch. Take advantage of every opportunity to meet and greet.

Armed with new knowledge, the next step is finding employment. I recommend seeking out all
of the board-certified oil and gas lawyers in a target employment area by using the Texas Board
of Legal Specialization Web site, www.tbls.org. Most of these folks are looking for contract help
right now.

The key to success is convincing a target employer that you are truly interested in the industry,
you do not mind serving in an apprentice-type role for an extended period of time and you are
a fanatic about attention to detail. Accept a heavy discount in your billing rate until you prove
yourself, but consider it the cost of advanced learning.

An oil and gas practice can take many forms, including title research and opinion writing, property acquisitions and sales, due-diligence reviews, energy loan transactions, operating agreements,
exploration and joint-venture agreements, railroad commission issues and litigation. The industry
has its own traditions and standards that have an important role in the interactions among the
corporate players. Solos should immerse themselves in an apprenticeship role at this opportune
moment. It's the best way to become a part of the industry and to build lifetime relationships that
make a legal career worthwhile.

Charles R. Peissel is an Austin solo who has focused on oil and gas, real estate and general corporate matters
for more than 30 years. His alma maters include Stanford University, the University of Texas McCombs School
of Business and the University of Houston Law Center.

Reprinted with permission from the June 2008 edition of Texas Lawyer.
© 2008 ALM Media Properties, LLC.
All rights reserved. Further duplication without permission is prohibited.

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