Latham & Watkins, recognized as the second-largest law firm by revenue globally, has significantly revamped its energy and infrastructure practice, positioning it to capitalize on the burgeoning role of artificial intelligence (AI) in the energy sector. Under the leadership of global chair Justin Stolte, who rejoined the firm in 2020, this practice area has ascended to a new level of financial importance for the firm, now accounting for more than a third of its total revenue. Stolte’s diverse background, bridging traditional energy practices and emerging technologies, underpins the firm’s strategic pivot towards a holistic approach encompassing various power sources, particularly as AI becomes increasingly integral to the global energy narrative.
The firm’s energy practice has burgeoned into a formidable $2 billion revenue engine, experiencing over a 300% increase in revenue since Stolte’s tenure began. This growth trajectory is a testament to the effective restructuring that has occurred under Stolte’s guidance, emphasizing a blend of traditional energy sources like oil and gas alongside renewables. Indeed, the practice brings in revenue on par with an AmLaw 25 firm, reflecting its substantial contributions to Latham’s financial success and its alignment with the shifting dynamics in the energy industry.
Latham’s energy group operates at the forefront of significant deals worldwide, oscillating between traditional fossil fuels and new energy projects, readying itself to tackle the demands of AI-driven data centers. The necessity of meeting these energy requirements is illustrated by Stolte’s recent work, advising on notable projects such as Woodside Energy Group Ltd.’s $2.35 billion acquisition of a clean ammonia project in Texas, and the divestment by ExxonMobil of a stake in a proposed low-carbon hydrogen and ammonia facility.
Globally, law firms have increasingly turned their attention to Houston, a locus of energy sector activity. According to Marcel Meijer, managing partner at CenterPeak, international legal giants like Kirkland & Ellis and Clifford Chance have enhanced their Houston contingents, aiming to fortify their energy-related offerings. Meijer notes that over 60 major law firms have set up offices in the city since 2010, attesting to the area’s critical importance on the legal landscape.
The rise of AI and the associated spike in data center energy needs present both a challenge and an opportunity. Latham’s energy and infrastructure practice is a key player in navigating this complex field. The firm most recently advised the Canada Pension Plan Investment Board’s joint venture with Equinix Inc., a move aimed at funding the expansion of hyperscale data centers in the United States, illustrating the magnitude of efforts required to meet evolving power demands.
Stolte affirms that satisfying these heightened energy needs will necessitate a carefully balanced energy mix, including both renewable and traditional sources like natural gas. As AI and digital infrastructure continue to expand, they will almost certainly necessitate increasing levels of investment and engagement from top law firms globally. For the original article, visit Bloomberg Law.