Is natural gas industry in Pa. creating new jobs -- or just more legal work?

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While there is debate over whether the rise of the natural gas industry in Pennsylvania has created as many jobs as boosters originally had projected, there is little disagreement among attorneys and legal recruiters that plenty of legal work is flowing from the drilling industry, creating a steady demand for oil and gas lawyers.

It hasn't always been that way, Pittsburgh legal recruiter Valerie Esposito said, characterizing the growth in the demand for oil and gas attorneys in Pennsylvania over the past few years as "a stutter-step."

While the initial frenzy surrounding the Marcellus Shale play in Pennsylvania four or five years ago created an active hiring market for energy lawyers, it was quickly followed by what Ms. Esposito called "a big slump."

She said firms and oil and gas operators alike went through a period of uncertainty as to whether they had enough work to keep their existing staffs busy. That uncertainty led to a sharp downturn in hiring.

But now, Ms. Esposito said, demand for attorneys is on the rise again as firms and drillers have begun expanding operations into Ohio and West Virginia.

And while the initial demand was for attorneys to do pure title work, the focus has now shifted to include attorneys with experience in oil and gas transactional work. Transactional energy lawyers are becoming "more and more in demand and more and more relevant," she said.

Anecdotal evidence seems to bear out her assessment. A number of out-of-state firms either set up shop or bulked up their existing offices in Pennsylvania when the Marcellus Shale play first began picking up momentum. Since then, many have grown significantly, primarily through local hires.

Kristian E. White, who opened West Virginia-based energy law firm Steptoe & Johnson's Southpointe office in late 2010, less than four months after the firm opened in Meadville, said his firm's investment in Pennsylvania is paying dividends.

"When we opened this office in December 2010, we had three attorneys and 6,000 square feet. In June 2012, we added an additional 6,000 square feet and we now have 17 attorneys practicing here," Mr. White said.

Although Mr. White relocated from Wheeling, W.Va., and three other attorneys moved to Southpointe from Steptoe & Johnson's Morgantown, W.Va., office, the rest of the attorneys came from Pennsylvania, he said.

He said there is a significant amount of oil- and gas-related legal work to go around in Pennsylvania. He said Steptoe & Johnson recently signed a lease that added another 12,000 square feet of space at Southpointe beginning in June 2014.

Meanwhile, Kenneth S. Komoroski, who left K&L Gates' Pittsburgh office with five other energy lawyers in April 2011 to open a Southpointe office for Houston-based energy law firm Fulbright & Jaworski, said the group's decision to move has been rewarded, but he admitted it has taken some time to grow the office, which now has nine lawyers.

Like Mr. White, Mr. Komoroski said there's currently a steady flow of business coming in, even as oil and gas operators have also staffed up to handle more legal work in-house.

The oil and gas industry was forced to regroup in early 2012 when the value of "dry" gas -- gas that is almost pure methane -- plummeted to under $3 per 1,000 cubic feet. That caused drillers to shift operations to regions containing more valuable "wet" gas -- a combination of methane and other components such as propane, benzenes and ethane. Mr. Komoroski said dry gas prices recently rebounded a bit and production has resumed at a "robust pace."

Although the initial flurry of drilling activity in wet gas areas caused its value to dip, it was not a significant enough decrease to affect oil and gas operations, he said.

Pittsburgh legal recruiter Lori Carpenter noted firms are currently interested in hiring attorneys who can handle a variety of work stemming both directly and indirectly from the oil and gas industry.

And while some Pittsburgh firms have looked to acquire experienced attorneys from states like Texas where the oil and gas industry has long been an economic staple, she said, there is still a higher demand for homegrown Pennsylvania attorneys.

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Zack Needles: zneedles@alm.com or 215-557-2493. To read more articles like this, visit www.thelegalintelligencer.com.


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