best project finance law firms

best project finance law firms

An In-Depth Analysis of the Best Project Finance Law Firms

1. Introduction to Project Finance Law Firms

Project finance is a widely employed set of financial techniques and structures, using a non-recourse or limited recourse financial model, often on a limited term basis, enabling private-sector financiers to participate in the provision of major infrastructure services. Project finance is utilized for a variety of purposes, most commonly in connection with the development, construction, and operation of energy facilities, including conventional as well as alternative energy, production, manufacturing, transportation, and communications systems, as well as other major assets. The financing is typically extended to special purpose vehicles or project companies which have been formed for specific business purposes and are designed to be bankruptcy-remote. The essential difference between project finance and other forms of business finance such as bond issues, equity markets, and corporate borrowing, is that project finance limits the liability of the primary equity investors or project sponsors and the financier to a project’s assets alone. Large projects which rely on direct equity investment from several firms and borrow the bulk of the needed funds will usually incorporate new, well-defined project companies. At the same time, the diversity of these projects and their specific financing needs causes project finance’s lawyers to be experts in many different sub-specialties of the law.

Each year, Who’s Who Legal surveys senior professionals, clients, and other practitioners to identify the leading legal experts in multiple practice areas from more than 100 countries. The publication provides comprehensive and detailed profiles of notable project finance lawyers, their contact details, and information relating to their practice. In addition to the leading law firms at a national level in project finance, the firm-wide chapter also provides unique insight into the top law firms which excel in this area of law.

2. Key Factors in Determining the Best Project Finance Law Firms

Profile includes the length of commitment and the resources the law firm devotes to project finance. Big firms have always had a challenging time with respect to satisfying both these parameters because of sometimes high establishment costs and actual utilization. The newfound group, however, which emerged, demonstrates the competition among the big firms. A firm is unable to pull resources from both equity and debt side efficiently. Whether to form a separate fiefdom and to have autonomy from the incumbent law firms of the borrower while developing and maintaining sound technical expertise and drafting systems is another dilemma, and often, more firms fail because of lack of autonomy in the subspecialty. The best law firms try to reconcile these conflicting goals, and some do so more successfully than others. Personality compatibility, creativity, open and direct communication, and a solid, responsible, and loyal core are some of the other aspects of profile. While required skills, personality compatibility, creativity, and communication are hard to judge from other indications, reputation is much more tangible. Reputation is a cumulative reflection of all substantive aspects of the law firm. Reputation is directly proportional to the total number of deals a firm has advised on. Long-term relationship is more effective in the long run than short-term profitability. High volume of business also creates visibility. Reputation is directly proportional to public visibility. High visibility, and hence, high reputation, is achieved through clever marketing and being good at what you do. However, a plant on a rooftop is not always easily visible. Market-oriented agencies often provide this kind of visibility. These agencies or groups evaluate and/or rank the firms in terms of legal expertise and high dollar deals diligently. Reputations of a law firm and its partners are also checked with both the recommended and unlisted referees. The financing method in one case could be to take on junior ranking teams, but it can also get in the way, and the law firm sometimes finds itself muscled out of the senior role in better projects. In general, specialization is the key. Even the best retail finance practices cannot hope to reach their full potential through extensive diversification. The top project finance law firms are like virtuous single-sector investment funds. The partner selects the venture to invest in. Various types of niche strategies or specialties are also required.

Law firms specializing in project finance have always been highly specialized groups and have been dominant in the industry for several years. Despite big firms boasting of general project development practices, technology is changing. What used to be each firm’s local advantage has now turned into its major disadvantage. Lawyers at local law firms have always had the substantive legal expertise. This year’s report has unearthed another group of firms lurking around – those which aren’t traditionally termed as project finance firms, but should be called so based on their deal and broad-based expertise. They are not the cream of the crop, but clients use them frequently. What makes some firms better than others and how they can improve should be the key question to ask. Profile, visibility, reputation, and substance are the four legs that help a firm to stand. The mix among these factors creates the synergy.

3. Case Studies and Success Stories of Top Project Finance Law Firms

This section provides detailed case studies of representative transactions profiled in the survey, as well as other successful project finance transactions structured and underwritten by the leading law firms, and affiliate and in-house law firms, including Allen & Overy, Ashurst, Shearman & Sterling, Milbank Tweed Hadley & McCloy, Winston & Strawn, Hunton & Williams and Clifford Chance. U.S. firms such as Chadbourne & Parke (before the combination with Norton Rose), Freshfields Bruckhaus Deringer, as well as other UK Magic Circle law firms such as Linklaters and White & Case, Cleary Gottlieb Steen & Hamilton, and Mayer Brown Rowe & Maw, Cadwalader Wickersham & Taft, Chadbourne & Parke (after the combination with Norton Rose), Norton Rose, Paul Hastings Janofsky & Walker, and Shearman & Sterling, Vinson & Elkins, Paul Weiss Rifkind Wharton & Garrison, Bracewell & Giuliani, and King & Spalding, and their respective regional power and project finance peers. The remainder of the paper is organized as follows. In Section 3.1, we profile the largest law firms and detail each firm’s legal advice in different power and project finance transactions.

4. Innovations and Trends in Project Finance Legal Services

Hence, ESG practice refers to a law firm’s new practice or unit especially designed for ESG advice, and this is a decisive factor. ESG advice is so important that by 2024, investment banks will no longer provide ESG finance, and all banks and other investors will require ESG advice. This marks the end of the differences in debt and in the finance market and means the alignment of finance, investor, and asset interests considered by NJCM and Zohar. In accordance with NJCM and Zohar, companies involved in PF projects should encourage corporations to provide more information about certain issues.

It is clear from the tables and comments above that our ranked firms offer top-quality legal work. But what kind of work do they do? And what is particular to project finance work? Innovations and trends in project finance legal services can be summarized in two key reports from Chapman and Cutler, a recipient of our great honor, and ‘The World’s First 100 years’, which describes the successive changes undergone by the law firm Clifford Chance, also part of our rankings. Our analysis here focuses on the specific services in project finance offered by corporate law firms and certain innovations within them. The particular legal services within these firms that were selected as relevant are the financial, tax, regulatory, and ESG practices. This focus is due to the unique nature of project finance.

5. Conclusion and Future Outlook

Finally, the specific role played by the firms that have dedicated teams to work on it provides an added level of importance to performing and demanding this type of analysis, which seems particularly absent in the research of these specific specialized publications.

As a final conclusion, we would like to re-emphasize the relevance of our research, not only due to the results obtained and presented here, but also to the broader public discussion about how to access and survey the most important studies that are published in the area of law. As project finance is one of the most fruitful areas when it comes to the interface of law and finance, it is important to have deep knowledge of the quality and contents of the studies that address its central issues.

With the details of the publications analyzed duly reported, as well as some descriptive analysis in separate dimensions, it is possible to conclude and anticipate future developments. The summarized descriptive research approach, with the focus on the number of documents published and the amount of citations received, is not enough to fully capture the complex dynamics that underlie the process. We need more ambitious and comprehensive measures that go beyond this snapshot approach. Our future work will go in that direction.