Michael Lishman is reminiscing.

The Clifford Chance partner, who was previously the head of the M&A group at Mallesons Stephen Jaques before starting the Western Australian boutique Cochrane Lishman in 2006, was warned about the perils of being an energy and resources specialist at the turn of the century.

This was a time when dotcom companies were all the rage, Baker & McKenzie and the Coudert Brothers were the only global law firm of note with a meaningful presence in Australia, and Perth was still better known for being the home of Alan Bond rather than a base for global mining and professional services companies.

"If you go back to 2000 it was all about telcos, and you had all the managing partners of all the law firms in Australia talking to their resources partner and saying; 'you are in the old economy, we need to migrate the firm's practice away from the miners to the telco companies, the IT industry, the banks, it is all about the new economy,'" says Lishman.

"Because of China, because of India and the world's economy, the old economy is now the new black of law firms, and everyone wants to again become a resources lawyer."

The lawyers and the global law firms are following the money.

Since Lishman left the confines of Mallesons to start his own firm five years ago, the Perth legal market has exploded.

Six global law firms have arrived, including Lishman's current firm Clifford Chance in May this year, the well regarded Western Australian energy and resources boutique Blakiston & Crabb merged with Gilbert + Tobin, and national firms like Allens Arthur Robinson are offering bonuses of $20,000 to staff who successfully recruit lawyers to the west-side.

"Western Australia and Queensland are our two booming offices," says DLA Piper partner Damian McNair. Based in Melbourne, McNair is the head of the firm's projects and finance group in Australia, with a large part of his work derived from the energy and resources sector.

Like Lishman, he was also a partner at Mallesons before leaving five years ago, because, as he sees it, "the future is with global law firms, not Australian law firms".

He echoes the sentiments of his ex-colleague at Mallesons by stating that national law firms like Mallesons did not predict that the resources sector would explode like it has.

"If you asked me at Mallesons if we would have five partners in finance and projects in both our Perth and Brisbane offices (as DLA Piper does now), I would say you were crazy. But luckily, we re-directed those resources a few years ago."

It is fair to say that without the resources boom, the six global law firms that have established offices in Perth since Lishman and McNair left Mallesons would not have done so.

For law firms, Peter Garrett's environmental call to arms that "nothing's as precious as a hole in the ground", has taken a rather literal meaning.

"Fundamentally, the global law firms align to global flows of capital," says Lishman "What Australia now has is a huge amount of stuff that needs to be built and needs to be financed, and that is why the global law firms became interested.

"An important part of Asia's economic future is supplying that demand for materials and energy and to a lesser extent, food."

Ah, yes, Asia. Without developing economies like China and India, which each has more than one billion inhabitants, lots of Australia's "stuff" would remain in the ground. High commodity prices also help the local mining companies, and associated interests such as their legal advisors, to reap the rewards.

"Our revenue is up 50 per cent on what it was four to five months ago," says Lishman. "We have hired more lawyers, and are taking five more graduates next year, so the work is coming in."

While there is no doubt that global law firms have taken market share and clients from local firms, and spooked more and more Australian firms like Blake Dawson to merge with global firms to sure up its client base, they too are reaping the benefit of the resources boom.

Australian firms still have major Australian based energy and resources companies with extensive international interests as clients. Blakes still act for BHP Billiton, Allens Arthur Robinson is still the go to law firm for Rio Tinto, and Freehills counts the Australian based gas company Santos as a major client.

"A lot of law firms have significantly expanded on the back of the resources boom over the last couple of years," says Freehills partner Matthew FitzGerald, who specialises in mergers and acquisitions in the mining and resources sector. "That appears set to continue on the significant number of large-scale projects being undertaken by sompanies in the sector."

The west is not always the best

While the riches to be found in the ground in Western Australia have been apparent ever since mining magnate Lang Hancock discovered the world's largest iron ore deposit in the Pilbara region almost 60 years ago, the potential of the Queensland energy and resources sector is only just starting to be realised.

In January, the final investment decision by the various partners in the $US16 billion [$16.1 billion] Gladstone Liquid Natural Gas Project [GLNG] was signed.

A multitude of global companies and law firms were involved in the deal, including Australian gas producer Santos, Malaysia's Petronas, the French company Total and Kogas from South Korea.

Freehills acted for Santos, Allens for Total, Blakes for Kogas, Addisons for Petronas and Clifford Chance.

Freehills partner Matthew FitzGerald, who was part of the Freehills team on this transaction, says that a perfect storm of major oil and gas projects in Queensland have led to law firm's increasing the numbers they have on the ground in Brisbane.

"The LNG industry has come relatively recently to Queensland after being active in Western Australia for many years," he says. In addition to the GLNG project, the Australia Pacific LNG [a consortium including Origin Energy and ConocoPhillips] deal with China's Sinopec Group to develop coal seam gas fields in central Queensland and the delivery of LNG to Curtis Island near Gladstone has piqued the interest of major global gas companies to invest further in the region.

"The large amount of work coming out of the Gladstone region has spawned work in a number of contract service industries to the Gladstone-based projects," says FitzGerald.

Freehills now has 16 partners, an additional 70 lawyers and around 100 support staff in its Brisbane office.

New South Wales is also providing law firms with opportunities to act on multi-million dollar resources projects.

FitzGerald advised Aston Resources on the $345 million sale of 15 per cent of its Maules Creek Project in the Gunnedah Basin to a Japanese subsidiary, while Clifford Chance has been active in the Hunter valley region north of Sydney.

"There is still a healthy coal market in the Hunter Valley region, providing some quite significant legal work over the past year or two," says Clifford Chance Sydney managing partner Mark Pistilli. "A lot of that work is in relation to the development of the Port of Newcastle, while there is also a lot of M&A activity in the Hunter Valley with the independent miners operating in the region."

Into Africa

While a lawyer like FitzGerald with a national firm can count on around 25 per cent of his client base consisting of overseas companies or consortiums investing into Australia, other energy and resources lawyers are increasingly looking abroad to grow their practice and remain competitive.

Michael Blakiston is regarded as one of Australia's foremost energy and resources lawyers. His old firm Blakiston & Crabb, which concentrated on energy and resources work, caught the eye of many global and national law firms, including Clifford Chance and Gilbert & Tobin.

Blakiston & Crabb eventually merged with Gilbert + Tobin in May, giving G+T a Perth office and a seven partner and 24 lawyer strong energy and resources practice.

Michael Blakiston's Australian client base, which includes Sundance Resources, now provides G+T with reach into cross-border work in Africa.

"People are identifying our skill base as being in operating in Africa, so we are actually getting work there, even though it might not have much of a nexus with Australia," he says. "There may be an overseas company with a subsidiary here, but because of what we do elsewhere, they are seeing we have a fairly unique offering, in the sense that there are not many lawyers anywhere that have a broad exposure to Africa."

Blakiston relies on his extensive contacts, knowledge and experience in Africa to compete with the global law firms. He estimates that around 65 per cent of his work is now centered there, with the lack of global law firm offices on the ground in many African countries providing him with the opportunity to compete effectively with international lawyers.

"I am having to work harder due to demand, not because of competition from global law firms in Australia," he says. "A global law firm does not set up offices in Zambia, the Congo or Equatorial Guinea.

They are trying to service those markets as best they can, but I spend a lot of times in those marketplaces, so I am there equivalent and there competition."

Global law firms have certainly noticed the riches available in Africa, with particular opportunities available with the associated infrastructure development.

"Everyone talks about mining, but people have to understand that a lot of the legal work surrounds the associated infrastructure," says Damian McNair from DLA Piper. "The mine expansion and the utilities solution that goes with that are significant. To have a 500 to 800 kilometre heavy haul rail network, then a deep water port and the associated infrastructure is where the real work comes into it."

DLA Piper is currently acting on one such $10 billion coal and infrastructure project in Botswana.

The burgeoning South African renewable energy sector is also providing opportunities for Australian energy and resources lawyers with global law firms.

"A significant portion of our African work is on the back of the Renewable Energy Feed In Tariff [REFIT] program," says McNair. "I do a lot of work for the Industrial Development Corporation of South Africa - which is a private equity arm of the South African government - that lends into a number of projects into South Africa."

A taxing time

On 1 July next year Australia's carbon pollution pricing scheme will kick-off as a precursor to an emissions trading scheme in 2015.

Under the scheme, the 500 heaviest emitters will pay a starting price of $23 per tonne of 'carbon pollution'.

While this is keeping many climate change lawyers at global and national law firms busy, not all firms want a slice of the action.

"Although we will advise on the carbon laws and its impact on the projects we are involved in, we are not aiming to be a carbon tax compliance practice," says Clifford Chance partner Mark Pistilli.

Despite mining groups and the conservative side of politics in Australia warning that this could severely curtail the level of resource activity in Australia, the energy and resources lawyers on the ground report that the long-term deal flow form the sector remains strong.

"The potential for continued profits outweighs the cost of the tax," says Lishman.

He believes that hinges on commodity prices remaining high, providing mining and resource companies with a high return on their investment.

"I wouldn't want anyone to think the carbon tax won't make a difference," he says "Anything that imposes a cost can make it harder. If the price is maintained at historically goods terms of trade and people can make exceptional return on their capital, then the mining activity will still be there."

Blakiston concurs with Lishman, that in the current climate of high commodity prices, the carbon tax "hasn't stopped projects going ahead."

However, he believes that once you impose a cost on business, you can't just undo that to suit the prevailing stage in the business cycle, and that the carbon tax could come back to bite the Australian mining industry.

"There is a well used expression that a rising tide lifts all boats," he says. "If commodity prices come down, and costs meets revenue, we have put ourselves in a slot where we make ourselves more uncompetitive," he says

"Today, it, is hard to say that it has had an impact on our major mines, but that could change if revenue comes down."

With China and India still developing economically, and Indonesia rising and needing materials to fund its development, that time might be a long, way away.