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November 20, 2013 Articles

Inside, Looking Out: In-House in the Energy Industry

One attorney opines on the pros and cons of working in-house.

By Jonathan D. Morris – November 20, 2013

The questions come in slightly different forms. “How do you like working for XYZ Oil and Gas Corporation?” “What is it like working in-house?” They come most frequently from attorneys in private practice, at both large and small law firms, but occasionally from attorneys in governmental positions and even attorneys in non-legal corporate roles. Sometimes attorneys are considering a professional move and other times they are just satisfying the inquisitive nature residing in most attorneys. This article is not intended to be a comprehensive overview of the role of in-house attorneys in the energy industry, but merely an attempt to satisfy some of the curiosities of those attorneys who may be considering such a professional choice. The perspectives in this article are those of one in-house energy attorney, which may certainly differ from the experience of other in-house attorneys.

In-house counsel operate within a corporation as conventional employees who handle the legal needs of the organization for whom they work. Depending on the size of the company and its legal needs, in-house counsel may work solo or within a small or large team of other attorneys and support staff who function similarly to a law firm embedded within the company. In-house counsel handle a wide variety of legal matters at varying depths of involvement. Nearly every company differs on what types of legal matters are (1) handled entirely by a company attorney; (2) referred to outside counsel working for the company in private practice with supervision by a company attorney; (3) or completely turned over to private practice attorneys working for the company.

All companies with employees have a number of employment-related legal issues (from subpoenas for current or previous employees' personnel records, to compliance with requirements and guidelines of the Fair Labor Standards Act of 1938 and the Employee Retirement Income Security Act of 1974) to contend with on a regular basis. Companies in the oil-and-gas sector consume a large amount of transactional and litigation legal services as well. Transactions—including oil-and-gas leases, assignments, master services agreements, service contracts, gas-purchase contracts, confidentiality agreements, purchase and sale agreements, joint-operating agreements, letter agreements, and development and farmout agreements—are constantly in various stages of drafting and negotiation. Despite the best intentions of all attorneys in their drafting, those transactions and the often hazardous business of the oilfield sporadically lead to litigation. The energy industry is a well-regulated industry at both the state and federal levels, requiring a multitude of regulatory and administrative legal support. The capital-intensive nature of the industry also leads to a number of legal matters involving public and private debt markets and compliance with the rules and regulations of the Securities and Exchange Commission for publicly traded companies.

I’ve found that one of the most appealing aspects of working for a corporate legal department is the pronounced sense of teamwork that comes with being a constant part of a company who is your only formal client. Taking part in company events, such as community outreach and philanthropy, a corporate challenge, a fitness challenge, or social gatherings, often brings a singular focus and pride to the in-house counsel’s daily job responsibilities as well as serves an important component to achieving that ever-elusive work-life balance. Because they are continually working with many of the same individuals at the company, in-house attorneys are afforded many opportunities to form personal relationships that extend outside the workplace with business colleagues from outside the legal profession. Similarly, energy corporate attorneys learn a great deal about multiple aspects of the energy industry, and some take that in-depth knowledge to lead or form their own energy companies.

However, the notion that in-house counsel have precisely one client is a bit misleading. While it’s true that the corporation and its various affiliates serve as the sole formal client of an in-house attorney, the corporation’s various and numerous business units and personnel more accurately represent the operational client list for an in-house attorney. Often, those business units and personnel have competing projects that require legal assistance with overlapping timelines, just like individual clients of a private-practice attorney. Despite the fact that many of the different business units and personnel in a single corporation do not always know what projects or issues others have that need legal assistance, the in-house attorney has the distinct advantage of having clients with competing demands all employed by the same organization who typically know each other in some fashion. How well they know each other obviously depends on the size of the organization and how much they otherwise work together. Because these clients are ultimately working for a common target, an in-house attorney gets some aid from clients in managing the competing demands for his or her time.

Two of the most obvious benefits for in-house counsel are the absence of client-development efforts and billable hours. Without a need to market their legal services to clients and build a book of business, in-house counsel free up some of their lunch and evening time for personal activities or other, non-marketing work endeavors. However, in-house counsel’s time is still at a premium and long working hours, including weekends, are undoubtedly required. This is particularly true in the energy industry where the clients are certainly working outside of “business hours,” and in some cases—such as drilling oil-and-gas wells and operating infrastructure such as pipelines and electric transmission lines—24 hours a day and 7 days a week. One of the still lingering effects on in-house energy attorneys of the economic downturn that hit the energy industry hard in late 2008 is a tightening of overall corporate spending. For a number of corporate energy legal departments, that tightening led to attempts at maximizing the amount of legal work done solely by company attorneys and staff.

While experiencing less pressure around billable hours is a definite benefit for in-house counsel, the lack of billing clients by the hour does come with one noteworthy drawback. Because clients are not being billed by the hour and they are not paying a tangible hourly bill for in-house counsel’s legal services, the number of requests for legal assistance can become overwhelming at times. Time-management skills are every bit as important for corporate legal counsel as for practicing attorneys in other capacities. Matters that would not ordinarily be sent to an external attorney being paid by the hour for review or input (except by a very cautious client with deep pockets) show up more routinely on the desk of an in-house attorney. The same is true of requests to attend routine business meetings. However, attending such business meetings can also assist in-house attorneys in managing their time and workload by providing them with the ability to communicate and provide support to a number of gathered business personnel on legal issues as they arise, rather than gathering all relevant facts and information from a single point of contact with the client after the business discussion has taken place and writing a memo to address the legal concerns for dissemination to the multiple business personnel of the client.

There also is a greater tendency for corporate business personnel to simply contact a member of the corporate legal department with a legal issue but without much investigation into the underlying facts and potential consequences of the matter. Instead, some corporate business personnel have an inclination to rely on the corporate attorney to do such an investigation from the ground floor that would be exceedingly expensive to request of an hourly private practitioner. Such time-consuming requests can often be successfully met by an in-house counsel with the capacity to empower such clients and ask appropriate initial questions. If not already possessed, such a skill is quickly acquired by any in-house counsel attempting to effectively manage his or her time and workload.

The sometimes vast number of requests from every corner of the company also serves as a benefit to the in-house attorney, who is thereby afforded a greater opportunity to experience a broad range of legal issues. Corporate legal departments at energy companies generally have fewer attorneys than areas of legal practice presented by the company’s activities, which naturally lends itself to a diverse practice. In today’s trends toward specialization in private practice, such opportunities to expand one’s legal practice can enrich the professional development and experience of in-house attorneys. Likewise, less pressure regarding billable hours can also allow for greater research of legal matters with which the in-house attorney is less familiar. This expanding development of legal practice certainly reduces the sometimes mundane aspects of the legal profession and diminishes professional burnout.

In-house counsel are constantly maintaining the balancing act of providing sound legal advice while allowing the business decisions to be made by the business personnel of the company. The “airtight” legal answer to an issue that is impractical and allows no room for business risk (if such an answer to the issue even exists) is generally not well received. The energy business is a somewhat risky one where opportunity and growth don’t usually occur without some amount of undertaken risk. An energy attorney’s job revolves around quantifying and helping to reduce that risk. Attempting to completely eliminate risk will not be particularly useful to the business personnel whose jobs entail maximizing opportunities and growth for the company by deciding which business risks to take and which ones to avoid. This is particularly true for the in-house energy counsel, who is most effective to the company by remaining flexible and offering solution-driven counseling to its business units and personnel.

What is it like working in-house? It’s enjoyable and challenging. The sense of teamwork and ability to see issues and projects from the very beginning, even the planning stages, through to the end, is highly rewarding. Sharing in the successful results provides a great deal of professional satisfaction. The depth of practice experience and not continually looking at the clock are also pretty hard to beat.

Keywords: energy litigation, in-house, career, energy, oil, gas

Jonathan D. Morris is an attorney at SandRidge Energy, Inc. in Oklahoma City, Oklahoma.

Copyright © 2013, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).