Acritas’ data reveals how buyers of legal services within the global energy industry face unique challenges when managing the legal affairs of their businesses.
Regulation, Regulation, Regulation
When asked, “What is the main challenge currently facing your industry?” one U.S.-based senior corporate counsel told us very simply that the biggest challenge is “changes in governmental regulation.” Another respondent from the UK further reiterated change, more specifically regulation change, explaining, “We’re a very heavily regulated industry; that is probably the biggest challenge facing us all, and adapting to it of course.”
In fact, 28 percent of senior corporate counsel in energy organizations*, interviewed as part of Acritas’ 2015 global Sharplegal survey, count regulation as challenging to their businesses. Some talked about complexities, some the sheer volume; others were more concerned about “regulatory uncertainty and changes in the [energy] market.”
Supply Does Not Equal Demand
“Energy prices and the surplus that exists in the market right now” was a major concern for one Canadian GC we spoke with. Across the world, 28 percent of Sharplegal survey respondents told us that market conditions were the other major challenge facing the industry.
The whole industry is in a downturn, and low prices are playing a major role in the growth of energy organizations. One chief legal counsel we interviewed in the U.S. summed up the global market feeling by confirming that the “decline in oil prices” is the biggest challenge facing energy companies. “Oil prices,” “crude prices,” “gas prices” – however it was phrased, the changing price of a fuel will always impact an energy company’s business as a whole in some way.
Technology Changes
Changes in technology in the energy sector is the third biggest challenge cited by legal departments around the world. U.S. survey respondents told us that they had concerns about “technology licensing related issues” and “restructuring of the electric markets being driven by technological change.”
Another talked more specifically about one of the biggest issues right now: cybersecurity. The energy/utilities industry, according to this respondent, “has become more dependent upon technology and become more digitized. It’s one of the last big industries to digitize. It’s made the industry more vulnerable to cyberattack. So there are lots of issues that come up with that, including how to deal with our vendors, counter parties who need access to our information, and how do you protect that information, primarily from a technological standpoint but also from a sort of legal standpoint.” Respondents raised specific concerns about “people who run critical infrastructure” as being at the greatest risk from cyberwars.
Join the Debate
If you would like a detailed legal spend report on the energy industry in the U.S. (generated from data provided by your peers), then all you have to do is complete a short Sharplegal telephone interview with Acritas. Please email Deirdre Roddy at [email protected] or go to acritas.com/takepartinsharplegal2016 to register your interest to participate.
Acritas interviews over 2,300 senior corporate counsel across 50 countries every year for Sharplegal – the world’s most comprehensive annual study of the global legal market.
Lizzy Duffy, Vice President at Acritas, [email protected]
Published January 6, 2016.
