Lawyers in the oil and gas sector across the Middle East have faced unprecedented challenges over the past year. Working in a such a fast paced, hyper sensitive sector means there are always new challenges and issues to consider, but the pandemic has brought along a host of new obstacles, and made previous in-house well made plans redundant.
The pandemic has made a great number of management teams reconsider the role of their in-house legal function and in many instances, appreciate how integral these teams are to the business. Historically, in-house legal teams have been deemed essential but not profitable – the ‘naysayers’ rather than actively bringing money in. The pandemic has changed this.
When the COVID-19 pandemic started to take hold in the Middle East last year, businesses had to adapt. Immediate concerns included a mass shift to working from home and checking insurance for business continuity issues. The health and safety of employees was a concern. Supply chains and contractual relationships were impacted and suppliers had to be assessed to ensure they were COVID-ready. New legislation and regulations were introduced to account for the pandemic, with which in-house lawyers had to familiarise themselves quickly.
In the oil and gas sector, demand for oil plummeted. Around the world, costs had to be cut and contracts were amended, suspended or cancelled.
In-house counsel were intrinsic to many of these decisions – to the extent that many found their workload increasing exponentially and stress levels rising. According to Marco Bollini, Chair of the IBA Corporate Counsel Forum, “in-house legal departments have been put under [the type of] stress possibly never experienced before.”
Many in-house teams have been trying to do more with less. Budgets have been slashed, but many businesses had been chipping away at their legal budgets for years prior to the pandemic. In 2019, EY surveyed 1,000 in-house lawyers across 25 jurisdictions and found that 82% of companies planned to reduce legal function costs. The survey pointed to in-house teams spending more than a quarter of their working hours on routine compliance and other lesser-valued tasks.
However, the picture is changing. The pandemic solidified the views of many businesses that their in-house counsel is not just important for the legal functionality of the business, but much more intrinsic to their senior leadership and overall direction.
We’ve seen two trends amongst in-house teams in the region as their workload has rocketed – more businesses in the sector looking to outsource to legal consultants and significant investment in technology.
The oil and gas sector has always been familiar with hiring contractors, so outsourcing legal work has not been a huge leap for many companies. Legal contractors are able to parachute into a business and work on a specific project or help out with some of the routine work to cover staff absences or a spike in workload. With more acceptance that people will be working from home, this also means that oil and gas companies in the Middle East can access a greater pool of legal talent than ever before. The EY survey noted that 60% of lawyers said their companies had struggled to “attract and retain the appropriate talent needed in today’s legal function.” Using legal consultants has helped fill that gap, with quality guaranteed and less time spent on a lengthy recruitment process.
Additionally, in-house legal teams are heavily investing in technology. Innovations like AI help automate the more routine aspects of legal work, such as parts of the due diligence process, allowing in-house counsel to concentrate on the more pressing and strategically important jobs.
In-house legal teams in this industry are being relied upon like never before. The pandemic brought into focus the existing challenges – slashed budgets, smaller teams, and rocketing workloads due to a rapidly changing sector and associated legislative and geopolitical landscape. Teams are adapting to ensure they can fulfil their strategically important role, while maintaining vital daily legal functions. Consultants & technology have an important part to play and this will continue long after the pandemic is over.
