Alberta’s energy sector has shown impressive resiliency over the last few years. Despite cancelled pipeline projects and sustained periods of depressed prices, the province’s oil production more than doubled in the last decade, and GPD generated from the sector rose 25% in the same period (hitting its peak of $91 billion in 2019).
Nevertheless, there are 36,000 fewer oil and gas workers compared to the industry’s 2013 peak, representing a 22% decline. Aside from job losses caused by challenged markets, this trend can also be attributed to overall efficiency gains made through new drilling technologies and the consolidation of industry players. Notwithstanding optimism about the sector’s recovery, there is a sentiment that some jobs are unlikely to return, given proof that it takes fewer people to get the work done.
This trend toward greater efficiency has also made its way into oil and gas in-house legal teams. The energy sector now employs a smaller percentage of Canadian in-house lawyers than before, falling from 11% in 2016 to 7% in 2020. In-house teams have shrunk, with those remaining counsel taking on more duties and farming less of their corporate-commercial work to outside firms. Other companies are making the decision to forego having an in-house lawyer altogether, relying on law firm lawyers, but hopefully not to the extent that it erodes net savings compared to keeping a salaried staff member.
It’s a balance between the bottom line and managing a company’s risks. A company that overly relies on the implicit legal knowledge of their business leaders, or overstretches the time and attention of their in-house lawyers, may leave itself open for an issue to slip through the cracks, which could later become a significant liability.
Gusto Law serves as a solution for energy sector companies trying to get more done on a smaller budget. We perform senior-level legal work at a significant discount compared to traditional firms, and help companies avoid the long-term commitment of adding a full-time hire.
Gus Lu has had extensive experience on many upstream, midstream and service sector matters, including: