Shell projects lawyers at risk under new in-house legal structure
Oil giant reveals plans to cut projects lawyers as part of a global profitability drive
June 02, 2016 at 08:05 AM
2 minute read
Royal Dutch Shell has indicated that it will cut projects lawyers when it finalises the structure of its legal team.
The oil giant is restructuring its business in the wake of its £35bn mega-merger with BG Group and a recent dropoff in oil prices.
As part of this, BG and Shell are in the process of combining their legal departments, which will be based on Shell's systems and processes. Shell has confirmed plans to cut back the number of projects lawyers it has, due to a dropoff in demand in this area.
Shell currently has 650 lawyers in its in-house team, while BG's legal team consists of 140 people – of which, approximately 120 are legally qualified. The company declined to provide the total number of projects lawyers it currently has.
Shell legal director Donny Ching said: "We are operating in the reality of a 'lower for longer' oil price environment and to remain competitive, Shell is taking essential steps to build a more sustainable and resilient company."
As part of the restructuring, BG's general counsel (GC) Tom Melbye Eide was appointed earlier this year as executive vice-president and GC for Shell's upstream business.
At the same time, BG also appointed Shell lawyer James Hine as 'transitional' GC, with responsibility for overseeing the transfer of BG's legal team into Shell.
The news comes after Shell said this week it was preparing to open an offshore legal centre to service its global operations in a bid to "increase efficiencies" and "reduce costs", according to Ching.
A project team is currently charged with investigating possible locations and working out headcount numbers for the centre. The team will come back with a brief by this autumn.
Other moves to save on legal costs include nearly halving its global legal panel. In April, the company cut the panel from 11 advisers to just six.
Last week, Shell announced plans to cut a further 2,200 jobs. It had previously said it expected to shed 2,800 staff as a result of the BG deal, as well as 7,500 jobs it was already planning to cull due to the oil price collapse.
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