Each year, many newly minted Texas lawyers start their legal careers as energy transactional attorneys. Like most new lawyers, they face a steep learning curve early in their careers — a learning curve that becomes even steeper when they realize the need to supplement legal training with an education on the energy industry, its major players and market trends and developments. For the uninitiated, finding out where to gain this critical industry knowledge can be overwhelming. The following tips are designed to help new energy transactional lawyers get on the right track.

  1. Understand the Energy Industry. For new energy lawyers, learning industry basics can be a daunting task. Here are a few pointers to help piece together the puzzle:
  • Learn the Lingo. During any energy transaction, the various deal participants will refer to terms and concepts that will be foreign to anyone new to the industry. New lawyers should keep running lists of these new terms and concepts, and should consult internet resources, as well as periodicals, books and treatises, to build up their energy vocabularies.
  • Use Transactions as Learning Opportunities. New lawyers sometimes focus so narrowly on specific tasks that they might not understand the rationale for the transaction. Understanding the "why" of a transaction will help a new lawyer quickly learn the commercial underpinnings of the energy industry.
  • Attend Energy Conferences. New lawyers should take advantage of the numerous energy-related conferences held annually regarding all industry segments (i.e., upstream, midstream and downstream, as well as power and renewables), even those that aren't focused on law. There are often untapped firm resources that will reimburse or subsidize the costs of attendance.
  • Follow Up with Energy Professionals. As soon as possible, new lawyers should get into the habit of following up with the energy professionals they encounter socially and professionally. Casual meetings for coffee and lunch are an easy way to start. These sorts of in-person discussions with lawyers (including firm or company colleagues), bankers, engineers, accountants, consultants and entrepreneurs, can reinforce existing knowledge and build new understanding. They can also be refreshing diversions, as well business development opportunities.
  1. Understand the Business Involved in the Transaction. In order to successfully negotiate an energy transaction, it is critical to gain a solid understanding of the relevant companies' respective businesses as their operations, technologies, corporate structures and financial positions, among others, will impact how negotiations unfold. Here is how to quickly get up to speed:
  • Review Audited Financial Statements. Reviewing a company's most recent audited financial statements is often the best place to start. In addition to providing a snapshot of a company's financial position, the audited financials also include footnotes that describe the company's outstanding debt, material agreements and key contingencies.
  • Review Public Filings. On transactions involving a publicly traded company, one of the most important sources of information will be the company's SEC filings. Annual (Form 10-K) and quarterly (Form 10-Q) reports provide helpful overviews of operations, financial performance and recent developments. Public filings also include copies of material agreements, including key debt documents and agreements that may serve as precedent (or important points of comparison) for the current transaction.
  • Watch Videos. Videos on a company's website or YouTube often provide simple explanations for any company operations that may be difficult to understand without a visual. Understanding exactly what the company does, and how, is invaluable, especially when it comes time to review or negotiate contract provisions.
  • Ask Questions. It sounds simple, but new lawyers are often hesitant to ask questions because they fear that questions will reveal inexperience. The old adage – "there are no stupid questions" – is particularly true when working on a complicated transaction where knowledge gaps can adversely impact the ability to effectively represent the client.
  1. Stay Up-to-Speed on Market Trends and Developments. The energy deal market is dynamic, and it is the responsibility of every transactional attorney to stay up to date on current developments — both in the energy industry specifically as well as general economic and business news. The following are a few ways to stay current:
  • Subscribe to News Digests. Many news services (both energy-specific and more generally focused) provide daily email updates to subscribers that include the headlines of the day. Reading several news publications daily is not realistic for most attorneys (although picking one or two energy specific publications, like The Wall Street Journal Energy page, to peruse each day is a worthy goal), so these daily email summaries are a convenient way to keep up with current deal activity and developments.
  • Set Up Custom Alerts. Setting up alerts with internet search engines keyed to clients and their industry peers is a great way for new lawyers to stay informed on recent transactions and other news items in the industry.
  • Join Investment Bank Mailing Lists. Investment banks typically circulate deal surveys and other up-to-date market presentations and deal announcements to an external email list on a regular basis. New lawyers can request the junior investment bankers with whom they worked with on a recent transaction to be added to the listserv for these important materials.
  • Attend Relevant CLE Presentations. Although time-consuming, every attorney must comply with CLE requirements. New lawyers should use the required CLE hours as an opportunity to attend presentations with a focus on energy industry developments (current developments in case law specific to energy transactions).

These best practices will help new attorneys get up-to-speed quickly, remain on top of market developments, and develop good habits for practicing law in a complicated and dynamic industry.

Tommer Yoked, Atman Shukla and Katy Lukaszewski are corporate lawyers in the Houston office of Sidley Austin. They represent clients on mergers and acquisitions and private equity transactions in the energy space as part of Sidley's Energy and Infrastructure Practice Group.     

This article has been prepared for informational purposes only and does not constitute legal advice. This information is not intended to create, and the receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. The content therein does not reflect the views of the firm.