Abby Yates’s journey to EthosEnergy began years ago, in 2008, with her former company, Wood Group GTS. It was that year that she transitioned from head of litigation to divisional counsel for the energy-services company, and she was swiftly tasked with creating a new divisional legal department.
The work was challenging—“It really was a major stepping stone for me,” Yates says—but it paved the way for a new opportunity when Wood Group and Siemens TurboCare partnered to form EthosEnergy, an independent service provider of rotating equipment services and solutions to the energy, oil and gas, and industrial markets. Yates became general counsel for the joint venture, and the team and skills she had built at Wood Group transitioned with her. “By the time we formed a joint venture, I had a good team around me,” she says, “and so I felt confident in my ability to do the job well.”
Managing the legal function of a joint venture has not been without its own challenges, though, and here Yates offers four pieces of advice for other counsel overseeing such complex entities.
1) Represent the Joint Venture First
After transitioning from Wood Group to the joint venture, Yates took immediate steps to demonstrate that she was acting in the best interest of her new client, the joint venture, rather than one or the other shareholder. “I made sure to establish a relationship with the Siemens legal department and to go out of my way to ensure that there was not any perception of bias,” she says.
Still, Yates quickly found herself in a position where the interests of the joint venture were not fully aligned with those of one of the shareholders. In that case, “you make the argument as strongly and as coherently and with the same passion that you would if you were dealing with a completely independent third party,” she says. “All it takes is one of these instances for both of the shareholders to see that I do the best thing for EthosEnergy.”
2) Manage Shareholders’ Expectations
Because Wood Group and Siemens’s interests don’t always align, hammering out agreements can be challenging. Typically, the shareholders agree that what’s best for EthosEnergy is best for them, but when they have conflicting expectations, Yates relies on her advocacy skills to present the best solution for EthosEnergy as a whole and push the shareholders in the right direction. “You have to do your homework, have all your details straight, and present in as dry and unbiased a way as possible the wisdom of the approach on behalf of the joint venture,” she says. “Ultimately, you have to fall back on your training as a lawyer, but you also have to be willing to be a
bit unpopular.”
3) Remain Compliant
Maintaining accordance with local laws can be complex for a global company such as EthosEnergy. “We take our compliance obligations very seriously,” Yates says. “Integrity is one of our five ethos, so this is not simply about serving a business purpose.”
The company has a trade-compliance and export-control team that reports to Yates, and it also has employees within each business group who attend monthly trainings and outreach to ensure that the business remains compliant. In addition, the compliance team conducts business-ethics training throughout the year and an annual online business-ethics test that is mandatory for more than 90 percent of employees.
The company has strict compliance processes, including multiple business-ethics subpolicies and a restrictive annual process for qualifying its intermediaries, and these and other practices have had company-wide effects. “While we benefitted from having two shareholders with mature compliance programs, we have continued to tailor our compliance program to the specific risks faced by EthosEnergy,” Yates says. “We’ve found that the level of awareness and understanding across the business has vastly improved.”
4) Minimize Risk
One key to Yates’s success has been looking beyond her legal department and establishing liaisons within other business units through an authorized contracts-advisor program. Business units nominate experienced commercial managers who, once accepted, complete a training course on EthosEnergy’s contracting policy and then, shadowed by a lawyer, complete at least ten contract redlines before sitting for a certification exam. Once they are certified, the advisors work alongside the legal department on future contracts. “They are our local representatives sitting in the businesses,”
Yates says.
Because these employees work directly in the business units and have substantial commercial experience, they are better positioned to identify potential risks and evaluate the practical applicability of contracts’ terms. “It makes for a better contracting structure, but it also creates this relationship of trust with a person that sits in the business,” Yates says. “They’re much more likely to pick up the phone and call the legal team. It is often through this relationship that we know about risks before they develop.”
Photo by Michael Bosshard
The Kullman Firm:
“Abby is a savvy problem solver who is always thinking outside of the box. Her creative leadership and dedication are unparalleled, and she is truly an asset to EthosEnergy and her team.”
—Sam Zurik, Shareholder
