A New Way Forward

Jordan Chester helps DistributionNOW double down on e-commerce and reinvent itself as a company in response to changing customer behavior

Jordan Chester’s transition from criminal prosecutor to oil and gas attorney took exactly seven days. The Tulane grad had a job lined up in the Florida State Attorney’s office. His girlfriend, however, decided to take a job in Texas. Chester spent seven months prosecuting in two misdemeanor courts by day and studying for the Texas bar exam at night. He was looking for a job in the Lone Star state but lacked the funds to maintain a protracted search.

Something had to give. One fateful week, Chester flew to Texas on a Monday, took the bar exam on Tuesday and Wednesday, proposed over the weekend, and interviewed at a law firm the following Monday. His girlfriend said yes, and he got the job on the spot.

Less than a decade later, Chester is vice president of legal at DistributionNOW, a leading supplier to energy and industrial markets worldwide. The publicly traded company has 4,200 employees and nearly $3 billion in annual revenue.

Chester was named vice president at age thirty-three, which he attributes to his willingness to work hard, build relationships, and accept tasks that aren’t in his job description. “A good in-house lawyer is willing to support the business in many ways, and one of my desires is to learn and grow as the company grows,” he says.

He’ll have the opportunity to continue that growth in 2021 and beyond as DistributionNOW moves deeper into the world of e-commerce. The move, Chester says, is a lifestyle change initiated by a forward-thinking leadership team. “We’re not changing a few small things. This is an all-encompassing transformation our leaders want to take on so we can be more innovative and competitive in a volatile market,” he explains.

The process will help DistributionNOW meet its customers’ needs in a changing world. It will also force the company to change itself from the inside out.

DistributionNOW started as Oilwell in 1862. Since then, the company has grown its capabilities, products, and expertise through a long series of acquisitions and spinoffs. Today, thousands of customers flock to hundreds of DistributionNOW locations in twenty-five countries for oilfield equipment, tools, safety gear, and pipes. A DistributionNOW customer can buy everything from a roll of paper towels to a complete oil pump system.

In 2020, several factors converged, causing DistributionNOW to reexamine its longstanding business model. Oil prices were already down when the coronavirus pandemic hit. With communities around the world sheltering in place, demand plunged even further. As leaders discussed a plan forward, a bigger focus on e-commerce became an obvious and unavoidable solution.

In June, the company named David Cherechinsky CEO. “I am honored to be taking on these new responsibilities as we transform DistributionNOW into a digitized distributor to energy and industrial markets, an initiative that puts more focus on our customers and suppliers,” said the company’s new leader and former CFO in a press release. “I believe our market-disruptive e-commerce platform will revolutionize oilfield distribution as we leverage technology to make it easier for customers to do business with us.”

DistributionNOW will continue to have brick-and-mortar locations, but the company is working overtime to increase what customers can do online. Many of those customers come to DistributionNOW for oil tank battery systems. Traditionally, a customer spends several hours in a physical store building a custom system with nearly one hundred SKUs. Now, Chester’s colleagues are working to make this entire process available online so customers can build a system online, click to purchase, pick up their order, and save the design for future use.

Streamlined purchasing is just one step in a multifaceted approach. More customers are asking for contactless delivery in response to the COVID-19 pandemic, and Chester says DistributionNOW is fully committed to making a series of improvements to its e-commerce solutions. “We’re talking to our customers to make sure we are providing the features they want, because these relationships are key,” he explains. Internally, all business units are working together to leverage mutual strengths and maximize results in pursuit of a common goal.

Critical moments and new business initiatives like these give employees in all departments the chance to take on new responsibilities and develop new skills. Within legal, Chester is asking his team to research what Amazon and other international e-commerce providers have done to make sure products don’t go to unauthorized users in sanctioned countries. They’re also working together to eliminate obstacles to implementation by monitoring issues related to IP, patents, trademarks, licensing, and compliance.

All domestic and global legal matters come through DistributionNOW’s Houston office, and Raymond Chang, the company’s general counsel, gives all in-house attorneys broad assignments. “Being seen as a generalist has really helped my professional development because I’ve been able to learn a little about a lot while specializing in some areas,” Chester says.

While the company outsources litigation, Chester coordinates with outside counsel on most matters, which usually stem from auto accidents or product liability allegations. For a large, international company, a successful litigation strategy is critical. Chester says effective outside counsel coupled with effective internal relationships lead to favorable outcomes.

Employees who aren’t accustomed to seeing their names on a lawsuit often get nervous. According to Chester, good corporate lawyers should be ready to step in, reassure uneasy employees, and preach the importance of honesty. Good facts lead to the best defense.

DistributionNOW’s legal team coaches outside lawyers who complete investigations, gather documents, and interview employees to defend each allegation. Chester says it’s important to avoid seeing each case in black-and-white in terms of wins and losses. “An in-house attorney has to put the company’s interests first, and sometimes the best win is an early resolution. Other times, the company has to take a stand, even if it costs more,” he explains. The strategy is working. Although DistributionNOW has twenty open cases at any given time, only two have gone to trial during Chester’s tenure.

As the oil crisis continues, times are hard for all industry players. Even in uncertain times, Chester and his colleagues believe their ability to adapt has DistributionNOW positioned for continued success. “We never do things just to respect the way they’ve always been done. We have to challenge ourselves. We have to question the business model. We can’t simply be reactive,” he says. “We have to be one step ahead.” As oil and gas companies look for a new path forward, DistributionNOW is leading the way.

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Dentons Canada LLP:

“Jordan is a talented lawyer and great leader. Dentons is proud to work with him in handling DNOW’s Canadian legal requirements. We value our relationship with Jordan and DNOW and wish him continued success.”

–Fausto Franceschi, Office Managing Partner, Edmonton

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McDowell Hetherington:

“I’ve had the pleasure of working with Jordan for the last six years. His ability to analyze complex legal issues and stay focused on practical solutions makes him a valuable strategic partner to the business and outside counsel. He’s also a lot of fun.”

–Matt Matthews, Partner