Who’s Who Legal speaks to Samuel Chrysostomo, in-house counsel, and Laura Susi-Gamba, vice president, legal, about their respective legal roles within Wärtsilä’s power plants division.
"What we value in external counsel is industry experience and the ability to provide pragmatic, business and solutions-oriented legal advice without compromising the high-quality level of the advice."
The modern world’s hunger for power shows no signs of abating. Fuelled by a growing population and mounting need in emerging economies, global energy demand is projected to increase by 70 per cent from 2010 through to 2035. In order to meet this requirement, today’s energy challenges must be met.
The power industry must meet the growing global demand while simultaneously guaranteeing a reliable supply of electricity at a reasonable cost, and with lower emissions. In many developing economies, the challenge is still to guarantee a reliable power supply 24 hours a day, seven days a week; however, in many Western countries the focus has shifted to limiting the emissions of carbon dioxide and other greenhouse gases contributing to climate change. On top of this, greater efficiency is needed to reduce the burden on limited resources. To meet these challenges, innovative new technologies are required to increase efficiency and output from renewable energy sources – Wärtsilä’s answer is Smart Power Generation.
Wärtsilä is a global leader in complete lifecycle power solutions for the marine and energy markets. Established in 1834, the company emphasises technological innovation and maximises the environmental and economic performance of the vessels and power plants of its customers. The company is divided into three main businesses: power plants, ship power and services.
In the power plants division, the company is helping its customers to convert to more modern energy infrastructure by providing flexible, high efficiency gas and liquid fuel power plant solutions for a wide-range of circumstances including grid stability, reserve, peaking, load following and intermittent power generation. Its activities span the globe and by the end of 2011, Wärtsilä had delivered 4,600 power plants in 169 countries totalling close to 49 Gw.
Tell us about your respective roles
Samuel Chrysostomo: As in-house counsel for the power plants division located in Brazil, I am responsible for Brazil, Argentina, Uruguay, Bolivia and Chile. My role is to provide legal support to our sales teams during sales and contract negotiations as well as to our project teams during the delivery phase of any of our projects.
Laura Susi-Gamba: I am vice president, legal, power plants, responsible for the legal affairs of the Wärtsilä power plants business worldwide. My role is to ensure legal assistance to the power plants business in all operative matters globally and to guide and support the members of my team in their daily work. In addition, in my role as VP legal, power plants, I am a member of the power plants management team and thus also participate in the more strategic aspects of the business.
Describe the structure of the in-house legal department
Samuel Chrysostomo: Wärtsilä’s power plants legal team comprises the head of the function, 14 legal counsel and one assistant, currently distributed throughout eight countries. Our group comprises nine different nationalities, which taken together with the geographic distribution, results in a team with great capabilities in terms of understanding different legal systems and business mindsets.
Laura Susi-Gamba: Whilst the power plants legal team is integrated into the Wärtsilä power plants business, it is also important to mention that we are part of the global legal organisation of the Wärtsilä group headed by the group general counsel. The legal organisation is organised into business legal teams for each business of the group, namely power plants (that is, our team), ship power and services, as well as a legal team for corporate (group level) legal affairs. We have a good deal of interaction and coordination among the different legal teams so as to ensure the development of best practices group-wide and the exchange of information and experiences.
What do you consider to be your most important role as in-house counsel? And how is life as an in-house counsel different from that of a private practitioner?
Samuel Chrysostomo: I like to believe that in-house counsel bring value to a business foremost as we are part of the business and thus involved in the day-to-day operations. This provides in-house counsel with an in-depth understanding of the business (compared with an external counsel). As a result, we bring two important tools to the business: tailor-made solutions to overcome obstacles in contract negotiation or execution; and a better understanding of risks related to the company’s operations to help those people with the appropriate powers to make better, well-informed decisions.
Laura Susi-Gamba: As Samuel said, an important element of an in-house counsel’s work is to provide a better understanding of the risks related to a specific business transaction or operation. Where a private practitioner can consider his or her job done when he/she has provided the client with the three possible options at hand, the work of in-house counsel is only starting: we are instrumental in the decision-making process leading to the particular choice of an option. External counsel have projects come and go through their desks but in-house counsel live through the projects – sometimes it may take several years before we, as in-house counsel, are “done”!
As head of the function, are you expected to make business decisions rather than solely provide legal solutions?
Laura Susi-Gamba: Everything translates into business decisions ultimately, except for compliance-type issues. While my area of expertise is legal, and while certain legal issues are the non-negotiable pillars in a deal or in our operations more generally, the outcome is a business decision that I make alone or, as is more usual, together and in dialogue with my business and legal colleagues – depending on the issue at hand.
Tell us about any recent special projects keeping your team busy.
Samuel Chrysostomo: EPC (equipment, procurement and construction) contracts are always interesting and challenging. In the southern area of South America we have been participating in tenders for new energy (especially in Brazil and Bolivia) and also developing some projects together with independent power producers.
Laura Susi-Gamba: EPC projects, that is, the delivery of complete power plants, always present a unique set of challenges for the entire business team. The legal issues are manifold and complex, putting us lawyers to the test to find practicable solutions with an acceptable risk level.
Describe a recent project you worked on together. What were the main challenges?
Samuel Chrysostomo: I guess every project has a challenge of some sort, but generally speaking, finding the balance for risk allocation in sophisticated power deals is always a good challenge and there are times when consulting with my VP and her peers is the key to finding the solution.
Laura Susi-Gamba: Much of Samuel’s and my joint work is to find a fair balance of risk in the most difficult contracting issues.
Do you always tend to work with the same firms? Do you see yourself hiring the firm primarily, or the individual?
Laura Susi-Gamba: We work with a mixture of international and local firms. It is usually expertise and industry experience that counts in the selection of counsel for a particular job. The reputation of the firm is of course important, but ultimately we look at the individual attorneys who would be working on our project. Since our projects are complex, it is very important for external counsel to understand and become familiar with our way of working and contracting practices. This is perhaps the main reason, in addition to our general level of satisfaction, why we go back to certain firms/attorneys.
As the VP, how do you monitor the different projects under way? How much influence do you have on which external counsel is selected? Who decides which external counsel to choose for each project?
Laura Susi-Gamba: All power plants in-house counsel work very independently and directly with business peers, which I understand they consider to be an important feature in their daily work. We have an established way of working and contracting guidelines but certain types of questions are naturally escalated to me. Although the work is independent, it is also an important part of my job to support each individual in-house counsel with whatever questions, big or small, they might have. We try to do most of the legal work in-house but we regularly need advice from external counsel on specific issues. It is always the in-house counsel who selects external counsel for a particular project and, as per our internal rules, such selection requires my approval.
What skills do you require in external counsel?
Samuel Chrysostomo: Legal knowledge is a given, what counts the most in our line of work is to find external counsel who understands the needs of the business at hand and who can help bridge the gap between the interests of the two parties.
Laura Susi-Gamba: What we value in external counsel is industry experience and the ability to provide pragmatic, business and solutions-oriented legal advice without compromising the high-quality level of the advice.
When dealing outside your home jurisdiction, how do you find counsel?
Samuel Chrysostomo: We have a list of law firms that have been used in the past by different colleagues within the company and that is a good resource because we are all required to rate the services we have received. Another source is of course directories such as Who’s Who Legal and also Chambers.
Which legal markets are you most familiar with? Is there a lot of choice for clients? Which legal markets present challenges when searching for counsel?
Samuel Chrysostomo: I would say South America in general, even if most recently my focus has been the southern part of South America. Aside from Brazil, which is quite a big legal market, I would say that Chile, Ecuador, Argentina and Uruguay are countries where one can find lots of choice. In other countries, although you find highly capable professionals, I would say the choice is a bit more limited.
Laura Susi-Gamba: As the head of a global team, I cannot single out any particular legal market with which I would be most familiar. Our team members have a better feel for specific markets and naturally I rely on their insights. Globally speaking, our main challenge in certain markets is to find counsel who would have relevant and sufficient experience from the power sector and its contracting practices, while still maintaining a pragmatic approach in complex projects.
What measures do you use to control or monitor fees?
Samuel Chrysostomo: Wärtsilä has an approval process for engagement of external counsel and we have to ask for estimates before engaging. On top of that we have specific accounting classification codes, which allows us to monitor the total costs with external counsel. On a bill-to-bill basis, I guess the best tool is still a good measure of common sense in terms of the time necessary to complete certain tasks.
Is the role of the in-house lawyer changing?
Samuel Chrysostomo: I believe so, in times when the world’s economy is not at its peak and individual markets are shrinking, the in-house counsel is also required to think outside the box and become more and more an instrument of wise risk mitigation whilst maintaining competitiveness for the company whose interest he or she is required to protect.
Laura Susi-Gamba: Yes, it has changed and it is changing. Generally, the framework for doing business is getting more and more complex – to name a couple of areas: export control regulations and compliance-related issues have gained importance in recent years. There is a great deal of pressure for fast response on the basis of sometimes very limited knowledge. I would also say that our legal team has gained a recognised business partner/peer status (as opposed to lawyers dealing with internal “clients”) amongst our business colleagues and therefore our involvement in various types of issues has also intensified in the past years.
How does the role of the in-house lawyer and your key responsibilities change as your career progresses? How does this differ from the progression from associate to partner in private practice?
Laura Susi-Gamba: Whilst the focus as a younger in-house lawyer was more on the legal advice and solutions, I am now more involved in strategy-related issues, managing complexities, developing tools for the business and of course, managing a team of experts inside the company. Much focus is put on teamwork, leadership and change management. As for private practice, I can speak from a client’s perspective. The focus of law firm work appears to be on such high-quality legal advice that it is done, at least in some instances, without putting much effort into the reconciliation of the legal advice with the compelling business realities.
Are legal services transforming in Latin America? How has the legal market changed during your career so far?
Samuel Chrysostomo: I believe one can safely say that Latin America has become a more sophisticated market over the years. Foreign long-term investment in areas such as infrastructure has played a big role in this change. Our company is meeting more and more specialised and sophisticated customers and this means that the legal market also has to be more sophisticated, both in-house and externally.
What is the greatest challenge in the power sector at present?
Samuel Chrysostomo: Challenges are different in different markets, but one that is quite common is probably the area of financial services. As the world’s biggest economies such as the US and Europe are facing challenges in their internal markets, the availability of funds to finance big power projects becomes a challenge and also a paradox because those power projects are needed to support industry and, generally speaking, the required economic growth.