In the high-stakes world of energy deals, the devil is often in the details—and those details are found in the contracts and the processes that govern them. Tracy Caswell, a seasoned attorney with decades of experience in the energy sector, pulls back the curtain on a pervasive yet often overlooked issue: the pitfalls of poorly managed contracts and contracting processes. Her insights should serve as a wake-up call for energy companies, urging them to scrutinize their paper and processes to avoid financial detriment and missed opportunities.
Caswell’s experience reveals a stark reality: many energy companies are flying blind when it comes to their contracts. They may think their processes are airtight, but a closer look often reveals cracks that can lead to significant problems. For instance, non-uniform customer contracts can make implementing changes like price increases a time-consuming and expensive nightmare. Vague contract terms can leave companies exposed to penalties they can’t pass on to customers. Overly complicated contracts can scare off new customers or prolong negotiations, costing valuable time and resources. And outdated contracts can fail to reflect the current business risks, leaving companies vulnerable.
The process-related issues are equally troubling. Confusion about who handles legal requests, unclear guidelines on which contracts to use, and unrealistic expectations about turnaround times can all lead to inefficiencies and lost deals. Ineffective communication between internal teams and the inability to close deals in a timely fashion can result in significant financial losses. Moreover, the termination or expiration of important contracts without timely renewal discussions can leave companies high and dry.
So, what’s the solution? Caswell advocates for a thorough evaluation and revamp of a company’s contracts and contracting processes. This doesn’t have to be a daunting task. A competent, experienced attorney can streamline the process, making it more efficient and effective. The first step is to meet with legal and business teams to understand the existing processes, what’s working, and what’s not. Then, conduct a comprehensive review of all relevant contracting forms and suggest changes. This often results in shorter, more precise agreements that better serve the business.
But the work doesn’t stop at updating contracts. Caswell also recommends creating a contracting process document that outlines clear guidelines for everything from where to send legal requests to how to set realistic expectations with external customers. This document should also include clear service level agreements regarding turnaround times, guidelines for what happens after submitting a request to legal, signature protocols, and management of agreements post-execution.
The energy sector is a complex and dynamic landscape. Vague contracts and sloppy contracting processes can cost companies dearly. Caswell’s insights should serve as a clarion call for energy companies to regularly review and update their contracts and processes. After all, in the high-stakes world of energy deals, every detail matters. And with the right guidance, companies can ensure they’re not just inking deals, but inking them right.