Priit Lepasepp is the General Counsel at Nelja Energia AS – the leading wind energy company in the Baltics, with an operational portfolio of 220 MW. He has been with the company since November 2011. Previously he worked as an Associate with Sorainen in the firm’s Tallinn office.
Can you tell our readers a bit about your career leading up to your current role?
P.L.: My career started in 2007 with a summer traineeship with the Sorainen law firm, where I was offered an entry position as a legal assistant for the real estate team in Tallinn. After obtaining my master’s degree in law, I started working as an Associate in the same team. Although I was working on the real estate team, I started to build up my knowledge in environmental law and serve clients who had problems or questions which needed to be solved in that field. At a certain point I understood that to learn faster and gain more experience in that field, I need to work as an in-house counsel. Just my luck, a renewable energy company was looking for an in-house counsel, and without any hesitation I sent them my cover letter and CV. By now, I have worked for Nelja Energia for almost 4 years, during which time the company has grown rapidly to become one of the biggest wind energy producers in this region. Today I am the General Counsel of Nelja Energia.
What does a regular day in the office look like for you – what ends up taking most of your time?
P.L.: Before my regular work day starts I usually go through my e-mails, list of projects, cases, and tasks that I am responsible for. Among other things there is always a list of issues that needs to be handled during that day, the tasks which I know mean I can not leave the office before they are done. This means that my working days are not brothers – most days do not look similar at all. In addition, Mondays (for some hours) and Wednesdays (for half a day) are for internal meetings, where day-to-day, development, and technical issues are analyzed and discussed.
Most of my time is related to legal work outsourcing, e.g., finding the suitable team, managing and leading the legal team, and helping the project managers to reach their goals and succeed in their tasks. This also means reviewing drafted documents and keeping the management of Nelja Energia up to date.
Since you mentioned legal work outsourcing, when you need to externalize legal work, what are the main criteria you use in selecting the firms you will work with?
P.L.: External legal advice is mainly procured in new projects or bigger disputes. Nelja Energia uses different law firms and the main criteria are the experience of the lawyers and the size of the team.
You mentioned that a great deal of your time is spent on managing external counsel. Have you set up a permanent panel of firms to minimize the time spent on identifying the right teams? If yes, how many firms does it include and how often do you revisit the composition of the panel?
P.L.: We have established a panel of law firms we use on a daily basis, but in case of bigger projects/disputes we always procure from among several reputable law firms. In that sense the list is always open. If a law firm is already chosen, we usually use the same law firm or the lawyers until the project is ready and/or concluded.
The panel is reviewed as often as necessary, and when an external advisor provides excellent service, we will most definitely try to give them the opportunity to assist us again in the future.
In light of Nelja Energia’s focus on renewable energy, in what ways would you say your role is different from GCs in other energy companies?
P.L.: Although Nelja Energia has only 40 employees due to the fact that we are mainly a wind energy company, it manages assets with a value over EUR 400 million. Nelja Energia is always looking for new investment opportunities and the goal is growth. Sizes of energy companies differ, but the GC’s role remains more or less the same. In general the GC role is to manage the legal risks of the company and provide diligence for the business. Usually, external lawyers see the risks and obstacles, but the GCs task is to understand the obstacles, get over them, and if possible then use the obstacles in favor of the company.
The EBRD has recently exited its minority shareholding in the company. In what ways did its past ownership impact your work? Were there specific compliance requirements you had to handle, or reporting, for instance?
P.L.: When I started at Nelja Energia, the EBRD was already a shareholder of the company (doing business as Freenergy at that time) and by that time the compliance requirements were already in place. After the EBRD exited, the reporting and the compliance regulations remained the same – or even increased. So, reporting definitely has been, is, and will be an important part of Nelja Energia.
The company also owns SIA 4Energia (100%) in Latvia and UAV 4Energia (84%). Did you opt to build local legal teams in these jurisdictions or did you decide to rely primarily on external counsel for legal matters there?
P.L.: Nelja Energia’s structure is simple. Assets are owned by the Nelja Energia AS and SIA 4Energia and UAB 4Energia are the management companies. Due to this fact the overall in-house legal capacity is in Tallinn. In cases where the Latvian and Lithuanian management companies need legal advice these issues are settled through external experts. The same applies for Nelja Enegria AS. Even though the company has an internal legal capacity, some issues still have to be procured from external legal advisors.
Since you require external legal support (presumably) fairly frequently in Latvia and Lithuania, do you tend to prefer working with regional firms or alliances that have a presence in all of the three markets as a one-stop-shop solution?
P.L.: We tend to use law firms that are present in all Baltic states, but this does not mean that we automatically prefer one-stop-solutions. In almost all cases we prefer long-lasting relationships with our external legal advisors. This means that we go to professionals with whom we have had a good track record and usually a long lasting problem-free co-operation. Through long term collaboration it is easier to manage the costs and risks related with external advisors.
The main shareholder of your company is a Norwegian company. Do you notice any cultural influence in the manner the legal function is run as a result of this?
P.L.: Yes, the cultural influence is definitely there, but I think that I am the wrong person to ask about the particularities. Before joining Nelja Energia I worked in a law firm which had Scandinavian origins. I have enjoyed working with Finns and Norwegians and their style of business is rational and comprehensible.
Any owner wants to have a valid overview about his/her investment´s well-being (which in our case means a monthly reporting system), test each investment before executing a decision, and provide reasonable surveillance over the business.
What, if anything, do you believe the regulators could do to further facilitate renewable energy projects in the country?
P.L.: In Estonia the main concern is the possibility that the subsidy scheme will be changed. This issue has been coming since 2010. This has had a big impact on foreign investors’ confidence into investing to Estonia. The main goal should be deciding how to continue, and if – and how – the system should be changed so that the existing investors do not feel betrayed and new investors have some assurance to make new investments.
This Article was originally published in Issue 2.3. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
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