When Greg White was a vice president at Old Dominion Electric Cooperative, a G&T based in Richmond, Virginia, he remembers appearing in front of an administrative law judge over a regulatory matter. He was with Adrienne Clair, an attorney he had worked with before. The judge said something White disagreed with, and as he was about to open his mouth, he felt Clair’s hand.
“I almost interrupted a judge, and Adrienne put her hand on my arm to get me to keep my mouth shut,” White says. “We still laugh about it. She knew me well.”
In recent decades, the relationship between electric co-ops and their attorneys has grown more demanding as federal and state regulations, property rights issues, and co-op governance concerns have made the legal environment in which cooperatives operate ever more complex. But as White’s story illustrates, the heart of the relationship remains a personal one, which succeeds when attorneys and co-op directors or managers have established a level of mutual trust and understanding.
Because relatively few co-ops retain in-house counsel, figuring out how to get the most out of the relationship—when to turn to an attorney and how to make the best use of their time—becomes an essential component of building that trust and understanding. Co-op attorneys and cooperative personnel say there are several keys to making the relationship work.
“It really all starts with communication,” says White, now CEO of Northern Neck Electric Cooperative based in Warsaw, Virginia, and a member of the Old Dominion board. “You have to have the trust to talk openly about things with each other.”
Richard Meyer, NRECA senior vice president and general counsel, notes that communicating openly sometimes means discussing details that might make directors or management uncomfortable.
“Do not hold back facts from your lawyer when seeking legal advice,” he says. “You want your lawyer to solve the problem you actually have.”
Avoid a Mess
Clair, a partner with Thompson Coburn LLP in Washington, D.C, who specializes in Federal Energy Regulatory Commission (FERC) issues, says bringing the attorney in early can benefit both co-op and counsel.
“It may seem counterintuitive, but I spend far less time on a matter when I’m brought in early and can help develop strategy than when I’m brought in after things don’t go as expected,” she says. “Oftentimes, I’ve seen the problems before, so I can use past experience to help my client avoid a problem. It’s easier and less expensive to avoid a mess than it is to clean one up.”
Steve Minor, a partner with Carrollton, Georgia-based Tisinger Vance PC, works with several Georgia distribution cooperatives as well as the Georgia statewide association. Minor says making sure your attorney stays up-to-date on cooperative business makes everything run smoother.
“With most of my clients, I am either able to attend their board meetings, or for those I don’t attend, they send me the board materials and minutes every month, so I have an ongoing involvement in the operation of the co-op,” he says. “It gives you an understanding of what the issues are. I think that helps you to be a better lawyer when the time comes that they need you to help them.”
CEO Tim Martin’s co-op, Carroll Electric Membership Corporation in Carrollton, is one of Minor’s clients. He says he and the co-op’s directors recognize the importance of keeping Minor in the loop and include him in communications outside board meetings on ongoing matters.
At board meetings, Martin says, Minor has developed a rapport with directors and management that makes for open give-and-take.
“He’ll interject during the discussion if something comes up where he has an opinion. And he has a sense of humor; he doesn’t get defensive if a board member pushes back. That’s just part of the process,” Martin says. “He’s definitely part of the team. And obviously, we all know that everything said is part of the attorney-client privilege.”
It often helps an attorney if clients can summarize an issue in writing, Clair says. If a legal matter involves multiple departments, she also likes to have a conference call to get everyone’s perspective.
“It’s always surprising how different disciplines will describe the same issue and what they need out of it in such different ways,” she says.
Clair feels that the way cooperatives deal with their lawyers has changed as the legal environment they face has grown more challenging.
“I think clients are much more business savvy and demanding with respect to their legal services than they used to be,” she says. “I think that’s a good thing. It’s not a negative.”
As a specialist in FERC regulation, Clair is an example of a significant trend within the cooperative legal environment.
“A big challenge is the increasing need for specialized legal advice required by creeping and increasingly complex state and federal laws,” NRECA’s Meyer says. “It’s nearly impossible for general practice firms to stay abreast of these narrowly focused but important issues.”
For example, White says Old Dominion often calls in specialists when dealing with permitting issues, which can require more than legal expertise.
“For permitting in some states, we’ve pulled in attorneys,” he says. “Some of that is a combination of licensing expertise plus lobbying skills.”
Martin says legal specialization has also affected distribution co-ops.
“Obviously, Steve as our general counsel deals with most things,” he says. “But there are things that we have other specialized attorneys deal with. For example, we have an HR attorney; we have a power supply attorney.”
When working with a special counsel, Meyer notes that it’s important to keep your main counsel informed of the relationship.
“Let your lawyer know you are using another lawyer solely for that specialized advice,” he says. “Similarly, let the specialized lawyer know that this is a single-shot engagement, that you’re not looking to switch lawyers. Both lawyers will appreciate your clarity.”
Scope and Fees
Clarity is also essential when it comes to costs and billing. Clair says it’s important to discuss the scope of a legal project and the fees up front.
“I know that seems like an obvious suggestion,” she says, “but lots of times clients engage me for a project, have it evolve over time, then question how we got so far beyond their initial scope. A conversation about the scope of the project and anticipated fees, up front, usually prevents surprises and sticker shock later.”
Martin says he’s a firm believer in committing resources to plan properly, even if it costs a bit more up front.
“You do want to minimize costs,” he says. “Sometimes though, you’ve got to be careful you don’t save costs on attorneys and end up paying a lot more down the road because you didn’t take the time to ask all the pertinent questions.
“For example, we, like a lot of co-ops, are trying to determine what we can do to help with rural broadband because there’s a real need in our service area,” Martin adds. “I’ve spent a lot of time doing research. The chief engineering manager has also devoted a lot of time. But we’ve also included our attorney because he can help us determine the risk in the various options.”
‘Be a Great Client’
White points out that it’s essential that a co-op attorney, especially one working on a part-time basis, understands the philosophy behind cooperatives.
“It’s very important that they recognize you’re member-owned and what that means,” White says. “They’ve got to be sensitive to that. But they’ve also got to be sensitive to looking out for the whole membership rather than one member who has an issue.”
Co-op attorneys are often asked to play a role in member relations, Minor notes.
“Things like assuring transparency and an open political process.” In those situations, he says, having a healthy, ongoing relationship with the board and co-op leadership “makes it so both parties can communicate much more freely about how to ensure transparency and open, democratic control.”
In the end, Meyer says co-ops need to remember that a successful co-op/ attorney relationship is a shared effort.
“You want your lawyer to be a great lawyer, and for that to happen, you need to be a great client,” he says. “A great client does not set arbitrary deadlines, promptly pays legal bills, and presents the full context—shares the whole story—when describing a problem they need solved.”
From his side of the relationship, Minor says he feels a special bond with his co-op clients.
“I truly believe the governance structure impacts the overall psyche of any organization,” he says. “The co-op structure, I think, creates community-centric businesses that not only want to do a good job with their primary mission, but also as part of the community they’re in. They make you feel like you’re part of the team, and that’s a great thing. It really is.”