What particular set of skills must a lawyer posses to excel on the 21st Century?

It is a fact: lawyers must be able to rapidly adapt to policy swifts, study in the fly new legislation , understand each of their clients needs to offer the best possible service, all of these, obviously in tight deadlines. However, in addition to those and other skills gathered through the legal career, in the 21st Century the society is starting to be built around internet, mass media, capacity to sell business, find clients in a scenario surrounded by competitive prices and stronger globalization, etc.

How does a lawyer react to this?

Not a while ago I had the opportunity to take an interview for a career starting position in a firm, and I was left surprised by the limited sight the lawyer interviewing me had on his particular legal career vision: 

- I don't understand why I should specialize in a concrete legal discipline.

- A lawyer does not perform advisory functions on a client's operation. We are lawyers; we are just meant to go to courts.

I understand each professional dedicated to the legal sector conceive it in a different manner. Despite such, I consider an error to limit the role of a lawyer to the writing of claims and attendeance to trials and courts. On the other hand, accompanying the client on inter alia, its needs of investment, of having an advisor on wether or not a concrete area of its business must be developed or must comply with additional regulations, and such, must not be understood as something stuck away from the legal sphere and simply bound to consultants or other professionals.

In fact, the commonly known "cross-selling" term has increased nowadays its relevance to acquire a determinant position on gathering clients and offering him an homogeneous legal support on all its needs. When you secured a client for your area of expertise, but still there is more business to exploit as he demands it, name it business law, real estate law, or even employment law, should you have a good relationship with him and trustworthy earned from your legal skills, you will be able to sell your colleague's legal specialization and get a bigger cake share.

In addition to specialization, which means performing better in the task undertaken, there are other qualities a lawyer must posses: business and commercial point of view, understanding of new technologies, being able to detect market movements and understand where the business is going to...Of course, all these and other attributes must be completed with the common skills a lawyer must posses, starting from owning an impecable legal knowledge.

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Main factors to be considered when carrying out a Due Diligence in Real Estate.

           So far, in my limited but intense experience, I have come up with the feeling that most managers coming from international companies lack the knowledge on what is analyzed when undertaking a Real Estate Due Diligence. While this is not surprising as it could be, yet; rather than relying on their in-house legal departments, they have an inclination on hiring the services of an independient legal firm to carry out the legal audit on the assets they are looking to acquire.

With this idea, the aim of the post is to bring some light to these individuals looking for their company to grow by investing on acquiring new properties where to develop their activity. With a number of factors outside the legal sphere, considering to hire the services of a firm in the early steps of the operation seems as much unrealistic as too high on costs. This short guide can bring a grasp on understanding better what is undertaken in this Due Diligence process, Indeed, every person is capable of understanding what is taken into consideration here, saving costs, and taking the decision on wether it is relevant or not to continue with the operation and then leaving it in the hands of lawyers or find other potential sellers and save the costs of the hiring.

• Perform a legal analysis on the liens and encumbrances of the asset, which are to be found in the Property Registry from the asset's location.

          In addition on deciding on the suitability of the operation, what will condition the legal analysis of it will be the information found of the asset included in the Property Registry. Such information is public, meaning saving money and headache for those intelligent enough to issue a note to the public worker asking for a certificate over the asset before issuing a bank note to the seller.

Thanks to such, you will be able to discover whether the asset is owned by the seller or leased to a third.  Even more, it can be that such asset is mortgaged by a bank using a financial instrument which is expected to burden the asset by a long number of years. Even more interestingly, you can find out it is not even registered to the name of the seller, or that there are judicial procedures currently on-going. Accessing these public registries is a must before setting the objectives of your legal analysis and studying the business suitability of the operation. However, depending on what you are seeking to acquire, not all information is currently included in this registry.

• What is the main activity of the company you are looking to purchase?

Legal and administrative requirements will not be the same when looking to acquire a company whose main activity is dedicated to appartment renting in summer,  than those related to a company which operates in the industrial sector producing nocive substances to the ozone.

In fact, an asset's legallity must be studied from two spheres: one regarding its physicial structure and compliance with the urbanistic planning and construction; and another one regarding its administrative compliance: activity licenses, administrative permissions to perform its activity, environmental requisites, etc.

Continuing with the above example, should you be looking for an asset whose activity is to serve for tourists as an appartment, you want to check if there is a registry where the asset must be registered, with its limitations regarding size, number of rooms, even internet connection, parking places...all of these following the guidelines of its sectorial legislation.

However, when looking to buy an asset whose main activity is that of chemicals, you should consider checking whether or not there is a national registry for pollution limits, noise limitations, how wastes are treated; even if there are required guarantees to be subscribed just in case wastes are wrongly treated. Obviously, you wanna see that asset correctly included there, without past or current administrative sanctions discussed in courts.

As you can see, it is not enough to check the ownership of the asset, or if the Final Works Certificate is subscribed by the architect and ratified by public bodies. You want to study whether or not the asset is prepared to carry out the activity it was constructed for.

• What kind of legal structure is to be used? Share Deal vs Asset Deal.

When deciding on carrying out the purchase agreement with the seller, it is important to understand there are different legal instruments on how to perform the operation, which might be more suitable for both parties, but which however affect how to conceive different encumbrances on the real estate.

When using the share deal option, the buyer will acquire company's assets, meaning all existing and potential liabilities and debts, some of these probably related to the real estate. The legal entity, the company, would be acquired as an everything, with its know how, goods, real asset, employees, mortgages, etc. However, an asset deal means acquiring some part of the business, solely acquiring determined goods, and as such discussing the suitability of the real asset you want to include in your company to grow. 

• Which documents to ask to the seller.

Depending on the activity of the company, in addition to asking for all the contracts or information you found out from the Public Registry, you want to study the previous purchase and sell agreement, you want to see the licenses regarding its activity, you want to see if there are assets leased and under which conditions. It is important to set apart real estate requirements with those related to tax and business ones. Here, you are focusing on the legallity of the asset: if it is registered in the Property Registry, if its activity complies with the law, if there are administrative requirements, etc. You want to buy a green flag asset.

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Japan's versatility of renewable energy as a real wildcard for energy production

Since the 2011 disaster, Japan’s nuclear power program, which had provided about 30% of the country’s electricity, has ground to a halt amid public anxiety over safety, and the country has had to fill much of the gap by burning fossil fuels, taking a look back into late 90s energy production strategies.

            The government has been trying for months to get the public consensus before turning some reactors back on, but so far its assurances that new, tighter regulations will keep the plants safe have not convinced many Japanese, on the contrary to what lobby’s argue as a symptom of losing competitivty in the international market, where there has been an increasing necessity to buy materials for burning fossil fuels. In 2013, Japan released the equivalent of 1.2 billion metric tons of carbon dioxide, more than 7% higher than the year preceding the nuclear accident and 14% higher than levels in 1990.

In 2011, Japan was the world’s fifth-biggest emitter of carbon dioxide, after China, the United States, India and Russia. Together, these countries and the European Union account for about 70% of total global carbon dioxide emissions, according to the Environmental Protection Agency in the United States. Japan had been reluctant in pursuing renewable energy, choosing instead to rely on its reactors to avoid greenhouse emissions. As a result, before the accident, less than 3% of the electricity Japan generated came from renewable energy sources.

To commence its renewable power program, Japan introduced incentives to diversify its energy sources last year. In the program’s first 12 months, through June, the country added renewable power equal to the output of about four nuclear reactors.

Japan’s new target assumes that the country will achieve energy savings of about 20% by investing in renewable energy sources and energy-efficient technology. Japan seeks to reduce emissions from 2005 levels by 3.8%. Japan’s nuclear reactors around the country were shut down for regular maintenance after the disaster at Fukushima Daiichi spewed radioactive materials over northeastern Japan, but the government did not count on the antinuclear feelings that greeted its attempts to try to restart them. Now, the necessity to implement renewable energy systems urges while Kyoto Protocol top emissions limit are not meet and the dependence on foreign materials to produce energy alerts its government.

Japan’s environment minister, Nobuteru Ishihara, said that the new target “does not consider the possible effect of nuclear power plants reducing emissions” and that Japan “would set a more definite target” once it settled on what sources of energy it would use in the future.

For this reason, Martin Kaiser, head of the Greenpeace delegation affirmed that “Japan can get dramatic emission reductions while shutting down nuclear entirely,” Greenpeace said its own calculations showed Japan could achieve emissions cuts of more than 20" without relying on nuclear power if it more aggressively pursued renewable energy.

In conclusion, those countries which were already transitioning into renewable energy sources do not solely depend on autonomous independent sources of energy production, but rather can diversify its energy production promoting its results. As a consequence, their dependence to foreign markets tends to zero while their know-how continues to advance where the versatility of merging renewable sources with other's production themes could be of intangible benefit for the society, in terms of economic advance as well as prosperity for the nation, defining a future strategy opting for the best model of energy production once different techniques have been evidenced.

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Measuring the power of energy from a different point of view: Tax Breaks in a fresh market

The unlimited possibilities for a company deciding to enter in an early stage of a market which is still under-going a process of configuration and direction is promoted where there are weaker companies. This position is even strengthen where these ones do not process or enjoy the same know how, causing a burst in benefits in the middle and long term. 

What else can a company achieve?

In a rapidly expanding market as it is the energetic one, those companies who have decided to invest in it are not simply seeking a market dominant position: their real desire lies within building the image of a trustworthy company that looks for clean and renewable friendly energies as the chosen future source of growth. Even deeper than this, as a result of the former, and what mostly attracts powerful investors to its configuration are the tax breaks produced.

As a clear example, we can examine the past buyout of Google. The company announced that it had signed a contract to buy the entire output of the 239.2 MW Happy Hereford wind farm that is being developed by Chermac Energy.  The project is expected to begin operation in late 2014.

Undoubtedly, Google is pleased with all the favorable publicity the company has received for being so environmentally committed. They even boast their green projects:

 “For transparency’s sake, we’re also reporting our footprint without those purchases. We urge others to do the same, which is why we participate in the World Resources Institute Scope 2 accounting process,” Nickerman explains. “This helps to ensure greenhouse gas reporting remains transparent and meaningful.”

The media has also reported Google’s funding are:

“Incredible awesome and seek the future tools for promoting green energy”

However, those who praise and thank Google for adopting a green politic are what Google knows for being here in the other flip of the coin

A point that none of the media stories have mentioned will be, amongst others, that taxpayers will have to cover the cost of the tax breaks that the wind farm owner, namely Google, will enjoy. 

The most lucrative USA tax break for the project owners will probably be the federal wind production tax credit (PTC).  This tax break will provide the owners with a tax credit, currently set at $0.023, for each kilowatt-hour of electricity that the “wind farm” produces during the first 10 years of operation.

Also, the wind farm owners will likely qualify for another lucrative federal tax break known as “accelerated depreciation” which allows the owners to depreciate for tax purposes the entire capital cost of the wind energy equipment over a 5-year period, thus providing a significant cash flow benefit.

The actual cost of the PTC to taxpayers can only be estimated at this time since the amount paid depends on the amount of electricity produced as well as the rate at the time of production. 

To sum up, Google will not only cause a positive impact in global society as a influential company supporting green energies, but meanwhile in the back door will higher its benefits as a result of the difference between what these wind mills will produce and the tax breaks.  

Name it marketing or company politics, energy is not only positive for the world's future survival, but as a tool to exploit its market eccentricities. As such, these advantages will be normalized once the market stops it swerve.

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Understanding why green energy development is bound to that of the legal sector

While we could refer to energy as an abstract or technical term, it is relevant to understand the concept of energy from a social-welfare meter which quantifies how much progress is being made under the renewable field. Now, while green energy can be seen as the set of opportunities a country aims to achieve in their territory by using original and newly developed techniques, there is something in addition to political will to make it feasible to replace common energy production techniques: legal framework. How are different countries starting to invest on green energy?

Under the 21th Century premises, where economical advance is still by far more relevant than social or environmental welfare, numerous shifts in policy making are taking place. Such is the relevance of these, that they are not only causing a disruption in economic affaires but do affect the way we conceal society, education and international relations between States and investors. Why is this happening?

When we introduce a new variable to an stable equation, namely the needs to build a strong economy, which is based in the quantity of goods able to produce and under certain requisites, when we add to those requisites the demands and needs of the earth we are living in we find a completely transformed panorama: environmental resilience and anti-jeopardizing politics in the environment do cause a significance impact in the quantity of goods able to be produced under newly fresh legal imposed requisites.

As a consequence, numerous scientists are aware of this premises and are coming up with different solutions to include the variable of the environment within the ownings of the economic progress: energy.

Points of connection between energy and its relevance in the configuration of quantity of goods:

• Versatility.
• Promotion around the necessity to conceal 21th Century technology with 21th Century economic advance, requiring a 21st Century legal framework to work on.

As a consequence of the above, should countries be willing to develop the energy market by incorporating green friendly energy transformations, it is conditio sine qua non to start by upgrading the legislation so as to incorporate a clear threeshold where the set of energy policies to be real and makeable.

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