New horizons for environmental lawyers

Climate change intertwined with energy and cleantech are the new horizons for environmental lawyers.
Which is not to say that the workload has changed.

“I’m working flat out as hard as I can go, which is what I’ve been doing since I started my practice in 1990,” says Dianne Saxe of Toronto, an environmental law specialist. “The shoe probably won’t drop until they have a carbon trading regime in place.”

Nowadays, Saxe and other environmental lawyers are preoccupied with the sudden emergence of the likes of the Green Energy Act, the Toxics Reduction Act, and the carbon offset regulations.

“Right now it’s a question of trying to figure out what’s going on,” says John Willms of Willms & Shier Environmental Lawyers LLP, a 12-lawyer boutique in Toronto. “Regulatory developments have been slow in coming, but we need to stay ahead.”

Indeed, the firm’s lawyers are busy responding to clients anxious about what’s coming in Canada and elsewhere, looking for explanations and interpretations of the laws and regulations that have emerged, and seeking to understand the business opportunities represented by the green movement.

Otherwise, the field of energy approvals is burgeoning.
“It’s gone from a gleam in the environmentalists’ eyes to fully-fledged, highly-leveraged government intervention with the introduction of laws like Ontario’s Green Energy Act,” Willms says. “The government is trying to change the whole economic paradigm around energy developments, and that’s one area where we’re expecting a lot of work.”

Certainly no one has come to grips with the impact of the Green Energy Act on transmission issues.
“Ontario hasn’t built a transmission since it adopted the Environmental Assessment Act in the ’70s,” Saxe says.
These and other emerging environmental concerns have converged in the transactions part of the practice.

“Traditionally, this amounted to advising lawyers involved in M&A and other transactions about brownfields complications, but there are now a whole range of other environmental issues that have become very real to the business world,” Willms says. “As was the case with brownfields, lawyers will take a while to understand that it’s not just a matter of throwing a few words into an agreement - environmental concerns have become way more complex.”

In other words, climate change and cleantech issues have moved from being an afterthought on transaction teams to being integral to their proper functioning. Inevitably, the divide between environmental lawyers and business lawyers has begun to blur.

That’s what happened to the IP and IT lawyer in the e-commerce heyday. The business lawyers - the core corporate commercial, corporate finance, securities, and M&A types - didn’t go away, nor did they lose their influence in the legal hierarchy.

Their visceral understanding of how business and transactions work, and what it takes to make a company prosper and a deal close, remained the legal lynchpin for a transaction’s success.

They called themselves e-commerce lawyers, and their ranks included a fair number of entrepreneurial IP and IT types - especially IT types - who, by dint of their background or rapid learning curve, evolved into business lawyers.

That’s now happening to environmental lawyers in a legal market where the cleantech designation is the flavour of the day.

“My experience is that senior business people take an interest in cleantech and climate change and they understand that they need to know something about it,” says Gray Taylor of Toronto, leader of Bennett Jones LLP’s climate change and emissions trading group, who started out as a corporate commercial lawyer and became an environmental transaction lawyer before emerging in his current incarnation.

“For the first time, environmental lawyers are gaining access to significant business people who have real money.”

It’s not that the link between environmental lawyers and business is entirely new.  “What’s new is that cleantech lawyers will become important in transactions because they will have to respond to a host of new regulatory issues as well as the impact of the cap and trade market,” says Paul Cassidy, head of Blake Cassels & Graydon LLP’s environmental group in Vancouver.

In other words, climate change considerations have brought business law closer to environmental law than it has ever been.

“Things have got to the point where any transaction where a client finances or buys or sells something that impacts the environment invokes the need for environmental negotiation,” says Anne-Marie Sheahan of Montréal, who leads McCarthy Tétrault LLP’s environmental law practice. “This has evolved over two decades, but recently, there is more and more negotiation about the environmental elements of such a transaction.”

When the product is an energy-saving device or service, the negotiation often revolves around pricing.
“If you have a system that reduces heating costs, how do you price that to someone who has an existing building?” asks David Pamenter of Toronto, national leader of Gowling Lafleur Henderson LLP’s technology industry group.

“Because business models are evolving, creativity is often required to turn a product into a commercial enterprise. And the newer the product is, the more skepticism you get, so frequently it becomes a matter of the supplier sharing the actual savings with the customer. The lawyer’s job is to make sure the pricing and structuring add up to a good deal for the client.”

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